United States v. Thorson

PUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.  No. 07-4787
A. THOMAS THORSON,
Defendant-Appellant.

Appeal from the United States District Court
for the District of Maryland, at Greenbelt.
Roger W. Titus, District Judge.
(8:05-cr-00467-RWT)

Argued: September 24, 2010

Decided: January 28, 2011

Before NIEMEYER, MOTZ, and GREGORY,
Circuit Judges.

Affirmed by published opinion. Judge Niemeyer wrote the
majority opinion, in which Judge Motz joined. Judge Gregory
wrote a dissenting opinion.
2 UNITED STATES v. THORSON
COUNSEL

ARGUED: Price Owen Gielen, NEUBERGER, QUINN,
GIELEN, RUBIN & GIBBER, PA, Baltimore, Maryland, for
Appellant. Michael Richard Pauze, OFFICE OF THE
UNITED STATES ATTORNEY, Greenbelt, Maryland, for
Appellee. ON BRIEF: Brian M. Boyle, NEUBERGER,
QUINN, GIELEN, RUBIN & GIBBER, PA, Baltimore,
Maryland, for Appellant. Rod J. Rosenstein, United States
Attorney, Baltimore, Maryland, Diana H. Beinart, Trial Attor-
ney, OFFICE OF THE UNITED STATES ATTORNEY,
Greenbelt, Maryland, for Appellee.

OPINION

NIEMEYER, Circuit Judge:

After a jury convicted Thomas Thorson on one count of
conspiring to defraud the United States of tax revenue, in vio-
lation of 18 U.S.C. § 371, and on three counts of aiding and
assisting in the preparation and presentation of false income
tax returns, in violation of 26 U.S.C. § 7206(2), the district
court sentenced him to 108 months’ imprisonment. Challeng-
ing his sentence on appeal, Thorson contends that the district
court erred in (1) enhancing his sentence under U.S.S.G.
§ 3B1.1, as an "organizer or leader" of the tax fraud scheme;
(2) enhancing his sentence under U.S.S.G. § 3C1.1, for
obstruction of justice in providing falsified documents to the
grand jury; and (3) imposing a sentence that did not serve the
need "to avoid unwarranted sentence disparities among defen-
dants with similar records who have been found guilty of sim-
ilar conduct," 18 U.S.C. § 3553(a)(6).

For the reasons that follow, we reject Thorson’s arguments
challenging his sentence and affirm the judgment of the dis-
trict court.
 UNITED STATES v. THORSON 3
I

In 1995, Thorson and co-conspirators John Ross, Glendle
Johnston, Thomas Franks, Paul Decker, and others designed
a scheme to solicit others to invest in partnerships to purchase
and subsequently donate cemetery lots in order to benefit
from tax deductions available to the partnerships. Thorson
and the other co-conspirators informed potential investors that
the partnership had purchased cemetery sites at a low cost;
that the sites would be held for longer than one year; and that
the sites would then be donated to a charity at the end of the
tax year, creating tax deductions in the amount of a higher
appraised value of the sites, yielding a tax benefit to partners.
IRS regulations provided that if a taxpayer owned a piece of
property for less than a year before making a charitable dona-
tion of the property, the deduction for the donation was lim-
ited to the purchase price of the property. But if the taxpayer
held the property for more than a year and then donated it, the
taxpayer could claim a stepped-up deduction for the appraised
value of the property.

The partnership had trouble recruiting investors in the
beginning because the investors would need to wait two years
to receive the tax benefit from their investment. Thus, in order
to make the investment attractive, the partnership had to
devise a way by which to purchase the cemetery sites, solicit
investment participation, and donate the sites to obtain a
deduction, all within the period of a single calendar tax year
so that the investor could claim the deduction the following
April.

For the tax years 1996, 1997, and 1998, Thorson formed
three separate partnerships, one for each year, that terminated
at the end of the year. During the given year, various co-
conspirators, but mainly Johnston, purchased cemetery sites
for that year’s partnership at low prices and on December 31
of that year, donated the sites to charities (often the same
entity from whom the sites were acquired). The partnership
4 UNITED STATES v. THORSON
then claimed a tax deduction for the substantially higher
appraised value of the site on the partnership’s tax return for
the year. To satisfy the Tax Code requirement that the prop-
erty be held for more than a year, Thorson fabricated docu-
ments to support a purchase date in the December before the
beginning of the tax year. On the basis of the fabricated docu-
ments, the partnership was able to claim that it had held the
cemetery sites for more than a year and, with that claim, was
able to make the investment attractive to investors. Over the
course of the three relevant years, investors paid the three
partnerships more than $2.3 million for partnership interests
and received $9.9 million in tax deductions.

Taking 1996 as an example, Johnston purchased cemetery
sites for the 1996 partnership between March 1996 and the
end of the year at a cost of $30 to $33 for each site. After the
partnership donated the sites to charity on December 31,
1996, it claimed a deduction of $650 per site, the amount of
the site’s claimed market value, for a total deduction of $1.8
million. To participate in the partnership’s 1996 tax deduc-
tion, investors paid the partnership a total of $494,416 for
partnership interests, or 27.5% of the $1.8 million deduction.
Because the cemetery sites cost a total of about $92,000, the
co-conspirators realized a profit of over $400,000, represent-
ing the difference between the cost of the sites and the pro-
ceeds from selling the partnership interests to the investors.
To be able to claim the deduction for tax year 1996, which
was the same year that the sites were purchased, Thorson fal-
sified the purchase documents to show that the sites had been
purchased on December 23, 1995, which was more than a
year before the sites were donated, on December 31, 1996. If
the partnership had accurately reported when it had purchased
the sites, it would have been able to claim as a deduction only
the amount paid for the sites. In order to receive the stepped-
up deduction, the partnership would have had to hold the sites
into the next tax year, making the investment in the partner-
ship unappealing to investors, as it would have tied up their
money for another year.
 UNITED STATES v. THORSON 5
Similar facts were shown for the partnerships relating to tax
years 1997 and 1998, although the purchase price of the cem-
etery sites rose each year, to a maximum of $65 per site, and
the number of investors increased.

At meetings with potential investors for the sale of partner-
ship interests, Decker was the initial spokesman for the part-
nership. But to respond to details and concerns about the
investment, he referred comments and questions to Thorson,
who was a lawyer and who had implemented the legal struc-
ture to fraudulently take advantage of the stepped-up tax
deduction allowed by the Tax Code. Thorson’s participation
in the enterprise was also advertized in some of the partner-
ships’ marketing materials, which cited his expertise in tax
and non-profit law. While some investors were willing to
invest after Decker had made his presentation, others did so
only after consulting with and receiving assurances from
Thorson.

Over the three years, 1996, 1997, and 1998, Thorson’s
income from the partnership increased significantly, and he
created mechanisms to conceal this income. He assigned his
income from the partnerships to a corporation named AGH,
Inc., which had recruited a lawyer to serve as president, but
in name only. In actuality, Thorson retained all decisionmak-
ing authority for AGH. Under Thorson’s direction, AGH
opened a Charles Schwab brokerage account, which did not
have Thorson’s name associated with it, and it deposited
Thorson’s income from the partnerships in the AGH Schwab
account. Thorson did not report this money as income on his
tax return but, instead, created paperwork suggesting that the
payments to AGH were loans from a company called Mid-
Atlantic Mortgage and Marketing Associates, Inc. When
Thorson took money from the AGH Schwab account, he did
the same. Thus, Thorson prepared a "demand promissory
note" in 1998 "evidencing" a purported loan from Mid-
Atlantic Mortgage to AGH and similar documents to "evi-
dence" loans from AGH back to him. Several of these agree-
6 UNITED STATES v. THORSON
ments were falsely dated. Consistent with this cover-up
scheme, the nominal president of AGH filed a 1998 corporate
tax return for AGH, reporting that AGH had received a loan
from Mid-Atlantic Mortgage and had made a loan to Thorson,
and therefore had no income from the transaction.

In 1998, the IRS initiated a civil audit of the 1996 partner-
ship’s tax return, and the revenue agent made a formal request
to the partnership for partnership agreements, documents
related to the acquisition of cemetery sites, and partnership
bank records for 1995-96. In responding to the request, Thor-
son prepared an index for the documents that were provided
to the agent, and the documents so provided included an
agreement dated December 23, 1995, purporting to evidence
the partnership’s purchase of a number of cemetery sites on
that date. As it turned out, however, Thorson prepared the
December 23, 1995 agreement in 1998 after the IRS requested
the documents. This fabrication was established not only by
the document’s computer metadata, but also by contextual
inconsistencies.

Even while the civil audit continued, a grand jury investiga-
tion began, and the grand jury subpoenaed various documents
from the three partnerships. In response to the subpoena,
Thorson produced not only the fabricated agreement dated
December 23, 1995, but also another fabricated agreement for
the purchase of cemetery sites, dated December 22, 1996.

Subsequently, the grand jury indicted Thorson with one
count of conspiring to defraud the United States of tax reve-
nue and three counts of filing false tax returns, and a petit jury
convicted Thorson on all counts.

In sentencing Thorson, the district court accepted the pre-
sentence report’s calculation of the offense level, level 21,
based on the amount of loss caused by the criminal activity.
The court then applied four enhancements: (1) a two-level
enhancement under U.S.S.G. § 2T1.4(b)(1)(A), finding that
 UNITED STATES v. THORSON 7
Thorson had derived a "substantial portion of his income"
from the scheme; (2) a two-level enhancement under U.S.S.G.
§ 2T1.4(b)(2), finding that Thorson had engaged in sophisti-
cated concealment; (3) a four-level enhancement under
U.S.S.G. § 3B1.1, finding that Thorson was "an organizer or
leader"; and (4) a two-level enhancement under U.S.S.G.
§ 3C1.1, finding that Thorson "willfully obstructed . . . jus-
tice." The resulting offense level of 31 yielded a recom-
mended sentencing range of 108 to 135 months’
imprisonment. After considering all of the factors under 18
U.S.C. § 3553(a), the district court sentenced Thorson at the
low end of the recommended range, to 108 months’ imprison-
ment.

On appeal, Thorson challenges the enhancement based on
being an organizer or leader, the enhancement for willfully
obstructing justice, and the reasonableness of his sentence
because he received a sentence significantly heavier than
those received by his co-conspirators and others in a purport-
edly similar situation.

II

For his principal argument, Thorson contends that the four-
level enhancement based on his being an organizer or leader
was not supported by the evidence and therefore was clearly
erroneous.

Because the district court’s findings as to whether Thorson
was an organizer or leader are factual in nature, we reverse
only if the district court’s findings are clearly erroneous.
United States v. Carter, 300 F.3d 415, 426 (4th Cir. 2002).
Under this standard,

If the district court’s account of the evidence is plau-
sible in light of the record viewed in its entirety, the
court of appeals may not reverse it even though con-
vinced that had it been sitting as the trier of fact, it
8 UNITED STATES v. THORSON
would have weighed the evidence differently. Where
there are two permissible views of the evidence, the
factfinder’s choice between them cannot be clearly
erroneous. This is so even when the district court’s
findings do not rest on credibility determinations, but
are based instead on physical or documentary evi-
dence or inferences from other facts.

Anderson v. Bessemer City, 470 U.S. 564, 573-74 (1985)
(internal citations omitted); see also United States v. Steven-
son, 396 F.3d 538, 542 (4th Cir. 2005).

In finding that Thorson was a leader or organizer, the dis-
trict court stated:

First, there’s no requirement that there be only one
leader; and clearly, based on the testimony that I
heard and the other information that’s been brought
to my attention in connection with the sentencing
leads me to the conclusion that Mr. Thorson was
clearly a leader of this.

I can recall, for example, the testimony of Mr.
Decker, who described himself as a "go-fer." But
when it came to describing Mr. Thorson, he referred
to him as a "closer." Mr. Decker’s role was to go out
and find gullible pigeons and bring them in. None of
those pigeons would have stayed inside the birds
nest of this case but for Mr. Thorson, who was the
person that was able to convince even people with
the letters "CPA" after their name, and some people
with the letters "J.D." after their names that, yes, this
was a legitimate deal.

It is [also] very clear that but for his fundamental
role as an architect of a large portion of this scheme
that this transaction could—these transactions could
 UNITED STATES v. THORSON 9
never have gone down and that he clearly was an
organizer or leader.*

The Sentencing Guidelines provide that a defendant’s sen-
tence is subject to a four-level enhancement "[i]f the defen-
dant was an organizer or leader of a criminal activity that
involved five or more participants or was otherwise exten-
sive." U.S.S.G. § 3B1.1(a). And Application Note 2 adds that
the defendant need not be an organizer or leader of all of the
participants involved in the criminal activity so long as he was
an organizer or leader "of one or more other participants."
U.S.S.G. § 3B1.1 cmt. 2. The Application Notes also provide
various factors for consideration in determining whether a
defendant is an organizer or leader, such as the "nature of [the
defendant’s] participation in the commission of the offense,"
"the degree of participation in planning or organizing the
offense," or "the nature and scope of the illegal activity."
U.S.S.G. § 3B1.1 cmt. 4.

Thorson does not contest the fact that the conspiracy in this
case involved five or more participants. Rather, he contends
that the district court clearly erred in concluding, as a factual
matter, that he was an organizer or leader of any of those par-
ticipants.

The record, however, belies his claim. Indeed, it contains
more than ample evidence to support the district court’s find-
ing that Thorson was an organizer or leader.

First, Thorson, who was a lawyer and performed the legal
work to carry out the conspiracy, drafted the paperwork, and
designed how the paperwork could, when fabricated or

*Thorson argues that the district court misconstrued Decker’s testimony
in making this statement, because Decker referred to Johnston, and not
himself, as a "go-fer." This slip, however, was not material, as the district
court accurately noted that Decker did, in fact, refer to Thorson as a
"closer."
10 UNITED STATES v. THORSON
altered, take advantage of the tax deduction. Because the
crime was essentially a paper crime committed with the fabri-
cation of documentation to show that the partnership had held
the cemetery sites for more than one year when it had not,
Thorson’s role was especially significant.

Second, Thorson was critical to the recruitment of inves-
tors. He provided Decker and other conspirators with instruc-
tion regarding the substance of the phony cover story to
describe the investment, i.e., that existing contracts supported
the necessary year-and-a-day holding period, a story that
Decker in turn passed on to the investors. Indeed Decker
never questioned Thorson about this claim but treated him as
"the point man," to whom even Decker went "when he had
questions about" the investments. In the same vein, in meet-
ings with potential investors, Decker held Thorson out as the
"expert" to address investors’ questions and concerns. Decker
invited investors to speak with Thorson, who, the evidence
showed, explained the deal professionally and in plain terms
to convince them; he was referred to as the "closer." Simi-
larly, solicitation letters to potential investors provided, "Our
attorney, Thomas Thorson, is an expert in this area and has
been involved in several hundred transactions over the last 30
years which involved donating real estate and oil and gas
properties to charity. He has never had a problem." There is
detailed evidence in the record about how Thorson had multi-
ple exchanges with individual investors in his effort to per-
suade them to invest. Indeed, evidence supports the
conclusion that some investors would not have invested in a
partnership were it not for Thorson’s explanations and persua-
sion. It was a modus operandi of the partnerships that Decker
bring potential investors through the door and that Thorson
thereafter persuade them to purchase a partnership interest. A
letter to investors detailed this process:

The first step to get the ball rolling is for you to
arrange with Jim and Steve an informal and cost-free
telephone interview with Tom Thorson to see if this
 UNITED STATES v. THORSON 11
is worth pursuing on your behalf. He will be able to
determine quickly and confidentially whether or not
you qualify. If you do . . . qualify, Mr. Thorson will
be glad to review this unique program with your
advisor at no cost to you. . . . After first speaking
with Mr. Thorson, . . . who is a very qualified legal
expert in this area, if you should have any questions,
please feel free to give me a call . . . .

Another such letter states, "The legal issues relating to the
form of this transaction have been monitored and will be con-
firmed by Thomas Thorson, Esquire of New York City, New
York." On these facts, the district court found that the illegal
activity would not have been successful were it not for Thor-
son’s recruitment of investors.

Third, Thorson supervised and directed the collection of
paperwork and supporting data necessary to document and
consummate the fraudulent transactions. He gave various
instructions to co-conspirators to obtain specified outside
information and lists for him, and he directed them to obtain
executed signature pages for the various agreements. Consis-
tent with this role, Thorson maintained detailed files and doc-
umentation of all transactions involved in the illegal
conspiracy. As the presentence report on Thorson accurately
summarized,

The defendant’s authority and control over numerous
aspects of the conspiracy is evidenced by his corre-
spondence to other participants and their actions at
his direction. Also, the defendant compiled docu-
ments and maintained binders containing key paper-
work for each partnership including the partnership
agreements, original signature pages, assignments,
donation paperwork, lists of investors, and tax
returns.

Fourth and finally, when Decker learned that the IRS had
initiated an audit of one of their investors, he turned to Thor-
12 UNITED STATES v. THORSON
son, who assured Decker not to worry—"We’ll deal with it."
And when an IRS agent contacted Decker himself, Decker
immediately called Thorson to receive instruction. In short,
because Thorson had prepared the paperwork, designed the
legal mechanisms for claiming the fraudulent deductions,
answered questions, and issued directions in implementing the
fraudulent scheme, he was in fact not only an organizer, but
his co-conspirators regarded him as a leader.

Thus, the district court’s findings that Thorson was the
member of the conspiracy responsible for keeping the inves-
tors "inside the bird’s nest" as he was the "closer"; that he was
able to persuade people to invest in the partnerships; and that
"these transactions could never have gone down" without him
are amply supported by the evidence. Moreover, the district
court’s finding that Thorson was the architect of "a large por-
tion of this scheme" is undisputed. That fact alone would have
supported the district court’s conclusion that Thorson was an
organizer of the criminal activity. Because the district court
addressed the relevant Guidelines factors, see United States v.
Chambers, 985 F.2d 1263, 1269 (4th Cir. 1993), and its
account of the evidence "is [at least] plausible in light of the
record viewed in its entirety," see Anderson, 470 U.S. at 574,
we cannot find that its findings are clearly erroneous.

III

Thorson also challenges his sentencing enhancement under
U.S.S.G. § 3C1.1 for obstruction of justice, based on his pro-
duction of fabricated or backdated documents to the grand
jury. He contends that he should not be punished for his pro-
duction of the fabricated or backdated documents to the grand
jury because the documents were already part of the offense
of conviction and his production of them was required by the
grand jury’s subpoena. He also contends that this enhance-
ment is duplicative of the sentencing enhancement imposed
on him under U.S.S.G. § 2Tl.4(b)(2) for sophisticated con-
cealment.
 UNITED STATES v. THORSON 13
The government argues that if Thorson’s sentence had not
been enhanced for obstruction of justice, then he would have
received a free pass with respect to providing false documents
to the grand jury. The government referred to two fabricated
purchase agreements, one created for production to the IRS
during its civil investigation and subsequently produced to the
grand jury and another one produced to the grand jury. The
government also referred to the spreadsheet and letters created
by Thorson to show that proceeds of the fraudulent scheme
were transferred to AGH, Inc., and then back to Thorson, pur-
portedly as loans.

The district court, relying on the Seventh Circuit’s decision
in United States v. Furkin, 119 F.3d 1276 (7th Cir. 1997),
concluded that while the fabricated documents might have
been part of the conspiracy’s concealment efforts, they were
also employed "to subvert the administration of justice during
the investigation, prosecution and sentencing of an offense."
Id. at 1285. It accordingly adopted the recommendation of the
presentence report to enhance Thorson’s sentence for obstruc-
tion of justice under U.S.S.G. § 3C1.1.

U.S.S.G. § 3C1.1 provides:

If (A) the defendant willfully obstructed or impeded,
or attempted to obstruct or impede, the administra-
tion of justice with respect to the investigation, pros-
ecution, or sentencing of the instant offense of
conviction, and (B) the obstructive conduct related to
(i) the defendant’s offense of conviction and any rel-
evant conduct; or (ii) a closely related offense,
increase the offense level by 2 levels.

Application Notes to the provision provide examples of
obstructive conduct, including the "producing or attempting to
produce a false, altered, or counterfeit document or record
during an official investigation or judicial proceeding."
U.S.S.G. § 3C1.1 cmt. 4(c). To satisfy the requirements of
14 UNITED STATES v. THORSON
this enhancement, the defendant’s obstructive conduct must
have been willful, meaning that he must have "consciously
act[ed] with the purpose of obstructing justice." United States
v. Romulus, 949 F.2d 713, 717 (4th Cir. 1991) (quoting
United States v. Stroud, 893 F.2d 504, 507 (2d Cir. 1990)).
Thus, if a document had been falsified as part of the offense
of conviction but before any investigation, the defendant’s
production of the falsified document in response to a sub-
poena would not support this enhancement, unless it were
shown that the falsification was "purposefully calculated, and
likely, to thwart the investigation or prosecution of the offense
of conviction." U.S.S.G. § 3C1.1 cmt. 1.

The willfulness element is essential. Not only is it explicitly
included in the language of the Guidelines, but to impose the
enhancement without that element would lead to making any
production of falsified documents an automatic basis for the
enhancement, creating an unacceptable dilemma for a defen-
dant. To avoid the automatic enhancement, he would have
either to withhold the fabricated documents from the grand
jury, which would amount to obstruction of justice by refus-
ing to comply with the grand jury subpoena, or to produce the
documents with added corrections, which would implicate his
Fifth Amendment right against self incrimination. We do not
read the enhancement so broadly. Rather, we conclude that
the willfulness element requires that either in producing or
attempting to produce fabricated documents in the course of
an investigation, a defendant must consciously act with the
purpose of obstructing justice.

In this case, Thorson did more than simply respond to a
grand jury subpoena by producing previously falsified docu-
ments. Rather, during the civil IRS investigation of his
offense, he created documents to thwart the investigation. He
fabricated a December 23, 1995 agreement in response to the
IRS audit, with the purpose of providing documentation to
support the tax deduction. Similarly, he fabricated another
purchase agreement dated December 22, 1996, and produced
 UNITED STATES v. THORSON 15
it, together with the fabricated December 23, 1995 agreement,
to the grand jury. As the IRS audit and grand jury investiga-
tion both constituted investigations of his offense, we find no
error in the district court’s application of the enhancement
under U.S.S.G. § 3C1.1. See United States v. Fiore, 381 F.3d
89, 94 (2d Cir. 2004) (holding that perjury during a related
civil investigation constituted obstruction of justice under
§ 3C1.1).

Thorson argues further that the same underlying conduct
gives rise to enhancements for both obstruction of justice and
sophisticated concealment and that, therefore, the enhance-
ments are duplicative. To be sure, "there is a certain amount
of overlap among various factors as they relate to sophisti-
cated means, obstruction of justice, departure, as well as the
guideline for the underlying conspiracy," but each enhance-
ment addresses different behavior and concerns. Furkin, 119
F.3d at 1284. An enhancement for sophisticated concealment
under U.S.S.G. § 2T1.4(b)(2) addresses the usual efforts of a
complex criminal enterprise to conceal its wrongdoing during
the course of the criminal activity. In this sense, this tax con-
spiracy’s widespread pattern of falsifying contracts and tax
information gives rise to the sophisticated concealment
enhancement. But that enhancement punishes the defendant’s
past efforts to avoid detection, whereas an obstruction of jus-
tice enhancement punishes conduct carried out with the pur-
pose of frustrating an actual investigation. While there may be
some overlap, the enhancement for obstruction of justice is
based on the distinct conduct focused on frustrating or imped-
ing the investigation. Accordingly, we reject Thorson’s argu-
ment based on duplication.

IV

Finally, Thorson contends that his 108-month sentence was
substantively unreasonable in that it ignored the prescribed
consideration of § 3553(a)’s direction "to avoid unwarranted
sentence disparities among defendants with similar records
16 UNITED STATES v. THORSON
who have been found guilty of similar conduct." See 18
U.S.C. § 3553(a)(6). Thorson relies on evidence presented to
the district court which showed "that the average prison term
for defendants who are convicted in cases involving between
$2.5 million and $5 million is 46.6 months." He was sen-
tenced to 108 months’ imprisonment. Thorson also points to
the sentences received by his co-conspirators, noting the fact
that Ross received a sentence of 5 years’ probation; Johnston
received a sentence of 37 months’ imprisonment; and Decker
was given immunity in exchange for his testimony.

The district court, in lieu of relying on the statistics
advanced by Thorson, which were drawn from other cases,
noted that it was conducting an individualized assessment of
Thorson’s circumstances in this case based on factors identi-
fied in the Sentencing Guidelines and in 18 U.S.C. § 3553(a),
that were applicable to him. See Gall v. United States, 552
U.S. 38, 49-50 (2007).

The court began by properly calculating the recommended
Sentencing Guidelines range, concluding that the recom-
mended range was a sentence of 108 to 235 months’ impris-
onment. The court then considered the § 3553(a) factors in
extensive detail, revealing its thinking as to each factor. The
court explained why it rejected a variant sentence, as
requested by Thorson, and imposed a sentence within the rec-
ommended Guidelines range, concluding that such a sentence
would best serve the relevant sentencing purposes. The court
stated:

I consider this to be a tragedy for Mr. Thorson and
his family, but it is also a tragedy for the legal pro-
fession. Mr. Thorson is a disgrace to the legal pro-
fession. There are those who take their law degree
and use it in the best traditions of this profession . . .
for promotion of good and the advancement of cli-
ent’s interest[s] and the legitimate practice of law,
 UNITED STATES v. THORSON 17
and there are those who take that special training and
use it not for good but for evil.

In this case, Mr. Thorson is not just a consigliere in
the context of the godfather, but he was a significant
leader of this enterprise. Indeed, as described by one
of the co-conspirators, a closer. . . . [H]e was consis-
tent in his deceptive manner. He was consistent in
deceiving everybody, including the grand jury. He
doctored documents, thumbed his nose at the Inter-
nal Revenue Code, and it is an extremely serious
offense and one that deserves punishment.

The history and characteristics of the defendant do
not, in my judgment, indicate that there should be
substantial leniency. He has—as I’ve mentioned
already, part of his history is obtaining a law degree,
which he has used to further a criminal enterprise.
It’s understandable that he’s a nice man, that he has
a lovely wife, good children, went to church, but I
cannot disregard the essential conduct in which he
engaged and, accordingly, I conclude that there’s lit-
tle basis or reason why there should be leniency
under those circumstances.

. . . Sometimes people think that a little old tax
cheating is not a big deal. It is. Especially when it
involves as much sophistication and devices as were
concocted by this defendant and his coconspirators
in order to cheat [the] Internal Revenue Service out
of tax moneys to which it was entitled.

***

And as I’ve already indicated, in light of the serious-
ness of this offense and the need to deter others from
engaging in fraudulent tax shelter schemes of this
18 UNITED STATES v. THORSON
nature, a sentence of incarceration—a significant one
—is required.

Addressing specifically the need to avoid unwarranted sen-
tencing disparities, which is at the heart of Thorson’s sentenc-
ing challenge, the court stated:

I’m required to consider the need to avoid unwar-
ranted sentence disparities among defendants with
similar records that have been found guilty of similar
conduct. I have considered the information provided
to me by counsel for the defense. It is largely based
upon the amount of the loss. It utterly fails to take
into account all of the various variables that are
before me, including the level of sophistication
involved in this enterprise, the concealment, the
obstruction of justice; so I find that to be of little
help. What is more help to me is the application of
the sentencing guidelines, which carefully consider
all of these various factors and apply an appropriate
offense level adjustment based on each one of those,
all of which are designed with the goal of promoting
a uniform system of sentencing.

I, therefore, conclude that a sentence within the
guidelines system is appropriate, does promote uni-
formity, and will fairly emulate all of the factors set
forth in Section 3553.

After considering the § 3553(a) factors and addressing each
one, the district court exercised its discretion to impose a sen-
tence within the Sentencing Guidelines range and at the low
end, finding that in doing so, it was accomplishing the Guide-
lines system’s goal of uniformity.

We find no error or abuse of discretion in the sentence
imposed. A sentence within the properly calculated Guide-
lines range is presumptively reasonable, see United States v.
 UNITED STATES v. THORSON 19
Raby, 575 F.3d 376, 381 (4th Cir. 2009); see also Rita v.
United States, 551 U.S. 338, 351 (2007) (authorizing appel-
late courts to presume that a sentence within the Guidelines
range is reasonable), and Thorson has fallen short in his
efforts to demonstrate otherwise.

For the reasons given, we affirm the judgment of the dis-
trict court.

AFFIRMED

GREGORY, Circuit Judge, dissenting:

At age sixty-seven, Thorson was the only co-conspirator
against whom the government chose to press all charges and
was able to obtain a conviction. The sentencing enhancements
that the government requested, and the district court applied,
increased Thorson’s sentence ten levels, from a sentencing
range of thirty-seven to forty-six months to a range of 108
months to 135 months. The district court clearly erred in
imposing the two enhancements at issue here, adjustments for
role in the offense and for obstruction of justice.

I.

At the outset, because of the short shrift the majority gives
to the issues, I feel compelled to address the disparate sen-
tences resulting from the government’s conduct in this case,
as well as some statements by the district court that seem to
be the basis for Thorson’s enhanced sentence. On September
29, 2005, defendants Ross, Johnston, Franks, and Thorson
were indicted with one count of conspiracy to defraud the
U.S. Treasury Department, in violation of 18 U.S.C. § 371,
and three counts of aiding and assisting in the filing of false
individual income tax returns, in violation of 26 U.S.C.
§ 7206(2). Prior to trial, the government dismissed three
counts against co-conspirators and leaders Ross and Johnston
after they entered into plea agreements, whereby each pled
20 UNITED STATES v. THORSON
guilty to one count of conspiracy. Ross was subsequently sen-
tenced to only five years probation, and Johnston was sen-
tenced to thirty-seven months imprisonment followed by three
years of supervised release, a sentence at the bottom of Thor-
son’s range without the numerous enhancements. The govern-
ment then gave Decker, who played a role in the conspiracy
arguably much greater than that played by Thorson, total
immunity in return for his testimony at the trial of Thorson
and Franks. At the conclusion of the trial, the jury found
Thorson guilty on all counts and Franks not guilty on all
counts. It was then that the government sought the four
enhancements against Thorson.

After imposing the enhancements sought by the govern-
ment, the district court made the following statement when
discussing Thorson’s sentence:

I consider this to be a tragedy for Mr. Thorson and
his family, but it is also a tragedy for the legal pro-
fession. Mr. Thorson is a disgrace to the legal pro-
fession. There are those who takes [sic] their law
degree [sic] and use it in the best traditions of this
profession of which I’m a member for promotion of
good and the advancement of client’s interest and the
legitimate practice of law, and there are those who
take that special training and use it not for good but
for evil.

In this case, Mr. Thorson is not just a concigliori
[sic] in the context of the godfather, but he was a sig-
nificant leader of this enterprise. Indeed, as
described by one of the coconspirators, a closer. His
offense is truly offensive to the court. . . .

J.A. 1121. Clearly the court took Thorson’s conduct as a per-
sonal affront, but that justification is insufficient to support
the government’s piling on in this case. Beyond that fact, it
is evident that Thorson’s occupation weighed heavily on the
 UNITED STATES v. THORSON 21
court’s mind when arriving at a sentence approximately triple
the original, unenhanced guidelines sentencing range. Given
the lack of evidence to support the enhancements at issue and
the court’s apparent focus on Thorson’s role as an attorney,
it seems that if the court was intent on adjusting Thorson’s
sentence based on facts in the record, it could have applied a
two-level enhancement for use of his special skill as an attor-
ney under U.S.S.G. § 3B1.3, which the government requested.
The court took a different course, one which the majority
today endorses, and punishes Thorson on no evidentiary basis.

II.

A.

To qualify for a four-level increase under § 3B1.1(a) of the
guidelines, a defendant must have been "an organizer or
leader of a criminal activity that involved five or more partici-
pants or was otherwise extensive." U.S. Sentencing Guide-
lines Manual ("U.S.S.G.") § 3B1.1(a) (1998). We have
recognized that "[t]he Sentencing Commission has indicated
that a court should consider seven factors in determining"
whether a defendant acted as an organizer or leader. United
States v. Sayles, 296 F.3d 219, 224 (4th Cir. 2002). These
include: "[1] the exercise of decision making authority, [2] the
nature of participation in the commission of the offense, [3]
the recruitment of accomplices, [4] the claimed right to a
larger share of the fruits of the crime, [5] the degree of partici-
pation in planning or organizing the offense, [6] the nature
and scope of the illegal activity, and [7] the degree of control
and authority exercised over others." U.S.S.G. § 3B1.1, cmt.
n.4.

There is no indication that the district court considered any
of these factors, as it was required to do. To justify the adjust-
ment in this case, the district court stated that "Mr. Thorson
was clearly a leader" "based on the testimony that I heard and
22 UNITED STATES v. THORSON
the other information that’s been brought to my attention."
J.A. 1088. The court continued,

I can recall, for example, the testimony of Mr.
Decker, who described himself as a "go-fer."[1] But
when it came to describing Mr. Thorson, he referred
to him as a "closer." Mr. Decker’s role was to go out
and find gullible pigeons and bring them in. None of
those pigeons would have stayed inside the birds
nest of this case but for Mr. Thorson, who was the
person that was able to convince even people with
the letters "CPA" after their name, and some people
with the letters "J.D." after their names that, yes, this
was a legitimate deal.

It is very clear that but for his fundamental role as
an architect of a large portion of this scheme that this
transaction could — these transactions could never
have gone down and that he clearly was an organizer
or leader.[2] I therefore conclude that the adjustment
for role in the offense set forth in Paragraph 59 of
the [PSR] is correct and I adopt that.

J.A. 1088-89. The court failed to cite any of the seven factors,
making principally conclusory statements.

In United States v. Chambers, we remanded the case for
resentencing because the district court failed to apply the fac-
tors to determine whether the defendant was a supervisor or
manager:
1
This is incorrect. Decker did not refer to himself as a go-fer but instead
referred to Johnston as a go-fer for Ross.
2
The court nor the PSR distinguishes between the terms "leader" or "or-
ganizer." Because the government treats "leader" and "organizer" as inter-
changeable and because being classified as either makes one eligible for
the adjustment, I need not decide the difference between the two terms.
Yet, as we recognized in Sayles, the court was required to decide the issue
based on factors set out in the guidelines. 296 F.3d at 224. It did not.
 UNITED STATES v. THORSON 23
The district court’s factual findings supporting the
upward adjustment in Chambers’s sentence were
limited to a statement that Chambers "was at least a
supervisor at some level." We find no basis in the
record for concluding that the district court consid-
ered the factors outlined in application note 3 in
making this finding. The evidence may or may not
support the conclusion that Chambers was a manager
or supervisor. However, without specific factual
findings showing that the district court evaluated the
defendant’s role in the offense in light of the factors
in application note 3, we cannot conduct meaningful
appellate review of this issue. Accordingly, we
vacate Chambers’s sentence and remand.

985 F.2d 1263, 1269 (4th Cir. 1993) (emphasis added). We
further held that "[o]n remand, the district court should apply
the factors outlined in application note 3 and determine
whether Chambers’s role in the conspiracy was sufficiently
extensive to warrant an increase in offense level under
§ 3B1.1(b)." Id. Chambers controls here. Because the district
court in this case, like the district court in Chambers, did not
cite any of the relevant factors and relied on conclusory state-
ments instead of sufficient evidence in the record, I would
remand for resentencing.

B.

The one inaccurate example provided by the court and the
court’s citation to the PSR does not save the leadership
enhancement. First, scouring the record for some evidence,
however slight, to support the enhancement is not only out-
side of our role, but also does not satisfy the standard to
which we adhere. "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.’" In re Mosko,
515 F.3d 319, 324 (4th Cir. 2008) (quoting United States v.
24 UNITED STATES v. THORSON
U.S. Gypsum Co., 333 U.S. 364, 395 (1948)). On the record
as a whole, I am left with the inescapable conclusion that the
court mistakenly found Thorson to be a leader or organizer.

The "primary goal of § 3B1.1" is "the determination of a
defendant’s culpability relative to other participants in a crim-
inal activity ‘based upon the role the defendant played in
committing the offense.’" Chambers, 985 F.2d at 1268;
U.S.S.G. § 3B1.1, cmt. background ("This adjustment is
included primarily because of concerns about relative respon-
sibility."). The district court in this case in no way compared
Thorson’s role to the roles of other members of the conspir-
acy. Instead of focusing on relative culpability, the district
court based the enhancement on its perception of the impor-
tance of Thorson’s role in the conspiracy, describing Thorson
as the "closer." This is erroneous for two reasons. First, the
district court’s description of Thorson as the "closer" is
unsupported by the record. The court stated that "none of" the
investors "would have stayed" in the scheme "but for" Thor-
son. J.A. 1089. This contradicts the testimony of Decker, who
specifically stated that Thorson was only involved in market-
ing "as . . . needed" and that some investors turned to Thorson
for legal information while others decided to invest solely
based on Decker’s presentation. J.A. 216-17, 225-26. Decker
was the primary salesperson, and Thorson did not instruct
Decker on how to market the program.

Second, as the Tenth Circuit has found, "the gravamen of
this enhancement is control, organization, and responsibility
for the actions of other individuals because § 3B1.1(a) is an
enhancement for organizers or leaders, not for important or
essential figures." United States v. Anderson, 189 F.3d 1201,
1211 (10th Cir. 1999) (emphasis added) (internal quotation
marks and citation omitted); United States v. Owens, 70 F.3d
1118, 1129 (10th Cir. 1995) (remanding for resentencing
because the fact that the defendant was "an important figure
who was integral to the success of [the] conspiracy" was
insufficient to justify an adjustment for leadership) (internal
 UNITED STATES v. THORSON 25
quotations omitted). The district court here plainly found
Thorson to be a vital member of the conspiracy, although
based on a questionable interpretation of the evidence. But, as
the case law shows, even if true, simply describing Thorson
as the "closer" is inadequate to justify a leadership enhance-
ment. Finding that Thorson convinced some investors to join
the scheme fails to demonstrate that Thorson had any "con-
trol, organization, [or] responsibility for the actions of others."
Anderson, 189 F.3d at 1211.

The court does cite to paragraph fifty-nine of the PSR,
which provided that Thorson’s

authority and control over numerous aspects of the
conspiracy is evidenced by his correspondence to
other participants and their actions at his direction.
Also, [Thorson] compiled documents and maintained
binders containing key paperwork for each partner-
ship including the partnership agreements, original
signature pages, assignments, donation paperwork,
lists of investors, and tax returns.

J.A. 1193. However, this paragraph describes nothing more
than actions an attorney would typically take and does not
demonstrate leadership of others. Moreover, the correspon-
dence referred to in the PSR consists of two letters from Thor-
son that, while possibly meant to address "the degree of
control and authority exercised over others," U.S.S.G.
§ 3B1.1, cmt. n.4, wholly fails to support that factor. The first
letter asked the accountant, Galvin, to obtain signatures on
partnership agreements, inquired about obtaining employer
identification numbers, and requested certain documents for
the files. If this letter demonstrates any control, it is over
paperwork and not over persons. "[I]n assessing whether a
defendant played an aggravating role in the offense of convic-
tion, the key inquiry is whether the defendant’s role was that
of ‘an organizer or leader of people,’ as opposed to that of a
manager over the property, assets, or activities of a criminal
26 UNITED STATES v. THORSON
organization." United States v. Llamas, 599 F.3d 381, 390
(4th Cir. 2010) (quoting United States v. Cameron, 573 F.3d
179, 185 (4th Cir. 2009)). Therefore, this letter is insufficient
to justify the adjustment for leadership. The second letter
actually shows that Thorson was acting at the direction of his
client, Johnston. The letter, dated March 9, 1998, from Thor-
son to Johnston, enclosed documents with instructions for
Johnston regarding signature and delivery and started by stat-
ing, "Here are the documents you requested . . . ." J.A. 968
(emphasis added). This letter suggests that Johnston had con-
trol over Thorson. The instructions to obtain signatures con-
tained in the letter, again demonstrate, if anything, control
over paperwork.

The PSR also cites Thorson’s compilation and maintenance
of paperwork. As stated, preparing the necessary paperwork
and maintaining the partnerships’ records is consistent with
Thorson’s role as an attorney brought in by Ross. While one
can unquestionably be an attorney and a leader or organizer,
there is no evidence that Thorson had control or management
responsibility over people relative to other co-conspirators.
Control over records is not enough to support the enhance-
ment given. See Llamas, 599 F.3d 381, 390.

C.

Conducting the proper analysis, according to Chambers, as
the district court and the majority failed to do, it is apparent
that Thorson was not a leader or organizer. First, the govern-
ment failed to present evidence that Thorson was in charge of
making major decisions. U.S.S.G. § 3B1.1, cmt. n.4 (listing as
the first factor "the exercise of decision making authority").
Instead, evidence showed that Ross brought Thorson in to
"help" with legal issues and marketing. J.A. 215. Addition-
ally, Decker testified that Ross, not Thorson, was the "boss"
who possessed decision-making authority. J.A. 299. Decker
also testified to the following:
 UNITED STATES v. THORSON 27
Q: Now, again, consistent with Mr. Ross being the
boss of these partnerships, is it fair to say that
Mr. Ross was the one who decided how every-
one was going to be compensated in the part-
nerships?

A: That is correct.

Q: That certainly applied to you, correct?

A: Yes.

Q: And your understanding was that applied to Mr.
Johnston and Mr. Thorson as well, correct?

A: That is correct.

Q: And it was Mr. Ross who made the decision,
did he not, that you would get your compensa-
tion in the form of these what you dispute as
loans, but he wanted them described as loans,
correct?

A: It was his decision to issue the promissory
notes, yes that’s correct.

J.A. 302. While true that more than one conspirator may have
control or decision-making authority, the evidence points to
only Ross as possessing this leadership quality.

Second, "the nature of [Thorson’s] participation," U.S.S.G.
§ 3B1.1, cmt. n. 4, was not one of an organizer or leader. As
previously described, Ross recruited Thorson to provide legal
advice and assist with marketing. J.A. 215. The trial court’s
factual finding that Thorson was a "closer" that was essential
to sealing the deal with every investor conflicts with Decker’s
testimony that Thorson became involved only when potential
investors requested clarification on the program’s operation.
28 UNITED STATES v. THORSON
Decker described the marketing of the investment and Thor-
son’s role as follows:

I was well versed enough so that I could handle it.
I would go on the appointments. I would make the
initial presentation and if there was any follow-up
needed, I would have Tom Thorson follow up with
a phone call the next day or two just to kind of, you
know, see if the investors had any questions, any
concerns, and he would help me in — in some cases
I didn’t need it but in some cases I did. So, I just
used his knowledge and expertise as I needed it
...

I just went out and met my clients, presented the
investment, and some of them bought just based on
what I told them. Some of them needed background
help with follow-up calls from Tom Thorson.

J.A. 216-17, 225-26. Providing reassurance and explanation
as necessary cannot convert a participant in this conspiracy
into a leader. In fact, Decker’s description of Thorson’s role
shows Thorson to only be acting as the partnerships’ attorney
by discussing the program’s legal requirements with some
potential investors when they had questions.

Third, Thorson did not recruit accomplices.3 U.S.S.G.
§ 3B1.1, cmt. n.4 (listing "recruitment of accomplices" as a
factor). The core team involved in this conspiracy was in
place before Thorson came into the picture, and it was Ross
who linked the parties together. In fact, Thorson was recruited
3
The government completely misapplies the third factor, the recruiting
of accomplices, dedicating four pages of its brief to showing that Thorson
sometimes assisted in recruiting investors. In fact, the government incor-
rectly cites comment note four as factoring in "recruitment of partici-
pants," rather than "accomplices." The investors were not accomplices or
alleged co-conspirators, and the government conceded as much at oral
argument.
 UNITED STATES v. THORSON 29
by Ross after Ross’s previous attorney Ellinger was no longer
involved. J.A. 297. Ross and Johnston knew each other for
many years, having worked together before, and they began
the program in 1995. Ross employed Decker as the salesper-
son to expand the program. Additionally, Franks, the accoun-
tant, was used because he had prior dealings with Ross.

Fourth, Thorson did not claim a right to a larger share of
the profits, U.S.S.G. § 3B1.1, cmt. n.4 (listing "the claimed
right to a larger share of the fruits of the crime" as a factor).
Instead, he received significantly less money than both Ross
and Johnston. Ross, receiving the largest share, claimed fifty-
four percent of the total compensation: over two million dol-
lars. Johnston received approximately $744,000, or nineteen
percent of the total compensation. Meanwhile, Thorson and
Decker both received approximately $500,000, or thirteen
percent of the total compensation. J.A. 977.

Fifth, Thorson’s "degree of participation in planning or
organizing the offense," U.S.S.G. § 3B1.1, cmt. n.4, counsels
against finding Thorson to be a leader or organizer. As dis-
cussed previously, Thorson was recruited by Ross after
Ellinger, the previous attorney, was no longer involved. And,
at the time of Thorson’s joining, the basic format of the
investment scheme was in place.

Sixth, Thorson did not exercise control and authority over
others to an extent necessary to characterize him as an orga-
nizer or leader. Again, it must be pointed out that the court
should have been guided by relative culpability. See Cham-
bers, 985 F.2d at 1268; U.S.S.G. § 3B1.1, cmt. background.
It is clear that Ross was the decision-maker of the group. Fur-
thermore, evidence demonstrated that Decker, the salesper-
son, excised control over Thorson. Decker testified that
Thorson did not instruct him on marketing, and that Decker
"just used [Thorson’s] knowledge and expertise as [Decker]
needed it." J.A. 216-17, 225. Thorson may have had control
over paperwork, but as discussed above, that is entirely inade-
30 UNITED STATES v. THORSON
quate to justify classifying him as an organizer or leader. See
Llamas, 599 F.3d at 390.

The government argues that Thorson’s role during the initi-
ation of civil and criminal investigations illustrates that he
was a leader or organizer. The government relies on testimony
by Decker that he called Thorson after being contacted by the
IRS, and that Thorson told him not to meet with the IRS.
However, this action is what one would expect given that
Thorson was acting as a legal advisor and hardly shows that
Thorson was a leader. The government also neglects to inform
the court that Decker was also contacted by Johnston that
same day, and Johnston instructed him not to speak to the
IRS. J.A. 263. Finally, to establish that he had control, the
government relies on Thorson’s title as a "Managing General
Partner" of the Partnerships. This is unpersuasive because
Johnston, the supposed go-fer, was also listed as a Managing
General Partner. J.A. 974. It is therefore unclear whether this
term had any actual correspondence to degree of control.
While the government’s evidence does show Thorson’s
involvement with co-conspirators, it does not show that he
recruited them or controlled their activity.

In conclusion, the district court failed to carry out the "pri-
mary goal of § 3B1.1," which is "the determination of a
defendant’s culpability relative to other participants in a crim-
inal activity ‘based upon the role the defendant played in
committing the offense.’" Chambers, 985 F.2d at 1268. The
above application of the relevant guideline factors to the evi-
dence before us makes clear that Ross and Johnston, both of
whom organized the conspiracy and obtained much more
compensation from it, were more culpable than Thorson. The
court failed to apply the guideline factors, and this case
should be remanded for resentencing. See United States v.
Brooks, 957 F.2d 1138, 1150 (4th Cir. 1992) (remanding the
case because a sentencing adjustment was not supported by
evidence relied on by the district court).
 UNITED STATES v. THORSON 31
III.

The district court also clearly erred in finding that Thorson
attempted to obstruct justice. Under § 3C1.1 of the guidelines,
a defendant’s base level is increased by two levels if

(A) the defendant willfully obstructed or impeded, or
attempted to obstruct or impede, the administration
of justice during the course of the investigation,
prosecution, or sentencing of the instant offense of
conviction, and (B) the obstructive conduct related to
(i) the defendant’s offense of conviction and any rel-
evant conduct; or (ii) a closely related offense.

U.S.S.G. § 3C1.1. Included in the list of examples of conduct
coming within the guideline is "producing or attempting to
produce a false, altered, or counterfeit document or record
during an official investigation or judicial proceeding." Id.,
cmt. n.4(c).

To the district court, Thorson argued that the evidence did
not support the conclusion that he engaged in obstruction of
justice. J.A. 1000. While Thorson asserted that imposing the
obstruction of justice enhancement and the sophisticated con-
cealment enhancement constituted impermissible double-
counting, an argument he declined to press before this Court,
he also argued that "produc[ing] the alleged false documents
to the Government, either during the IRS audit or in response
to grand jury subpoenas," was insufficient for the obstruction
enhancement. J.A. 1001. According to his reasoning, "[o]nce
the documents were created, there was no choice but to pro-
duce them to the Government when the Government asked for
them. Indeed, withholding the documents in response to a
grand jury subpoena that specifically required that they be
produced arguably would have been an act of obstruction of
justice." J.A. 1001.

The court rejected Thorson’s double-counting argument
and concluded "for the reasons set forth in the [PSR] at Para-
32 UNITED STATES v. THORSON
graph 60" that the adjustment for obstruction of justice is
appropriate." J.A. 1096. Paragraph sixty of the PSR provides
that, according to the government,

[Thorson] caused fraudulent documents to be pro-
vided to the grand jury in April 2001. [Thorson]
caused to be produced to the grand jury two agree-
ments between VCDC and HMPA 1995-2 and
HMPA 1995-3, respectively, dated December 23,
1995 and December 22, 1996. . . . [T]he agreements
were back-dated and submitted to support the false
deductions. [Thorson] also caused to be produced
pursuant to a subpoena to AGH, a Quickbooks
schedule purporting to show that transfers from the
Wachovia account to the AGH account were loans
from MAMMA, and that [Thorson]’s use of the
funds were loans from AGH. In fact, evidence dem-
onstrated that those payments constituted income to
[Thorson] from the sales of the HMPA and related
partnership interests. Finally, [Thorson] caused to be
provided to the grand jury the correspondence
between [Thorson] and AGH to foster the false pre-
tense that his use of the funds in the AGH account
were non-taxable loans.

J.A. 1193. Thus, the court ruled that based solely on the hand-
ing over of the back-dated and false documents in response to
the subpoenas, Thorson attempted to obstruct justice.

"In order to have acted willfully within the meaning of
[§ 3C1.1], a defendant must ‘consciously act with the purpose
of obstructing justice.’" United States v. Romulus, 949 F.2d
713, 717 (4th Cir. 1991) (quoting United States v. Stroud, 893
F.2d 504, 507 (2d Cir. 1990) (emphasis omitted)). "If the
defendant lacks knowledge that his actions are likely to affect
a judicial proceeding, he lacks the requisite intent to obstruct."
United States v. Furkin, 119 F.3d 1276, 1282 (7th Cir. 1997).
 UNITED STATES v. THORSON 33
In this case, Thorson did not willfully obstruct or attempt
to obstruct justice. The district court did not find that Thorson
created the documents at issue for the purpose of obstructing
an investigation, despite the government’s direct statement to
this Court that it did so.4 Instead, the district court relied only
on paragraph sixty of the PSR and concluded that Thorson
"caused fraudulent documents to be provided to the grand
jury." J.A. 1096. "Caused to be provided" is not the same as
"created for the purpose of." Absent any evidence that Thor-
son created the documents to obstruct justice, simply comply-
ing with the subpoenas is insufficient to support an
enhancement in this case.

Both parties agree that when the grand jury issued the sub-
poenas, the documents at issue had already been created. At
the time of the documents’ creation, without knowledge that
a grand jury would even be convened, Thorson did not intend
to obstruct its investigation. See Furkin, 119 F.3d at 1282.
Thus, "the natural result of his plan" was not "to interfere with
judicial processes." United States v. Neiswender, 590 F.2d
1269, 1274 (4th Cir. 1979). Indeed, the government argued at
4
The government’s brief states: "as the district court found, the defen-
dant in this case created these documents for the purpose of obstructing
any subsequent investigations." Resp. Br. at 43 (citing to J.A. 1186). The
court did not make this finding. The citation to J.A. 1186 is to paragraph
thirty-three of the PSR, within a section entitled "The IRS Audit," which
provides that an agreement was provided to an IRS agent to obstruct the
civil audit. There is no mention of a grand jury investigation. Moreover,
the district court not once referred to this section of the PSR. The govern-
ment has repeatedly made such misleading statements to this Court in this
case.
The government also cites cases in which defendants set into motion
plans to obstruct investigations before they begin, thus warranting adjust-
ments for obstruction of justice. These cases simply are not relevant with-
out a showing that Thorson had such a plan. The falsification of
documents before any investigation took place, which was necessary to
carry out the scheme of which Thorson was convicted in the first place,
does not evidence a plan to thwart a future investigation. Thorson cooper-
ated with the grand jury investigation at issue.
34 UNITED STATES v. THORSON
sentencing that the creation of the documents served a pur-
pose apart from obstruction of justice: to conceal the offense.
The government urged, and the district court agreed, that the
exact same documents used to justify the obstruction enhance-
ment were created for the purpose of concealing the true
donation dates and fostering the false pretence that the pay-
ments to Thorson were loans. J.A. 1028, 1192. Thorson thus
created the documents to carry out and conceal the conspir-
acy, not to obstruct a future grand jury investigation.

Indeed, Thorson aided the grand jury investigation by com-
plying with the subpoenas and in no way tried to thwart the
grand jury’s efforts. The documents produced by Thorson
provided much of the substantive ammunition in the govern-
ment’s case against him. Also, had Thorson not complied
with the subpoenas, he would have likely been subject to
obstruction of justice. Although the subpoenas at issue are not
in the record, I assume that one was sent to Thorson in his
representative capacity, the other being sent to AGH.5 As
such, Thorson was obligated to produce the existing business
records, having no Fifth Amendment right despite the docu-
ments’ incriminating nature. See S.E.C. v. Dunlap, 253 F.3d
768, 775 (4th Cir. 2001) (finding that the Fifth Amendment
does not apply to a custodian’s production of voluntarily pre-
pared business records); United States v. Stone, 976 F.2d 909,
912 (4th Cir. 1992) ("The privilege against compulsory self-
incrimination is, of course, personal, and does not apply to
collective entities, such as corporations."). One cannot simul-
taneously comply with and obstruct the same investigation. In
other words, it cannot be that a defendant is subject to
obstruction for refusing to provide subpoenaed documents
and for, without more, producing the same existing docu-
ments.
5
The government does not dispute that Thorson would have been sub-
ject to obstruction of justice had he not complied with the subpoenas.
 UNITED STATES v. THORSON 35
The government’s advancement of such position, adopted
by the district court and now the majority, suggests that the
only way Thorson could have avoided an obstruction
enhancement was to alert the government about the nature of
the documents, in other words to incriminate himself. This
punishes Thorson for exercising his Fifth Amendment right
— yet, a defendant cannot be compelled to provide incrimi-
nating testimony. Application Note Two to § 3C1.1 provides
that

[t]his provision is not intended to punish a defendant
for the exercise of a constitutional right. A defen-
dant’s denial of guilt (other than a denial of guilt
under oath that constitutes perjury), refusal to admit
guilt or provide information to a probation officer, or
refusal to enter a plea of guilty is not a basis for
application of this provision.

U.S.S.G. § 3C1.1, cmt. n.2; United States v. Taylor, 31 F.3d
459, 468 (7th Cir. 1994) ("§ 3C1.1 cannot be read to abrogate
a defendant’s Fifth Amendment rights."). Thorson did not
volunteer the documents or designate them for any purpose;
instead, he produced the documents solely because the sub-
poenas required it. He did so without testimony or commen-
tary, as was his right.

We addressed the catch-22 Thorson faced in United States
v. Coleman, 1989 WL 50286 (4th Cir. 1989) (unpublished).
In Coleman, the defendant back-dated certain documents and
placed them in a personnel file to give the impression that the
defendant’s actions were lawful. Id. at *2. When the govern-
ment subsequently subpoenaed the file, the defendant pro-
duced the file without making any alteration to it. Id. at *3.
As the Court found, the file tampering for which the defen-
dant was convicted had already been completed. Id. Yet, the
government argued that the defendant should also be con-
victed for obstruction of a grand jury investigation. We
rejected this argument on the grounds that the simple act of
36 UNITED STATES v. THORSON
producing documents requested by a subpoena could not,
without more, support a conviction for obstruction of justice:

Were we today to sanction such an approach, the
result would be to discourage litigants from tender-
ing subpoenaed documents and would naturally
cause a chilling effect on the swift and complete
compliance with grand jury subpoenas. We do not
believe that in pursuing this conviction the govern-
ment intended such a result. Nor would such a result
be proper.[6]

. . . Here, appellant did little more than comply with
the subpoena. Any act of illegality on the part of the
appellant had long been completed. We are reluctant
now to affirm a conviction absent a showing of a dis-
tinct culpable act on the part of the defendant.

Id. Although Coleman involved the statutory crime of
obstruction of justice, its holding is unambiguous — a defen-
dant may not be punished for compliance with a subpoena by
producing the requested documents that may have been previ-
ously altered. Thorson, like Coleman, did not alter the docu-
ments requested, but only produced the documents, as
required. To sustain the obstruction adjustment here, we need
a distinct culpable act by Thorson apart from his compliance
with the subpoena — the government has failed to point to it.

Based on the above reasoning, I find that although com-
mentary to the guideline does list producing a false record to
the grand jury as an example of obstruction, "production" can-
not mean simply providing pre-existing documents pursuant
to a subpoena. A review of case law shows no case in which
a defendant’s offense level was raised based exclusively on
6
The Court found that such result would be "especially" improper given
that the custodian could not avoid production by invoking the Fifth
Amendment.
 UNITED STATES v. THORSON 37
the defendant providing previously-altered documents pursu-
ant to a subpoena. For example, in Furkin, the only case cited
by the district court and the case relied on by the government
in its sentencing memorandum, the conduct upon which the
Seventh Circuit affirmed the obstruction of justice enhance-
ment was affirmative, deliberate, and undertaken with the
plain purpose to obstruct the administration of justice. In that
case,

Furkin committed eight of the nine types of listed
conduct that qualify for the obstruction of justice
enhancement. For example, after Furkin learned of
the grand jury investigation, he lied to the IRS and
caused others to do so, he caused others to lie to the
grand jury, he failed to produce records which had
been subpoenaed, and he created false documents to
be turned over to the IRS and to the grand jury.

Furkin, 119 F.3d at 1285; see also United States v. Hughes,
401 F.3d 540, 558 (4th Cir. 2005) (affirming the obstruction
of justice adjustment based on perjury before a bankruptcy
court); United States v. Martin, 369 F.3d 1046, 1061 (8th Cir.
2004) (finding that concealing and destroying documents, as
well as backdating checks, after an investigation had begun,
qualified as obstruction of justice).

Before this Court, the government for the first time argues
that the court’s application of the obstruction of justice
enhancement is justified because the documents were pro-
duced during the IRS audit. The government did not present
this argument to the district court, and the court never consid-
ered it. Thus, I believe that the majority should have adhered
to "[t]he general rule . . . that except in exceptional circum-
stances, ‘a federal court does not consider an issue not passed
upon below.’" United States v. Moss, 963 F.2d 673, 676 (4th
Cir. 1992) (quoting Singleton v. Wulff, 428 U.S. 106, 120
(1976)). Nevertheless, I find the government’s argument
unpersuasive on this point.
38 UNITED STATES v. THORSON
The government relies on United States v. Fiore, 381 F.3d
89 (2d Cir. 2004), for the proposition that "the obstruction
enhancement applies to efforts to obstruct not just criminal
investigations, but also civil and administrative inquiries into
the same conduct." Resp. Br. at 35. In Fiore, the defendant
was convicted of securities fraud, as well as perjury for lying
to SEC officials during their civil investigation. 381 F.3d at
91. Thus, the Second Circuit found that "[w]here federal
administrative and prosecutorial jurisdiction overlap, subse-
quent criminal investigations are often inseparable from prior
civil investigations, and perjury in the prior proceeding neces-
sarily obstructs—if successful, by preventing—the subsequent
investigation." Id. at 94.

Yet, in the case before us, there is no evidence that Thorson
made false statements to the IRS agents or created false docu-
ments to be produced to the IRS for the purpose of obstruct-
ing the civil audit. The official civil inquiry began in March
1998 when a revenue agent initiated a civil examination for
the first fraudulent partnership. The government claims that
"[t]he partnership’s accountant provided to the revenue agent
a contract for the partnership to purchase sites that was dated
December 23, 1995." Resp. Br. at 37. The government then
cites to a section of the PSR claiming that "the district court
found that the agreement was ‘fabricated,’ . . . and ‘provided
to the agent to establish falsely that the sites were purchased
by the partnership in December 1995 to obstruct the civil
audit.’" Resp. Br. at 37. While the court adopted the factual
findings of the PSR in general, the court never cited to this
section nor used it to justify the obstruction enhancement. The
court relied solely on the grand jury investigation to support
the adjustment. Moreover, the government cites no evidence
that this backdated contract dated December 23, 1995, was
drafted following the commencement of the audit.

Additionally, the government misleadingly argues now that
defendants prepared correspondence during the audit "to fos-
ter the false pretense that his use of the funds in the AGH
 UNITED STATES v. THORSON 39
account were non-taxable loans." Resp. Br. at 38. However,
the correspondence the government cites was not produced to
the IRS during the audit, but was instead produced in
response to subsequent grand jury subpoenas. J.A. 1034.
Accordingly, the government’s argument fails on all accounts.
Thus, I believe that the district court erred in adjusting Thor-
son’s sentence for obstruction of justice.

IV.

Because the district court clearly erred in finding that Thor-
son was a leader or an organizer and that Thorson obstructed
justice, I would vacate his sentence and remand for resentenc-
ing.7 Thus, I respectfully dissent.

7
I would not reach Thorson’s third issue on appeal — whether the sen-
tence imposed was procedurally unreasonable.