FILED
                                                             United States Court of Appeals
                                                                     Tenth Circuit

                                                                    April 6, 2011
                     UNITED STATES COURT OF APPEALS
                                                  Elisabeth A. Shumaker
                                                                     Clerk of Court
                            FOR THE TENTH CIRCUIT


    UNITED STATES OF AMERICA,

                Plaintiff-Appellee,
                                                          No. 10-1328
    v.                                         (D.C. No. 1:08-CR-00458-MSK-1)
                                                           (D. Colo.)
    JEFFREY HARRIS,

                Defendant-Appellant.


                             ORDER AND JUDGMENT *


Before MURPHY, HARTZ, and GORSUCH, Circuit Judges.




         Jeffrey Harris appeals the district court’s prison sentence of 108 months on

his guilty plea to one count of conspiracy to defraud the government. He

contends that the court’s imposition of a variant sentence above the maximum

sentence calculated pursuant to the United States Sentencing Guidelines (U.S.S.G.




*
       After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. It may be cited, however, for its persuasive value consistent
with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
or Guidelines) is procedurally and substantively unreasonable. We take

jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a). We affirm.

I. Introduction

      Harris was charged in two cases. In the first, he was charged in a 23-count

indictment with 17 counts of mail fraud and aiding and abetting, in violation of

18 U.S.C. § 1341; one count of conspiracy to defraud the government, in violation

of 18 U.S.C. § 286; and five counts of making false claims and aiding and

abetting, in violation of 18 U.S.C. § 287. In the second case, he was charged in a

40-count indictment with 19 counts of mail fraud and aiding and abetting, in

violation of § 1341; one count of conspiracy to defraud the government, in

violation of § 286, and 20 counts of making false claims and aiding and abetting,

in violation of § 287.

      On November 30, 2009, Harris conditionally pleaded guilty to one count of

conspiracy to defraud the government, in violation of § 286, in exchange for the

government’s agreement to dismiss the remaining counts in both indictments. As

part of the plea agreement, the parties stipulated to a sentence of 60 months. The

district court deferred accepting the guilty plea until the sentencing hearing.

Thereafter, the United States Probation Office prepared a presentence report

(PSR), indicating an appropriate sentencing range under the Guidelines of 87 to

108 months. The government then filed a motion pursuant to section 5K1.1 of the




                                         -2-
Guidelines, requesting a 30 percent sentence reduction based on Harris’s

cooperation in the prosecution of a codefendant.

      At the sentencing hearing convened on May 3, 2010, the parties requested a

sentence of 61 months, reached by reducing the low end of the Guidelines

sentence of 87 months by 30 percent. The district court stated that it would grant

the government’s § 5K1.1 motion, but would not impose the stipulated sentence.

Instead, the court informed Harris that it intended to vary upward from the

Guidelines sentence. Harris then accepted the court’s offer to withdraw his guilty

plea to afford him an opportunity to consult with counsel. Sentencing was

rescheduled for July 30, 2010, when Harris reinstated his guilty plea and the court

imposed a sentence of 108 months. 1

II. Background

      Harris stipulated to the following facts. From 2001 through 2006, he ran a

scheme to defraud the Internal Revenue Service (IRS) and the Colorado

Department of Revenue (CDR), whereby he sought tax refunds for customers of

Olympia Financial and Tax Services (Olympia), 2 a corporation he owned and


1
      In addition to a term of imprisonment, the district court imposed a $100
special assessment, restitution of $359,919.91, and three years’ supervised
release. Because Harris does not challenge these terms on appeal, any challenge
to them is waived. United States v. Wayne, 

, 1334 n.6 (10th Cir.
2010) (holding argument waived for failure to raise it in opening brief).
2
       Harris initially ran the scheme by using Grand Peak Financial Services,
Inc., another corporation he owned and controlled.

                                        -3-
controlled. Harris had no specialized tax-preparation experience, nor was he a

certified public accountant or a former IRS agent. Olympia’s employees and

Harris directly solicited customers. They represented that: (1) Olympia could

amend the customers’ tax returns to claim legitimate tax refunds, (2) the tax

professionals who worked at Olympia were former IRS employees or were

otherwise qualified to amend tax returns, and (3) Olympia would use legal

methods and truthful information to amend customers’ returns. Harris also

developed and used promotional written and internet materials falsely

representing that Olympia employed experienced tax and legal professionals to

review the amended returns to ensure compliance with the law. He also

represented that all amendments to tax returns would be discussed with the

customer and supported with documentation.

      To implement the scheme to defraud, Harris and others prepared amended

federal and state tax returns containing false information so as to entitle the

customer to a refund. Typical of the false claims were itemized deductions,

business profits or losses, educational expenses, amount of taxable income, and

the amount of refund owed to the taxpayer. Olympia charged its customers 40 to

50 percent of any refund they received. As a result of this scheme, Harris and

others caused over 800 fraudulent amended returns to be filed with the IRS

claiming $2,667,788 in refunds, R. Vol. 1 at 35, 37. In addition, over 500

fraudulent amended returns were filed with the CDR claiming $511,101 in

                                          -4-
refunds. 

total of fraudulent claims submitted to both agencies was

$3,178,889. The total loss was determined to be $351,919.91, less than the

amount fraudulently claimed, because once fraud was suspected, the agencies

stopped issuing refunds, and some of the loss was recouped from the participating

taxpayers. 

at 8-9.

III. Sentencing 3

      Harris’s PSR noted that the base offense level for the crime of conviction

was 6 under U.S.S.G. § 2B1.1(a)(2). 

An increase of 18 levels was

warranted because the actual loss and/or the intended loss was more than

$2,500,000 and less than $7,000,000 pursuant to U.S.S.G. § 2B1.1(b)(1)(J). 

level was further increased by 2 levels because the offense involved

the abuse of trust and/or use of a special skill pursuant to U.S.S.G. § 3B1.3. 

levels were added pursuant to U.S.S.G. § 3B1.1(a) because Harris was

an organizer or leader of criminal activity that was otherwise extensive. 

Lastly, a 3-level reduction was included for acceptance of responsibility under

U.S.S.G. § 3E1.1(a) & (b), 

total offense level of 27. Harris’s 6 criminal


3
       10th Cir. R. 28.2(A)(1) & (2) require that pertinent written and oral
findings be included as attachments to the appellant’s brief. If the appellant’s
brief fails to include these attachments, the appellee’s brief must include them.
10th Cir. R. 28.2(B). In this case, the district court stated orally its reasons for
the sentence and those reasons are included in the sentencing transcript.
Although the sentencing transcript was in the record on appeal, the relevant pages
were not included as attachments to either party’s brief. We remind the parties of
their obligations to comply with this court’s rules.

                                         -5-
history points resulted in a criminal history category of III. 

Accordingly, the Guidelines sentencing range was 87 to 108 months. 

      At the July 30, 2010, sentencing hearing, the district court clearly informed

Harris that it would not accept the parties’ stipulated sentence of 61 months.

Before pronouncing sentence, the court told defense counsel that he would have

an opportunity to make legal objections or to continue the hearing to address any

new issues raised by the sentence.

      In announcing the sentence, the district court first stated that the sentence

was designed to satisfy the objectives and factors of 18 U.S.C. § 3553(a). 4 The

court then reviewed the applicable Guidelines for (1) the crime of conspiracy to

defraud the government; (2) the stipulated loss amount between $2,500,000 and

$7 million; (3) Harris’s role in the offense involving an abuse of trust and use of a

special skill; (4) his role in the offense as an organizer and leader of criminal

activity that was otherwise extensive; (5) his criminal history; and (6) a

downward adjustment for acceptance of responsibility. The court noted the

recommended Guidelines sentence of 87 to 108 months. The court granted the


4
       Section 3553(a) directs a court to “impose a sentence sufficient, but not
greater than necessary,” to serve the following sentencing purposes: (1) to
consider “the nature and circumstances of the offense and the history and
characteristics of the defendant;” (2) to account for the “seriousness of the
offense, to promote respect for the law, and to provide just punishment for the
offense;” (3) to adequately deter criminal conduct; (4) “to protect the public from
further crimes of the defendant;” and (4) to provide appropriate training, medical
care, and other correctional treatment to the defendant.

                                          -6-
government’s motion for a 30 percent sentence reduction filed pursuant to

U.S.S.G. § 5K1.1.

      Explaining the decision to impose a variant sentence, the district court

determined that the Guidelines calculation did not adequately take into account

Harris’s criminal history. 5 His first convictions were based on state charges in

1989, at age 29, and involved “communications fraud, computer crimes, unlawful

use of financial ATM card, and forgery, all of which are felonies.” R. Vol. 2 at

64. Although he was sentenced to concurrent terms of one to fifteen years, he

was released on parole after only two years. In 1991, he was convicted in federal

court for the felony of conspiracy to transport interstate and sell stolen computer

components. His sentence to probation for 60 months was terminated early.

      In addition, although under the Guidelines Harris received an enhancement

for being a leader, the court was not satisfied that the enhancement adequately

considered his manner in dealing with the individuals who worked for him in the

scheme. In recalling the testimony of several of Harris’s subordinates who had

testified before the court, the court noted that they “did not feel free to avoid the



5
      A “variant” sentence results when “a court enhances or detracts from the
recommended [Guidelines] range through application of § 3553(a) factors.”
United States v. Atencio, 

, 1101 n.1 (10th Cir. 2007), overruled in
part on other grounds by Irizarry v. United States, 

(2008). In
contrast, a “departure” refers to “a sentence above or below the recommended
Guidelines range [reached] through application of Chapters Four or Five of the
Sentencing Guidelines.” 

conduct” of the enterprise. 

This assessment was confirmed by

the court’s own observations of Harris’s “demeanor on the witness stand, his

arrogance, [and] his abusive demeanor toward counsel in the courtroom.” 

also commented on Harris’s allocution: he expressed no remorse, he

did not take responsibility for his conduct, he said sometimes he obeyed the law

and sometimes he did not, and he spoke of his plans to turn his incarceration to

his advantage by attending college on-line. The court found those remarks to be

focused on what would benefit him.

      After remarking that Harris had been convicted and sentenced for crimes

involving fraud resulting in significant losses while in his 30’s, the district court

observed that Harris, now at a more advanced age, had not changed his behavior

or accepted responsibility for his criminal conduct, thus posing a risk to society.

Expressing concerns about “(1) the seriousness of the offense; (2) the necessity to

promote respect for the law; (3) [and] the necessity to protect the public from

further crimes by Mr. Harris,” the court imposed a sentence of 108 months’

incarceration. 

Even though the sentence was within the Guidelines

range, the court acknowledged it was a variant sentence because it was the

government’s § 5K1.1 motion that brought the sentence to 108 months; without

the motion, the sentence would have been above the Guidelines range. After

announcing the sentence and the reasons for it, the court inquired whether any of

the parties requested further clarification or explanation. All parties declined.

                                          -8-
IV. Discussion

A. Standard of Review

      “In reviewing a sentence on appeal, this court must first determine whether

the sentence is procedurally reasonable, . . . review[ing] the district court’s legal

conclusions regarding the Guidelines de novo and its factual findings for clear

error.” United States v. Munoz-Nava, 

, 1146 (10th Cir. 2008).

“Procedural reasonableness addresses whether the district court incorrectly

calculated or failed to calculate the Guidelines sentence, treated the Guidelines as

mandatory, failed to consider the § 3553(a) factors, relied on clearly erroneous

facts, or failed to adequately explain the sentence.” 

addresses “whether the length of the sentence is

reasonable given all the circumstances of the case in light of the factors set forth

in . . . §3553(a).” United States v. Verdin-Garcia, 

, 895 (10th Cir.

2008) (internal quotation marks omitted). This court reviews “all

sentences–whether inside, just outside, or significantly outside the Guidelines

range–under a deferential abuse-of-discretion standard.” Gall v. United States,

, 41 (2007); accord United States v. Smart, 

, 806

(10th Cir. 2008). Under this standard, “[w]e afford substantial deference to the

district court,” United States v. Martinez, 

, 1227 (10th Cir.)

(citation omitted) (internal quotation marks omitted), cert. denied, 

(2010), and find an abuse of discretion only if the sentence imposed is “arbitrary

                                          -9-
capricious, whimsical, or manifestly unreasonable,” United States v. Huckins,

, 1317 (10th Cir. 2008) (internal quotation marks omitted). “[W]e

will defer to the district court’s judgment so long as it falls within the realm of

the[] rationally available choices.” United States v. McComb, 

,

1053 (10th Cir. 2007).

B. Procedural Reasonableness

      Harris first claims the sentence is procedurally unreasonable because the

district court considered factors already taken into account in calculating the

Guidelines sentencing range without explaining with sufficient specificity how

Harris’s situation differed from the typical Guidelines situation. He also argues

that the court’s stated reasons were not sufficiently compelling to justify the

sentence, which he characterizes as “more than 40 percent longer than the 61

month sentence contemplated under the Guidelines.” Aplt. Br. at 17.

      Harris has forfeited his first argument challenging the adequacy of the

district court’s explanation by declining the court’s invitation to provide further

clarification or explanation at the conclusion of the sentencing hearing. United

States v. Uscanga-Mora, 

, 1294-95 (10th Cir.), cert. denied,

(2009). Consequently, we review this issue for plain error. 

“Our plain error standard is satisfied when there is (1) error, (2) that is

plain, which (3) affects substantial rights, and which (4) seriously affects the




                                          -10-
fairness, integrity, or public reputation of judicial proceedings.” 

(internal quotation marks omitted).

      Harris has not demonstrated that the district court’s explanation, even if

inadequate, affected his substantial rights. The district court’s sentencing

decision was fully supported by evidence in the PSR that Harris stipulated was

accurate. See United States v. Mateo, 

, 1166 (10th Cir. 2006)

(holding sentencing court “is entitled to rely on uncontested facts contained in the

PSR for certain sentencing purposes”). The court gave clear and specific reasons

for its decision to impose an upward variant sentence, concluding that application

of the Guidelines would not result in a sentence to achieve the purposes of

§ 3553(a), because they did not take into full consideration Harris’s criminal

history, his treatment of his subordinates, his arrogance and abusive demeanor,

his lack of remorse and failure to acknowledge responsibility, the seriousness of

the offense, the need to promote respect for the law, and the need to protect the

public. Accordingly, Harris has not established that any error affected his

substantial rights, “meaning that there is a reasonable probability that, but for the

error claimed, the result of the proceeding would have been different.” United

States v. Weiss, 

, 1274 (10th Cir. 2010) (internal quotation marks

omitted).

      Turning to Harris’s second argument that the district court’s justification

was not sufficiently compelling, we reject as a matter of law his contention that

                                         -11-
extraordinary circumstances or conditions must be found before a district court

may impose an above-Guidelines sentence. To the contrary, the district court was

“allowed to contextually evaluate each § 3553(a) factor, including those factors

the relevant guideline(s) already purport to take into account, even if the facts of

the case are less than extraordinary.” 

. In addition,

Harris’s argument that his sentence is procedurally unreasonable because it

represents an increase of 40 percent above the minimum Guidelines sentence is

unavailing. Not only does he offer no authority for measuring from the lowest

point on the Guidelines range, but using “a rigid mathematical formula” to

evaluate reasonableness has been rejected, see 

. Accordingly,

we conclude that the sentence is procedurally reasonable.

C. Substantive Reasonableness

      Harris also challenges the substantive reasonableness of his 108-month

sentence, arguing that the above-Guidelines sentence created unwarranted

sentencing disparities among similarly situated defendants. He claims that the

characteristics of his offense are addressed by the Guidelines, thus creating a

sentencing disparity. He maintains that the district court failed to identify

sufficient meaningful distinctions between him and others who committed similar

offenses to warrant the variant sentence.

      “Unlike procedural reasonableness review, which focuses on the

permissibility of relying on a particular factor, substantive reasonableness review

                                         -12-
broadly looks to whether the district court abused its discretion in weighing

permissible § 3553(a) factors in light of the ‘totality of the circumstances.’”

United States v. Sayad, 

, 1118 (10th Cir. 2009) (quoting 

). “Because substantive reasonableness contemplates a range, not a

point, in this arena we recognize a range of rationally available choices that the

facts and law at issue can fairly support.” 

(citations

omitted) (internal quotation marks omitted).

      The district court was required to consider “the need to avoid unwarranted

sentence disparities among defendants with similar records who have been found

guilty of similar conduct,” § 3553(a)(6), but “this factor requires a district court

to take into account only disparities nationwide among defendants with similar

records and Guideline calculations,” 

(internal

quotation marks omitted). The district court was not required to distinguish

Harris’s “characteristics and history from those of the ordinary offender

contemplated by the Guidelines.” 

(internal quotation

marks and ellipsis omitted). Moreover, “[s]ince the District Judge correctly

calculated and carefully reviewed the Guidelines range, [she] necessarily gave

significant weight and consideration to the need to avoid unwarranted

disparities.” 

. Accordingly, based on the court’s

consideration of the appropriate factors, we reject Harris’s claim that his sentence

is substantively unreasonable based on alleged sentencing disparities.

                                         -13-
      We next consider whether Harris’s sentence is within the range of

rationally available choices fairly supported by the facts and law. As discussed

above, the district court determined that a Guidelines sentence would produce a

sentence less than necessary to achieve the purposes of § 3553(a) because the

Guidelines failed to take into full consideration Harris’s criminal history, his

treatment of his subordinates in the fraudulent scheme, his arrogance and abusive

demeanor, or his lack of remorse and failure to acknowledge responsibility. See

§ 3553(a)(1) & (2)(A). The court further found that an upward-variant sentence

was warranted based on the seriousness of the offense, the need to promote

respect for the law, and the need to protect the public. See 

&

(C). As a result, the court determined that a 108-month sentence would best

achieve the purposes of § 3553(a). “In examining a deviation from the advisory

Guidelines, this court may consider the extent of the deviation, but must give due

deference to the district court’s decision that the § 3553(a) factors, on a whole,

justify the extent of the variance.” 

(internal quotation

omitted); see also 

(stating deferential standard of review

precludes our examination of the weight the district court gave the § 3553(a)

factors or its balancing of those factors).

      Applying our deferential standard of review, and “tak[ing] into account the

totality of the circumstances, including the extent of [the] variance from the




                                          -14-
Guidelines range,” 

, we determine that the above-Guidelines

sentence of 108 months is substantively reasonable.

V. Conclusion

      The district court’s sentence in this case was both procedurally and

substantively reasonable. Accordingly, this court AFFIRMS the 108-month

sentence imposed on Jeffrey Harris.




                                                  Entered for the Court



                                                  Michael R. Murphy
                                                  Circuit Judge




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