Submitted: September 27, 2019
from United States District Court for the Eastern District of
Missouri - St. Louis
KELLY, MELLOY, and STRAS, Circuit Judges.
MELLOY, CIRCUIT JUDGE.
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.
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.
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
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.
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. The PSR listed each of the 155 vehicles
and its corresponding lost tax amount. 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
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.
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.