United States v. Verita Hines-Flagg , 789 F.3d 751 ( 2015 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 14-2975
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
VERITA D. HINES-FLAGG,
Defendant-Appellant.
___________________
Appeal from the United States District Court for the
Eastern District of Wisconsin.
No. 13-CR-00248 — Lynn Adelman, Judge.
____________________
ARGUED JANUARY 6, 2015 — DECIDED JUNE 16, 2015
____________________
Before FLAUM, WILLIAMS, and TINDER, Circuit Judges.
WILLIAMS, Circuit Judge. Verita Hines-Flagg and her
nephew operated a fraud scheme based in Detroit. They
stole identities and created fake identifications. Then they
traveled to other states to open credit card accounts, bought
merchandise, and returned to Detroit to sell the goods. After
being caught, Hines-Flagg pled guilty to one count of con-
spiracy to commit mail and wire fraud and one count of ag-
2 No. 14-2975
gravated identity theft. At the sentencing hearing, the dis-
trict court sentenced Hines-Flagg to three years for the con-
spiracy to commit mail and wire fraud and to a mandatory
consecutive two-year sentence for aggravated identity theft,
resulting in an aggregate five-year prison sentence. In calcu-
lating the Guidelines offense level, the court applied a two-
level increase to the count for conspiracy to commit mail and
wire fraud for relocating the fraud scheme to evade law en-
forcement under U.S.S.G. § 2B1.1(b)(10)(A). Hines-Flagg is
challenging the application of this two-level increase. She
argues that she neither relocated the fraud scheme to anoth-
er jurisdiction nor did so with the intent to evade law en-
forcement. We find that the fraud scheme was not relocated
for the purposes of U.S.S.G. § 2B1.1(b)(10)(A) and that the
district court’s application of the resulting two-level increase
to the count for conspiracy to commit wire and mail fraud
was a procedural error. Therefore, we vacate Hines-Flagg’s
sentence and remand for resentencing.
I. BACKGROUND
In early October 2012, Verita Hines-Flagg, a lifetime resi-
dent of the Detroit area, and her nephew Benjamin Hines
drove from Detroit to Milwaukee with the aim of opening
fraudulent lines of credit at various retail stores in the Mil-
waukee area. The pair was going to use fake identification
documents they had made back at Hines-Flagg’s home in
Detroit to purchase merchandise on credit from various
stores. Once sufficient merchandise had been obtained, the
pair planned to return home to Michigan to fence the mer-
chandise.
Upon arriving in Milwaukee, Hines-Flagg opened credit
accounts at a number of retail stores between October 2 and
No. 14-2975 3
4, 2012. However, on October 4 their plans went awry when
local police received a complaint from a Kohl’s Department
Store in Brown Deer, Wisconsin regarding the opening of a
suspicious credit account and the subsequent purchase of
store merchandise on the account. The complaint also indi-
cated that the two suspects were still in the store’s parking
lot. When the police arrived they found both Hines and
Hines-Flagg in a vehicle filled with retail merchandise, val-
ued at approximately $20,000, that had been purchased from
several stores using fraudulent identification. Both Hines
and Hines-Flagg were arrested.
Further investigation revealed that Hines-Flagg and oth-
ers had leased the car, a Lincoln MKZ, from an Illinois car
dealership in June 2012 using fraudulent identification. Ad-
ditionally, Hines-Flagg and her co-actors had fraudulently
leased four other luxury vehicles between June 24 and June
28 from various Illinois car dealerships. The additional vehi-
cles were recovered in Michigan in the possession of friends
or family of Hines and Hines-Flagg.
Following his arrest, Hines explained to police how the
fraud scheme operated. First, Hines-Flagg would identify
various potential victims who resided in states other than
Michigan who had a good credit history. Once the victims
were selected, Hines-Flagg and her co-actors would obtain
the victims’ credit reports and make fake identifications us-
ing her home computer in Detroit. Then, Hines and Hines-
Flagg would travel to other states, 1 approximately twice a
year, to open store credit card accounts and shop using the
fraudulent identifications. The pair would typically bring
1 Hines and Hines-Flagg traveled to Ohio, Wisconsin, and Illinois.
4 No. 14-2975
three or four fake identifications when they left from Detroit
to make fraudulent purchases. And they would not hit a
town more than twice in order to cut down on the chances of
getting caught. After the purchasing sprees, the merchandise
was brought back to Detroit to be fenced or kept for personal
use.
In December 2013, a grand jury in the United States Dis-
trict Court for the Eastern District of Wisconsin returned a
six-count indictment against Hines-Flagg. She was charged
with one count of conspiracy to commit mail and wire fraud
(18 U.S.C. § 1341) and five counts of aggravated identity
theft (18 U.S.C. § 1028A). On April 29, 2014, Hines-Flagg
pled guilty to the conspiracy to commit mail and wire fraud
count and one count of aggravated identity theft.
The plea agreement reflected the government’s intent to
recommend a two-level increase to the offense level under
U.S.S.G. § 2B1.1(b)(10)(A). The presentence report also rec-
ommended the same two-level sentencing enhancement.
U.S.S.G. § 2B1.1(b)(10)(A) prescribes a two-level increase if
the defendant (1) relocated, or participated in relocating, a
fraudulent scheme to another jurisdiction, and (2) did so to
evade law enforcement (or regulatory officials). Hines-Flagg
objected to the increase on the grounds that she neither relo-
cated the scheme to another jurisdiction nor did so with the
intent to evade law enforcement.
On August 21, 2014, the district court rejected these ar-
guments and sentenced Hines-Flagg to 36 months (three
years) for the fraud conspiracy and to a mandatory consecu-
tive two-year sentence for aggravated identify theft, result-
ing in a total sentence of five years in prison. The court also
imposed a supervised release term of three years. In calculat-
No. 14-2975 5
ing the offense level for the conspiracy to commit mail and
wire fraud count, the court applied the two-level increase for
relocating the fraud scheme to evade law enforcement. 2
Hines-Flagg appeals.
II. ANALYSIS
On appeal, Hines-Flagg once again argues that the two-
level increase to the offense level under U.S.S.G.
§ 2B1.1(b)(10)(A) to the fraud conspiracy count was improp-
erly applied because the fraud scheme was never relocated
and alternatively, even if the scheme was relocated, it was
not relocated to evade law enforcement.
We generally “review the district court’s application of
the Sentencing Guidelines de novo and its factual findings
for clear error.” United States v. Jumah, 599 F.3d 799, 811 (7th
Cir. 2010). U.S.S.G. § 2B1.1(b)(10)(A) requires a two-level in-
crease if “the defendant relocated, or participated in relocat-
ing, a fraudulent scheme to another jurisdiction to evade law
enforcement.” Therefore, the inquiry into whether U.S.S.G.
§ 2B1.1(b)(10)(A) is applicable has two prongs: (1) whether
the defendant relocated, or participated in relocating, a
fraudulent scheme to another jurisdiction and (2) whether
the relocation was done with the intent to evade law en-
forcement. Id.; United States v. Savarese, 686 F.3d 1, 15 (1st Cir.
2012). The Guidelines and their commentary do not define
“relocated” or “evade.”
2 As a result of the two-level increase, Hines-Flagg’s Guidelines
range on the mail fraud count was 41–51 months based on an offense
level of 22 and a criminal history of I. Without the enhancement, her
range would have been 33–41 months.
6 No. 14-2975
A. There Was No Relocation of the Scheme Under
U.S.S.G. § 2B1.1(b)(10)(A).
The history of the provision indicates that the Sentencing
Commission added the enhancement to the Guidelines in
order to “address conduct that the Commission ha[d] been
informed often relates to telemarketing fraud, although the
conduct also may occur in connection with fraudulent
schemes perpetrated by other means.” U.S.S.G. app. C
(2003). Specifically, “testimony offered at a Commission
hearing on telemarketing fraud indicated that telemarketers
often relocate their schemes to other jurisdictions once they
know or suspect that enforcement authorities have discov-
ered the scheme.” Id.
With this history in mind, we turn first to Hines-Flagg’s
argument that she did not relocate the fraudulent scheme to
another jurisdiction. Hines-Flagg does not contest the factual
findings of the district court. Instead, she limits her argu-
ment to the meaning of “relocated.” She argues that this
court should define “relocate” as the moving of something
with a fixed location, like one’s residence or place of busi-
ness, from one place to another, which she contends is the
everyday meaning of the word, referencing Dictionary.com.
See United States v. Taliaferro, 211 F.3d 412, 415 (7th Cir. 2000)
(“In the absence of a definition of a term in the guidelines,
courts are to look to the common-law definition or the plain
meaning of the term.”). Under her definition, Hines-Flagg’s
temporary trips to other jurisdictions to fraudulently pur-
chase merchandise would not amount to a relocation under
the Sentencing Guidelines.
We find that Hines-Flagg’s scheme was not relocated un-
der U.S.S.G. § 2B1.1(b)(10)(A). The Guidelines language
No. 14-2975 7
“clearly refers to relocation of the scheme only, not the reloca-
tion of the defendant.” United States v. Paredes, 461 F.3d 1190,
1193 (10th Cir. 2006) (emphasis in original). We do not be-
lieve that this Guideline applies to every fraudulent scheme
that just happens to operate in multiple jurisdictions. The
Guideline does not state that it applies to fraudulent
schemes that operate in or cross multiple jurisdictions, nor
does any commentary on this sub-section indicate such an
application. Hines-Flagg’s scheme was always meant to op-
erate in multiple locations, with Detroit as its home base. In
other words, it was always located in multiple jurisdictions.
Therefore, the scheme was not “relocated” to Wisconsin,
Ohio, and Illinois when Hines-Flagg traveled to those loca-
tions for temporary trips and returned to Detroit.
In United States v. Morris, the Eleventh Circuit found no
relocation where the defendants operated a fraudulent
scheme in the Atlanta area and surrounding districts of steal-
ing credit cards, using those credit cards to purchase elec-
tronics, and fencing the merchandise. 153 F. App’x. 556, 557–
58 (11th Cir. 2005) (unpublished opinion). In reaching its de-
cision, the court adopted the “ordinary meaning” of “relo-
cate,” defining it as “to ‘establish or lay out in a new place.’”
Id. at 558 (quoting Webster’s 3d New Int’l Unabridged Diction-
ary 1919 (1976)). At sentencing, the government produced
the testimony of a co-defendant who said that the conspira-
tors would sometimes go out of town to engage in credit
card fraud, including to Albany (in the Middle District of
Georgia), the Carolinas, Texas, Alabama, Mississippi, Ohio,
and Arkansas. Id. The district court applied the enhance-
ment, but the Eleventh Circuit reversed, finding that the
government’s evidence of the defendant venturing outside of
the Northern District of Georgia did not establish a reloca-
8 No. 14-2975
tion under the ordinary meaning of the term. Id. Rather, the
court said, the out of town trips were meant to be temporary
and amounted to “an expansion, and not a relocation, of the
conspiracy.” Id. In support of its holding, the court indicated
that the primary location of the scheme was always Atlanta.
Id. The court specifically noted that the fraudulently ob-
tained merchandise was always delivered to, and eventually
fenced from, the same location in Atlanta. Id. This indicated
a strong connection to Atlanta that the defendants never at-
tempted to sever or relocate. See id.
Similarly here, we find no indication that Hines-Flagg re-
located the fraudulent scheme under the common under-
standing of the term. See id. at 558. The plan was always that
the stolen merchandise would be returned to and fenced in
Detroit. Detroit was the hub of Hines-Flagg’s operations and
the temporary trips to other states operated as spokes. Cf.
Savarese, 686 F.3d at 15. In Savarese, the First Circuit reserved
judgment on whether to officially adopt a hub and spoke
approach to evaluating relocation under U.S.S.G.
§ 2B1.1(b)(10)(A), the hub and spoke theory being that where
a fraudulent scheme operates with one hub and several
spokes, the scheme is not “relocated” when the defendant
travels to different spokes as part of the scheme. Id. Howev-
er, the court applied the framework to demonstrate the flaws
in the defendant’s argument, affirming application of the en-
hancement. Id. It found that because the components of the
scheme that occurred outside of Boston (the defendant’s city
of residence) were “at least as critical, if not more so, to the
operation’s success than any of its other elements” that oc-
curred in Boston, these acts comprised the true “heart of the
enterprise” and “the fact that other tangential elements re-
curred in a convenient geographic locale [Boston]” did not
No. 14-2975 9
render that location the scheme’s “hub.” Id. Instead, the
scheme “might best be described not as hub with spokes, …
but as two hubs adjoined.” Id. It found that because at least
one of the hubs moved across jurisdictions, the district court
did not clearly err in applying the enhancement. Id. at 15–16.
Hines-Flagg’s scheme is more similar to the one in Morris
than the one in Savarese. Like Atlanta in Morris, Detroit
played a central role in Hines-Flagg’s scheme. Hines-Flagg
procured all the fraudulent identities, created the fake iden-
tifications, and fenced the stolen merchandise all in Detroit.
Were we to use Savarese’s approach, Detroit would be “the
heart of th[is] enterprise,” 686 F.3d at 15. Under our analysis,
the trips to other jurisdictions were certainly part of the
scheme, but they do not amount to a relocation, since the
scheme was always set up to operate multi-jurisdictionally.
The district court erred in applying the two-level enhance-
ment during Hines-Flagg’s sentencing.
Because we find an error occurred based on the district
court’s interpretation of relocation under U.S.S.G.
§ 2B1.1(b)(10)(A), we do not need to rule on whether any
hypothetical relocation was done “to evade law enforce-
ment.” However, we note that most criminal enterprises are
set up to avoid getting caught. Based upon the plain lan-
guage of the Guideline, we believe application of this en-
hancement requires more than just the operation of a multi-
jurisdictional scheme in order to reduce the chances of detec-
tion. Cf. Paredes, 461 F.3d at 1192 (determining that the
scheme relocated “to evade law enforcement” where fraudu-
lently obtained goods “moved from Utah to Idaho because
Utah became ‘hot’ after one of the [participants] was arrest-
ed”); United States v. Smith, 367 F.3d 737 (8th Cir. 2004) vacat-
10 No. 14-2975
ed and remanded on other grounds, 543 U.S. 1103 (2005) (finding
that evidence established that the defendant—who operated
a fraud scheme in Iowa and then moved permanently to
Florida and began operating a fraud scheme there—moved
in order to evade law enforcement where he had been ar-
rested several times for fraud and other crimes in Iowa and a
warrant for his arrest was outstanding in Iowa). But see Unit-
ed States v. Vega-Iturrino, 565 F.3d 430, 433 (8th Cir. 2009)
(finding that relocation need not “be motivated by a ‘specif-
ic’ threat of arrest as opposed to a more general intent to
evade law enforcement”).
B. The Enhancement Error Was Not Harmless.
We turn now to whether the error by the district court in
applying the enhancement was harmless. “It is important to
emphasize that … our harmless error determination and re-
view of the sentence’s reasonableness are separate” inquiries.
United States v. Abbas, 560 F.3d 660, 667 (7th Cir. 2009). First,
we must determine whether the district court’s sentencing is
procedurally sound. Id. Second, if the district court’s sentenc-
ing is procedurally sound we must “then consider the sub-
stantive reasonableness of the sentence under an abuse-of-
discretion standard.” Id. (quoting Gall v. United States, 552
U.S. 38, 51 (2007)).
The district court must correctly understand what the
Guidelines recommend. United States v. Allredge, 551 F.3d
645, 647 (7th Cir. 2008). After getting the Guidelines right, it
has discretion to take the individual defendant’s circum-
stances into account. Id. However, the “recognition that some
Guideline miscalculations can be harmless does not change
these basic principles.” Abbas, 560 F.3d at 667. “It merely re-
moves the pointless step of returning to the district court
No. 14-2975 11
when we are convinced that the sentence the judge imposes
will be identical to the one we remanded.” Id. Therefore, to
prove harmless error, the government must be able to show
that the guidelines error “did not affect the district court’s
selection of the sentence imposed.” Id. When a Guidelines
range is miscalculated, we have historically looked for an
unequivocal statement by the sentencing court that it would
have imposed the same sentence under a correct application
to find harmless error. See id.; United States v. Anderson, 517
F.3d 953, 965 (7th Cir. 2008).
Here, we have found that the district court improperly
applied U.S.S.G. § 2B1.1(b)(10)(A) to Hines-Flagg’s sentence
and therefore miscalculated the Guidelines range. This mis-
take constitutes a significant procedural error. See Gall, 552
U.S. at 51; Abbas, 560 F.3d at 666. The government offers no
“firm assurances” that the district court would have im-
posed the same sentence if it had properly calculated the
Guidelines. See United States v. Zahursky, 580 F.3d 515, 528
(7th Cir. 2009). And the district court did not state that it
would have imposed the same sentence without application
of the enhancement. Therefore, we find the misapplication of
U.S.S.G § 2B1.1(b)(10)(A) was not harmless error. Because we
find a reversible procedural error in the application of
U.S.S.G. § 2B1.1(b)(10)(A), we do not need to make a deter-
mination as to whether Hines-Flagg’s sentence was neverthe-
less reasonable.
III. CONCLUSION
For the foregoing reasons, we VACATE Hines-Flagg’s sen-
tence and REMAND for resentencing in accordance with this
opinion.
12 No. 14-2975
FLAUM, Circuit Judge, dissenting.
It is my view that Verita Hines-Flagg relocated her fraud
scheme to another jurisdiction for the purpose of evading
law enforcement and structured her entire scheme in such a
way as to do precisely that. Accordingly, I respectfully dis-
sent.
Though the Brown Deer police did not know it when
they arrested Hines-Flagg and her nephew, the two had
driven from Detroit to Milwaukee to effectuate a scheme that
they had previously carried out in various venues through-
out Illinois, Ohio, and Wisconsin. The scheme worked as fol-
lows: the duo used fake identification to open lines of credit
at various retail stores in the names of real people to fraudu-
lently purchase merchandise in large quantities. They car-
ried out the scheme in each town that they hit, before mov-
ing on to avoid detection by law enforcement. It is my judg-
ment, therefore, that the district court’s application of
U.S.S.G. § 2B1.1(b)(10)(A)—permissible when a “defendant
relocated, or participated in relocating, a fraudulent scheme
to another jurisdiction to evade law enforcement or regula-
tory officials”—was appropriate.
The majority grounds its position in the fact that Hines-
Flagg planned her scheme at her home in Detroit and re-
turned there after each out-of-town trip to sell her fraudu-
lently-obtained goods. In the majority’s words, the “scheme
was always meant to operate in multiple locations, with De-
troit as its home base. In other words, it was always located
in multiple jurisdictions.” I view Hines-Flagg’s criminal op-
eration differently. Hines-Flagg, of course, had a tie to De-
troit (that’s where she lived), but the heart of the scheme—
indeed, the fraud itself—traveled from place to place. There-
No. 14-2975 13
fore, I agree with the majority’s statement that the scheme
was always meant to operate in multiple locations; it was, by
design, a scheme that moved around. But I disagree that it
was always located in multiple jurisdictions; the suggestion is
that the scheme somehow was operating in more than one
jurisdiction simultaneously. I cannot adopt such a character-
ization of the defendant’s conduct. I see the scheme as being
relocated with Hines-Flagg to each jurisdiction in which she
performed it.
The district court found that Hines-Flagg and her neph-
ew consciously chose not to perform the scheme in the state
of Michigan; rather, they only victimized stores in Ohio, Illi-
nois, and Wisconsin. And prior to leaving home for these
out-of-state “shopping” trips, the pair packed all the materi-
als they needed to conduct their scheme: a disguise kit (in-
cluding wigs), the personal identity information for their vic-
tims (SSN, DOB, and address), counterfeit Michigan driver’s
licenses, a list of where the victims had accounts so they
would know what stores to hit, a credit card reader, and ma-
terials for making ID cards. They fraudulently leased cars—
like the Lincoln, leased in Illinois, that they drove on the day
of their arrest in Brown Deer—to use on their trips. And they
made sure not to conduct their scheme in the same location
more than twice. Thus, it is evident to me that Hines-Flagg
relocated her fraud scheme from jurisdiction to jurisdiction
for the purpose of evading law enforcement. 1
1 Perhaps the clearest indicator that their scheme was designed to evade
law enforcement is the difficulty that law enforcement had—on account
of the scheme’s relocating quality—in tying Hines-Flagg’s frauds to the
same individual. Hines-Flagg initially was charged in Milwaukee Coun-
14 No. 14-2975
In reaching its conclusion, the majority relies on an un-
published, per curiam decision from the Eleventh Circuit,
United States v. Morris, 153 F. App’x 556 (11th Cir. 2005) (re-
versing an application of the relocation enhancement), and
distinguishes the facts here from those in the First Circuit’s
decision in United States v. Savarese, 686 F.3d 1 (1st Cir. 2012)
(affirming the relocation enhancement’s application). Alt-
hough the facts of this case arguably are more analogous to
those at issue in Morris, I find the logic employed in Savarese
to be more persuasive (though I emphasize that neither deci-
sion devotes significant attention to the relocation enhance-
ment issue).
In Morris, the defendant ran a scheme in which he stole
credit cards and driver’s licenses from lockers at various At-
lanta-area health clubs, then used them to buy electronic
equipment at retail stores. 153 F. App’x at 557. After fraudu-
lently obtaining the goods, Morris’s co-defendant would
–––
ty Circuit Court with misappropriating identification information. Fol-
lowing the completion of a three-month sentence, she was extradited to
Cook County, Illinois, on identity theft charges related to the leased vehi-
cle. She remained in custody there until November 27, 2013, when she
was brought to the Eastern District of Wisconsin for an initial appearance
on the criminal complaint in this case. As the government describes it, a
year after her arrest by the Brown Deer police, “after local and state au-
thorities and federal authorities worked together extensively … they dis-
covered that when Hines-Flagg was arrested on October 4, 2012 [in the
Kohl’s parking lot], she was in the throes of committing a pre-planned
and well thought-out fraudulent scheme similar to others that she had
done many times in the past.” The Illinois case then was dropped, and a
federal indictment followed.
No. 14-2975 15
then sell them on eBay from his home in Marietta, Georgia.
Id. Almost all of the stores victimized by Morris were in the
Northern District of Georgia, with the exception of a few in
Albany—a city in Georgia’s Middle District. Id. at 558. (Alt-
hough a different co-defendant visited the Carolinas, Texas,
Alabama, Mississippi, Ohio, and Arkansas as part of the
conspiracy, it’s unclear as to whether that co-defendant
committed credit card fraud in those locations. Id.)
The Eleventh Circuit reversed the district court’s applica-
tion of the relocation enhancement, agreeing with Morris
that “his conduct could not be described as ‘relocating’: at
best, his conduct showed that he operated in multiple loca-
tions but always sold the merchandise to [his co-defendant],
who remained in the same location.” Id. at 558. In doing so,
the court noted that “the government presented no evidence
that [Morris] or any member of the conspiracy tried to ‘relo-
cate’ the scheme to another jurisdiction, under the ordinary
meaning of that word.” Id.I am unpersuaded by the majority’s extension of Morris to
the facts of our case, as the facts of Morris differ in a critical
respect. There, the fraudulent conduct occurred largely with-
in one federal jurisdiction, the Northern District of Geor-
gia—the same jurisdiction in which Morris lived and where
his home base was situated. Morris did make purchases in
one town located in the Middle District of Georgia, but there
is no suggestion that he crossed federal-jurisdictional lines
for the purpose of evading law enforcement. Here, by con-
trast, Hines-Flagg intentionally victimized stores in different
federal jurisdictions, spanning several different states—all to
minimize the odds of being caught.
16 No. 14-2975
In any event, I find the First Circuit’s logic in Savarese to
be more convincing. Savarese, like Morris, involved credit
cards stolen from gym locker rooms. 686 F.3d at 5. After ob-
taining the cards, Savarese would fax a list of the cardhold-
ers’ names, as well as forged replica signatures, to his associ-
ates in Boston, who would make false identification for Sa-
varese and others using the information. Id. Armed with the
false documents, Savarese and his cohorts then traveled to
over a dozen states throughout the country to withdraw
large cash advances in their victims’ names. Id. at 5–6. On
appeal, Savarese challenged the district court’s imposition of
the two-level relocation enhancement, urging the court to
adopt the “hub and spokes” approach (as the court de-
scribed it) of Morris. Id. at 15. The court, however, upheld the
application of the enhancement (while purporting to reserve
judgment as to the validity of the Eleventh Circuit’s logic,
deeming that theory factually inapplicable). Id. at 15.
Though Savarese stole the credit cards and communicat-
ed with his cohorts at the scheme’s home base in Boston, the
court reasoned: “The theft and fraudulent use of the credit
cards seems to us at least as critical, if not more so, to the op-
eration’s success than any of its other elements; indeed, these
acts comprised the heart of the enterprise. Their transitory
nature does not undermine their centrality to the scheme,
and conversely, the fact that other tangential elements re-
curred in a convenient geographic locale does not necessari-
ly render that location the scheme’s effective ‘hub.’” Id. at 15.
The court went on: “More accurately, then, the structure of
the fraudulent scheme might be best described not as a hub
with spokes, as was the case in Morris, but as two hubs ad-
joined … .” Id. at 15. “Because at least one of those hubs
moved across jurisdictions, and did so with the primary in-
No. 14-2975 17
tent to evade law enforcement,” the First Circuit upheld the
enhancement’s application. Id. at 15–16. I would apply that
same reasoning here.
Hines-Flagg contends that, in enacting the relocation en-
hancement, the Sentencing Commission sought to increase
sentences for telemarketing schemes, which often relocate to
evade ongoing law enforcement investigations. Therefore,
she argues, it should not apply to her since she never relo-
cated her scheme while being actively pursued by the au-
thorities. I reject that logic. First, the most successful fraud-
sters are those that structure their schemes in ways as to
avoid detection, so it seems unlikely that the Sentencing
Commission would exempt those particularly sophisticated
defendants from the enhancement at issue here. Second, tel-
emarketing schemes were just one of many fraud schemes
that the Sentencing Commission sought to curb in enacting
the enhancement. See United States v. Singh, 291 F.3d 756, 761
(11th Cir. 2002) (discussing the enhancement’s broader pur-
pose). The background notes to U.S.S.G. § 2B1.1(b)(10)(A)
expressly state that the guideline “covers offenses involving
theft, stolen property, property damage or destruction,
fraud, forgery, and counterfeiting … .” And it emphasizes
that “most fraud statutes cover a broad range of conduct
with extreme variation in severity.”
Moreover, the plain text of the enhancement—again, ap-
plicable when a “defendant relocated … a fraudulent
scheme to another jurisdiction to evade law enforcement”—
appears to squarely implicate the conduct at issue here.
While the enhancement assuredly covers uprooted telemar-
keting schemes, I read it to also include the conduct of
Hines-Flagg, who opened fraudulent lines of credit to steal
18 No. 14-2975
goods and then intentionally performed that same scheme in
other jurisdictions to avoid being caught by law enforce-
ment. Even if it fairly can be said that the home base of
Hines-Flagg’s scheme was in Detroit, the critical part of the
scheme was the fraud itself. And it was that part that she re-
located to different jurisdictions to evade authorities.
Accordingly, I would affirm the district court’s applica-
tion of U.S.S.G. § 2B1.1(b)(10)(A) in this case.