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United States v. Gehrmann Jr.

No. 19-1145. D.Colo. Judge Phillips. US Sentencing Guidelines—Presentence Report—Sufficiency of Sentencing Findings—Sufficient Evidence.

July 27, 2020

Defendant and another chiropractor opened a chiropractic center. A few years later, the practice began an income diversion scheme in which patients were instructed to pay by cash or check directly to the individual provider. These payments were not reported as income on the company’s books or tax returns. The scheme continued after a third chiropractor joined the practice. The two founders were later indicted by a grand jury on four felony charges: conspiracy to defraud the United States and three counts of filing false tax returns. Defendant went to trial, and a jury convicted him on all four counts.

The parties stipulated to the loss amount, which established a base offense level for sentencing purposes. Defendant objected to portions of the presentence report (PSR), including its recommended three-level adjustment under the US Sentencing Guidelines, but did not object to the document’s characterization of him as a manager or supervisor of criminal activity. Despite the PSR’s recommendation, the government sought only a two-level adjustment. The district court agreed with the government and imposed a 24-month sentence. This adjustment was premised on the finding that defendant was a manager or supervisor in the criminal activity.

On appeal, defendant contended that the trial court did not adequately explain its findings in support of the adjustment. A district court explains its reasons for a sentence at the sentencing hearing, so a defendant must object at the hearing to preserve an objection to the adequacy of the court’s findings. Here, defendant’s counsel did not object to the adequacy of the findings but at one point said that defendant was no more responsible than his co-conspirators and should not receive an adjustment. This abbreviated mention required the district court to better explain how defendant qualified as a leader, organizer, manager, or supervisor of the criminal activity. The district court thus erred, and the error was plain. However, defendant failed to show a reasonable probability that the error led to an incorrect application of the Sentencing Guidelines.

Defendant also argued that the adjustment was imposed without sufficient evidence. However, the district court’s findings as supplemented by undisputed facts demonstrated that defendant acted as an organizer. Thus, the district court had sufficient information to apply the adjustment.

The sentence was affirmed.

Official US Court of Appeals for the Tenth Circuit proceedings can be found at the US Court of Appeals for the Tenth Circuit website.

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