UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-4790
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
THOMAS L. KIMMEL,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Greenville. James C. Dever III,
Chief District Judge. (4:13-cr-00057-D-1)
Argued: March 24, 2016 Decided: April 8, 2016
Before MOTZ, GREGORY, and KEENAN, Circuit Judges.
Vacated and remanded by unpublished per curiam opinion.
ARGUED: Robert Earl Waters, OFFICE OF THE FEDERAL PUBLIC
DEFENDER, Raleigh, North Carolina, for Appellant. Kristine L.
Fritz, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North
Carolina, for Appellee. ON BRIEF: Thomas P. McNamara, Federal
Public Defender, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Raleigh,
North Carolina, for Appellant. Thomas G. Walker, United States
Attorney, Jennifer P. May-Parker, Yvonne V. Watford-McKinney,
Assistant United States Attorneys, OFFICE OF THE UNITED STATES
ATTORNEY, Raleigh, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
The district court sentenced Thomas L. Kimmel to 264
months’ imprisonment after a jury convicted him on multiple
counts relating to his participation in a Ponzi scheme. On
appeal, Kimmel challenges the three-level sentencing enhancement
he received for his role as a manager or supervisor of the
conspiracy. For the reasons set forth within, we vacate and
remand for resentencing.
I.
In 2005, James Kirk invited Kimmel to join in a business
venture buying and selling used cars. Kirk incorporated the
portion of the business that provided in-house financing to
customers under the name Sure Line Acceptance Corporation (“Sure
Line”) and served as its Chief Executive Officer. Sure Line
raised additional funds for the business by offering investments
purportedly secured by the vehicle titles and accounts
receivable.
Kimmel, who had been conducting debt-counseling seminars at
churches throughout the country, became the principal fundraiser
for Sure Line by selling its securities to seminar attendees.
While promoting the notes, Kimmel made several false statements
regarding the degree of risk in the investment and his role at
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Sure Line. For his efforts, Kimmel earned a ten percent
commission on all proceeds he generated for the company.
Although Kimmel was Sure Line’s top sales person, he
conducted his seminars through his own business, Faithful
Stewards. As such, while Kimmel made several suggestions to
Kirk aimed at improving the company’s fundraising, he did not
make any decisions regarding the day-to-day operations of Sure
Line. Kirk accepted Kimmel’s recommendations but testified at
trial that Kimmel neither sought nor accepted general authority
over Sure Line’s operations or employees.
Sure Line began as a legitimate business, but became a
fraudulent Ponzi scheme when the financial crisis halted used
car purchases and the company began using new investor money to
make interest payments to earlier investors. As is to be
expected, this arrangement merely postponed the inevitable bust,
which occurred in January 2012 and resulted in over sixteen
million dollars in economic loss. On August 21, 2013, a federal
grand jury indicted Kimmel on multiple counts related to his
involvement in the fraudulent scheme.
While Kirk and other Sure Line employees pled guilty and
eventually cooperated with the Government, Kimmel elected to
stand trial. The jury convicted Kimmel on several counts of
conspiracy to commit mail and wire fraud and engaging in
unlawful monetary transactions. In the presentence
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investigation report, the Probation Office recommended several
sentencing enhancements, including a four-level increase for
Kimmel’s role as an organizer or leader of the conspiracy,
pursuant to U.S. Sentencing Guidelines Manual § 3B1.1(a) (U.S.
Sentencing Guidelines Comm’n 2012). Kimmel objected to this
enhancement at sentencing.
The district court found that, although the conspiracy
involved only four participants and perhaps implicated a fifth,
the scheme was certainly “extensive.” Kimmel does not challenge
before us this threshold finding, necessary to support the
§ 3B1.1 enhancement. Next, the district court considered the
seven factors found in the commentary to § 3B1.1 that assist in
the evaluation of a defendant’s role in an offense. See id.
§ 3B1.1 cmt. n.4. Weighing these factors, the court determined
that the facts proved at trial did not support a four-level
enhancement for organizers or leaders under § 3B1.1(a), but did
support a three-level increase applicable to managers and
supervisors under § 3B1.1(b). The court then sentenced Kimmel
to 264 months’ imprisonment, a term that reflects additional
enhancements and a downward variance. Kimmel noted this timely
appeal, challenging the three-level sentencing enhancement.
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II.
Guidelines § 3B1.1(b) provides for a three-level
enhancement “[i]f the defendant was a manager or supervisor (but
not an organizer or leader) and the criminal activity involved
five or more participants or was otherwise extensive.” Id.
§ 3B1.1(b). The commentary to the Guidelines explains that the
enhancement is appropriate only when the defendant was a manager
or supervisor “of one or more other participants,” as opposed to
“exercis[ing] management responsibility over the property,
assets, or activities of a criminal organization.” Id. § 3B1.1
cmt. n.2. “A ‘participant’ is a person who is criminally
responsible for the commission of the offense, but need not have
been convicted.” Id. § 3B1.1 cmt. n.1. In accordance with the
Guidelines, we have long held that a defendant must have been a
“manager or supervisor of people” to warrant the enhancement.
United States v. Sayles, 296 F.3d 219, 226 (4th Cir. 2002).
We review the district court’s “essentially factual”
determination that the defendant was a manager or supervisor for
clear error. United States v. Steffen, 741 F.3d 411, 414 (4th
Cir. 2013). Our review is not limited to the reasoning of the
district court, thus we will find clear error “only when, after
reviewing all the evidence, we are left with the definite and
firm conviction that a mistake has been committed.” Id. at 415
(internal quotation marks omitted).
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III.
Kimmel argues that the district court clearly erred in
concluding that he was a manager or supervisor of the conspiracy
because he did not exercise any control over other people.
Based on our review of the record, we must agree.
In its analysis of the § 3B1.1 factors, the district court
made several factual findings that we believe accurately reflect
the record evidence. First, the court found that Kimmel “had a
specific role,” which was to “raise money for Sure Line.” The
court also found that Kimmel was “responsible for marketing the
program,” served as its “principal fundraiser,” and received
“the second highest share of the fruits of the fraud.” On the
other hand, the court found that Kimmel “did not recruit
accomplices in the fraud,” and did not “exercise[] formal
decision-making authority within Sure Line in terms of its day-
to-day operations.”
These factual findings, and the Guidelines factors on which
they bear, certainly demonstrate that Kimmel played a
significant role in the extensive fraudulent scheme. Yet these
facts do not establish that Kimmel ever managed or supervised
people, which is a necessary finding to support the enhancement.
See, e.g., Sayles, 296 F.3d at 226-27. Our independent review
of the record confirms that Kimmel, an important fundraiser, did
not exert control over any other participant in the scheme.
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The only instances we have found in the record when Kimmel
arguably influenced another participant are the times Kimmel
proposed changes to Sure Line’s fundraising operations to Kirk,
like creating a “spiritual board of advisors.” But the district
court found that these interactions were mere “suggestions” that
Kimmel made “to better enable [Kimmel] to raise money for Sure
Line.” Even though Kirk frequently accepted these unsolicited
recommendations, we agree with the district court that they are
best understood as suggestions, not instances where Kimmel
managed or supervised a fellow participant. Thus, we conclude
that the district court clearly erred when it enhanced Kimmel’s
sentence pursuant to § 3B1.1(b) without finding that he managed
or supervised people. Kimmel must be resentenced. *
IV.
For the foregoing reasons, the judgment of the district
court is
VACATED AND REMANDED.
*Because we vacate Kimmel’s sentence and remand for
resentencing, we need not decide whether the original sentence
was substantively unreasonable, as Kimmel contends.
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