Filed: Jul. 27, 2020
Latest Update: Jul. 27, 2020
Summary: FILED United States Court of Appeals PUBLISH Tenth Circuit UNITED STATES COURT OF APPEALS July 27, 2020 Christopher M. Wolpert FOR THE TENTH CIRCUIT Clerk of Court _ UNITED STATES OF AMERICA, Plaintiff - Appellee, v. No. 19-1145 THOMAS FORSTER GEHRMANN, JR., Defendant - Appellant. _ Appeal from the United States District Court for the District of Colorado (D.C. No. 1:15-CR-00303-RBJ-1) _ Jane H. Ruemmele, Indianapolis, Indiana, for Defendant-Appellant. Alexander P. Robbins, Attorney, Tax Divisio
Summary: FILED United States Court of Appeals PUBLISH Tenth Circuit UNITED STATES COURT OF APPEALS July 27, 2020 Christopher M. Wolpert FOR THE TENTH CIRCUIT Clerk of Court _ UNITED STATES OF AMERICA, Plaintiff - Appellee, v. No. 19-1145 THOMAS FORSTER GEHRMANN, JR., Defendant - Appellant. _ Appeal from the United States District Court for the District of Colorado (D.C. No. 1:15-CR-00303-RBJ-1) _ Jane H. Ruemmele, Indianapolis, Indiana, for Defendant-Appellant. Alexander P. Robbins, Attorney, Tax Division..
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FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS July 27, 2020
Christopher M. Wolpert
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 19-1145
THOMAS FORSTER GEHRMANN, JR.,
Defendant - Appellant.
_________________________________
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 1:15-CR-00303-RBJ-1)
_________________________________
Jane H. Ruemmele, Indianapolis, Indiana, for Defendant-Appellant.
Alexander P. Robbins, Attorney, Tax Division (Richard E. Zuckerman, Principal Deputy
Assistant Attorney General; S. Robert Lyons, Chief, Criminal Appeals & Tax
Enforcement Policy Section; Stanley J. Okula, Jr., and Mark S. Determan, Attorneys, Tax
Division; Jason R. Dunn, United States Attorney, Denver, Colorado, of Counsel, with
him on the brief), Department of Justice, Washington, D.C., for Plaintiff-Appellee.
_________________________________
Before LUCERO, KELLY, and PHILLIPS, Circuit Judges.
_________________________________
PHILLIPS, Circuit Judge.
_________________________________
Dr. Thomas Forster Gehrmann, Jr., appeals a portion of his sentence—a two-
level adjustment under § 3B1.1(c) of the U.S. Sentencing Guidelines Manual (the
“Guidelines” or “U.S.S.G.”) (U.S. Sentencing Comm’n 2018) for his aggravating role
in a conspiracy to defraud the United States. In the district court, Dr. Gehrmann
never objected to the adequacy of the court’s explanation of its sentencing decision.
Accordingly, we review this issue for plain error. We conclude that the district court
did not adequately explain its basis for imposing the adjustment. But we also
conclude that Dr. Gehrmann cannot show a reasonable probability of a different
sentencing outcome on a remand. The district court’s findings, the undisputed
findings in the presentence report (PSR), and the facts acknowledged in Dr.
Gehrmann’s appellate briefs show that he qualifies for the adjustment as an organizer
of the criminal activity. Exercising jurisdiction under 18 U.S.C. § 3742(a) and 28
U.S.C. § 1291, we affirm.
BACKGROUND
In 2001, two chiropractors, Drs. Gehrmann and Eric Carlson, opened Atlas
Chiropractic Center in Colorado Springs, Colorado. By mid-2005, they had hired
office staff, including an office manager, a chiropractic assistant, and a massage
therapist. In addition, they hired that year a newly graduated chiropractor, Dr. John
Davis, as a preceptee. A few months later, Dr. Davis completed his preceptorship at
Atlas, enabling him to become an associate at the business. This allowed Atlas to
expand and treat more patients.
In the last few months of 2006, Dr. Davis negotiated with the other two
doctors for a one-third share of the business. In January 2007, Dr. Davis became a
full partner after agreeing to pay a $350,000 buy-in amount—$200,000 financed by a
bank, and $75,000 each financed by the other two doctors.
2
In January 2007, at a meeting among the three doctors, Drs. Gehrmann and
Carlson advised Dr. Davis of their income-diversion scheme. Drs. Gehrmann and
Carlson explained that they placed cash payments and checks written to the treating
doctor (as opposed to the business) in a cookie jar 1 and regularly split those proceeds.
They told Dr. Davis “that all small businesses basically do this[.]” Appellant’s App.
vol. II at 475:1. Unsurprisingly, Drs. Gehrmann and Carlson did not bluntly discuss
their scheme as one to defraud the United States or sign a written agreement with Dr.
Davis to defraud the United States. But Dr. Davis understood that the purpose of the
scheme was to avoid claiming the diverted money as income on their tax forms. 2 Dr.
Davis testified that it was “obvious” that this was the reason for separating and
distributing the checks placed in the cookie jar. Id. at 490:3–10. And in fact, after
splitting the money, each doctor deposited his share of this diverted money into his
personal bank account instead of Atlas’s business account. They neither reported this
income to Atlas’s bookkeeper or tax preparer nor paid taxes on it.
In 2004 or 2005, about two years before Dr. Davis joined the conspiracy, Drs.
Gehrmann and Carlson crafted this scheme, instructing patients to write checks to
them individually instead of to Atlas. Further, they instructed their front-desk staff to
1
The cookie jar was a plastic container that originally held fortune cookies.
2
Despite this, the dissent contends that Dr. Gehrmann’s organizer status is
shaky—apparently because the conspirators did not specify that they were diverting
money to defraud the government. Dissenting Op. at 13. The obviousness was not
lost on Dr. Davis or the jury. The lack of an “agreement formed to participate in a tax
fraud scheme” did not prevent Dr. Gehrmann’s conviction and does not bear on his
organizer status. Id. at 13 n.9.
3
have patients write checks to them personally rather than to the business. Along this
line, at least by 2007, the doctors had posted a sign on the front desk directing
patients as follows: “Please make checks payable to Dr. Eric Carlson, Dr. Tom
Gehrmann, Dr. John Davis.” Id. at 250:20–21. The staff had patients rewrite their
checks if written to the business and reminded the patients to write checks payable to
the individual doctors in the future. At the end of each business day, the office staff
made two photocopies of all checks received (placing one copy in an office binder
and the other in Dr. Gehrmann’s office), put any checks written to Atlas in a deposit
bag for deposit in the business’s account, and placed the checks written to the
treating doctors in the cookie jar. In 2007, the doctors opened another business,
SpineMed Decompression Center, in the same building as Atlas—sharing employees,
the front office, and other resources—and solicited payments the same way from
SpineMed patients.
In the beginning and for the first few years, Dr. Carlson was responsible for
collecting the checks written to the treating doctors. He left on the other doctors’
desks their share of the checks, with a sticky note providing an updated balance of
the distributions. But by 2009, Dr. Gehrmann had become suspicious that Dr. Carlson
was taking more than his share, so Dr. Gehrmann took over responsibility for the
incoming checks, keeping the cookie jar in his office. In 2010, he improved the
system after having a staff member purchase a “Records” notebook for him. On the
cover he wrote “Secret” above the preprinted “Records” (so it read “Secret
Records”). In his Secret Records book, Dr. Gehrmann recorded the checks that each
4
doctor had received and the payouts to each doctor. He further had each doctor sign
his initials to memorialize each payout. The doctors met about weekly, usually in Dr.
Gehrmann’s office, to divide the diverted payments.
This continued until September 2011, when federal agents executed a search
warrant at the Atlas/SpineMed office. After this, the doctors had their office staff
instruct patients to make their checks payable to Atlas (or SpineMed), not to the
individual doctors. Though some patients kept writing checks to their treating doctor,
the office staff now began depositing those checks in the businesses’ bank accounts.
In 2014, Dr. Gehrmann sold his portion of the practice to Dr. Davis.
In July 2015, a grand jury indicted Drs. Gehrmann and Carlson on four felony
charges each: one count of conspiracy to defraud the United States in violation of 18
U.S.C. § 371 and three counts of filing false tax returns in violation of 26 U.S.C.
§ 7206(1). A month later, Dr. Davis—who was cooperating with investigators, and
not indicted—pleaded guilty to willfully delivering a false tax return to the Internal
Revenue Service in violation of 26 U.S.C. § 7207, a misdemeanor. In October 2018,
after this court reversed the district court’s order suppressing evidence seized under
the search warrant, see generally United States v. Gehrmann, 731 F. App’x 792 (10th
Cir. 2018) (unpublished), Dr. Carlson pleaded guilty to a felony count of filing a
false tax return in violation of 26 U.S.C. § 7206(1). But Dr. Gehrmann went to trial,
and a jury convicted him on all four counts.
Before sentencing, the parties stipulated to a loss amount of $235,356,
resulting in a base offense level of 16. See U.S.S.G. §§ 2T1.1(a)(1), 2T4.1(F). But
5
Dr. Gehrmann had filed several written objections to other portions of the PSR. As
concerns this appeal, he objected to the PSR’s recommended three-level adjustment
under U.S.S.G. § 3B1.1(b) for his aggravating role in the criminal activity. 3 For this
objection, he argued related points about the conspiracy’s breadth: that the criminal
activity had neither involved five or more participants (persons criminally liable) nor
had been otherwise extensive. Notably, in his short, written objection, Dr. Gehrmann
did not object to the PSR’s characterizing him as a manager or supervisor of the
criminal activity.
At the sentencing hearing, the district court resolved each of Dr. Gehrmann’s
written objections. Along the way, the court eventually reached the PSR’s
recommended three-level adjustment for Dr. Gehrmann’s having acted as a manager
or supervisor in criminal activity involving five or more participants. The district
court noted that if Dr. Gehrmann was “an organizer or leader or manager or
supervisor” of the criminal activity, the criminal activity could involve fewer than
five participants and still result in “the addition of two levels” under § 3B1.1(c).
Appellant’s App. vol. III at 617:21–22, 617:25–618:1. Having offered those thoughts,
3
Section 3B1.1(b) applies “[i]f the defendant was a manager or supervisor (but
not an organizer or leader) and the criminal activity involved five or more
participants or was otherwise extensive[.]” The district court rejected the PSR’s
recommendation to apply this adjustment, instead favoring § 3B1.1(c), which applies
to all four statuses. The dissent characterizes the PSR as explicitly finding that Dr.
Gehrmann was not an organizer, but the PSR has no findings on any of the statuses.
And we do not understand the dissent’s suggesting that the PSR would somehow be
authoritative on this point anyway—after all, the dissent does not hesitate to reject
the PSR’s characterizing the offense as one involving five or more participants.
6
the court remarked to defense counsel, “Okay. I need to hear what you have to say, if
anything, about that.” Id. at 618:1–2.
Dr. Gehrmann’s counsel responded, “Just briefly, Your Honor, because I think
our pleadings are pretty comprehensive and cover the arguments that we would
make.” Id. at 619:6–7. Addressing the PSR’s recommended three-level adjustment
under § 3B1.1(b), counsel noted that under “the plain language of the guidelines, it
just doesn’t apply here.”
Id. at 620:9–10. The court cut in to say, “I think the
Government actually agrees with you on this.”
Id. at 620:12–13. The court continued,
“I think they agreed that the applicable enhancement is not 3B1.1(b), but 3B1.1(c),”
which the court noted “would change the level a little bit.”
Id. at 620:22–23, 620:25.
Even so, counsel returned to subsection (b), arguing that “this isn’t a case that
involves some kind of sophisticated tax evasion scheme that involved millions and
millions of dollars,” but instead involved “three chiropractors at a small business in
Colorado Springs.”
Id. at 621:2–5. After this, perfunctorily touching on subsection
(c) too, counsel concluded with these fateful words:
There is no evidence to suggest that Mr. Gehrmann, for instance, is, you
know, any more responsible than Dr. Carlson, or Dr. Davis for the years in
which Dr. Davis was a partner at Atlas. And so, you know, we would
maintain that there should be no adjustment for the role in the offense under
either subsection.
Id. at 621:5–11.
When the government had an opportunity to comment, it agreed with the
district court’s assessment that it was seeking two levels under § 3B1.1(c), not three
levels as the PSR recommended under § 3B1.1(b). The government argued that
7
“[t]here’s no doubt that the Defendant was an organizer, leader, manager, and
supervisor.” Id. at 623:20–21. As support, the government pointed out that Drs.
Gehrmann and Carlson ran the business “and it was a criminal activity[.]” 4
Id. at
623:22–24.
After moving on to address Dr. Gehrmann’s other objections, the court
returned to the aggravating-role adjustment. The court noted that “[f]inally, with
respect to the manager or supervisory role enhancement, as I said, there are three
levels that apply if somebody is an organizer, leader, manager, or supervisor.” Id. at
628:3–5. First, concerning the four-level adjustment under § 3B1.1(a), the court
commented that no one contended that Dr. Gehrman “was necessarily an organizer or
leader, or even if he was, that there were five or more people involved[.]”
Id. at
628:9–10. Second, concerning the three-level adjustment under § 3B1.1(b), the court
noted that Dr. Gehrmann would have to be “a manager or supervisor, not an
organizer or leader, but a manager or supervisor, and [that] the criminal activity
involved five or more participants or was otherwise extensive[.]”
Id. at 628:13–16.
Though the court agreed with the probation officer that “there were more than three
4
The dissent asserts that “[t]he majority’s focus on Gehrmann and Carlson’s
coordination of office staff is therefore misplaced because it does not concern the
organization, leadership, management, or supervision of other participants in the
scheme.” Dissenting Op. at 14. This misses the mark. The majority speaks to those
two doctors’ directing office staff to take steps to assist in the fraud. This evidence
matters apart from whether the persons directed are criminally responsible
participants under § 3B1.1. One of the factors the Sentencing Commission gives us
for evaluating whether a person is an organizer is “the nature of participation in the
commission of the offense[.]” U.S.S.G. § 3B1.1 cmt. n.4.
8
people whose participation was necessary for this whole scheme to work,” id. at
628:20–21, the court was unpersuaded that “the staff in the office knowingly,
willfully participated in any wrongdoing,” 5
id. at 628:23–24.
That left just the third possibility—a two-level adjustment under § 3B1.1(c).
Here the court made a specific finding. It found that “this thing was cooked up
between Carlson, Gehrmann, Davis later joined in, but I’m going to presume that the
people in the office, the receptionist, the people like that were just doing what they
were told to do, and this was not a five-or-more-person conspiracy.” Id. at 628:24–
629:4. Addressing subsection (c)’s terms, the court read, “If the Defendant was an
organizer, leader, manager, or supervisor in any criminal activity other than that
described in categories A or B, increase by two levels,” and declared, “[t]hat one
applies.” 6
Id. at 629:5–8. Wrapping up, the court found that Dr. Gehrmann “was at a
5
We do not know what the dissent relies on to say that in evaluating Dr.
Gehrmann’s role, “the district court appears to have focused solely on the number of
individuals involved in the scheme to determine which of § 3B1.1’s three tiers
applied.” Dissenting Op. at 5. In fact, the district court properly counted the
participants—finding the three doctors qualified, but not the office staff—and
directed its gaze at § 3B1.1(c). Doing so was proper.
6
The dissent repeatedly states that the district court did not consider whether
Dr. Gehrmann was an organizer. But the court more than once stated that an
organizer qualifies under § 3B1.1(c). And its reference to Dr. Gehrmann’s “at a
minimum” qualifying as a manager or supervisor is understandable—the PSR had
deemed him a manager or supervisor. Appellant’s App. vol. III at 629:9. And as
mentioned, Dr. Gehrmann objected to three levels under § 3B1.1(b), while not
contesting that he was a manager or supervisor in the criminal activity. In addition,
the district court found that “this thing was cooked up between Carlson, Gehrmann,
Davis later joined in[.]” Appellant’s App. vol. III at 628:24–629:1. That describes the
very sort of activity qualifying one as an organizer. Drs. Gehrmann and Carlson
9
minimum a manager or supervisor in this criminal activity, and that two levels of
increase, not the three levels that the probation office found, should apply.” Id. at
629:9–11.
Accordingly, the court applied a total offense level 18 and a criminal history
category I, which together rendered an advisory Guidelines range of 27–33 months.
U.S.S.G. Ch. 5, Pt. A, Sentencing Table. From that, the district court next considered
whether to exercise its discretion to vary below the advisory low-end sentence.
In considering whether to vary, the district court summarized the case and
evidence as follows:
The facts are that, as I said, Mr. Gehrmann was convicted by jury
trial of conspiring -- conspiring with Dr. Carlson, and to some extent with
Dr. Davis, to divert income into their personal bank accounts to avoid
taxes. I’m not going to even begin to attempt to describe all of the
evidence that was presented at trial. There’s a pretty good summary I
think in the presentence investigation report at their paragraphs 6 through
13, but in some ways it can be summarized quite simply.
The doctors decided that it was a good idea to have their patients
make some of the checks out, not to the practice, but to them individually,
and those checks went into the so-called cookie jar, and they were
diverted ultimately from their tax returns. They had this so-called secret
book and so forth, but it’s just about as simple as that. We’ll report some
of the income, but not all of it, and our taxes, yes, we’ll pay taxes, but not
as much. And that is not acceptable, and that is why the jury, after a trial,
convicted them of all these counts.
Appellant’s App. vol. III at 672:17–673:10.
cooked up the tax-fraud scheme. And they recruited Dr. Davis into the tax-fraud
scheme they had cooked up. How else would he get there? So contrary to the
dissent’s statement, the majority opinion simply applies undisputed facts regarding
the recruitment—it does not make fact findings. See Dissenting Op. at 10–13.
10
Then, after considering the factors from 18 U.S.C. § 3553(a), the court
announced a 24-month sentence. Even then, the district court asked, “Anything else,
[defense counsel]?” and she responded, “Nothing from the defense, Your Honor.” Id.
at 681:19–20. With this needed background, we now consider Dr. Gehrmann’s
appeal.
DISCUSSION
Dr. Gehrmann contends that the district court erred in two ways: (1) by not
adequately explaining its findings in support of the § 3B1.1(c) adjustment, and (2) by
imposing the adjustment without sufficient evidence. We address each argument in
turn. For the reasons given below, we hold for the first argument that Dr. Gehrmann
cannot satisfy the prejudice prong of the plain-error standard, and for the second
argument that sufficient evidence supports the adjustment.
I. Procedural Reasonableness: Adequacy of Explanation of Reasons for
Imposing Two Levels Under § 3B1.1(c)
A. Standard of Review
A district court explains its reasons for a sentence at the sentencing hearing, so
a defendant must object at the hearing to preserve an objection to the adequacy of the
court’s findings. See United States v. Yurek, 925 F.3d 423, 444 (10th Cir. 2019)
(requiring a “contemporaneous objection” to a “court’s explanation for a sentence”
(citations and internal quotation marks omitted)). If a defendant fails to preserve an
objection, “any review would be confined to the plain-error standard.”
Id. at 445
(citing United States v. Romero,
491 F.3d 1173, 1178 (10th Cir. 2007)). Here, as
11
spelled out above, the district court gave Dr. Gehrmann’s counsel multiple
opportunities to speak and to object at several junctures of the sentencing hearing.
See supra pp. 7–11. Though Dr. Gehrmann’s counsel availed herself of the
opportunities to speak, she never objected to the adequacy of the court’s findings.
Accordingly, we will review this first claim for plain error. 7 See Yurek, 925 F.3d at
444–45; United States v. Marquez,
833 F.3d 1217, 1220 (10th Cir. 2016); United
States v. Uscanga-Mora,
562 F.3d 1289, 1293 (10th Cir. 2009).
B. Dr. Gehrmann’s Challenge to the Adequacy of the District Court’s
Findings Does Not Satisfy Our Plain-Error Standard.
To merit relief under the plain-error standard, Dr. Gehrmann must establish
“(1) error, (2) that is plain, which (3) affects [his] substantial rights, and which
(4) seriously affects the fairness, integrity, or public reputation of judicial
proceedings.” Uscanga-Mora, 562 F.3d at 1295 (quoting United States v. Cook,
550
F.3d 1292, 1298 (10th Cir. 2008)) (internal quotation marks omitted). Dr. Gehrmann
contends that he has met this standard because “the court’s failure to make any
findings . . . is plain on the record” and “resulted in an ‘erroneous, and higher,
7
We usually treat unpreserved arguments as forfeited, but when a defendant
“also fails to make a plain-error argument on appeal, we ordinarily deem the issue
waived (rather than merely forfeited) and decline to review the issue at all[.]” United
States v. Leffler, 942 F.3d 1192, 1196 (10th Cir. 2019) (citing Richison v. Ernest
Grp., Inc.,
634 F.3d 1123, 1128, 1130–31 (10th Cir. 2011)). Here, Dr. Gehrmann first
argued plain error in his reply brief. But the government has not asserted waiver, and
we will exercise our discretion to review his challenge to the adequacy of the district
court’s findings under the plain-error standard. See
Yurek, 925 F.3d at 445 (citing
United States v. Zander,
794 F.3d 1220, 1232 n.5 (10th Cir. 2015)).
12
Guidelines range [that] set the wrong framework for the sentencing proceedings.’” 8
Appellant’s Reply Br. at 9 (alteration in original) (quoting Molina-Martinez v. United
States, 136 S. Ct. 1338, 1345 (2016)).
1. Prongs 1 and 2: Error that is plain
We agree that the district court’s findings do not meet our requirement that it
“must make specific findings and ‘advanc[e] a factual basis’ to support an
enhancement under U.S.S.G. § 3B1.1.” United States v. Ivy, 83 F.3d 1266, 1292
(10th Cir. 1996) (alteration in original) (quoting United States v. Wacker,
72 F.3d
1453, 1477 (10th Cir. 1995)). The district court may well have thought it had no need
to be more specific because Dr. Gehrmann had neither before or at the sentencing
hearing objected to the PSR’s finding that he qualified as a manager or supervisor.
Perhaps lost in the lengthy sentencing hearing was defense counsel’s single uttered
sentence saying that Dr. Gehrmann was no more responsible than his coconspirators
and should not receive an adjustment under either subsection (apparently referencing
§ 3B1.1(b) and (c)). Though arguable, we conclude that this abbreviated mention
required the district court to better explain how Dr. Gehrmann qualified as a leader,
8
The dissent agrees with this argument. Dissenting Op. at 5–6. The problem
with this approach is that it assumes that the § 3B1.1(c) adjustment does not apply.
Because we conclude that it does apply, the Molina-Martinez issue never arises.
13
organizer, manager or supervisor of the criminal activity. Accordingly, we conclude
that Dr. Gehrmann has shown error that was plain. 9
2. Prong 3: A reasonable probability of a different sentencing
outcome
Dr. Gehrmann fails on the plain-error standard’s third prong—which requires
him to show a reasonable probability that the error led to an incorrect Guidelines
application. See, e.g., Uscanga-Mora, 562 F.3d at 1295. Here lies the chief
disagreement between the majority and dissenting opinions. The dissent would limit
this inquiry into whether Dr. Gehrmann has shown a reasonable probability that the
district court would change course on its finding that, at a minimum, Dr. Gehrmann
had acted as a manager or supervisor in the criminal activity. In contrast, the majority
would inquire whether Dr. Gehrmann has shown a reasonable probability that he
would not qualify for the two-level adjustment under § 3B1.1(c).
In United States v. Belfrey, 928 F.3d 746, 751 (8th Cir. 2019), the Eighth
Circuit faced a similar issue in reviewing an adjustment under § 3B1.1(a). On appeal,
the defendant challenged the district court’s finding that the criminal activity had
involved more than five participants.
Id. The court declined to review whether the
9
The dissent concludes that “our precedents require us to remand for the
district court to make specific findings in support of its sentencing calculation
[regarding organizer].” Dissenting Op. at 1. To reach this conclusion, the dissent
relies on United States v. Chisum, 502 F.3d 1237, 1242 (10th Cir. 2007),
Wacker, 72
F.3d at 1477, and United States v. Pelliere,
57 F.3d 936, 940 (10th Cir. 1995).
Dissenting Op. at 2–3. But none of these cases involve a plain-error challenge to the
specificity of the district court’s findings. Those cases are important for the first two
prongs of the plain-error analysis, but provide no help on the third.
14
district court’s finding was clear error, instead affirming on a ground that the district
court had not reached—that “the criminal activity here was ‘otherwise extensive.’” 10
Id. (citation omitted).
In Yurek, our court did something similar in analyzing whether the district
court applied the wrong test under U.S.S.G. § 3B1.2. 11 925 F.3d at 445–46. In that
case, a husband and wife were prosecuted for tax evasion and bankruptcy fraud.
Id. at
444. The district court ruled that the wife was ineligible for a mitigating-role
adjustment under § 3B1.2 because her participation had been “central and necessary
for both . . . crimes to take place.”
Id. (omission in original) (citation and internal
quotation marks omitted). Though the government conceded on appeal that the
district court’s test was erroneous, our court did not automatically remand for
10
See also United States v. Reyes-Rodriguez, 725 F. App’x 303, 304 (5th Cir.
2018) (per curiam) (unpublished) (no plain error in applying § 3B.1.1 adjustment
based on defendant’s role in his drug-trafficking offense because, even if that was
error, the adjustment was warranted based on his role in a money-laundering
offense); United States v. Saavedra-Moreno, 544 F. App’x 251, 251 (5th Cir. 2013)
(per curiam) (unpublished) (no plain error in applying § 3B1.1 based on a
defendant’s directing a confidential source because the evidence showed the
defendant directed a coconspirator other than the confidential source); United States
v. Vargas-Soto, 700 F.3d 180, 183–84 (5th Cir. 2012) (no plain error in applying a
§ 2L1.2 enhancement based on one of defendant’s convictions because, even if that
was error, another conviction that the district court did not rely on supported the
same enhancement).
11
To support its view that the district court here also applied a wrong test, the
dissent contends that the district court failed “to analyze Gehrmann’s relative
culpability for the tax fraud scheme as compared to other members of the scheme.”
Dissenting Op. at 4. As throughout the dissent, this ignores Dr. Gehrmann’s (and Dr.
Carlson’s) role compared to Dr. Davis’s. Id. at 14–15.
15
resentencing. Id. at 445–46. Instead, we examined whether the district court would
have awarded a mitigating-role adjustment if correctly applying § 3B1.2.
Id. at 446–
47. Only after seeing that the district court had acknowledged that the wife bore less
culpability than the husband did we remand. 12
Id. at 447. The lesson is clear: It is not
enough to show a mistake by the district court; a defendant must show a reasonable
probability of success on remand. 13
a. Dr. Gehrmann as an organizer
Though the district court imposed two levels under § 3B1.1(c), and twice
recited that any of the four listed statuses (leader, organizer, manager, or supervisor)
activate that subsection, the dissent accuses us of inventing an issue by considering
under the plain-error standard whether Dr. Gehrmann acted as an organizer.
Dissenting Op. at 10. This suffers a big problem. Dr. Gehrmann himself has briefed
his position about why he should not qualify as an organizer, and the government has
12
See also United States v. Davis, 339 F.3d 1223, 1227 (10th Cir. 2003)
(noting that we may “affirm the rulings of the lower court on any ground that finds
support in the record” (citations and internal quotation marks omitted)); United States
v. Taylor,
97 F.3d 1360, 1364 (10th Cir. 1996) (noting that, despite the district
court’s failure to make specific findings on an issue, “we may address it because ‘we
are free to affirm a district court decision on any grounds for which there is a record
sufficient to permit conclusions of law, even grounds not relied upon by the district
court’” (quoting Griess v. Colorado,
841 F.2d 1042, 1047 (10th Cir. 1988))).
13
The dissent contends that our approach is distinguishable from Yurek’s,
because there we relied on the district court’s “explicit finding” to conclude that the
wife satisfied prong three. Dissenting Op. at 9. But the dissent ignores that in Yurek,
this “explicit finding” contradicted the sentencing decision the district court had
made. 925 F.3d at 447. The dissent points to no district-court findings showing that it
would not have applied § 3B1.1 if evaluating Dr. Gehrmann as an organizer, and we
see none.
16
responded with reasons why he should. Appellant’s Opening Br. at 8–9, 11–12, 14–
15; Br. for Appellee at 10, 23–26. And Dr. Gehrmann has not complained that the
district court failed to find that he qualifies as an organizer. Cf. United States v.
Wilfong, 475 F.3d 1214, 1219 (10th Cir. 2007) (“Although the district court did not
specifically find that Wilfong organized or led his co-conspirators,” the findings
showed “at a minimum, Wilfong was properly subjected to an adjustment under
§ 3B1.1(a) for his role as an organizer in the conspiracy.”).
Dr. Gehrmann misperceives what it takes to show he was an organizer of the
criminal activity. He argues that to be an organizer “requires control and a hierarchy
among the participants in the conspiracy toward the commission of the offense.”
Appellant’s Opening Br. at 11. But no such control is necessary to qualify as an
organizer. See United States v. Valdez-Arieta, 127 F.3d 1267, 1271 (10th Cir. 1997);
see also
Marquez, 833 F.3d at 1222–23 (“To qualify as an organizer . . . no control is
necessary.” (omission in original) (quoting United States v. Wardell,
591 F.3d 1279,
1304 (10th Cir. 2009)) (internal quotation marks omitted)).
The district court’s findings as supplemented by undisputed facts show that
Dr. Gehrmann acted as an organizer—and that he has not shown a reasonable
probability that he would be resentenced without the two levels for his aggravating
role as an organizer. Specifically, as noted, the district court found that “this thing
was cooked up between Carlson, Gehrmann, Davis later joined in[.]” Appellant’s
App. vol. III at 628:24–629:1. In this kernel lies the reason Dr. Gehrmann qualifies as
an organizer under § 3B1.1—he organized the criminal activity with Dr. Carlson, and
17
those two recruited Dr. Davis into the criminal activity. Further, he and Dr. Carlson
“coordinat[ed] and overs[aw] the implementation of the conspiracy[.]” Wardell, 591
F.3d at 1304 (quoting
Valdez-Arieta, 127 F.3d at 1272) (internal quotation marks
omitted); see also United States v. Levine,
983 F.2d 165, 168 (10th Cir. 1992) (“To
find that a defendant was an organizer or leader under § 3B1.1, we consider
defendant’s recruitment of accomplices, control over accomplices, organizing the
enterprise and exercising decision-making authority.” (citations omitted)).
No one challenges these underlying facts, and the background section of this
opinion pulls from the record to establish each conclusively. Yet the dissent accuses
us of stepping outside our appellate role and finding facts. 14 But this ignores the
court’s role when reviewing under the plain-error standard. Our plain-error cases
involving § 3B1.1 demonstrate this.
For instance, in Uscanga-Mora, a drug defendant appealed his sentence,
arguing that the district court had not adequately explained its reasons for applying a
two-level adjustment under § 3B1.1(c). 562 F.3d at 1292–93. The district court had
simply concluded that “sufficient evidence” supported the defendant’s status as
“either an organizer, leader, manager or supervisor in this activity.”
Id. at 1292.
14
As we consider the organizer issue, it is worth remembering that for small
conspiracies like this one, the divisions between leader, organizer, manager, and
supervisor are not so ironclad: “In relatively small criminal enterprises that are not
otherwise to be considered as extensive in scope or in planning or preparation, the
distinction between organization and leadership, and that of management or
supervision, is of less significance than in larger enterprises that tend to have clearly
delineated divisions of responsibility.” U.S.S.G. § 3B1.1 cmt. background.
18
Because the defendant had raised no concern with the procedural adequacy of the
explanation in the district court, we reviewed for plain error. Id. at 1293. We ruled
that the defendant could not show “a reasonable probability that, but for the error
claimed, the result of the proceeding would have been different.”
Id. at 1295 (quoting
Cook, 550 F.3d at 1298) (internal quotation marks omitted). We concluded that
“[w]hatever the perceived inadequacy of the district court’s recitation of its reasons,
the district court’s sentencing decision was amply supported by evidence the
government proffered at sentencing-evidence that was neither contested nor
countered by the defense.”
Id. Because the defendant “received a sentence merited by
the evidence,” and because we could not say that but for the claimed error the
sentence would be different, we affirmed.
Id. (citations omitted); see also
Marquez,
833 F.3d at 1220–23 (reviewing a procedural adequacy-of-findings appeal on plain
error for a § 3B1.1(c) adjustment, in which the district court applied the adjustment
on “significant evidence,” and affirming after reviewing the record evidence and
concluding it supported the adjustment). 15
The dissent also protests that we have failed to consider Dr. Gehrmann’s
responsibility in relation to his coconspirators’. Dissenting Op. at 14–15. The dissent
contends that Dr. Gehrmann is no more responsible than Dr. Carlson. Id. This may
well be so. After all, the district court thought “Dr. Carlson and Dr. Gehrmann were
15
See also Taylor, 97 F.3d at 1363–65 (affirming drug sentence despite district
court’s not finding supporting relevant conduct under § 1B1.3(a)(2) after finding
enough evidence in the record to support such a finding).
19
in this together up to their elbows,” and it was unsure it could “draw a big distinction
between the two.” Appellant’s App. vol. III at 667:6–8. But here is what matters—
both of them are more responsible than another participant, Dr. Davis, whom they
recruited into the tax-fraud conspiracy they created. If the dissent is saying that Dr.
Gehrmann cannot qualify for an aggravating role unless he is the sole person to do
so, its position runs afoul of the Guidelines’ command: “There can, of course, be
more than one person who qualifies as a leader or organizer of a criminal association
or conspiracy.” U.S.S.G. § 3B1.1 cmt. n.4; see also United States v. Snow, 663 F.3d
1156, 1163 (10th Cir. 2011) (upholding § 3B1.1(c) adjustment because defendant’s
conduct met criteria to deem him an organizer and noting that, “[e]ven if his son met
many of these criteria as well, as previously noted more than one person may qualify
as an organizer of a criminal conspiracy”).
Finally, the dissent contends that defendants qualifying as supervisors or
managers “tend to profit more from [the criminal activity] and present a greater
danger to the public and/or are more likely to recidivate.” Dissenting Op. at 17
(quoting U.S.S.G. § 3B1.1 cmt. background) (internal quotation marks omitted). But
this is just one factor among many, and the aggravating-role status matters less here
where the criminal enterprise is small. U.S.S.G. § 3B1.1 cmt. background. Second,
the dissent emphasizes the district court’s application of the 18 U.S.C. § 3553(a)
factors—Dr. Gehrmann’s community support and lack of criminal history. Dissenting
Op. at 17. But these considerations are no more relevant to this appeal than is the
district court’s being most troubled by Dr. Gehrmann’s “never accept[ing]
20
responsibility in a meaningful way for what happened.” Appellant’s App. vol. III at
674:17–18. All those factors together led the court to vary downward, but they do not
bear on the aggravating-role determination.
II. The District Court Had Sufficient Evidence to Support Enhancing Dr.
Gehrmann’s Sentence Under § 3B1.1(c).
Dr. Gehrmann asserts that there is insufficient evidence to sustain his
§ 3B1.1(c) adjustment. Because Dr. Gehrmann preserved this objection by objecting
to “either subsection,” id. at 621:10–11, we review the district court’s decision to
apply the adjustment for clear error and will affirm if its “account of the evidence is
plausible in light of the record viewed in its entirety,” even if we “would have
weighed the evidence differently[,]”
Uscanga-Mora, 562 F.3d at 1296 (quoting
United States v. Spears,
197 F.3d 465, 469 (10th Cir. 1999)) (internal quotation
marks omitted). As spelled out in this opinion, we conclude that the district court had
sufficient information to apply the adjustment based on Dr. Gehrmann’s qualifying as
an organizer. Thus, this challenge also fails.
CONCLUSION
Accordingly, we affirm Dr. Gehrmann’s sentence.
21
19-1145, United States v. Gehrmann
LUCERO, J., dissenting:
I agree with the majority that the district court plainly erred by failing to explain
its reasons for imposing an enhancement under U.S.S.G. § 3B1.1(c). I disagree,
however, with the majority’s conclusion that Gehrmann failed to satisfy the third prong
of plain error review. I would instead hold that Gehrmann has established a “reasonable
probability that, but for the error claimed, the result of the proceeding would have been
different.” United States v. Marquez, 833 F.3d 1217, 1221 (10th Cir. 2016) (quotation
omitted).
In concluding otherwise, in what amounts to improper de novo review, the
majority proceeds—on appeal—to raise for the first time in this case the issue of
“organizer” of the tax fraud scheme. And as an initial proposition, it makes its own
findings to declare Gehrmann an organizer under the Sentencing Guidelines. The district
court did not even consider the issue, let alone make any findings to that effect. Under
these circumstances, our precedents require us to remand for the district court to make
specific findings in support of its sentencing calculation.
By making a factual finding for the first time on appeal with respect to an issue the
district court did not even consider, the majority oversteps our role as an appellate court
and encroaches upon the district court’s domain. The majority also fails to properly
conduct the aggravating-role inquiry under § 3B1.1(c). For these reasons, I respectfully
dissent.
I
I agree with the majority that our review in this appeal is for plain error.
Regarding the first two prongs of plain-error analysis, Gehrmann must establish (1) error
that is (2) plain. See United States v. Uscanga-Mora, 562 F.3d 1295 (10th Cir. 2009). In
United States v. Chisum,
502 F.3d 1237 (10th Cir. 2007), we recognized as error the
district court’s failure to “make specific findings and advance a factual basis to support
an enhancement under U.S.S.G. § 3B1.1.”
Id. at 1242. We have also observed that
“even if the record evidence overwhelmingly supports the enhancement, appellate fact-
finding cannot substitute for the district court’s duty to articulate clearly the reasons for
the enhancement.” United States v. Wacker,
72 F.3d 1453, 1477 (10th Cir. 1995); see
also United States v. Pelliere,
57 F.3d 936, 940 (10th Cir. 1995) (observing that absent
factual findings by the district court, the reviewing court is left “to flounder in the zone of
speculation” (quotation omitted)).
In Wacker, the district court “found that Edith Wacker was a manager or
supervisor (but not an organizer or leader) and imposed a three-level enhancement under
U.S.S.G. § 3B1.1(b).” 72 F.3d at 1476 (quotation omitted).1 On appeal, we vacated
1
Section 3B1.1 provides:
(a) If the defendant was an organizer or leader of a criminal activity that
involved five or more participants or was otherwise extensive, increase by 4
levels.
(b) If the defendant was a manager or supervisor (but not an organizer or
leader) and the criminal activity involved five or more participants or was
otherwise extensive, increase by 3 levels.
2
Wacker’s sentence and remanded because the district court failed to make specific
findings in support of the enhancement. 72 F.3d at 1477. We noted that our precedents
“emphasize that an enhancement based on the defendant’s role in the offense will stand
only if the record contains a clear picture of the reasoning employed by the sentencing
court.”
Id. (quotation omitted). The district court, however, “made no findings of Edith
Wacker’s role as a manager or supervisor, nor did it refer to any factors or evidence by
which we could review any such findings had they been made.”
Id.
As did the district court in Wacker, the trial court in this case (1) did not consider
Gehrmann’s role as an organizer in the scheme, (2) failed to make any findings regarding
Gehrmann’s role under § 3B1.1, and (3) did not refer to any factors or evidence by which
we could review any such findings had they been made. Instead, the district court made a
conclusory statement that Gehrmann “was at a minimum a manager or supervisor in th[e]
criminal activity.” The majority agrees, explaining that this failure to provide a sufficient
factual basis for applying the § 3B1.1(c) enhancement satisfies the first two prongs of
plain error review. (Maj. Op. 13-14.)
The third and fourth prongs are also satisfied. With respect to the third prong,
Gehrmann must show prejudice—that is, “a reasonable probability sufficient to
undermine confidence in the outcome at h[is] sentencing.” United States v. Yurek, 925
(c) If the defendant was an organizer, leader, manager, or supervisor in
any criminal activity other than described in (a) or (b), increase by 2 levels.
Id.
3
F.3d 423, 446 (10th Cir. 2019). “[T]he district court’s application of the wrong test”
satisfies this standard if it leads the court to calculate the defendant’s sentence from the
wrong starting point.
Id. at 446-47; see also United States v. Sabillon-Umana,
772 F.3d
1328, 1333 (10th Cir. 2014) (“When the court’s starting point is skewed a reasonable
probability exists that its final sentence is skewed too.” (quotation omitted)).
In this case, the district court failed to conduct the proper inquiry in determining
whether Gehrmann was a manager or supervisor under § 3B1.1(c). This error, in turn,
skewed the calculation of Gehrmann’s sentence. The court was required to analyze
Gehrmann’s relative culpability for the tax fraud scheme as compared to other members
of the scheme. As provided in the section’s commentary, the “primary” purpose of a
§ 3B1.1 enhancement is to reflect the greater responsibility of a defendant relative to
other participants in the scheme:
This section provides a range of adjustments to increase the offense level
based upon the size of a criminal organization (i.e., the number of
participants in the offense) and the degree to which the defendant was
responsible for committing the offense. This adjustment is included primarily
because of concerns about relative responsibility. However, it is also likely
that persons who exercise a supervisory or managerial role in the commission
of the offense tend to profit more from it and present a greater danger to the
public and/or are more likely to recidivate. The Commission’s intent is that
this adjustment should increase with both the size of the organization and the
degree of the defendant’s responsibility.
§ 3B1.1 cmt. background (emphasis added); see also United States v. Miller, 868 F.3d
1182, 1188 (10th Cir. 2017) (“[U]nless the commentary violates the Constitution or a
federal statute, or is inconsistent with, or a plainly erroneous reading of, that guideline,
we treat it as binding and authoritative.” (quotation omitted)). But instead of analyzing
4
Gehrmann’s specific role in the tax fraud scheme and his relative culpability as compared
to his co-conspirators, the record reflects that the district court appears to have focused
solely on the number of individuals involved in the scheme to determine which of
§ 3B1.1’s three tiers applied. It thus failed to conduct the relevant inquiry with respect to
whether Gehrmann was a manager or supervisor—or, for that matter, an organizer.2 This
error led the district court to increase Gehrmann’s base offense level, resulting in a higher
guidelines range. The district court failed to make specific, comparative findings that
Gehrmann was a manager or supervisor of the criminal scheme, and there is no indication
in the record that it would have found Gehrmann was a manager or supervisor under
§ 3B1.1 had it applied the correct test. Thus, applying Yurek and Sabillon-Umana, the
third prong of plain error review is satisfied.3
As for the fourth prong, Gehrmann must show that the district court’s error
“seriously affects the fairness, integrity, or public reputation of judicial proceedings.”
United States v. Bustamante-Conchas, 850 F.3d 1130, 1137 (10th Cir. 2017) (en banc).
We have held that “[w]hen an error affects the calculation of a defendant’s guideline
range, the fourth prong is ordinarily satisfied when the first three prongs are satisfied.”
2
I agree with the majority that it was proper for the district court to determine the
number of participants in the scheme. (See Maj. Op. 9 n.5.) But the court’s task did not
end there; it was also required to assess Gehrmann’s specific role in the scheme,
irrespective of the number of participants in it. The majority does not appear to disagree.
3
The majority contends that Chisum, Wacker, and Pelliere “are important for the
first two prongs of the plain-error analysis, but provide no help on the third.” (Maj. Op.
14 n.9.) As is evident here, I rely on those three cases for the first two prongs of plain-
error review. My analysis for the third prong relies on Yurek and Sabillon-Umana.
5
Yurek, 925 F.3d at 447. This is because a reasonable citizen would “bear a rightly
diminished view of the judicial process and its integrity if courts refused to correct
obvious errors of their own devise that threaten to require individuals to linger longer in
federal prison than the law demands . . . .”
Id. (quotation omitted). As explained, the
district court’s plainly erroneous application of the § 3B1.1(c) enhancement led it to
increase Gehrmann’s base offense level. Because the court’s error thus affected its
sentencing calculation, the fourth prong of plain error review is satisfied.
Id.
All four prongs having been met, I would vacate Gehrmann’s sentence and
remand this case for resentencing. The majority disagrees. Instead of addressing the
district court’s findings with respect to the conclusion that Gehrmann was a manager or
supervisor, the majority concludes that Gehrmann did not satisfy the third prong of plain
error review because the record independently demonstrates that he was an “organizer”
under § 3B1.1(c). (Maj. Op. 17.) As expanded above, the district court did not analyze
the organizer issue and did not make findings on point.
The word “organizer” appears sparsely in the record. It came up in the district
court’s brief description of the enhancement sought by the Probation Office, as well as in
the court’s acknowledgement that the Probation Office did not believe Gehrmann was an
organizer. It also arose in the context of the court’s conclusion that § 3B1.1(c) applies
based on the number of participants in the scheme and in the court’s conclusory statement
that Gehrmann “was at a minimum a manager or supervisor in th[e] criminal activity.”
Elsewhere, the word appears in the government’s statement at the sentencing hearing that
Gehrmann was undoubtedly “an organizer, leader, manager, and supervisor”—but even
6
there, counsel focused her argument on the number of participants in the criminal scheme
and Gehrmann’s role in his chiropractic practice, not his precise role in the criminal
scheme. Finally, the Presentence Investigation Report (“PSR”) uses the word in a
sentence stating that Gehrmann was not an organizer.
It is thus clear from the record that the district court did not consider whether
Gehrmann was an organizer under § 3B1.1(c). The majority asserts that the district court
considered whether Gehrmann was an organizer because it “more than once stated that an
organizer qualifies under § 3B1.1(c).” (Maj. Op. 9 n.6.) But the district court’s general
recognition that “organizer qualifies under § 3B1.1(c)” says nothing about whether
Gehrmann, specifically, was an organizer. None of the district court’s brief and fleeting
mentions of the word “organizer” involved an inquiry about Gehrmann’s role in the tax
fraud scheme. Rather, they merely concerned which of § 3B1.1’s three tiers were on the
table due to the number of participants in the scheme. Accordingly, by concluding that
Gehrmann was an organizer, the majority raises a question not considered by the district
court and proceeds to make factual findings inconsistent with the only quasi-evidentiary
references to the contrary in the record. Our precedents do not condone such an
approach.
In Marquez, the district court plainly erred by failing to explain its reasoning for
applying an enhancement under § 3B1.1. 833 F.3d at 1221. It offered only the
conclusory statement that the defendant was a leader or organizer.
Id. We upheld this
plainly erroneous determination by consulting the record to determine whether the
evidence supported the trial court’s conclusion that the defendant “was an organizer or
7
leader.” Id. at 1222. We ultimately determined that “[a]lthough the district court did not
make factual findings at the sentencing hearing, it did appropriately focus on the facts
pertaining to” whether the defendant was a leader or organizer.
Id. at 1222. This led to
the conclusion that the defendant did not satisfy the third prong of plain error.
Id.
In Uscanga-Mora, the error was also in the trial court’s failure to explain its
reasoning. The district court in that case offered only the conclusory statement that “the
defendant was either an organizer, leader, manager or
supervisor.” 562 F.3d at 1292.
Again, we affirmed by consulting uncontested facts “that Mr. Uscanga-Mora led,
managed, or supervised at least his cousin, Mr. Uscanga-Cano, in criminal activity.”
Id.
at 1296 (quotation omitted). We did not affirm the district court on a basis it failed to
consider.
By contrast, the district court in this case did not find that Gehrmann was an
organizer—it “found” only that he was a manager or supervisor. Unlike in Marquez and
Uscanga-Mora, there is no indication that the district court even considered whether
Gehrmann was an organizer. By finding that he was an organizer for the first time on
appeal, the majority oversteps our role as an appellate court. See Wacker, 72 F.3d at
1477 (“[I]t is not this court’s role to make the factual findings necessary to support a
sentencing calculation; that is the role of the district court.” (quoting United States v.
Roberts,
14 F.3d 502, 523 (10th Cir. 1993)).
8
The majority asserts that its approach is similar to the approach followed in Yurek.
(See Maj. Op. 15.)4 Not so. As the majority observes, Yurek involved a husband and
wife prosecuted for tax evasion and bankruptcy fraud. 925 F.3d at 444. The district
court explicitly found that Mrs. Yurek was not eligible for a mitigating-role adjustment
under § 3B1.2.
Id. But it did not assess her culpability relative to her husband, as
required under § 3B1.2. The court did, however, grant Mrs. Yurek a “downward
variance based in part on its view that Mrs. Yurek bore less culpability than her
husband.”
Id. at 447. Relying solely on this explicit finding, the panel reasoned that had
the court applied the correct test, it would have granted her a mitigating-role adjustment
under § 3B1.2.
Id. By contrast, the district court in this case made no express finding
that we could use to conclude that it would have found Gehrmann was an organizer had it
applied the correct test.5
Moreover, the majority’s reliance on Yurek to find for the first time that
Gehrmann was an organizer is inconsistent with plain error review. As we explained in
4
The majority relies primarily on an out-of-circuit opinion, United States v.
Belfrey, 928 F.3d 746 (8th Cir. 2019), and on several unpublished Fifth Circuit cases.
(See Maj. Op. 14-15 & n.10.) For the reasons set forth in this dissent, to the extent these
out- of-circuit cases permit appellate courts to make findings of fact related to an issue
not considered by the trial court, they are not persuasive.
5
The majority appears to admit as much. It agrees that the district court failed to
“make specific findings and ‘advanc[e] a factual basis’ to support” Gehrmann’s
§ 3B1.1(c) enhancement. United States v. Ivy, 83 F.3d 1266, 1292 (10th Cir. 1996)
(alteration in original) (quoting
Wacker, 72 F.3d at 1477). (Maj. Op. 13.) Notably, the
majority fails to identify in the record specific facts showing that Gehrmann was a
manager or supervisor.
9
Uscanga-Mora, “[a] district court alerted to the potential inadequacies of its statement of
reasons at sentencing is often in a position to remedy them easily and quickly.” Id. at
1294. My respected colleagues in the majority miss the point: there never was an
opportunity for Gehrmann to object to a conclusory statement that he was an “organizer”
because the trial court never made such a statement. There was never an opportunity for
Gehrmann to object to a finding that he was an organizer because the district court never
made such a finding.6 The only evidentiary basis that the record contains on that point is
the statement of the Probation Office expressly to the contrary. Respectfully, the
“organizer” issue is an invention by the majority.7 This is why I refer to the majority’s
review as improper de novo review.
The majority protests that it is not making factual findings. It asserts that “[t]he
district court’s findings as supplemented by undisputed facts show that Dr. Gehrmann
6
The majority makes much of the fact that Gehrmann did not object to the district
court’s conclusory assertion that he was a manager or supervisor. (Maj. Op. 9 n.6.) This
is irrelevant to whether Gehrmann was an “organizer” or to the district court’s failure to
make such a finding. Perplexingly, the majority also faults Gehrmann for “not
complain[ing] that the district court failed to find that he qualifies as an organizer.” (Maj.
Op. 17.) But Gehrmann had nothing to object to—he had no duty or reason to complain
about the absence of an unfavorable finding. Instead of explaining this puzzling
assertion, the majority cites an inapposite case involving an express finding that the
defendant was an organizer and an explicit objection to that finding. See United States v.
Wilfong, 475 F.3d 1214, 1219 (10th Cir. 2007).
7
The majority observes that the parties briefed the organizer issue on appeal. (See
Maj. Op. 16-17.) That is immaterial. “It is clear in this circuit that absent extraordinary
circumstances, we will not consider arguments raised for the first time on appeal. This is
true whether an appellant is attempting to raise a bald-faced new issue or a new theory on
appeal that falls under the same general category as an argument presented at trial.”
McDonald v. Kinder-Morgan, Inc., 287 F.3d 992, 999 (10th Cir. 2002) (quotations
omitted). Whether Gehrmann is an organizer falls into the latter category.
10
acted as an organizer.” (Maj. Op. 17.) This is a finding. The fact that it is purportedly
based on two things—the “district court’s findings” and “undisputed facts”—does not
mean it is not a de novo factual determination. The majority acknowledges that the
district court made a finding of fact when it determined that Gehrmann was a manager or
supervisor. (See Maj. Op. 13 (“We agree that the district court’s findings do not meet our
requirement that it must make specific findings and advance a factual basis to support an
enhancement under U.S.S.G. § 3B1.1.” (quotation and alteration omitted) (emphasis
added)).) The majority does the same when it finds that Gehrmann is an organizer.
In sum, because the district court applied the wrong test in determining whether
Gehrmann was eligible for the § 3B1.1(c) enhancement, and because this plain error
affected the court’s calculation of his sentence, I would conclude that all elements of our
plain error review have been satisfied. Accordingly, I would vacate the sentence and
remand for resentencing. The majority’s affirmation of the erroneous decision of the
district court oversteps our role as a court of appeals and is not condoned by our
precedents.
II
I would not reach the merits of the “organizer” issue, and I respectfully fault my
colleagues for doing so. But even if this were a case where we could affirm the district
court on alternative grounds, the majority’s attempt to do so is flawed.
Purporting to rely on “[t]he district court’s findings as supplemented by
undisputed facts,” the majority finds that Gehrmann was an organizer of the tax fraud
scheme he conducted with his fellow chiropractors, Carlson and Davis. (Maj. Op. 17.)
11
This finding lacks support. With respect to the district court’s findings, the majority
identifies one: the district court’s statement that “this thing was cooked up between
Carlson, Gehrmann, Davis later joined in[.]” (Maj. Op. 17.) This is not a finding; it is a
conclusory assertion. Cf. Wacker, 72 F.3d at 1477 (“Our cases require the district court
to make findings, not conclusions.”). The majority recognizes as much by concluding
that the district court failed to “advance a factual basis to support an enhancement under
U.S.S.G. § 3B1.1.” (See Maj. Op. 13 (citing
Wacker, 72 F.3d at 1477).) Thus, the
majority appears to contradict itself when it asserts the district court’s statement
“describes the very sort of activity qualifying one as an organizer.” (Maj. Op. 9 n.6.)
The district court’s statement failed to advance a sufficient factual basis for finding
Gehrmann to be a manager or supervisor, and it similarly does not advance a sufficient
factual basis for the majority’s finding that Gehrmann is an organizer.
With respect to the “undisputed facts” supplementing the district court’s
conclusory assertion, the majority completely ignores the only direct reference in the
record to whether Gehrmann was an organizer: the PSR’s express statement that he was
not an organizer. The majority specifically recognizes that the “PSR[] characteriz[es]
[Gerhmann] as a manager or supervisor of the criminal activity.” (Maj. Op. 6.) But that
is only half of the story. In the very same sentence, the PSR states: “Adjustment for
12
Role in the Offense: The defendant was a manager or supervisor (but not an organizer or
leader).”8
The majority also insinuates it is undisputed that Gehrmann and Carlson recruited
Davis into the tax fraud scheme. Focusing primarily on a business lunch in 2007, the
majority picks several facts from the record concerning what the three chiropractors
discussed over lunch. (See Maj. Op. 3.) Although these findings regarding what was
discussed may be undisputed, this does not mean the majority’s separate finding that
Davis was recruited is undisputed.9 The majority attempts to bridge its recitation of
undisputed facts to its composite finding that Davis was recruited by asking, “How else
did he get there?” (Maj. Op. 10 n.6) But this rhetorical question is not an explanation; it
neither justifies the majority’s finding nor disguises the fact that the majority is indeed
making a finding of fact. The majority incorrectly assumes that because certain
8
The majority admits the PSR is not “authoritative” with respect to any status—
manager, supervisor, leader, or organizer—under § 3B1.1. (Maj. Op. 6 n.3.) I agree.
That point supports my contention that there is nothing in the record suggesting the
district court would have found that Gehrmann was an organizer had it applied the correct
test. And it does not detract from my conclusion that the “undisputed” facts on which the
majority relies to find for the first time that Gehrmann was an organizer are cherry-picked
from the record.
9
For example, the majority notes that Davis testified it was “obvious” to him that
Gehrmann and Carlson were engaged in a tax fraud scheme. But whether this was
obvious to Davis does not bear on whether Gehrmann “recruited” Davis into the scheme.
(See Maj. Op. 3 n.2.) Additionally, the record reflects that Davis repeatedly asserted
before the district court that there was never any agreement formed to participate in a tax
fraud scheme, either express or implied, either at or after the 2007 lunch. The majority
contends that this fact is immaterial to whether Gehrmann was an organizer. (Maj. Op. 3
n.2.) But it is relevant to the majority’s finding that Gehrmann recruited Davis, on which
the majority relies to find that Gehrmann was an organizer. (See Maj. Op. 17-18.)
13
underlying facts are undisputed, its first-time finding that Gehrmann was an “organizer”
is also indisputable.
Moreover, the majority erroneously focuses on Gehrmann and Carlson’s direction
of office staff in the course of conducting the tax fraud scheme. “To qualify for an
adjustment under [§ 3B1.1], the defendant must have been the organizer, leader,
manager, or supervisor of one or more other participants” in the criminal scheme.
§ 3B1.1 cmt. n.2 (emphasis added). The district court found—and the majority does not
disagree—that the only members of the tax fraud scheme were Gehrmann, Carlson, and
Davis; their office staff did not participate. The majority’s focus on Gehrmann and
Carlson’s coordination of office staff is therefore misplaced because it does not concern
the organization, leadership, management, or supervision of other participants in the
scheme.10
10
The majority asserts that Gehrmann and Carlson’s direction of non-participants
is relevant to a § 3B1.1 enhancement, despite note 2’s clear limiting language. In
support, the majority relies on § 3B1.1 cmt. n.4, which lists “the nature of participation in
the commission of the offense” as a factor for determining whether a person is an
organizer. (Maj. Op. 8 n.4.) But the majority’s reading of note 4 is overbroad, and its
reliance on it is misplaced. Note 4 concerns “distinguishing a leadership and
organizational role from one of mere management or supervision.” § 3B1.1 cmt. n.4.
And the majority’s expansive reading of note 4 contradicts note 2’s express instruction
that “[a]n upward departure may be warranted . . . in the case of a defendant who did not
organize, lead, manage, or supervise another participant, but who nevertheless exercised
management responsibility over the property, assets, or activities of a criminal
organization.” § 3B1.1 cmt. n.2 (emphasis added). Thus, a defendant’s managerial
actions that do not involve managing, supervising, leading, or organizing another
criminal participant support a departure from § 3B1.1, not an application of it. See
United States v. Darton, 595 F.3d 1191, 1194 (10th Cir. 2010) (“[A] departure only
exists apart from the applicable guideline range.”).
14
The majority also ignores the purpose and exceeds the scope of § 3B1.1. The
“primary” purpose of a § 3B1.1 enhancement is to reflect the greater responsibility of a
defendant relative to other participants in a criminal scheme. See § 3B1.1 cmt.
background. Yet the majority’s findings regarding Gehrmann’s role in the tax fraud
scheme fail to compare Gehrmann’s degree of responsibility with that of his co-
conspirators. This itself is plain error—one we have not hesitated to reverse. See Yurek,
925 F.3d at 446-47.
Much of the majority’s analysis concerns Gehrmann and Carlson together, without
distinguishing their roles. The majority finds that Gehrmann and Carlson devised and
implemented the tax fraud scheme and jointly recruited Davis into the scheme. (Maj. Op.
17-18.) The majority fails to consider, however, whether Gehrmann was more
responsible than Carlson for conducting the scheme.11 At best, the majority notes that
Gehrmann “took over” accounting functions because he suspected that Carlson was not
evenly disbursing the diverted funds. He also kept a “cookie jar” in his office storing the
diverted funds and a “Secret Records” ledger recording them. Yet the majority does not
compare Gehrmann’s actions with those of Carlson or Davis or analyze the three
chiropractors’ relative degrees of responsibility.12
11
By claiming that I “contend[] that Dr. Gehrmann is no more responsible than Dr.
Carlson,” the majority fundamentally misunderstands my analysis. (Maj. Op. 19.) I
make no such contention. Instead, I fault the majority for failing to conduct a
comparative analysis, irrespective of the outcome of that analysis.
12
Observing that there can be more than one organizer of a criminal association or
conspiracy, see U.S.S.G. § 3B1.1 cmt. n.4, the majority asserts “what matters” in this
15
Finally, I also note that the commentary to § 3B1.1 indicates the aggravating-role
enhancement is premised on the assumption “that persons who exercise a supervisory or
managerial role in the commission of the offense tend to profit more from it and present a
greater danger to the public and/or are more likely to recidivate.” § 3B1.1 cmt.
background. But Gehrmann did not profit more from the tax fraud scheme than Carlson
or Davis—they each received one-third of the diverted funds. Further, the district court
expressly stated that Gehrmann had a complete lack of criminal history, posed no danger
to the community, was not likely to recidivate, and had received “one of the most
substantial outpourings of community support that [the court had] seen.”
In sum, I disagree with the majority’s conclusion that the record supports a finding
that Gehrmann was an organizer. The majority’s misapplication of the § 3B1.1 inquiry
notwithstanding, whether Gehrmann was an organizer is a debatable issue of fact, and
Gehrmann never had the opportunity to object to a finding that he was an organizer
because the district court never made such a finding.
case is that Gehrmann and Carlson were more responsible than Davis for the criminal
scheme because they recruited him into it. (Maj. Op. 20.) As explained above, it is
disputable that Gehrmann recruited Davis into the scheme. Moreover, it does not
logically follow that Davis bears less responsibility for the tax fraud scheme than
Gehrmann or Carlson merely because he entered the scheme later. And finally, the
majority’s observation does not cure its failure to conduct the proper inquiry under
§ 3B1.1(c). The majority discusses at length Gehrmann and Carlson’s involvement in the
scheme, but not Davis’. Its analysis is therefore erroneous because it is one-sided and not
comparative. See Yurek, 925 F.3d at 446-47.
16
III
For the foregoing reasons, I would vacate Gehrmann’s sentence and remand for
the district court to make specific findings in support of its application of the § 3B1.1(c)
enhancement.
17
