United States v. Thomas Kimmel

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-4790

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

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Vacated and remanded by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.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.

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.