United States v. David Donadeo

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 18a0274p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, ┐
Plaintiff-Appellee, │
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> No. 17-4295
v. │
│
│
DAVID DONADEO, │
Defendant-Appellant. │
┘
Appeal from the United States District Court
for the Northern District of Ohio at Cleveland.
No. 1:13-cr-00210-1—Benita Y. Pearson, District Judge.
Argued: December 5, 2018
Decided and Filed: December 18, 2018
Before: CLAY, McKEAGUE, and BUSH, Circuit Judges.
_________________
COUNSEL
ARGUED: Claire R. Cahoon, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Toledo,
Ohio, for Appellant. Rebecca C. Lutzko, UNITED STATES ATTORNEY’S OFFICE,
Cleveland, Ohio, for Appellee. ON BRIEF: Claire R. Cahoon, OFFICE OF THE FEDERAL
PUBLIC DEFENDER, Toledo, Ohio, for Appellant. Rebecca C. Lutzko, UNITED STATES
ATTORNEY’S OFFICE, Cleveland, Ohio, for Appellee.
_________________
OPINION
_________________
CLAY, Circuit Judge. Defendant David Donadeo appeals the district court’s December
7, 2017 order sentencing him to a 70-month term of imprisonment and a 3-year term of
supervised release following his guilty plea to charges of conspiracy to commit mail fraud, in
No. 17-4295 United States v. Donadeo Page 2
violation of 18 U.S.C. §§ 1341, 1349, and conspiracy to commit money laundering, in violation
of 18 U.S.C. § 1956(h). For the reasons set forth below, we AFFIRM the district court’s
sentence.
BACKGROUND
Factual Background
This case arises out of a four-year scheme to defraud the Cuyahoga Heights School
District (the “District”) in northern Ohio. From 2007 to 2011, a group of individuals led by
District employee Joseph Palazzo defrauded the District of approximately $3.3 million. From
2009 to 2011, Defendant was part of this group.
The scheme to defraud the District worked as follows. Joseph Palazzo was the District’s
Information Technology (“IT”) Director, and in that capacity had the authority to purchase IT-
related goods and services for the District from outside vendors. Any purchase that cost less
than $10,000 required only Joseph Palazzo’s approval. He would submit an invoice to the
District, and the District would issue a check to the vendor.
Joseph Palazzo abused this authority by submitting fake invoices to the District. The
fake invoices purported to be for IT-related goods and services purchased from legitimate
vendors. However, the vendors were in fact shell corporations that never supplied goods or
services of any kind to the District. Nevertheless, because only Joseph Palazzo’s approval was
required, the District issued checks to these shell corporations based on the fake invoices. These
shell corporations were established and owned by Dominick Palazzo (Joseph’s brother), Dennis
Boyles, and Defendant.
Dominick Palazzo was the first to join in the scheme in 2007. He established and owned
two shell corporations—“Forte Promotions” and “Laptops and More.” (RE 46, Pre-Sentence
Report, PageID # 291.)1 From 2007 to 2011, these corporations deposited checks from the
District totaling $2,156,331.36. Dennis Boyles was the second to join in the scheme in 2008,
after being recruited by Dominick Palazzo. He established and owned one shell corporation—
1Unless otherwise indicated, all record citations refer to the record in district court action No. 13-cr-00210.
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“Macwin-Protocol.” (Id.) From 2008 to 2011, this corporation deposited checks from the
District totaling $260,167.22. Defendant was the third to join in the scheme in 2009, after also
being recruited by Dominick Palazzo. He established and owned one shell corporation—“DDR
Technologies.” (Id. at PageID # 290–91.) From 2009 to 2011, this corporation deposited checks
from the District totaling $648,035.37. Additionally, Dominick Palazzo and Defendant
established and owned one shell corporation jointly—“Impact Global,” doing business as “The
Jump Yard.” (Id. at PageID # 292.) From 2009 to 2011, this corporation deposited checks from
the District totaling $268,913.40.
Thus, all told, the group led by Joseph Palazzo used five shell corporations to defraud the
District of approximately $3.3 million over the course of four years.
Defendant’s involvement in the scheme stems from his friendship with Dominick
Palazzo. The two first met while Defendant was a student at the University of Akron in the early
1990s. And though Defendant subsequently moved to California to pursue an acting career, they
remained close. By late 2008, however, Defendant’s acting pursuits had proved fruitless, and he
and his family—a wife and two young children—were in dire financial straits. Facing
foreclosure on their home, Defendant was overwhelmed with anxiety about their future, and soon
relapsed into an alcohol addiction. It is at this time that Dominick Palazzo visited Defendant,
and invited him to join in the scheme to defraud the District.
According to Defendant, Dominick Palazzo told Defendant about Joseph Palazzo’s IT
position with the District, and said that he and Joseph “had partnered together to provide [IT]
services to the District through a third-party company two years ago.” (RE 48, Defendant’s
Sentencing Memorandum, PageID # 320.) Dominick Palazzo explained that “since Joseph was in
charge of the outsourcing, and was qualified to do the work himself, it was an opportunity for
everyone to make extra money.” (Id.) Joseph “completed the work, prepared the invoice,
submitted it to the District, and then collected the money,” which they split between themselves.
(Id.)
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Dominick Palazzo then offered to “share this opportunity” with Defendant. (Id.) All
Defendant needed to do was “open a company so that Joseph could outsource the District’s IT
needs to that company.” (Id.) Joseph would then “provide the services, prepare the invoices,
ensure the District made payment, and then spit the profits with [Defendant] once payment was
received.” (Id.) Though Defendant knew from the outset that this arrangement “presented a
potential conflict of interest between Joseph and the District,” he maintains that he believed it to
be legal. (Id. at PageID # 321.) Thus, he agreed.
In January 2009, Defendant incorporated DDR Technologies, opened a corporate bank
account, and began depositing checks from the District for IT-related goods and services that
DDR Technologies was not providing. Each time the District issued a check, Joseph Palazzo
retrieved it, delivered it to Defendant, and told Defendant how much money he could keep and
how much money was to be returned to Joseph—typically 50%. Defendant deposited the check,
returned the agreed upon amount, and then issued an IRS Form 1099 Statement falsely indicating
that Joseph Palazzo had performed services for DDR Technologies in exchange for payment in
that amount. At least 73 checks were ultimately issued from the District to DDR Technologies
in this manner, all while Defendant remained in California.2
Later in 2009, at the urging of Dominick Palazzo, Defendant moved to Ohio. Defendant
and Dominick Palazzo then established a jointly-operated corporation called Impact Global,
doing business as The Jump Yard. Dominick Palazzo incorporated Impact Global, both he and
Defendant opened a corporate bank account, and Defendant was purportedly set to manage The
Jump Yard’s day-to-day operations. The Jump Yard was a legitimate children’s recreational
center through which Defendant and Dominick Palazzo laundered funds that Impact Global
received from the District. At least 30 checks were ultimately issued from the District to Impact
Global in the same manner as with DDR Technologies.
To the extent that Defendant had any doubts about the legality of this scheme, they were
admittedly resolved once Defendant moved to Ohio in late 2009 to help establish Impact Global.
2The checks to the other shell corporations then involved in the scheme—Forte Promotions, Laptops and
More, and Macwin-Protocol—were issued from the District in the same manner, with the exception that Dennis
Boyles did not issue IRS Form 1099 Statements to Joseph Palazzo.
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While in California, Defendant “had limited personal interaction with the Palazzo brothers,” and
it was “easy for [them] to ignore” any of his requests for “information regarding the IT services
being provided to the District.” (Id. at PageID # 322.) However, “once [Defendant] was in Ohio
and working more closely with the Palazzo brothers, [they] were no longer able to conceal what
was actually occurring from [Defendant] . . . . [Defendant] now learned that no IT services were
being provided to the District.” (Id.) Rather, “the money [was] being stolen from the District
[and] had been put in his companies’ bank accounts.” (Id.)
Nevertheless, Defendant continued to participate in the scheme to defraud the District
until the scheme was discovered in February 2011. At that time, Joseph Palazzo was suspended
from his IT position with the District pending an internal investigation, and the entire group—the
Palazzo brothers, Dennis Boyles, and Defendant—met at Joseph Palazzo’s house to discuss how
to respond to the inevitable police investigation. Once that investigation was underway,
Defendant purportedly began to believe that Dominick Palazzo posed a threat to him and his
family. According to Defendant, Dominick Palazzo called him and his wife regularly “to check
on him—to see where he was and what he was doing,” and told him that “if anybody talks they
will pay the price.” (Id. at PageID # 324.) This led Defendant to fear that “[e]ven if [he] did not
cooperate [with the police investigation] . . . Dominick could one day presume he was
cooperating and seek revenge.” (Id. at PageID # 325.)
In June 2011, ten days before search warrants were executed on The Jump Yard as well
as on the residences of Defendant and the Palazzo brothers, Defendant sold his interest in The
Jump Yard and moved with his family to North Carolina, where they had purchased a bar and
restaurant. In August 2011, Defendant abandoned the bar and restaurant and moved with his
family to Germany—where Defendant’s mother-in-law resided. At this point Defendant cut off
all communications with his immediate family in the United States, and there are no records of
Defendant obtaining employment in Germany, using a credit card in Germany, or registering
housing in Germany. A few months later, Defendant again moved with his family, this time to
Spain. At this point, Defendant cut off all communications with his attorney in the United
States, who had been asked by the government to negotiate Defendant’s return, and there are no
records of Defendant obtaining employment in Spain, using a credit card in Spain, or registering
No. 17-4295 United States v. Donadeo Page 6
housing in Spain. Defendant also cancelled a planned flight back to the United States.
Defendant purportedly relocated to North Carolina out of fear of physical harm from Dominick
Palazzo, to Germany in order to care for his ailing mother-in-law, and to Spain on the
recommendation of a friend about the cost-of-living and quality of life there.
While abroad, Defendant was aware that Joseph Palazzo, Dominick Palazzo, and Dennis
Boyles were all arrested and charged with various criminal offenses due to their involvement in
the four-year scheme to defraud the District. All subsequently pled guilty. Defendant was also
aware that he had been charged with similar offenses. But it was not until September 2016—
three years and five months after those charges were filed against him—that Defendant was
arrested. And in May 2017, he was extradited from Spain to answer them.
Procedural History
Defendant had been indicted by a grand jury in the Northern District of Ohio in April
2013. He was charged with one count of conspiracy to commit mail fraud, in violation of
18 U.S.C. §§ 1341, 1349, and one count of conspiracy to commit money laundering, in violation
of 18 U.S.C. § 1956(h). Defendant pled guilty to both charges without a plea agreement.
Defendant’s pre-sentence report (“PSR”) calculated his Sentencing Guidelines range
based on a Total Offense Level of 26. The PSR began with a Base Offense Level of 7, and
Defendant then received a 16-level increase for the amount of pecuniary loss that resulted from
his offenses—$2,615,927. Defendant also received three separate, two-level increases for using
sophisticated means in his offenses, laundering money, and obstruction of justice. After a three-
level decrease for accepting responsibility for his offenses, Defendant’s Total Offense Level was
26. This, combined with his Criminal History Category of I, produced a Guidelines range of 63–
78 months in prison.
Defendant raised three objections to the PSR: (1) that he should have only received a 14-
level increase for the amount of loss that resulted from his offenses—$916,948.77, (2) that he
should have received a two-level decrease for playing only a minor role in the offenses, and
(3) that he should not have received a two-level increase for obstruction of justice. At the
sentencing hearing, the district court overruled all three objections. The district court then
No. 17-4295 United States v. Donadeo Page 7
sentenced Defendant to a 70-month term of imprisonment and a 3-year term of supervised
release.
This appeal followed.
DISCUSSION
I. Standard of Review
We review a defendant’s sentence for reasonableness, using an abuse-of-discretion
standard. United States v. Jeross, 521 F.3d 562, 569 (6th Cir. 2008). “Reasonableness review
has both substantive and procedural components.” United States v. Keller, 498 F.3d 316, 322
(6th Cir. 2007). The procedural component requires us to ensure that the district court:
“(1) properly calculated the applicable advisory Guidelines range; (2) considered the other
§ 3553(a) factors as well as [arguments for a sentence outside the range]; and (3) adequately
articulated its reasoning for imposing the particular sentence chosen.” United States v. Bolds,
511 F.3d 568, 581 (6th Cir. 2007).
In evaluating the procedural reasonableness of a defendant’s sentence, “we review a
district court’s findings of fact for clear error and its legal conclusions de novo.” United States v.
Angel, 576 F.3d 318, 320 (6th Cir. 2009). Accordingly, whether conduct constitutes “relevant
conduct” under Guidelines § 1B1.3(a)(1)(B) is reviewed de novo, while the underlying factual
findings regarding whether that conduct is “within the scope” of, “in furtherance” of, and
“reasonably foreseeable” in connection with jointly undertaken criminal activity are reviewed for
clear error. United States v. Tocco, 306 F.3d 279, 284 (6th Cir. 2002). Similarly, whether
conduct constitutes “obstruction of justice” under Guidelines § 3C1.1 is reviewed de novo, while
any underlying findings of fact regarding that conduct are reviewed for clear error. United States
v. Amerson, 886 F.3d 568, 578 (6th Cir. 2018). A finding of fact is clearly erroneous “when,
although there is evidence to support it, the reviewing court on the entire evidence is left with the
definite and firm conviction that a mistake has been committed.” United States v. Charles,
138 F.3d 257, 262 (6th Cir. 1998).
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However, where a procedural reasonableness issue has not been preserved for appeal, we
review only for plain error. United States v. Wallace, 597 F.3d 794, 802 (6th Cir. 2010). Plain
error exists where there is “(1) error (2) that was ‘obvious or clear,’ (3) that ‘affected [the]
defendant’s substantial rights’ and (4) that ‘affected the fairness, integrity, or public reputation of
the judicial proceedings.’” United States v. Vonner, 516 F.3d 384, 386 (6th Cir. 2008) (en banc)
(quoting United States v. Gardiner, 463 F.3d 445, 459 (6th Cir. 2006)). Accordingly, plain error
is a standard that is extremely deferential to the district court, and it should be found “sparingly,
only in exceptional circumstances, and solely to avoid a miscarriage of justice.” United States v.
Gold Unlimited, Inc., 177 F.3d 472, 483 (6th Cir. 1999) (quoting United States v. Hook, 781 F.2d
1166, 1172–73 (6th Cir. 1986)).
II. Analysis
On appeal, Defendant argues that his sentence is procedurally unreasonable because the
district court (1) improperly determined the amount of loss attributable to him pursuant to
Guidelines §§ 2B1.1(b), 1B1.3(a)(1)(B), and (2) improperly applied an obstruction of justice
enhancement to him pursuant to Guidelines § 3C1.1. We address each argument in turn.
A. The amount of loss attributable to Defendant pursuant to Guidelines
§§ 2B1.1(b), 1B1.3(a)(1)(B)
A defendant’s Guidelines range is based on his/her Criminal History Category and Total
Offense Level. U.S.S.G. ch. 5, pt. A (sentencing table). And a defendant’s Total Offense Level
is based on his/her Base Offense Level and any increases or decreases warranted by the
circumstances surrounding the offense. Id. § 1B1.1(a). Where a defendant has committed a
fraud-related offense, his/her Total Offense Level is increased in proportion to the amount of
pecuniary loss that resulted from it. Id. § 2B1.1(b).
In this case, the district court applied a 16-level increase to Defendant’s Total Offense
Level after determining that the amount of loss attributable to Defendant was approximately
$2.6 million. See U.S.S.G. § 2B1.1(b)(1)(I)–(J). Defendant asserts that that determination was
improper for three reasons: (1) the district court erroneously attributed to him the amount of loss
that resulted from the shell corporations established and owned by Dominick Palazzo and Dennis
No. 17-4295 United States v. Donadeo Page 9
Boyles, (2) the district court failed to make sufficient factual findings in attributing that loss to
him, and (3) the district court applied the wrong legal standard in attributing that loss to him. We
disagree.
1. The amount of loss that resulted from the shell corporations established
and owned by Dominick Palazzo and Dennis Boyles
In determining the amount of loss attributable to a defendant pursuant to Guidelines
§ 2B1.1(b), the district court may consider any “relevant conduct.” U.S.S.G. § 1B1.3(a); United
States v. Hodge, 805 F.3d 675, 678–79 (6th Cir. 2015). Relevant conduct includes:
(A) all [criminal] acts and omissions committed, aided, abetted, counseled,
commanded, induced, procured, or willfully caused by the defendant, and
(B) in the case of a jointly undertaken criminal activity (a criminal plan, scheme,
endeavor, or enterprise undertaken by the defendant in concert with others,
whether or not charged as a conspiracy), all acts and omissions of others that
were--
(i) within the scope of the jointly undertaken criminal activity,
(ii) in furtherance of that criminal activity, and
(iii) reasonably foreseeable in connection with that criminal activity;
that occurred during the commission of the offense of conviction, in preparation
for that offense, or in the course of attempting to avoid detection or responsibility
for that offense.
U.S.S.G. § 1B1.3(a)(1); Hodge, 805 F.3d at 678–79. Accordingly, the amount of loss
attributable to a defendant may include any loss that resulted from his/her own criminal conduct,
as well as any loss that resulted from certain conduct of others. United States v. Kennedy,
714 F.3d 951, 960–61 (6th Cir. 2013). Conduct of others “that meets all three criteria set forth in
subdivisions (i) through (iii)”—i.e. is “within the scope” of, “in furtherance” of, and “reasonably
foreseeable” in connection with jointly undertaken criminal activity—“is relevant conduct under
this provision” for which a defendant may be held accountable. U.S.S.G. § 1B1.3 cmt. n.3(A).
To ensure that these criteria are met in a given case, the district court “must first
determine the scope of the criminal activity the particular defendant agreed to jointly undertake.”
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U.S.S.G. § 1B1.3 cmt. n.3(B).3 Significantly, this “is not necessarily the same as the scope of
the entire conspiracy,” nor is it necessarily the same as the scope of conduct for which a
defendant can be held accountable under the criminal law of conspiracy.4 Id. Rather, it is
limited to “the scope of the specific conduct and objectives embraced by the defendant’s
agreement.” Id. “[A]ny explicit agreement [and any] implicit agreement fairly inferred from the
conduct of the defendant and others” may be considered. Id. After the district court has
determined in this manner the scope of the criminal activity that the particular defendant agreed
to jointly undertake, it must then proceed to determine if the conduct of others at issue was
“in furtherance” of that activity and “reasonably foreseeable” in connection with that activity.
This Court has not had occasion to provide much additional guidance about these criteria,
particularly the requirement that the conduct of others at issue be “within the scope” of the
criminal activity the particular defendant agreed to jointly undertake. Rather, our opinions on
that requirement have often simply noted the case-specific facts relied upon in reaching their
conclusions. We now take the opportunity to state more clearly what is relevant when
determining whether that requirement has been satisfied, and because our precedent is of limited
utility, we look to helpful cases from other circuits.
In United States v. Salem, the Seventh Circuit held that the amount of loss loss that
resulted from wire fraud committed by the defendants’ co-conspirators could be attributed to the
defendants. 657 F.3d 560, 565 (7th Cir. 2011). And in doing so, the court listed factors relevant
3“A district court must calculate a defendant’s Guidelines range correctly, and in doing so, account for all
applicable commentary.” United States v. Havis, 907 F.3d 439, 444 (6th Cir. 2018).
4The latter distinction is important, if not intuitive. Just because a defendant could be convicted for a
substantive offense committed by another on the basis of the criminal law of conspiracy does not automatically
mean that his/her sentence for the conspiracy offense itself can take into account the conduct underlying that
substantive offense. The latter inquiry is “narrower than” the former. United States v. Swiney, 203 F.3d 397, 399
(6th Cir. 2000). For instance, a defendant cannot be held accountable under § 1B1.3(a)(1)(B) for “the conduct of
[other] members of a conspiracy prior to the defendant joining the conspiracy.” U.S.S.G. § 1B1.3 cmt. n.3(B). But
“it has long been established [under the criminal law of conspiracy] that a conspirator may join a conspiracy already
in progress and be held responsible for actions done in furtherance of the conspiracy before he joined.” United States
v. Collins, 799 F.3d 554, 579 (6th Cir. 2015) (quotation omitted). In the same way, a defendant cannot be held
accountable under § 1B1.3(a)(1)(B) for “[a]cts of others that were not within the scope of the defendant’s
agreement, even if those acts were known or reasonably foreseeable to the defendant” and committed in furtherance
of the conspiracy. U.S.S.G § 1B1.3 cmt. n.3(B). And this is true even though “[c]onspirators are generally held
liable [under the criminal law of conspiracy] for [all] known or reasonably foreseeable acts of their co-conspirators
committed in furtherance of the conspiracy.” United States v. Walton, 908 F.2d 1289, 1299 (6th Cir. 1990).
No. 17-4295 United States v. Donadeo Page 11
to determining the scope of the criminal activity that a defendant agreed to jointly undertake,
including: “(1) the existence of a single scheme; (2) similarities in modus operandi;
(3) coordination of activities among schemers; (4) pooling of resources or profits; (5) knowledge
of the scope of the scheme; and (6) length and degree of the defendant’s participation in the
scheme.” Id. at 564 (internal citations omitted). Other circuits have articulated similar factors.
See, e.g., United States v. Treadwell, 593 F.3d 990, 1005 (9th Cir. 2010); United States v.
Spotted Elk, 548 F.3d 641, 675 (8th Cir. 2008); United States v. Studley, 47 F.3d 569, 576 (2d
Cir. 1995). And without articulating them, we have frequently relied on similar factors.5 Thus,
we adopt the factors listed by the Seventh Circuit in Salem to determine the scope of the criminal
activity that a defendant agreed to jointly undertake.
In this case, Defendant asserts that he cannot be held accountable for the conduct of
Dominick Palazzo and Dennis Boyles because their shell corporations were not within the scope
of the criminal activity that he agreed to jointly undertake. In support of this assertion,
Defendant contends that he was “never involved” with those corporations, “never agreed to
participate in criminal activity involving” those corporations, and had “no independent
knowledge of the operations of” those corporations. (Brief for Appellant at 14–15; Reply Brief
for Appellant at 3.) Rather, Defendant contends that he only agreed to establish and own DDR
Technologies and Impact Global, and that any other shell corporations involved in the scheme to
defraud the District accordingly fall outside the scope of that narrow agreement. But this
assertion is ultimately unpersuasive, as the factors listed in Salem support the district court’s
finding that the scope of Defendant’s jointly undertaken criminal activity was broad enough to
include the conduct of Dominick Palazzo and Dennis Boyles.
5See, e.g., United States v. Agundiz-Montes, 679 F. App’x 380, 390 (6th Cir. 2017) (relying on the
defendant’s knowledge of the scope of the scheme); United States v. Carmichael, 676 F. App’x 402, 407 (6th Cir.
2017) (relying on the length and degree of the defendant’s participation in the scheme, the defendant’s knowledge of
the scope of the scheme, and on the coordination of activities among schemers); United States v Harris, 636 F.
App’x 922, 926 (6th Cir. 2016) (relying on the length and degree of the defendant’s participation in the scheme);
United States v. Kennedy, 714 F3d 951, 961 (6th Cir. 2013) (relying on the length and degree of the defendant’s
participation in the scheme, and on the pooling of resources or profits); United States v. Jackson, 308 F. App’x 899,
907 (6th Cir. 2009) (relying on the existence of a single scheme); United States v. Smith, 239 F. App’x 162, 167 (6th
Cir. 2007) (relying on the existence of a single scheme); United States v. Elias, 107 F. App’x 634, 638 (6th Cir.
2004) (relying on similarities in modus operandi); United States v. Drummer, 225 F.3d 660, at *3 (6th Cir. 2000)
(Table) (relying on similarities in modus operandi); United States v. Nallie, 53 F.3d 332, at *3 (6th Cir. 1995)
(Table) (relying on the pooling of resources or profits).
No. 17-4295 United States v. Donadeo Page 12
(1) The existence of a single scheme. The scheme to defraud the District had a single,
unlawful objective—to obtain as much money from the District as possible. (RE 46, PageID
# 288) (“From 2007 to February 14, 2011, Joseph Palazzo and others conspired and executed a
fraud scheme to steal approximately $3,300,000 from the [District].”); (RE 48, PageID # 320)
(“Dominick continued by informing [Defendant] that . . . it was an opportunity for everyone to
make extra money. . . . Dominick then offered to share this opportunity with [Defendant].”).
Thus, this factor supports a finding that the scope of Defendant’s jointly undertaken criminal
activity was broad enough to include the conduct of Dominick Palazzo and Dennis Boyles.
Accord U.S.S.G. § 1B1.3 cmt. n.3(B) (“[T]he [district] court must first determine . . . the scope
of the specific conduct and objectives embraced by the defendant’s agreement.”) (emphasis
added); United States v. Jackson, 308 F. App’x 899, 907 (6th Cir. 2009) (“[The defendants] were
still working towards a common goal of the criminal conspiracy . . . .”) (emphasis added); United
States v. Smith, 239 F. App’x 162, 167 (6th Cir. 2007) (“Selling crack was not one of several
illegal ends sought by the [conspiracy]—it was the end.”) (emphasis added).
(2) Similarities in modus operandi. The group led by Joseph Palazzo all defrauded the
District in the exact same manner—by establishing and owning shell corporations that purported
to provide IT-related goods and services to the District. (RE 46, PageID # 289) (“Regularly,
Joseph Palazzo retrieved the checks from the [D]istrict, which were made payable to the [shell
corporations], and delivered them either to [Defendant], Dominick Palazzo, or [Dennis] Boyles.
Each time he did so, Joseph Palazzo told [Defendant] or those individuals how much of the
money to keep for their own personal use and how much money to return to Joseph Palazzo, via
check or cash, for his personal use.”). In the case of Defendant and Dominick Palazzo, they then
also issued IRS-Form 1099 Statements to Joseph Palazzo falsely indicating that Joseph had
performed services for their shell corporations in exchange for payment in that amount. Thus,
this factor supports a finding that the scope of Defendant’s jointly undertaken criminal activity
was broad enough to include the conduct of Dominick Palazzo and Dennis Boyles. Accord
United States v. Elias, 107 F. App’x 634, 638 (6th Cir. 2004) (“[The defendants] ‘all did the
same thing with the same checks gotten [sic] them from the same place with the same IDs,
cashed at the same bank.’ . . . The acts of entering the banks together and cashing fraudulent
checks as a group also provide the basis for finding an implicit agreement among [the
No. 17-4295 United States v. Donadeo Page 13
defendants].”) (citation omitted); United States v. Drummer, 225 F.3d 660, at *3 (6th Cir. 2000)
(Table) (“[The defendants] were each engaged in a common scheme to defraud [the bank] using
the same method . . . . [They were] engaged in ‘basically the same scheme’ involving the same
bank.”) (citation omitted).
(3) Coordination of activities among schemers. The scheme to defraud the District
required at least some coordination among all of the co-conspirators. Dominick Palazzo
instructed Defendant on how join in the scheme. (RE 48, PageID # 320) (“Dominick explained
that all [Defendant] needed to do was open a company so that Joseph could outsource the
District’s [IT] needs to that company.”). Later, Defendant and Dominick Palazzo jointly
established and owned Impact Global, doing business as The Jump Yard. (RE 46, PageID # 289)
(“Beginning in approximately the spring of 2009, [Defendant] and Dominick Palazzo used
the[ir] stolen funds to make preparations to start and operate The Jump Yard . . . [in order] to
conceal the illegal nature of receiving said funds and to avoid detection by law enforcement.”).
All of the individuals involved coordinated with Joseph Palazzo in order to receive the checks
from the District, as described above. And once the scheme was discovered, the entire group—
the Palazzo brothers, Dennis Boyles, and Defendant—all met at Joseph Palazzo’s house to
discuss how to respond to the inevitable police investigation. Thus, this factor supports a finding
that the scope of Defendant’s jointly undertaken criminal activity was broad enough to include
the conduct of at least Dominick Palazzo, and likely also Dennis Boyles. Accord United States
v. Carmichael, 676 F. App’x 402, 407 (6th Cir. 2017) (“[One conspirator] provided instructions
to his coconspirators about obtaining various identifications and opening fraudulent bank
accounts. . . . [Defendant then] opened a number of fraudulent bank accounts . . . .”).
(4) Pooling of resources or profits. Dominick Palazzo used $100 from one of his shell
corporations to open the corporate bank account for Impact Global, the shell corporation that he
and Defendant jointly established and owned. Defendant and Dominick Palazzo then both
deposited checks from the District into that bank account and used that bank account to fund
check and debit card purchases related to The Jump Yard. Thus, this factor supports a finding
that the scope of Defendant’s jointly undertaken criminal activity was broad enough to include
the conduct of Dominick Palazzo, but not Dennis Boyles. Accord United States v. Kennedy,
No. 17-4295 United States v. Donadeo Page 14
714 F.3d 951, 961 (6th Cir. 2013) (“[T]he government’s evidence showed that [one defendant]
deposited into [a joint bank account] one check from [the victim of another defendant] and
another check written by [the other defendant] himself.”); United States v. Nallie, 53 F.3d 332, at
*3 (6th Cir. 1995) (Table) (“[T]here is no indication from the record before us . . . that [the
defendant] shared resources with [his co-conspirators].”).
(5) Knowledge of the scope of the scheme. Defendant admittedly knew at the time he
joined in the scheme to defraud the District that Dominick Palazzo had established and owned at
least one other shell corporation that he was using for that purpose. (RE 48, PageID # 320)
(“Dominick went on to explain that he and Joseph had partnered together to provide [IT] services
to the District through a third-party company two years ago. . . . Dominick then offered to share
this opportunity with [Defendant].”); (RE 46, PageID # 288) (“[Defendant] had knowledge of
other shell corporations . . . used by co-conspirators; however [he] claims that he did not have
knowledge that the other shell corporations were being used to further advance the scheme.”).
Thus, this factor supports a finding that the scope of Defendant’s jointly undertaken criminal
activity was broad enough to include the conduct of Dominick Palazzo, but not Dennis Boyles.
Accord Carmichael, 676 F. App’x at 407 (“The actions of [the defendants] also indicate that they
were fully aware of the scope of the conspiracy.”); United States v. Agundiz-Montes, 679 F.
App’x 380, 390 (6th Cir. 2017) (“[The defendant] was so deeply involved that he would have
known the full extent of the heroin distribution.”).
(6) Length and degree of the defendant’s participation in the scheme. Defendant played
a “middle of the tier” role in the scheme to defraud the District, and accordingly the district court
found that he was entitled to neither a leadership role enhancement nor a minor role reduction at
sentencing. (RE 60, Sentencing Hearing Transcript, PageID # 458.) While Defendant was not
the architect of the scheme and was the last of the co-conspirators to join in it, he participated for
over two years during which he established and owned two shell corporations that were
responsible for almost one-third of the total loss that resulted from the entire four-year
conspiracy. Thus, this factor supports, if only slightly, a finding that the scope of Defendant’s
jointly undertaken criminal activity was broad enough to include the conduct of Dominick
Palazzo and Dennis Boyles. Accord Carmichael, 676 F. App’x at 407 (6th Cir. 2017) (“[One
No. 17-4295 United States v. Donadeo Page 15
defendant] ‘was at the center of the activity in the United States’ . . . . [and the other defendant]
was left in charge of the American part of the conspiracy when [the first defendant] was out of
town.”) (citation omitted); United States v. Harris, 636 F. App’x 922, 926 (6th Cir. 2016) (“[A]n
active and fundamental role in a fraud can establish an agreement to undertake the entire
scheme.”); Kennedy, 714 F.3d at 961 (“Both [defendants] fully participated in the fundamental
aspect of the scheme . . . .”).
Thus, all of the factors listed in Salem support the district court’s finding that the shell
corporations established and owned by Dominick Palazzo were within the scope of Defendant’s
jointly undertaken criminal activity, and a majority of the factors support the same finding with
regard to the shell corporation established and owned by Dennis Boyles. Accordingly, we hold
that the district court did not err in making these findings.
Defendant also briefly asserts that the shell corporations established and owned by
Dominick Palazzo and Dennis Boyles were not reasonably foreseeable in connection with his
jointly undertaken criminal activity. But this assertion is equally unpersuasive. As to Dominick
Palazzo’s shell corporations, Defendant had actual knowledge of at least one at the time he
joined in the scheme, and “[a]ctual knowledge necessarily satisfies the lesser reasonable-
foreseeability standard.” United States v. Anderson, 795 F.3d 613, 617 (6th Cir. 2015).
Defendant also jointly established and owned a second shell corporation with Dominick Palazzo.
Accordingly, it was reasonably foreseeable that Dominick Palazzo had established and owned a
second shell corporation that, along with the other two, he was similarly using to defraud the
District. Accord United States v. Doe #2, 291 F. App’x 268, 270 (11th Cir. 2008) (“It was
reasonably foreseeable that [the defendant] was not the only store employee handling stolen
merchandise and that additional stolen merchandise, not just that [the defendant] handled
personally, would be included in the shipments delivered to New York.”). And as to Dennis
Boyles’ shell corporation, Defendant was recruited to join in the scheme by Dominick Palazzo.
Accordingly, it was reasonably foreseeable that Dominick Palazzo had recruited or would in the
future recruit others, including Dennis Boyles, to do the same. Accord United States v. Sorokin,
570 F. App’x 217, 219 (3d Cir. 2014) (“[The defendant] reasonably could foresee that Kismat
No. 17-4295 United States v. Donadeo Page 16
would bring another person to assist him in the fraudulent shopping sprees because [the
defendant] himself accompanied and assisted Kismat on several of these trips.”).6
Thus, we hold that the district court properly found that the amount of loss that resulted
from the shell corporations established and owned by Dominick Palazzo and Dennis Boyles is
attributable to Defendant. Accordingly, we need not address clear error.
2. The district court’s factual findings regarding the loss attributable to
Defendant
We review Defendant’s second assertion for plain error, as it is an alleged procedural
error that was not raised before the district court. United States v. Bostic, 371 F.3d 865, 871 (6th
Cir. 2004); see also United States v. Donohue, 726 F. App’x 333, 358–59 (6th Cir. 2018).
A district court must “make particularized findings with respect to both the scope of the
defendant’s agreement [to engage in jointly undertaken criminal activity] and the foreseeability
of his co-conspirators’ conduct before holding the defendant accountable” for that conduct.
United States v. Campbell, 279 F.3d 392, 400 (6th Cir. 2002).
With regard to the scope of a defendant’s agreement to engage in jointly undertaken
criminal activity, we have found the particularized findings requirement satisfied by a finding
that “witnesses testified that the total amount of crack purchased by [the defendant] and his co-
conspirators . . . was somewhere between 50 kilograms and 60 kilograms, a great deal more than
7.5.” United States v. Valentine, 553 F. App’x 591, 597 (6th Cir. 2014) (citation omitted)
(second two alterations in original). We have also found the requirement satisfied by a finding
that “this was a jointly undertaken criminal activity . . . [based on] the documents that we have
received in evidence and on the testimony of Agent Lewis and [on the fact that] your client has
6Though the foreseeability of the shell corporation established and owned by Dennis Boyles is a close case,
any error would also have been harmless, as “either way [Defendant] is subject to the same guideline range.” United
States v. Gill, 348 F.3d 147, 155 (6th Cir. 2003); see also United States v. Turner, 738 F. App’x 856, 865 (6th Cir.
2018) (“[W]here a district court errs in its guidelines calculations, remand is appropriate only if the error affected the
defendant’s guidelines range.”). Even excluding the amount of loss that resulted from Dennis Boyles’ shell
corporation from the amount of loss attributable to Defendant, Defendant would have received the same 16-level
increase to his Total Offense Level because the amount of loss attributable to him would still have exceeded
$1.5 million. See also U.S.S.G. § 2B1.1(b)(1)(I)–(J).
No. 17-4295 United States v. Donadeo Page 17
pleaded guilty to a conspiracy count.” United States v. Labib, 38 F. App’x 257, 261 (6th Cir.
2002).
With regard to the foreseeability of the co-conspirator’s conduct, we have found the
particularized findings requirement satisfied by a finding that the defendant “was aware that the
conspiracy was broader than merely the three transactions with which he was involved and that,
as a result, the conduct of the conspiracy as a whole was reasonably foreseeable to him.”
Campbell, 279 F.3d at 400–01. We have also found the requirement satisfied by a finding that
the defendant “‘was involved in . . . three to five purchases in Arkansas of one to two kilograms
per transaction,’ and other ‘multiple kilogram purchase[s] from Arkansas,’” and that, as a result
“this quantity was either known by [the defendant] personally because he was there or was
reasonably foreseeable to him.” Valentine, 553 F. App’x at 597. (citation omitted) (first two
alterations in original).
In this case, the district court made similar factual findings. The district court stated:
Counselors, I’ve had an opportunity now to hear you in court and I’ve read
what’s been written, not only by you, but also by the probation officer, and I find
that the objection [to the amount of loss attributable to Defendant] is well placed
if I were to believe that [Defendant] didn’t know what was happening, and that he
didn’t know for a much longer period than even the end of 2009. And if I believe
that the law requires that I narrowly construe what’s jointly taken – jointly
undertaken behavior in the way defense counsel suggests, I don’t believe I am so
constrained. . . .
I do think there is room for argument that you’re not to be held for the
entire loss amount [of $3.3 million]. The $2.6 million is a portion, is more than
1.5, but I think that greater amount is easily substantiated . . . .
Because while I accept what’s written here [in the PSR] and I adopt it as
my own, the criminal activity that was jointly undertaken during 2009 to 2011 is
appropriately attributed to you, Mr. Donadeo. Even if I were to give you the
benefit of the doubt that [the government] isn’t urging, but recognizes as a
possibility and limited to 2010 to 2011, it still far exceeds the $1.5 million
threshold, which would dictate a 16-level upwards adjustment.
What’s important in this case is that you did participate, jointly and
knowingly, in a criminal conspiracy that created a loss to the victim in excess of
$1.5 million.
No. 17-4295 United States v. Donadeo Page 18
(RE 60, PageID #442–43.) Although “less than optimal,” these findings were sufficient. United
States v. Harris, 636 F. App’x 922, 926 (6th Cir. 2016). The district court addressed both the
scope of Defendant’s agreement to engage in jointly undertaken criminal activity and the
foreseeability of his co-conspirators’ conduct. The district court explained that $2.6 million of
loss was attributable to Defendant because he could not be attributed with the $3.3 million of
loss that resulted from the entire conspiracy. And it explained that the $2.6 million of loss was
attributable to Defendant because he knew “what was happening” and chose to join in the
scheme anyway. Significantly, that knowledge is relevant to both the scope and foreseeability
criteria, as discussed above. See Salem, 657 F.3d at 564; Anderson, 795 F.3d at 616–17.
Thus, we hold that the district court made sufficient factual findings in attributing the
amount of loss that resulted from the shell corporations established and owned by Dominick
Palazzo and Dennis Boyles to Defendant. Accordingly, we need not address plain error.
3. The district court’s legal standard regarding the loss attributable to
Defendant
We also review Defendant’s third assertion for plain error, as it is an alleged procedural
error that was not raised before the district court. Bostic, 371 F.3d at 871.
At sentencing, the government must prove the amount of loss attributable to a defendant,
like all sentencing adjustments, by a preponderance of the evidence. Wright v. United States,
182 F.3d 458, 467 (6th Cir. 1999). Defendant contends that the district court here erroneously
applied the lesser “probable cause” standard. Accord Smoak v. Hill, 460 F.3d 768, 778 (6th Cir.
2006) (“[Reasonable suspicion] requires more than just a ‘mere hunch,’ but is satisfied by a
likelihood of criminal activity less than probable cause, and ‘falls considerably short of satisfying
a preponderance of the evidence standard.’”).
It is true that the district court used the phrase “probable cause” when stating its findings
regarding the amount of loss attributable to Defendant. Specifically, the district court stated:
I think that greater amount [of $2.6 million] is easily substantiated, at least by
probable cause, and even clearly—more clearly than that.
No. 17-4295 United States v. Donadeo Page 19
(RE 60, PageID # 442.) However, as the context demonstrates, the district court seemed to
understand that a higher standard applied. And this understanding was made clear later in the
sentencing proceeding when the district court stated, in relation to a different objection:
I’m keeping all of these [arguments] in mind as I develop what I think will be a
fair, sufficient sentence to be imposed. I’m aware of what the guidelines suggest
and about the preponderance that usually is required to substantiate an adjustment,
and also what I can do by way of exercising a variance.
(Id. at PageID # 474.) Thus, we hold that the district court’s use of the phrase “probable cause”
was not error. Accord Arnett v. Jackson, 393 F.3d 681, 688 (6th Cir. 2005) (“[A]lthough ‘a trial
judge on occasion will misspeak during sentencing . . . every ill-advised word will not be the
basis for reversible error.’”) (alteration in original) (quoting United States v. Bakker, 925 F.2d
728, 741 (4th Cir. 1991)); United States v. Chambliss, 398 F. App’x 142, 144 (6th Cir. 2010)
(“Even in original sentencing proceedings, however, we do not punish district courts for minor
omissions or slips of the tongue.”). Accordingly, we need not address plain error.
B. Defendant’s obstruction of justice enhancement pursuant to Guidelines
§ 3C1.1
As stated above, a defendant’s Sentencing Guidelines range is based on his/her Criminal
History Category and Total Offense Level. U.S.S.G. ch. 5, pt. A (sentencing table). And a
defendant’s Total Offense Level is based on his/her Base Offense Level and any increases or
decreases warranted by the circumstances surrounding the offense. Id. § 1B1.1(a). Where a
defendant has “willfully obstructed or impeded, or attempted to obstruct or impede, the
administration of justice with respect to the investigation, prosecution, or sentencing of the
instant offense of conviction,” his/her Total Offense Level is increased by 2 levels. Id. § 3C1.1.
In this case, the district court applied this 2-level increase to Defendant’s Total Offense
Level after finding that he had obstructed justice by relocating multiple times in order to “evade
investigation and prosecution.” (RE 60, PageID # 478.) Defendant asserts that that application
was improper because he “did nothing to avoid detection other than leave the United States with
no criminal case pending against him,” which does not constitute obstruction of justice. (Brief
for Appellant at 23.) We disagree.
No. 17-4295 United States v. Donadeo Page 20
“Obstructive conduct can vary widely in nature, degree of planning, and seriousness.”
U.S.S.G. § 3C1.1 cmt. n.3. As a result, “comparison of the examples set forth in Application
Notes 4 and 5 [accompanying § 3C1.1] should assist the [district] court in determining whether
application of this adjustment is warranted in a particular case.” Id. Application Note 5 states
that “avoiding or fleeing from arrest” does not “ordinarily” constitute obstruction of justice. Id.
cmt. n.5; see also United States v. Henry, 819 F.3d 856, 872 (6th Cir. 2016).
As the word “ordinarily” suggests however, this is not a hard-and-fast rule. Avoidance of
or flight from arrest can constitute obstruction of justice. But we have yet to adopt a test for
distinguishing ordinary avoidance or flight—which does not constitute obstruction of justice—
from extraordinary avoidance or flight—which does. Accordingly, we look to helpful cases from
other circuits.
Three circuits have held that avoidance of or flight from arrest constitutes obstruction of
justice only where there is some additional obstructive conduct. See, e.g., United States v. Bliss,
430 F.3d 640, 648–49 (2d Cir. 2005) (“[W]e believe that [the defendant’s] flight itself is
insufficient to support the district court’s application of the enhancement. We therefore look for
other ‘obstructive conduct’ that, ‘coupled with’ his flight, might allow us to affirm the court’s
ruling.”) (internal citations omitted); United States v. Alpert, 28 F.3d 1104, 1107 (11th Cir. 1995)
(“We conclude that the § 3C1.1 enhancement does not apply to persons engaged in criminal
activity who learn of an investigation into that activity and simply disappear to avoid arrest,
without more. . . . The [defendants] may have engaged in additional conduct while avoiding
arrest, however, that would warrant application of the obstruction enhancement . . . .”) (internal
citations omitted); United States v. Madera-Gallegos, 945 F.2d 264, 267 (9th Cir. 1991) (“‘Mere
flight in the immediate aftermath of a crime’ is not sufficient to apply the § 3C1.1 adjustment.
But flight, coupled with other ‘obstructive’ conduct, may justify the § 3C1.1 enhancement.”)
(internal citations omitted). But one circuit has recently “set a [lower] bar,” holding that
avoidance of or flight from arrest constitutes obstruction of justice “if it is likely to burden a
criminal investigation or prosecution significantly—likely to make the investigation or
prosecution significantly more costly or less effective than it would otherwise have been.”
No. 17-4295 United States v. Donadeo Page 21
United States v. Nduribe, 703 F.3d 1049, 1052–53 (7th Cir. 2013). Because these cases apply
significantly different tests to the same issue, they deserve further discussion.
In Madera-Gallegos, the defendant facilitated the sale of heroin to an undercover police
officer. 945 F.2d 266–67. Presumably after realizing that fact, the defendant immediately fled
from California to Mexico. Id. Later that night, a search warrant was executed at the
defendant’s residence and revealed “the lights on and food cooking on the stove, which
indicated . . . that someone had fled in a hurry.” Id at 266. Nine months later, the defendant was
arresting after returning to the United States to persuade his wife to come to Mexico with him.
Id. On these facts, the Ninth Circuit held that an obstruction of justice enhancement was
inapplicable. The court reasoned that the defendant “fled to Mexico immediately after the drug
deal turned sour,” and that “there [was] no evidence that, once found, [the defendant] made any
efforts to impede authorities.” Id. at 268. Thus, there was no “other ‘obstructive’ conduct” to
justify the enhancement. Id. at 267.
And in Bliss, the defendant sexually abused his minor niece. 430 F.3d at 642–43. The
police, relying on an anonymous tip, obtained and executed a search warrant at the defendant’s
residence. Id. Presumably after realizing that fact, the defendant immediately fled from
Vermont to California. Id. Twelve months later, having been placed on the Federal Bureau of
Investigation’s Ten Most Wanted List, the defendant was arrested. Id. While a fugitive, the
defendant had used an alias and his appearance had changed. Id. On these facts, the Second
Circuit held that an obstruction of justice enhancement was inapplicable. The court reasoned
that the defendant’s actions “amount[ed] to little more than ‘simply disappear[ing] to avoid
arrest,’” which “fall[s] short of what we believe the Sentencing Commission contemplated in
prescribing the enhancement for obstruction of justice.” Id. at 648 (second alteration in original)
(internal citations omitted). The court further reasoned that the defendant’s use of an alias was
not “other obstructive conduct” because there was no evidence that it “actually hindered or
impeded the investigation or prosecution of the offense,” and that the defendant’s change in
appearance was also not “other obstructive conduct” because there was no evidence that the
changes—gaining weight and growing a mustache—were “abnormal” or “calculated and
No. 17-4295 United States v. Donadeo Page 22
deliberate.” Id. at 649–51; accord United States v. Spates, 162 F. App’x 592, 596 (6th Cir. 2006)
Thus, there was no “other obstructive conduct” to justify the enhancement. Id. at 651.
But in Nduribe, the defendant was part of a large heroin distribution conspiracy. 703 F.3d
at 1050–51. After learning that the police were searching the home of a co-conspirator, the
defendant fled from Illinois to New York, Nigeria, and then to Amsterdam. Id. Several years
later, the defendant was arrested and extradited. Id. While a fugitive, and even upon arrest, the
defendant had used an alias. Id. On these facts, the Seventh Circuit held that an obstruction of
justice enhancement was applicable. The court stated that the exception in § 3C1.1 for
avoidance of or flight from arrest was “puzzl[ing]” in its lack of regard for the effect of a
defendant’s actions on the government. Id. at 1051. And the court cited to Bliss as epitomizing
the absurdity of blindly adhering to that approach, questioning “what better example of
obstructing justice could one want [than what occurred in Bliss]?” Id. at 1052. The court then
reasoned that the proper test for distinguishing ordinary avoidance or flight from extraordinary
avoidance or flight is whether it is “likely to burden a criminal investigation or prosecution
significantly—likely to make the investigation or prosecution significantly more costly or less
effective than it would otherwise have been.” Id. at 1052. And that test was “easily satisfied.”
Id.
We adopt the test of the Second, Ninth, and Eleventh circuits, and hold that avoidance of
or flight from arrest constitutes obstruction of justice only where there is some additional
obstructive conduct. In addition to having been adopted by the majority of circuits to decide the
issue, this test finds stronger support in the text of § 3C1.1—which notes the relevance of the
effect of a defendant’s actions on the government in some contexts, but notably does not do so in
others, including avoidance of or flight from arrest. Compare U.S.S.G § 3C1.1 cmt. n.4(G), 5(A)
with id. cmt. n.5(D). This test is also consistent with our holding in United States v. Sanchez,
928 F.2d 1450 (6th Cir. 1991), abrogated on other grounds by United States v. Jackson-
Randolph, 282 F.2d 369 (6th Cir. 2002). In that case, we held, without much explanation, that an
obstruction of justice enhancement was inapplicable where the defendants “undoubtedly
abandoned their known residence in an attempt to avoid being arrested.” Id. at 1459. But no
additional obstructive conduct was argued or discussed there.
No. 17-4295 United States v. Donadeo Page 23
Applying that test to the facts of this case, we hold that Defendant’s conduct constituted
obstruction of justice. While, as in Sanchez, Defendant’s relocations to North Carolina,
Germany, and Spain were undoubtedly an attempt to avoid being arrested, here there is also
other obstructive conduct sufficient to justify the enhancement. After leaving the country,
Defendant cut off all communications with his immediate family in the United States, did not
obtain employment, did not use a credit card, did not register housing, cancelled a planned flight
back to the United States, and eventually, as the government closed in on him, cut off all
communications with his attorney in the United States. Though a close case, this conduct is
sufficient to justify the enhancement because it was a “calculated” and “deliberate” effort by
Defendant to evade arrest, prosecution, and possible conviction for his involvement in the
scheme to defraud the District. Accord Spates, 162 F. App’x at 596; Bliss, 430 F.3d at 651.7
Thus, we hold that the district court properly applied an obstruction of justice
enhancement pursuant to § 3C1.1.
CONCLUSION
For the reasons set forth above, we AFFIRM the district court’s sentence.
7Any error would also have been harmless as “either way [Defendant] is subject to the same guideline
range.” United States v. Gill, 348 F.3d 147, 155 (6th Cir. 2003); see also United States v. Turner, 738 F. App’x 856,
865 (6th Cir. 2018) (“[W]here a district court errs in its guidelines calculations, remand is appropriate only if the
error affected the defendant’s guidelines range.”). The district court stated an “in-the-alternative variance” with
regard to the obstruction of justice enhancement. ( RE 60, PageID # 481–82.) It is well-established that such a
variance renders any error harmless. See United States v. Steel, 609 F. App’x 851, 854–55 (6th Cir. 2015)
(collecting published Sixth Circuit cases to that effect).