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United States v. Harmon

United States Court of Appeals, Eighth Circuit

December 10, 2019

United States of America Plaintiff- Appellee
v.
Melvin Harmon Defendant-Appellant

          Submitted: September 27, 2019

          Appeal from United States District Court for the Eastern District of Missouri - St. Louis

          Before KELLY, MELLOY, and STRAS, Circuit Judges.

          MELLOY, CIRCUIT JUDGE.

         A jury convicted Melvin Harmon of fraudulently registering the personal vehicles of St. Louis residents in Illinois to avoid Missouri tax. At sentencing, the district court calculated an actual loss amount of $119, 359.92, ordered Harmon to make restitution in the same amount, and sentenced Harmon to a below-guidelines term of 33 months. Harmon challenges the district court's calculation of the loss amount and the restitution award. He also challenges the district court's application of a two-level enhancement for obstruction of justice. For the reasons discussed below, we affirm in part and reverse in part.

         I. Background

         From 2010 to 2016, Harmon was an employee in the Illinois State Motor Vehicle Registration Office in Granite City, Illinois, where he issued vehicle registrations. Each transaction he completed was tracked by an audit stamp and unique identification number, called a RAC-ID number. Illinois collects tax on vehicles registered within the state only once, at the initial registration. Missouri collects tax on vehicles registered within the state annually.

         In 2015, the Illinois Secretary of State Inspector General flagged fourteen motor vehicle registrations processed by Harmon as having inconsistent residential addresses. That is, a Missouri address was listed on the vehicle title and an Illinois address was listed on the registration application. Several of the Illinois addresses were not residences. The Inspector General referred the case to Investigator Don Thierry and Sergeant Douglas McFarland of the Illinois Secretary of State Police. Thierry and McFarland collected all of Harmon's vehicle registration transactions from a four-to-five-month period-a total of 1, 100 transactions. Of that sample, Thierry and McFarland found 200 transactions bearing similarities to the initially-suspicious fourteen registrations. Similarities included: vehicles were purchased in Missouri but registered in Illinois; sales prices reported in Illinois were lower than the actual purchase price; and Harmon's RAC-ID number or audit stamp was linked to the registration transaction.

         In September 2017, a grand jury issued an eight-count superseding indictment, charging Harmon on six counts: Conspiracy to Commit an Offense Against the United States, in violation of 18 U.S.C. § 371; three counts of Mail Fraud, in violation of 18 U.S.C. § 1341; and two counts of Interstate Transportation of Securities, in violation of 18 U.S.C. § 2314. Three co-defendants were also charged. At trial, Thierry and McFarland testified as to the method of determining the number of fraudulent transactions. Special Agent Buehrle of the Missouri Department of Revenue also testified as to the amount of lost revenue. Harmon testified in his defense. In May 2018, a jury found Harmon guilty on five of the six counts charged.[1]

         The Presentence Investigation Report (PSR) grouped all counts. To determine Harmon's base offense level under U.S.S.G. § 2B1.1, the PSR recommended the district court find an actual loss amount of $119, 359.92. That amount represented one year's worth of sales tax Missouri was unable to collect for 155 fraudulently registered vehicles that were attributable to Harmon.[2] The PSR listed each of the 155 vehicles and its corresponding lost tax amount.[3] The PSR recommended the district court increase the base offense level by eight levels based on the loss amount, two levels for use of sophisticated means, four levels for Harmon's role in the offense, and two levels for obstruction of justice, resulting in a total offense level of 23. Harmon objected.

         At sentencing, Harmon reaffirmed his objections. In support of the eight-level enhancement for loss amount, the government put on testimony by Thierry and Buehrle as to the process of investigating and calculating the amount of lost sales tax for the 155 vehicles. The government argued the calculation was reasonable and "very conservative." The government also argued, and put on supporting testimony, that a two-level enhancement for obstruction of justice was appropriate based on Harmon's alleged perjury at trial and improper interaction with a possible witness.

         The district court adopted the PSR and accepted the government's proposed loss amount. It applied the two-level enhancement for obstruction of justice and the eight-level enhancement for loss amount, finding the Guidelines range for each count was 46 to 57 months. It then varied from that range and imposed a sentence of 33 months. The court ordered Harmon pay restitution for the total loss amount. On appeal, Harmon challenges (1) the loss amount calculation; (2) the restitution order; and (3) the two-level enhancement for obstruction of justice.

         II. Discussion

         A. ...


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