United States v. Nicole Warren

NOT RECOMMENDED FOR PUBLICATION
File Name: 23a0087n.06
Case No. 22-3323
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Feb 13, 2023
UNITED STATES OF AMERICA, )
DEBORAH S. HUNT, Clerk
)
Plaintiff-Appellee,
)
) ON APPEAL FROM THE UNITED
v.
) STATES DISTRICT COURT FOR
) THE NORTHERN DISTRICT OF
NICOLE WARREN,
) OHIO
Defendant-Appellant. )
) OPINION
Before: MOORE, STRANCH, and MURPHY, Circuit Judges.
MURPHY, J., delivered the opinion of the court in which STRANCH, J., joined. MOORE,
J. (pp. 12–13), delivered a separate dissenting opinion.
MURPHY, Circuit Judge. Nicole Warren agrees that she participated in an extensive fraud
scheme that cost her victims over $200,000. But she disagrees that she qualified as an “organizer”
or “leader” of this scheme for purposes of an aggravating-role enhancement in the Sentencing
Guidelines. U.S.S.G. § 3B1.1(a). Yet the facts contained in her plea agreement and her
coconspirators’ statements to law enforcement gave the district court a fair basis to conclude that
she played a leadership role. Given the deference that we owe its finding that she qualified for this
enhancement, we affirm.
No. 22-3323, United States v. Warren
I
The following facts come from Warren’s plea agreement or from portions of her
presentence report to which she did not object. See Fed. R. Crim. P. 32(i)(3)(A); United States v.
Baker, 559 F.3d 443, 449 (6th Cir. 2009).
Between September 2018 and April 2020, Warren engaged in a fraud scheme with eight
others that resulted in at least $220,716.54 in losses. Throughout this time, the scheme followed
a common pattern primarily in northeast Ohio and western New York.
The conspirators would steal people’s personal identifying information and make fake IDs
that combined their victims’ information with their own pictures. They would use these fake IDs
to open fraudulent bank accounts at several banks, including Fifth Third Bank, Huntington Bank,
and U.S. Bank.
The conspirators would next search for legitimate checks by stealing mail from the
mailboxes at residential and commercial locations. They would change the payees on these stolen
checks to match themselves or the individuals whose identities they had stolen. The conspirators
would alternatively create their own fraudulent checks using sophisticated printing equipment and
make the checks payable to these individuals. They would then deposit the illegitimate checks in
the fraudulent bank accounts or cash the checks at the banks. If they deposited the checks, they
would later withdraw the money from the accounts and use it for their own benefit. The
conspirators would also sometimes cash the illegitimate checks at other retail establishments, such
as liquor or drug stores.
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Separately, the conspirators would use the victims’ stolen personal identifying information
to obtain credit accounts from banks, retailers, or online-payment systems. They would rely on
these fraudulent credit lines to buy goods and services at many venues, ranging from the Hard
Rock Casino to Kohl’s.
Warren played a large part in the fraud. Her coconspirators identified her as the primary
person who stole mail in search of checks. They also identified her as the one who made the
counterfeit checks and fake IDs. Warren would sometimes cash or deposit these checks herself.
Other times, she would give the counterfeit checks and fake IDs to coconspirators and drive them
to the chosen bank, so that these coconspirators could cash or deposit the checks. In return, the
coconspirators would give her a cut of the proceeds: “At various times, co-conspirators delivered
money obtained from cashed checks to” her. Plea Agreement, R.28, PageID 146.
The scheme came crashing down in April 2020. Warren attempted (but failed) to cash a
check for over $800 at a bank in rural southeast Ohio. Local authorities tracked her down, but she
gave them a false identification. They eventually learned her true identity and found stolen mail
and fraudulent checks in her car. A subsequent search of her home uncovered checks, computers,
printers, and personal identifying information for 162 people.
Warren entered into a plea agreement. She pleaded guilty to one count of bank fraud, in
violation of 18 U.S.C. § 1344; two counts of aggravated identity theft, in violation of 18 U.S.C.
§ 1028A(a)(1); two counts of conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349;
one count of conspiracy to commit access-device fraud, in violation of 18 U.S.C. § 1029(b)(2);
one count of mail theft, in violation of 18 U.S.C. § 1708; and one count of access-device fraud, in
violation of 18 U.S.C. § 1029(a)(2).
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Warren and the government agreed on several calculations under the Sentencing
Guidelines. But they disagreed over whether Warren qualified as an “organizer” or “leader” of
the fraud scheme—a fact that would increase her offense level by four under the aggravating-role
enhancement in U.S.S.G. § 3B1.1(a).
Warren’s presentence report recommended that the district court apply this enhancement.
In interviews with Warren’s coconspirators, the report reasoned, the coconspirators had identified
Warren as the person who “made fraudulent checks” and “fraudulent identification[s]” and who
“stole mail from various locations.” PSR, R.50, PageID 344. According to the coconspirators,
Warren also gave them the fraudulent checks that they cashed or deposited at banks using the fake
IDs that she had provided. The report lastly mentioned the incriminating evidence found at
Warren’s home.
Warren objected to the report’s recommendation. As evidence that she had not acted as an
organizer or leader, she offered four law-enforcement summaries of interviews with
coconspirators. She also provided a declaration from a friend who had lived at her house for three
months and who implicated another coconspirator as the ringleader.
At sentencing, the parties continued to debate whether the enhancement applied.
According to the government, § 3B1.1(a) required Warren to have led or organized only one other
participant, and the court could find that she had done so based on the statements from her
coconspirators alone. The court agreed. It pointed out that, “as the government has highlighted
and outlined,” Warren gave her coconspirators the counterfeit checks and fake IDs to use. Sent.
Tr., R.62, PageID 458. It also referred to her role in printing the checks and noted that she
possessed the equipment required to do so. It lastly suggested that her “history of forgery”
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supported a finding that she led the operation. Id., PageID 459. Ultimately, the court imposed a
total of 94 months’ imprisonment for all eight counts.
II
Section 3B1.1 requires district courts to increase the offense level of defendants who have
“aggravating roles” in the crime. As relevant here, this guideline provides: “If the defendant was
an organizer or leader of a criminal activity that involved five or more participants or was otherwise
extensive, increase by 4 levels.” U.S.S.G. § 3B1.1(a). This language contains two primary
elements. A defendant must qualify as either an “organizer” or a “leader” of the “criminal
activity.” Id. And the “criminal activity” must either “involve[] five or more participants” or be
“otherwise extensive.” Id. Warren does not dispute the second element, so we need only focus on
whether she qualified as an organizer or leader of the fraud scheme.
The guideline does not define these words, but their usual meanings are obvious enough.
An organizer is “one who ‘organizes’” (that is, who “arranges”) the criminal activity, whereas a
“leader” is “one who takes the lead in” (that is, who “guides others” in) the activity. 10 Oxford
English Dictionary 924 (2d ed. 1989); 13 Oxford English Dictionary, supra, at 747. A review of
the guideline as a whole provides context for what it requires. Section 3B1.1 elsewhere instructs
district courts to increase a defendant’s offense level by three if the defendant qualifies as a
“manager or supervisor” (rather than an “organizer or leader”) of the criminal activity. Id.
§ 3B1.1(b). Thus, an organizer or leader (who receives a 4-level enhancement) necessarily must
have a larger criminal role than a mere manager or supervisor (who receives only a 3-level
enhancement).
The guideline’s commentary (which both parties accept) offers further clarification. Cf.
United States v. Riccardi, 989 F.3d 476, 485 (6th Cir. 2021). One application note provides that
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No. 22-3323, United States v. Warren
a defendant cannot qualify as an organizer or leader merely because the defendant manages the
“property, assets, or activities of a criminal organization.” U.S.S.G. § 3B1.1 cmt. 2. Rather, the
defendant must lead or organize “one or more other participants” in the crime. Id. Our caselaw
has thus “repeatedly” held that § 3B1.1 requires the defendant to have overseen a participant (not
just a scheme). United States v. Davis, 815 F. App’x 908, 911 (6th Cir. 2020) (citing cases). We
have also reversed a district court’s use of this enhancement when it misunderstood the law by
relying on the defendant’s management of the criminal activity alone. See United States v.
Kamper, 748 F.3d 728, 748 (6th Cir. 2014); see also United States v. Bertram, 900 F.3d 743, 753–
54 (6th Cir. 2018). At the same time, we have held that § 3B1.1 requires a defendant to have led
or organized only one other participant in the scheme. See Baker, 559 F.3d at 449.
A separate application note identifies “[f]actors” to help courts distinguish the more
significant organizer or leader from a “mere” manager or supervisor. U.S.S.G. § 3B1.1 cmt. 4.
These factors direct a court to ask both general and specific questions. Generally, what was “the
nature and scope of the illegal activity” and the “nature” of the defendant’s “participation” in it?
Id. Specifically, did the defendant “exercise” “decision making authority” over the scheme? Id.
And did the defendant have a high “degree of participation in planning or organizing” it or a high
“degree of control and authority” “over others”? Id. Lastly, did the defendant “recruit[]”
“accomplices” or assert a “right to a larger share of the fruits of the crime”? Id. Because these
factors offer only useful guideposts, a court need not find them all met to apply the enhancement.
See United States v. Castilla-Lugo, 699 F.3d 454, 460 (6th Cir. 2012). We have, for example,
upheld the use of the enhancement based largely on a defendant’s recruitment of others. See id. at
461 (citing cases).
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These factors demonstrate the fact-intensive nature of this aggravated-role inquiry—
something that matters to our standard of review. We, of course, review the factual findings
supporting a district court’s aggravating-role conclusion under the clear-error standard. United
States v. Sexton, 894 F.3d 787, 794 (6th Cir. 2018). We must uphold a factual finding so long as
the record permitted the district court plausibly to reach it, even if conflicting evidence reasonably
could have justified the opposite finding. United States v. Caston, 851 F. App’x 557, 560 (6th Cir.
2021). Aside from the facts, though, how should we review the district court’s ultimate conclusion
that the enhancement does (or does not) apply on a given record? At times, we have described this
type of ruling as a “legal conclusion,” United States v. Washington, 715 F.3d 975, 983 (6th Cir.
2013), but the Supreme Court’s more recent guidance might treat it as a “mixed question[] of law
and fact[.]” United States v. Thomas, 933 F.3d 605, 609 (6th Cir. 2019) (citing U.S. Bank Nat’l
Ass’n v. Vill. at Lakeridge, LLC, 138 S. Ct. 960, 966–67 (2018)). Either way, we have repeatedly
held that we must review the district court’s final aggravating-role conclusion under a “deferential”
standard given its fact-intensive nature. Washington, 715 F.3d at 983; see Davis, 815 F. App’x at
915; Sexton, 894 F.3d at 794.
This deferential standard of review compels us to uphold the district court’s conclusion
that Warren qualified as an organizer or leader under § 3B1.1(a). The relevant factors reasonably
justified that conclusion. To begin with, the “nature and scope” of the fraud scheme was extensive,
as was Warren’s “participation” in it. U.S.S.G. § 3B1.1 cmt. 4. In her plea agreement, she
admitted that the scheme lasted for over a year and a half and caused over $220,000 in losses. She
also played the main role, as evidenced by one coconspirator’s description of the enterprise as
“Warren’s fraud ring” in an interview. Int. Summ., R.49-1, PageID 310. Confirming this point,
Warren did not dispute the finding in her presentence report that she caused substantially more
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No. 22-3323, United States v. Warren
loss (the entire amount) than the coconspirator who caused the second most amount of loss (only
$17,540).
Warren next had a “high degree of participation” in “the planning and organization” of the
scheme and in leading other participants in its execution. United States v. Arrechavaleta, 851
F. App’x 570, 573 (6th Cir. 2021); U.S.S.G. § 3B1.1 cmts. 2, 4. Coconspirators told investigators
that Warren was the one who stole mail and made fraudulent checks and fake IDs. PSR, R.50,
PageID 344. These statements were corroborated by the evidence discovered at Warren’s home,
including the computers and printers and the personal identifying information of some 162 people.
Warren also “instructed” others in executing the scheme. United States v. Nicolescu, 17 F.4th 706,
725 (6th Cir. 2021). Coconspirators told investigators that they “cashed counterfeit checks given
to [them] by” Warren, using forged identification also “given to [them] by Warren.” Int. Summ.,
R.49-1, PageID 313; id., PageID 316–17; PSR, R.50, PageID 344. Warren even “transported”
them to the chosen banks “to open bank accounts, deposit checks, and cash checks.” Plea
Agreement, R.28, PageID 145; PSR, R.50, PageID 331.
The other factors likewise reasonably supported the enhancement. As for Warren’s
“recruitment of accomplices,” U.S.S.G. § 3B1.1 cmt. 4, one coconspirator noted that Warren “was
always looking for people to cash the counterfeit checks.” Int. Summ., R.49-1, PageID 314; see
Castilla-Lugo, 699 F.3d at 461. Warren also expected to receive a substantial share of the profits.
U.S.S.G. § 3B1.1 cmt. 4. When coconspirators successfully cashed checks, they “provided
portions of the money they obtained” to her. PSR, R.50, PageID 331. As one example, a
coconspirator who successfully cashed a check received only $60 and some drugs, while Warren
obtained the remaining “$900.00 something.” Int. Summ., R.49-1, PageID 309. As another
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No. 22-3323, United States v. Warren
example, a coconspirator once refused to share the profits from a cashed check, and Warren “got
mad,” “robbed her,” and “took her money and some clothes.” Id., PageID 314.
All told, the record in this case gave the district court a sufficient basis to find that the
enhancement applied. Indeed, we have previously upheld the use of this enhancement for similar
check-cashing frauds in which a defendant (like Warren) “provided the counterfeit checks and
identification, and shared in the proceeds.” United States v. Green, 242 F. App’x 343, 347 (6th
Cir. 2007); see United States v. Burley, 241 F. App’x 290, 296–97 (6th Cir. 2007).
In response, Warren criticizes the district court’s reliance on her prior frauds as a basis to
find that she held a leadership position in the current fraud scheme. Yet her criminal history
showed that she had “knowledge of the proper steps to set up and carry out the” scheme.
Arrechavaleta, 851 F. App’x at 573. The court thus could reasonably rely on this history (as one
among several other factors) to show that Warren held an organizational or leadership position in
it. Id.; see Burley, 241 F. App’x at 296–97.
Warren next criticizes the district court for failing to make specific factual findings for each
of the several factors listed in § 3B1.1’s commentary. Yet the district court recognized those
“factors” at the outset of its analysis, so nothing suggests that it misunderstood the law. Sent. Tr.,
R.62, PageID 458. The government had also already described the statements of Warren’s
coconspirators as the basis for finding most of the factors satisfied. While more factual specificity
would have been helpful, based on our deferential standard of review, we do not find error in the
court’s decision to reference in summary what the government had already “highlighted and
outlined[.]” Sent. Tr., R.62, PageID 458; see United States v. House, 872 F.3d 748, 751–52 (6th
Cir. 2017); cf. Bertram, 900 F.3d at 754.
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No. 22-3323, United States v. Warren
Warren also argues that the district court wrongly applied the enhancement because it
found that she merely managed the property and not any of the participants. To the contrary, the
government pointed to the commentary that required a defendant to supervise at least one
“participant,” not just the criminal activity. Sent. Tr., R.62, PageID 456. So again, nothing
suggests that the court misunderstood the law. Cf. Kamper, 748 F.3d at 748. The court’s finding
that Warren gave the “counterfeit checks” and fake IDs to coconspirators so that they could cash
the checks also shows her leadership over these participants. Sent. Tr., R.62, PageID 459. In fact,
coconspirators regularly described their criminal activities as “for” Warren. See Green, 242
F. App’x at 347. One noted that he had recruited others “to cash fraudulent checks for Warren.”
R.49-1, PageID 309. Another likewise described “cash[ing]” a check “for Nicole.” Id., PageID
317.
For these reasons, Warren wrongly analogizes her case to United States v. Christian, 804
F.3d 819 (6th Cir. 2015). There, the defendant participated in a scheme to steal semitrucks,
including one truck with a load of tires. Id. at 821. We held the district court erred in applying an
aggravating-role enhancement based on the defendant’s “control” of the stolen tires because the
court “stated that other people were in charge” and “did not state that [the defendant] controlled a
co-participant.” Id. at 824. Here by contrast, the district court did not rely on the mere fact that
Warren controlled the equipment. It added that she gave the counterfeit checks to the
coconspirators to cash, showing her oversight of participants, not just property.
Warren lastly points to the declaration from her friend that suggested that another
coconspirator had been “running the operation.” Decl., R.49-2, PageID 319. There are both legal
and factual problems with this argument. Legally, there can be “more than one person who
qualifies as a leader or organizer of a criminal association or conspiracy.” U.S.S.G. § 3B1.1 cmt.
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4; see Washington, 715 F.3d at 984. Factually, the record as a whole gave the district court a fair
basis to apply the enhancement despite the declaration. Among other evidence, another person
implicated in the scheme described this coconspirator (the one allegedly running the operation) as
“‘high up’ in Warren’s fraud ring”—suggesting that she too was working at Warren’s direction.
Int. Summ., R.49-1, PageID 310 (emphasis added).
We affirm.
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No. 22-3323, United States v. Warren
KAREN NELSON MOORE, Circuit Judge, dissenting. The majority makes a
reasonable case for the application of the aggravated-role enhancement. I respectfully dissent,
however, because the majority makes its case using factual findings that the district court failed to
make in the first instance. I would not backfill what the district court left incomplete.
We review a district court’s determination that a defendant was an organizer or leader
“deferentially, and its factual findings for clear error.” United States v. Sexton, 894 F.3d 787, 794
(6th Cir. 2018) (quoting United States v. House, 872 F.3d 748, 751 (6th Cir. 2017)). Implicit in
this deferential standard of review is the requirement that the district court make and articulate its
factual findings. If the lower court fails to provide a reasoned and adequate basis for its application
of the enhancement, both the parties and the reviewing court are left to guess whether one fact or
another led the court to its decision. Our cases preclude that form of post-hoc factfinding.
In United States v. Kamper, we addressed a challenge to the district court’s application of
the aggravated-role enhancement. 748 F.3d 728, 748–49 (6th Cir. 2014). The record “arguably
demonstrate[d]” that the defendant “was responsible for directing other individuals in menial
tasks[.]” Id. at 748. And the district court found that the defendant shared “control of the criminal
enterprise” with others. Id. Yet we held that the district court erred in imposing the enhancement
“because it failed to make a factual finding that [the defendant] managed or supervised other
individuals involved in the conspiracy.” Id. We explained that “regardless of whether [the
defendant] actually did supervise other individuals in the conspiracy, the district court erred
procedurally by misapprehending the law and applying the aggravating-role enhancement based
solely upon [the defendant’s] management of the criminal activity.” Id. at 748–49.
We later distilled Kamper’s holding into a basic rule: Before a district court may apply an
aggravated-role enhancement, “[t]he record must show that the defendant had control over another
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criminal participant, and the court must make a finding to that effect.” United States v. Bertram,
900 F.3d 743, 753 (6th Cir. 2018) (emphasis added) (citing Kamper, 748 F.3d at 748–49).
Here, the district court did not make a finding that Warren “had control over another
criminal participant.” Id. The district court’s discussion of Warren’s role in the charged fraud
scheme was cursory. R. 62 (Sent’g Tr. at 14–15) (Page ID #458–59). The court noted that Warren
“coordinated with coconspirators,” “printed the checks,” “possessed” certain devices, “gave
coconspirators counterfeit checks” and other fraudulent documents, and “has a history of forgery.”
Id. At most, these findings suggest that Warren “direct[ed] other individuals in menial tasks” or
“shared control of the criminal enterprise.” Kamper, 748 F.3d at 748. None amounts to a finding
that Warren had control over another coconspirator.
The district court also referenced the presentence report and the government’s sentencing
presentation. R. 62 (Sent’g Tr. at 14) (Page ID #458). To the extent that the court can be said to
have adopted either the report or the presentation, neither supplies the critical but missing factual
finding that Warren had control over another criminal participant. See R. 50 (PSR at 20–21, 23)
(Page ID #344–45, 347); R. 62 (Sent’g Tr. at 11–14) (Page ID #455–58). Both the presentence
report and the government’s sentencing presentation mirror the district court’s focus on Warren’s
control over the means of the fraud scheme rather than the participants in it. Id.Accordingly, even if the majority is correct that there is evidence in the record that Warren
had control over another criminal participant, the district court failed to make a finding to that
effect. I decline to join the majority in supplying that missing finding, and would vacate Warren’s
sentence and remand the case for appropriate factfinding and resentencing.
I respectfully dissent.
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