Submitted: October 20, 2017
from United States District Court for the District of
Minnesota - St. Paul
WOLLMAN and SHEPHERD, and GOLDBERG,  Circuit Judges.
WOLLMAN, CIRCUIT JUDGE.
Arlin Hammerschmidt (Mark) pleaded guilty to two counts of
conspiracy to defraud the United States in violation of 18
U.S.C. § 286 and was sentenced to 135 months'
imprisonment. Ornella Angelina Hammerschmidt (Ornella)
pleaded guilty to one count of making false claims for
refunds in violation of 18 U.S.C. § 287 and was
sentenced to 48 months' imprisonment. The Hammerschmidts
appeal from their sentences. Mark argues that the district
court erred in calculating his offense level and his criminal
history points. Ornella argues that the district court erred
in calculating her offense level and in imposing a sentence
above the range set forth in the United States Sentencing
Guidelines Manual (Guidelines or U.S.S.G.). Because the
district court did not make the findings required to increase
Mark's offense level for being a manager or supervisor
and because it should not have assessed criminal history
points for a 2008 purged disposition of civil contempt, we
vacate Mark's sentence and remand for resentencing. We
affirm Ornella's sentence.
case involves two schemes to obtain fraudulent tax refunds
from the United States Department of the Treasury through the
Internal Revenue Service (IRS). The first scheme involved the
Hammerschmidts' providing accounting and tax preparation
services through their businesses, American Group and Liberty
Tax. They also offered immigration services, with Ornella
Hammerschmidt falsely claiming that she was an attorney.
January 2011 through February 2013, the Hammerschmidts
completed income tax returns for taxpayers in Florida and
Minnesota, many of whom were immigrants who did not speak
English. The Hammerschmidts reported false information on the
returns to qualify the taxpayers for additional refunds. The
false information included incorrect filing statuses, false
household-help income, fictitious businesses and business
losses, and fraudulent tax credits. The taxpayers were not
aware that the Hammerschmidts were making false statements on
their returns. Ornella sometimes signed the returns on behalf
of the taxpayers, and American Group did not always provide
clients with copies of their returns. The Hammerschmidts did
not identify themselves on the returns as paid tax preparers.
the refunds were deposited directly into a bank account
managed by the Hammerschmidts, who thereafter deducted fees
and remitted partial refunds to the taxpayers. All told, the
first scheme involved twenty-two federal tax returns that
claimed more than $95, 000 in fraudulent refunds, on which
the IRS paid out more than $45, 000. The first scheme also
involved Minnesota tax returns that claimed $110, 000 in
fraudulent refunds, on which the Minnesota Department of
Revenue suffered no identifiable actual loss.
second scheme, Mark conspired with others to file false
federal income tax returns on behalf of Guatemalan citizens
(the Guatemalan conspiracy). From 2010 until February 2012,
co-conspirators provided Mark with identifying information of
Guatemalan citizens, which he used to obtain individual
taxpayer identification numbers. Mark then filed fraudulent
federal income tax returns for multiple tax years in the
names of the Guatemalan citizens, none of whom resided or
worked in the United States. The refunds were sent to
addresses or deposited in bank accounts associated with Mark.
Mark filed more than five hundred of these fraudulent federal
tax returns, claiming approximately $1.8 million in
fraudulent refunds, on which the IRS paid out $1, 787, 621.
federal grand jury returned a thirty-seven count indictment.
Counts 1 through 23 charged Mark and Ornella with offenses
related to the first scheme. Counts 24 through 37 charged
only Mark and related to the second scheme.
pleaded guilty to the two counts of conspiracy to defraud the
United States (counts 1 and 24), and Ornella pleaded guilty
to one count of making a false claim for refunds (count 18).
While released on bond pending sentencing, the Hammerschmidts
violated a condition of their release by participating in the
preparation of tax returns. Ornella helped another tax
preparer complete a fraudulent tax return for an undercover
agent, who posed as a tax client. The district court placed
Mark on location monitoring with home confinement and revoked
Ornella's release, concluding that Ornella's
"egregious violation of her conditions of release and
her involvement in advising the undercover agent to file a
fraudulent tax return support a determination that her
release must be revoked." D. Ct. Order of Apr. 19, 2016.
district court determined that Mark's total offense level
was 31, that his criminal history category was III, and that
his advisory sentencing range was 135 to 168 months'
imprisonment. To impose a sentence of 135 months'
imprisonment, the district court sentenced Mark to the
statutory maximum term of imprisonment of 120 months on each
count, see 18 U.S.C. § 286, with 105 months on
count 24 to be served concurrently with count 1 and the
remaining 15 months to be served consecutively.
district court determined that Ornella's total offense
level was 16, that her criminal history category was II, and
that her advisory sentencing range was 24 to 30 months'
imprisonment. The district court varied upward ...