United States v. Linney ( 2006 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-4636
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
BERNARD H. LINNEY,
Defendant - Appellant.
Appeal from the United States District Court for the Southern
District of West Virginia, at Parkersburg. Robert C. Chambers,
District Judge. (CR-04-220)
Argued: March 17, 2006 Decided: March 28, 2006
Before WILKINSON, MICHAEL, and MOTZ, Circuit Judges.
Affirmed by unpublished per curiam opinion.
ARGUED: Leah Perry Macia, BAILEY & GLASSER, L.L.P., Charleston,
West Virginia, for Appellant. Robert Booth Goodwin, II, Assistant
United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY,
Charleston, West Virginia, for Appellee. ON BRIEF: Benjamin L.
Bailey, BAILEY & GLASSER, L.L.P., Charleston, West Virginia, for
Appellant. Charles T. Miller, Acting United States Attorney,
Charleston, West Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Bernard H. Linney pleaded guilty to one count of failure to
account for and pay over federal income tax in violation of 26
U.S.C. § 7202 (2000). Linney appeals his sentence, arguing that
the district court improperly imposed a four level enhancement
based on his leadership role in the offense. We affirm.
Linney served as president and CEO of Progressive Financial
Group (PFG), a holding and management company that ultimately
controlled seven small businesses. In July, 1997, Linney began
instructing employees at PFG’s small businesses not to pay taxes.
In 1998, Linney set up a check-kiting scheme that operated among
PFG’s various businesses and accumulated millions of dollars in
debt from bad checks. Linney continued instructing employees not
to pay taxes owed, telling them that he was negotiating with the
IRS and that he had secured a loan to pay off the taxes. Five of
the businesses operating under PFG’s umbrella ultimately owed over
$500,000 in unpaid taxes.
At sentencing, the district court found that Linney qualified
for a four level enhancement because of his leadership role in a
criminal scheme that was “otherwise extensive.” See United States
Sentencing Commission Guidelines Manual § 3B1.1(a). Linney’s
advisory guidelines range was 27-33 months; the court found that “a
sentence at the top of the guideline range is appropriate” and
sentenced Linney to 33 months.
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Linney asserts that it was improper for the district court to
consider the check kiting scheme when determining whether the
scheme at issue was extensive for purposes of the guidelines. We
review a district court’s legal interpretations of the sentencing
guidelines de novo and a district court’s factual findings for
clear error. See United States v. Green, 436 F.3d 449, 456 (4th
Cir. 2006). Section 3B1.1 of the Guidelines Manual indicates that
a four level enhancement is appropriate “[i]f the defendant was an
organizer or leader of a criminal activity that involved five or
more participants or was otherwise extensive.” The introductory
commentary to this section of the manual directs the district court
to consider all relevant conduct as defined by § 1B1.3. See also
United States v. Fells, 920 F.2d 1179, 1183-84 (4th Cir. 1990)
(holding that a district court should consider all relevant
conduct). In addition, § 3B1.1 instructs the sentencing court to
consider “all persons involved during the course of the entire
offense,” regardless of whether those persons are knowing
participants in the scheme. See United States Sentencing
Commission Guidelines Manual [hereinafter USSG] § 3B1.1 n.3.
Linney argues that the check kiting scheme was not relevant
conduct under § 1B1.3 because the check kite did not facilitate the
tax evasion. However, even assuming that the check kite was not
relevant conduct under § 1B1.3, there is sufficient evidence in the
record to support a finding that the tax evasion scheme alone was
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“otherwise extensive.” Linney instructed at least four employees
to refrain from paying taxes owed. The district court specifically
noted “the number of people involved” and that although “perhaps
not all of them were criminally responsible . . . Application Note
Number 3 [to USSG § 3B1.1] indicates that a factor in considering
whether [a criminal activity is] otherwise extensive is the extent
to which other people are used even if they’re not criminally
responsible for the conduct.” In addition, Linney does not dispute
the fact that five distinct corporate entities -- all operating
under the umbrella of PFG -- participated in the tax evasion
scheme.
These facts are sufficient to support a finding that the tax
evasion scheme alone was extensive; thus, the district court did
not err in imposing a four level enhancement for Linney’s
leadership role in an extensive criminal scheme. Given the
extensive nature of the tax evasion scheme, we need not decide
whether the check kiting scheme was relevant conduct according to
§ 1B1.3.
For the foregoing reasons, the judgment of the district court
is
AFFIRMED.
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