United States v. Guidry

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
DEC 21 1999
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v. No. 98-3287

ANITA L. GUIDRY,

Defendant-Appellant.

Appeal from the United States District Court
for the District of Kansas
(D.C. No. 97-CR-10162-MLB)

Debra L. Barnett (Jackie N. Williams, United States Attorney, with her on the
brief), Assistant United States Attorney, Wichita, Kansas, for Plaintiff-Appellee.

Daniel E. Monnat of Monnat & Spurrier, Chartered, Wichita, Kansas, for
Defendant-Appellant.

Before BRORBY, HENRY and LUCERO, Circuit Judges.

BRORBY, Circuit Judge.

A jury found Appellant Anita L. Guidry guilty of three counts of knowingly

and willfully filing a false tax return in violation of 26 U.S.C. § 7206(1). The
district court denied Mrs. Guidry’s Motion for Judgment of Acquittal as to the

three counts and sentenced her to sixty months imprisonment. Mrs. Guidry now

appeals her conviction and sentence, challenging a search warrant as overbroad,

jury instructions, the sufficiency of the evidence, and various applications of the

sentencing guidelines. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and

18 U.S.C. § 3742. We affirm in part, reverse in part, and remand for

resentencing.

BACKGROUND

Anita L. Guidry was the architect of an embezzlement scheme that allowed

her to line her pockets with approximately $3 million belonging to her employer,

Wichita Sheet Metal. 1 While the embezzlement scheme itself is not directly in

issue here, understanding the facts surrounding the scheme is a necessary

predicate to resolving the issues before us. Accordingly, we begin with a cursory

1
Mrs. Guidry used her stolen money to make sure she had plenty of
pockets to line. During the years of her embezzlement, Mrs. Guidry spent over
$1.2 million on clothing from one retailer alone – GM Clotheshorse. Her
employer, Wichita Sheet Metal, eventually took possession of 1300 dresses, 182
pairs of shoes, 164 hats, 40 belts, 27 purses, two fur coats, and boxes of jewelry
that included over 400 pairs of earings, all of which Mrs. Guidry had kept in
several rented storage units. Mrs. Guidry’s former employers certainly have the
inventory, if not the experience, to open their own boutique should the sheet
metal business turn sour.

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examination of Mrs. Guidry’s background and her embezzlement.

Mrs. Guidry graduated from Wichita State University with a Bachelor’s

Degree in Business Administration. Her resume lists her major area of study as

accounting, and she listed her occupation as accountant on several tax returns

filed with the Internal Revenue Service. Wichita Sheet Metal hired Mrs. Guidry

as an assistant to the controller of the company in 1986, and she subsequently

became the controller in 1987, a position she held until she resigned in 1997. As

controller, Mrs. Guidry not only supervised nearly every employee in the office,

but she was an authorized signatory on the company checking account.

Mrs. Guidry’s embezzlement scheme consisted of submitting checks,

already signed by her and made payable to the company’s bank, to Freda Moore

or John Griffit, owners of Wichita Sheet Metal, for their signature. Mrs. Guidry

wrote the checks in $10,000 or $9,000 increments, and she told Mrs. Moore and

Mr. Griffit the checks were for federal tax payments. After collecting the proper

signature, Mrs. Guidry cashed the checks at the company bank and pocketed the

cash. Finally, to prevent discovery of her scheme, Mrs. Guidry altered the

company’s books to make it appear the money she had taken for personal

pleasures was actually used to purchase inventory for the company. This created

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a discrepancy between the actual inventory and the inventory reflected on the

company’s books. The company’s owners eventually asked for a detailed audit of

the discrepancy, which ultimately led to the discovery of Mrs. Guidry’s

embezzlement.

Mrs. Guidry had financial responsibilities at home in addition to those at

work. As the accountant in the family, Mrs. Guidry prepared the joint federal tax

returns she filed on behalf of herself and her husband for 1993, 1994, and 1995.

According to Mrs. Guidry’s husband, these returns were prepared elaborately,

which fact is buttressed by the returns themselves. The Guidrys painstakingly

itemized their deductions, taking charitable deductions of $7,513 in 1993,

$11,692 in 1994, and $13,102 in 1995. Not surprisingly, however, none of the

returns reported the embezzled income. In 1993, Mrs. Guidry cashed forty checks

through her embezzlement scheme for a total amount of $400,000. The Guidrys

declared a total income, combined husband and wife, of $82,817 on their federal

income tax return in 1993. In 1994, fifty-nine checks were cashed for a total of

$563,000, and the Guidrys declared a total income of $88,547. In 1995, it was

sixty-four checks cashed for $576,000, compared to a total declared income of

$90,883.

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 While investigating Mrs. Guidry’s embezzlement, Special Agent Martin

McCormick of the Internal Revenue Service participated in the execution of a

search warrant at the Guidry home. While searching for bank records, Special

Agent McCormick opened a drawer in a file cabinet marked “taxes” and observed

“tax booklets identical to those that are mailed to everyone by the Internal

Revenue Service every year at the first of the year.” The 1993 tax booklet the

Internal Revenue Service provided with the Individual Income Tax Return listed

embezzled income as taxable income that must be reported. The 1994 and 1995

tax booklets did not specifically contain this language, but instead referenced a

publication the taxpayer could request which did specifically state embezzled

income must be reported as taxable income.

DISCUSSION

I. The Warrant

The search warrant executed at Mrs. Guidry’s home authorized officers to

seize “[a]ny and all bank records, including but not limited to checks, statements,

deposits, or investment records, or records of bank or money transfers.” Mrs.

Guidry contends the warrant suffered from three deficiencies: (1) the warrant

failed to provide any meaningful limitations on items to be seized; (2) the warrant

simply authorized the seizure of all files, regardless of their relevance to a

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specified crime; and (3) the warrant authorized the search and seizure of evidence

not supported by probable cause, meaning the scope of the warrant exceeded the

probable cause supporting it.

“ When reviewing a district court’s denial of a motion to suppress, we

consider the evidence in the light most favorable to the government, and accept

the court’s findings of fact unless they are ‘clearly erroneous.’” United States v.

Vazquez-Pulido, 155 F.3d 1213, 1216 (10th Cir.), cert. denied, 119 S. Ct. 437

(1998). However, “[w]e review de novo whether the warrant was overbroad or

insufficiently particular under the Fourth Amendment.” United States v. Hargus,

128 F.3d 1358, 1362 (10th Cir. 1997), cert. denied, 118 S. Ct. 1526 (1998). The

Fourth Amendment requires warrants "particularly describing the place to be

searched, and the persons or things to be seized." U.S. Const. amend. IV. A

sufficiently particular warrant “allows the searcher to reasonably ascertain and

identify the things authorized to be seized,” leaving “nothing to the officer’s

discretion as to what is to be seized, so that the officer is prevented from

generally rummaging through a person’s belongings.” Hargus, 128 F.3d at 1362.

A warrant describing “items to be seized in broad and generic terms may be valid

‘when the description is as specific as the circumstances and the nature of the

activity under investigation permit.’” United States v. Leary, 846 F.2d 592, 600

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(10th Cir. 1988) (quoting United States v. Santarelli, 778 F.2d 609, 614 (11th Cir.

1985)); see also Hargus, 128 F.3d at 1363.

The district court focused on the affidavit in support of the warrant to

examine the context in which the warrant was requested. The court pointed out

the affidavit detailed what was known about the embezzlement scheme at the

time, including information about the closing of several bank accounts in Kansas

proximate to the time the scheme was discovered and the subsequent opening of

other accounts in Oklahoma, and the inability of agents to find either the vast

majority of the money Mrs. Guidry had embezzled, or all the money she withdrew

from her Kansas banks. Considering the type and extent of Mrs. Guidry’s

criminal activity, the district court reasoned the warrant was as specific as

circumstances allowed: “Absent omniscience, the government could provide no

greater specificity.” We find this a much closer call, but need not address the

Fourth Amendment issue because we exercise our discretion to turn “immediately

to a consideration of the officers’ good faith” as allowed under United States v.

Leon, 468 U.S. 897, 925 (1984).

“Even if the warrant was not specific enough, [a] court should not suppress

the evidence [if] the agents seized it in objectively reasonable reliance on the

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warrant.” United States v. Robertson, 21 F.3d 1030, 1034 (10th Cir. 1994) (citing

Leon, 468 U.S. at 920-22). “Our good-faith inquiry is confined to the objectively

ascertainable question whether a reasonably well trained officer would have

known that the search was illegal despite the magistrate’s authorization. In

making this determination, all of the circumstances ... may be considered.” Leon,

468 U.S. at 922 n.23. Given the circumstances surrounding the warrant at issue

here, we hold the officers acted on a good-faith belief the warrant was sufficiently

particular in regard to the items to be seized.

The government executed this warrant nearly two months after the initial

indictment was filed against Mrs. Guidry. The initial indictment charged Mrs.

Guidry with violations of 18 U.S.C. §§ 1956 (money laundering) and 1344 (bank

fraud). Special Agent McCormack was intimately involved in the investigation of

Mrs. Guidry’s embezzlement prior to the execution of the warrant at Mrs.

Guidry’s home. By the time he executed the warrant, Special Agent McCormack

had analyzed numerous bank records connected to the case, served federal grand

jury subpoenas on two banks, and served seizure warrants at three banks. The

affidavit in support of the warrant limited the search to bank records related to

violations of 18 U.S.C. §§ 982 (criminal forfeiture) and 1957 (engaging in

monetary transactions in property derived from specified unlawful activity), in

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addition to the code sections listed in the initial indictment. 2 While Special Agent

McCormack did not personally prepare the affidavit, he did help collect the

information used by the preparing officer.

We have previously stated “the knowledge of the executing officer can be

considered in determining the sufficiency of the description [of a place to be

searched].” United States v. Occhipinti , 998 F.2d 791, 799 (10th Cir. 1993). We

have also applied the good-faith exception when the officer who swore out the

affidavit helped execute the warrant. See United States v. Simpson , 152 F.3d

1241, 1248 (10th Cir. 1998). We find these cases instructive, and hold Special

Agent McCormack acted in good-faith reliance on the warrant because he was so

intimately involved in the investigation prior to the execution of the warrant, and

the preparation of the affidavit in support of the warrant. This level of

involvement in the case gave him obvious knowledge of the crimes that were the

subject of the investigation. 3

2
The particularity of an affidavit can cure an overbroad warrant when the
affidavit is both referenced in the warrant and physically attached to the warrant.
See Leary, 846 F.2d at 603. The record here is insufficient to make such a
determination, thus the affidavit cannot cure any possible overbreadth in the
warrant.

3
Our holding is further bolstered by the fact Special Agent McCormack
did not actually seize the tax records and booklets he observed in Mrs. Guidry’s
home.

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II. The Jury Instructions

Mrs. Guidry next assigns error to the district court’s jury instructions,

claiming the instructions inadequately defined the term “willfully” as it pertains

to the crime of filing a false tax return. (Apt. Br. at 19-22.) “We review de novo

a timely challenge to a jury instruction to determine whether, considering the

instructions as a whole, the jury was misled.” United States v. Winchell, 129 F.3d

1093, 1096 (10th Cir. 1997). We will not reverse “unless we have ‘substantial

doubt that the jury was fairly guided.’” Id. (quoting United States v. Mullins, 4

F.3d 898, 900 (10th Cir. 1993)).

The Supreme Court addressed the statutory definition of “willful” as it is

applied in the tax code in Cheek v. United States, 498 U.S. 192 (1991). The Court

held its cases “conclusively establish that the standard for the statutory

willfulness requirement is the ‘voluntary, intentional violation of a known legal

duty.’” Id. at 200-01 (quoting United States v. Bishop, 412 U.S. 346, 360

(1973)); see also Winchell, 129 F.3d at 1096. The district court’s instructions in

the current case tracked the Cheek language almost verbatim: “For the purpose of

this instruction, the term ‘wilfully’ means to voluntarily and intentionally violate

a known legal duty.” Mrs. Guidry requested an additional sentence at the end of

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the instruction stating “[n]egligent conduct is not sufficient to constitute

willfulness.” Mrs. Guidry argues she was entitled to the requested language. As

support for her position, she contends we have endorsed such an instruction in

Winchell, and the additional language is crucial for a proper definition of the

willfulness element. This argument has no merit. First, Mrs. Guidry

misconstrues our holding in Winchell. In Winchell, we held the defendant in a §

7206(1) case was not entitled to a separate instruction on “specific intent”

because the “willfulness” instruction given was adequate standing alone. 4

Winchell, 129 F.3d at 1096-97. Concluding the language at issue in Winchell was

adequate is a far cry from deeming it necessary. Second, nothing in Cheek

requires an additional reference to negligent conduct. The instructions in this

case did not mislead the jury. To the contrary, the instructions clearly stated the

correct legal standard.

III. Sufficiency of the Evidence

Mrs. Guidry next complains the evidence at trial was insufficient to sustain

the jury’s verdict. This argument presents a high hurdle, and one Mrs. Guidry

4
The instruction in Winchell, which was accepted by both parties, stated:
“To act ‘willfully’ means to voluntarily and intentionally violate a known legal
duty .... Negligent conduct is not sufficient to constitute willfulness.” Winchell,
129 F.3d at 1096 (quotation marks and citation omitted).

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fails to surmount.

“[I]n reviewing the sufficiency of the evidence to support a jury
verdict, this court must review the record de novo and ask only
whether, taking the evidence – both direct and circumstantial,
together with reasonable inferences to be drawn therefrom – in the
light most favorable to the government, a reasonable jury could find
the defendant guilty beyond a reasonable doubt.”

United States v. Beers, 189 F.3d 1297, 1301(10th Cir. 1999) (quoting United

States v. Voss, 82 F.3d 1521, 1524-25 (10th Cir.), cert. denied, 519 U.S. 889

(1996)). We will not second-guess the jury’s credibility determinations or

conclusions concerning the weight of the evidence presented. Id.

Mrs. Guidry contends the “only” evidence supporting willfulness consists

of her background and experience in accounting, the testimony to the effect

Internal Revenue Service documents listed embezzled income as taxable income,

and Agent McCormick’s testimony he observed some Internal Revenue Service

tax booklets in Mrs. Guidry’s files at her home. Seeing a lack of evidence, Mrs.

Guidry then goes on to cite our decision in McCarty v. United States, 409 F.2d

793 (10th Cir.), cert. denied, 396 U.S. 836 (1969), for the proposition that

“willfulness cannot be inferred from a mere understatement of income.” Id. at

795 (citing Spies v. United States, 317 U.S. 492 (1943)). This analysis suffers

from two fatal flaws: it fails to view all the evidence in the light most favorable

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to the Government, and it provides an incomplete view of the Supreme Court’s

guidance in Spies.

While it is well established willfulness cannot be inferred solely from an

understatement of income, willfulness can be inferred from

making false entries of alterations, or false invoices or documents,
destruction of books or records, concealment of assets or covering up
sources of income, handling of one's affairs to avoid making the
records usual in transactions of the kind, and any conduct, the likely
effect of which would be to mislead or to conceal.”

Spies, 317 U.S. at 499; see also United States v. Samara, 643 F.2d 701, 704 (10th

Cir. 1981). This conduct can be used to prove willfulness “even though the

conduct may also serve other purposes such as concealment of other crime.”

Spies, 317 U.S. at 499. The jury heard sufficient evidence to support its finding

of willfulness in this case.

First, the jury heard evidence of Mrs. Guidry’s expertise in accounting via

her degree in business and her work experience as the controller of a company.

The evidence showed Mrs. Guidry prepared the family taxes, and did so

“elaborately” according to her husband. An investigator observed tax booklets

from unknown years in Mrs. Guidry’s files, and the jury learned the tax booklets

specific to the years in question in this case either stated embezzled income

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should be reported, or referenced a second Internal Revenue Service document

where taxpayers might receive that information. The evidence also showed: an

ever-burgeoning disparity between the Guidrys’ reported income and their actual

income as complemented by the embezzlement scheme; the embezzled cash was

used to purchase goods, making the money more difficult to detect; the Guidrys

took significant charitable deductions on their taxes while not reporting the

embezzled income; and the money was embezzled in increments of $9,000 or

$10,000. Mrs. Guidry argues the jury should not have been allowed to take

evidence of the embezzlement scheme itself into account, but such an argument

defies logic.

Concealment of income can have more than one purpose. Such activity can

show a desire to conceal the theft from the employer, and it can tend to show a

purposeful attempt to conceal such income from the Internal Revenue Service. In

addition, an inference of willfulness can be supported by a “consistent pattern of

underreporting large amounts of income.” Holland v. United States, 348 U.S.

121, 139 (1954); see also United States v. Frank, 437 F.2d 452 (9th Cir.), cert.

denied, 402 U.S. 974 (1971). “Criminal willfulness can be inferred when a

defendant does not supply her tax preparer with evidence of substantial items of

income.” United States v. Stokes, 998 F.2d 279, 281 (5th Cir. 1993). In Stokes,

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the Ninth Circuit upheld a conviction under § 7206(1) when the defendant did not

disclose illegal income to her tax preparer. It makes little sense to apply one

standard to a person who withholds information from a tax preparer, and another

standard to a self-preparer who withholds similar information from the Internal

Revenue Service directly. The jury was free to conclude Mrs. Guidry had

accounting expertise, that information stating embezzled income was to be

reported as income on the tax return was available to her, and that she would have

availed herself of the information. The jury was also free to examine the way the

embezzlement scheme was designed to conceal assets, and infer Mrs. Guidry’s

intent was to avoid paying a known tax liability. As in Spies, Mrs. Guidry

“claims other motives animated [her] in these matters. We intimate no opinion.

Such inferences are for the jury.” Spies, 317 U.S. at 500. Our holding is limited

to the unique facts of this case. Given the combination of Mrs. Guidry’s

background and training, the details of her embezzlement scheme and attempts to

conceal her income, and the testimony concerning the presence and contents of

federal tax booklets, the evidence was sufficient to support the jury’s verdict in

this case.

IV. Application of the Sentencing Guidelines

Finally, Mrs. Guidry argues the district court erred in imposing sentencing

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enhancements for sophisticated means and abuse of position of trust, and

improperly considered race when denying a downward departure. We review the

district court’s legal interpretation of the sentencing guidelines de novo and the

district court’s factual findings for clear error. United States v. Rice, 52 F.3d

843, 848-49 (10th Cir. 1995). We conclude the district court’s imposition of the

enhancement for abuse of position of trust was clearly erroneous, and remand for

resentencing.

A. Sophisticated Means Enhancement

United States Sentencing Guideline § 2T1.1 provides for a two-level

sentence enhancement when “sophisticated means were used to impede discovery

of the existence or extent of the offense.” U.S.S.G. § 2T1.1(b)(2). The

commentary to the guideline defines “sophisticated means” as “conduct that is

more complex or demonstrates greater intricacy or planning than a routine tax-

evasion case.” U.S.S.G. § 2T1.1, cmt. n.4. The district court imposed this

enhancement after explicitly finding this was not a routine case. We agree.

Mrs. Guidry’s is not a case of simply claiming to have paid withholding

taxes not paid, see Rice, 52 F.3d at 849, or of not disclosing income to one’s

accountant, see Stokes, 998 F.2d at 282. Mrs. Guidry’s scheme allowed her to do

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more than conceal her embezzlement from her employers – it allowed her to

conceal the income from the Internal Revenue Service and made it difficult to

determine the extent of the tax loss suffered by the federal government. The

checks Mrs. Guidry used to embezzle funds were made payable to the bank, not

Mrs. Guidry. Mrs. Guidry converted the checks to cash, which is harder to trace,

then spent the vast majority of the money on personal items, again making it

difficult for the Internal Revenue Service to discover the extent of the crime. She

deposited only a fraction of the embezzled money in the bank. Most damaging

for Mrs. Guidry, she never took more than $10,000 in one day. The district court

heard testimony at the sentencing hearing that banks are required to file

documents known as Currency Transaction Reports for transactions exceeding

$10,000. These reports are filed with the Internal Revenue Service, and are not,

as a matter of course, made available to the company or individual in whose name

the transaction occurred. Structuring the transactions to avoid a Currency

Transaction Report, therefore, served the main purpose of shielding the

transaction from the Internal Revenue Service. In addition, while Mrs. Guidry

may not have used a sham corporation, or offshore bank accounts, to hide her

bounty from the Internal Revenue Service, stocking multiple storage units with

over a million dollars in clothes and costume jewelry had a similar effect –

concealment of the embezzled cash. Clearly, her meticulous scheme was

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designed, at least in part, to conceal the existence and extent of her failure to file

a truthful tax return, and the district court did not clearly err in finding she did so

in a sophisticated manner.

B. Abuse of Position of Trust Enhancement

The district court also imposed an enhancement pursuant to U.S.S.G.

§ 3B1.3, which provides, in pertinent part: “If the defendant abused a position of

public or private trust, or used a special skill, in a manner that significantly

facilitated the commission or concealment of the offense, increase [the offense

level] by 2 levels.” U.S.S.G. § 3B1.3. Before imposing this enhancement, a

district court must find two things: (1) the defendant possessed a position of

trust; and (2) the defendant abused the position to significantly facilitate the

commission or concealment of the offense. United States v. Burt, 134 F.3d 997,

998-99 (10th Cir. 1998). Mrs. Guidry focuses on the latter step, arguing the

imposition of this enhancement was clearly erroneous because her obvious abuse

of her position of trust at Wichita Sheet Metal did not significantly facilitate the

commission or concealment of her offense. While this particular argument is

unconvincing, we agree the application of this enhancement is inappropriate here

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because Mrs. Guidry did not occupy a position of trust vis-à-vis the government, 5

thereby failing the first step of the Burt analysis.

The district court employed the two-step Burt analysis and made the

following findings: “The first element is really not contested.... [T]he evidence

is overwhelming that the Defendant occupied a position of trust at Wichita Sheet

Metal.” As far as the second element, the court emphasized the control Mrs.

Guidry exercised over the payment of wages and the finances of the company, and

found the evidence showed

the people who ran Wichita Sheet Metal trusted her explicitly and
really never questioned her about anything she was doing in her
capacity as controller, [her position] allowed her to systematically
take more than $2 million out of that company and put it into her
pocket and not report it in any way on the books of the company and
particularly on records that would go to the Internal Revenue Service
as a matter of course from the business.... And that allowed her to
conceal the offense from the [Internal Revenue Service].

The district court’s approach to the second prong of Burt is fairly

persuasive. U.S.S.G. § 3B1.3 allows enhancement when a defendant’s abuse of a

5
“‘When an issue or claim is properly before the court, the court is not
limited to the particular legal theories advanced by the parties, but rather retains
the independent power to identify and apply the proper construction of governing
law.’” United States Nat’l Bank v. Independent Ins. Agents of Am., Inc., 508 U.S.
439, 446 (1993) (quoting Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90, 99
(1991)).

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position of trust significantly facilitates “the commission or concealment of the

offense.” U.S.S.G. § 3B1.3. Sentencing courts may consider conduct outside the

offense of conviction when imposing the abuse of a position of trust

enhancement: “The determination of a defendant’s role in the offense is to be

made on the basis of all conduct within the scope of § 1B1.3 (Relevant Conduct),

... and not solely on the basis of elements and acts cited in the count of

conviction.” U.S.S.G. Ch. 3, Pt. B, intro. cmt. Section 1B1.3 in turn states

enhancements shall be based on “all acts and omissions committed, aided,

abetted, counseled, commanded, induced, procured, or willfully caused by the

defendant ... that occurred during the commission of the offense of conviction, in

preparation for that offense, or in the course of attempting to avoid detection or

responsibility for that offense.” U.S.S.G. § 1B1.3(a)(1). Given the facts of this

case, the district court may have been correct in finding Mrs. Guidry’s

embezzlement activity was relevant conduct, committed to avoid detection of her

false income tax returns. However, to reach the second prong of Burt a district

court must first find the defendant occupied a position of trust, and our case law

clearly states the position of trust must be found in relation to the victim of the

offense: “The question of whether an individual occupied a position of trust is

evaluated from the victim’s perspective.” United States v. Trammell, 133 F.3d

1343, 1355 (10th Cir. 1998) (citing United States v. Queen, 4 F.3d 925, 929 (10th

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Cir. 1993), cert. denied, 510 U.S. 1182 (1994)); see also United States v.

Brunson, 54 F.3d 673, 677 (10th Cir.), cert. denied, 516 U.S. 951 (1995).

“The primary concern of § 3B1.3 is to penalize defendants who take

advantage of a position that provides them freedom to commit or conceal a

difficult-to-detect wrong.” United States v. Koehn, 74 F.3d 199, 201 (10th Cir.

1996). We have applied § 3B1.3 in two types of cases: “The first is where the

defendant steals from his employer, using his position in the company to facilitate

the offense,” and the “second is where a ‘fiduciary or personal trust relationship

exists’ with other entities [not the employer], and the defendant takes advantage

of the relationship to perpetrate or conceal the offense.” Id. (quoting Brunson, 54

F.3d at 677). Mrs. Guidry’s conduct in filing false income tax returns falls into

neither category. We must vacate the portion of the sentence imposed due to the

abuse of a position of trust enhancement and remand for resentencing because

Mrs. Guidry did not occupy a position of trust vis-à-vis the government, the

victim in this case. 6

6
The Circuits are split on the relationship a position of trust must have to
the victim of the offense for the purpose of enhancement. Compare United States
v. Barakat, 130 F.3d 1448, 1454-56 (11th Cir. 1997) (holding defendant did not
use his particular position of trust, which allowed him access to illegal unreported
income, to conceal the offense of conviction – tax evasion), United States v. Jolly,
102 F.3d 46, 48-50 (2d Cir. 1996) (“the abuse of trust enhancement applies only
where the defendant has abused discretionary authority entrusted to the defendant

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 C. Denial of Downward Departure

At sentencing, Mrs. Guidry moved for a downward departure, citing as

support her years of service to groups and individuals in the black community.

The district court denied Mrs. Guidry’s motion. In considering the departure, the

court stated it was

balancing her community service with what she did in this case; and
in my opinion her community service does not justify a downward
departure considering the evidence in the case regarding the nature
and extent of her wrongdoing.... This is a case where the Defendant
set out and did steal millions of dollars from her employer and would
be doing so today if she had not been caught.

Now, she might also be out doing good works, Ladies and

by the victim” (citing United States v. Broderson, 67 F.3d 452, 455-56 (2d Cir.
1995) (stating without a nexus between the victim and the position of trust,
anyone commanded by statute to make an accurate report to the government
would be subject to the enhancement, including all taxpayers who file false tax
returns)), and United States v. Moore, 29 F.3d 175, 179-80 (4th Cir. 1994)
(reversing § 3B1.3 enhancement when defendants held positions of trust in
relation to entities other than the victim of their fraud scheme), with United States
v. Cianci, 154 F.3d 106, 110-13 (3d Cir. 1998) (holding § 3B1.3 enhancement
appropriate in tax evasion case when defendant abused position of trust with his
company to embezzle unreported income), United States v. Bhagavan, 116 F.3d
189, 193 (7th Cir. 1997) (holding the government is not necessarily the only
victim in a tax evasion scheme, and the enhancement can apply if any identifiable
victim of the overall scheme to evade taxes put the defendant in a position of
trust), and United States v. Duran, 15 F.3d 131, 132-34 (9th Cir. 1994) (per
curiam) (sheriff’s use of position to embezzle money and his subsequent
structuring of financial transactions to avoid reporting requirements were part of a
common scheme or plan under U.S.S.G. § 1B1.3(a)(2), and § 3B1.3 enhancement
was appropriate when jury convicted defendant of structuring offense, but failed
to reach a verdict on underlying theft charge).

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 Gentlemen, in the community; but she also would be a thief and a
crook ....

The court also cited the “terrible disservice” Mrs. Guidry’s criminal activity had

visited on her husband and daughter as a factor to take into consideration in

determining whether or not to depart. The court then added the following

remarks:

So I suppose I ought to say one more thing in view of the
evidence today. I have sentenced many many people in this court
from the black community here in Wichita. Some of you know that.
And probably all of you know it to one extent or another. They are
people, some of them, many of them, have had no – they don’t have
parents ... who cared for [them]. They had no significant upbringing
of any kind. They commit violent crimes. They’re involved with
drugs. Things that you all, I think rightly so, are trying to stop.
Now, what kind of message does it send to the people that you all are
concerned about if I overlook, as you all have done for your own
reasons, what Mrs. Guidry – the crimes Mrs. Guidry has committed
and consider only her community service? It says – I think it would
say – it would send a message, perhaps, to people, maybe the wrong
message, but it might send the message that if you’re active in the
community that you can steal a couple of million dollars from your
employer and then come in and ask the judge to give you a break
because you were active in the community. And I don’t believe
that’s the message to be sent.

Just prior to imposing sentence, the court expressed its dislike for the sentencing

guidelines, but stated: “I do my best to follow [the guidelines] because I think

that’s my duty ... because I think that the appropriate way for a federal judge to

conduct himself or herself is to follow the guidelines whenever possible rather

than find ways to get around them.”

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 Under normal circumstances, we lack jurisdiction to review a sentencing

court’s discretionary denial of a downward departure. United States v. Neary, 183

F.3d 1196, 1197 (10th Cir. 1999); United States v. Castillo, 140 F.3d 874, 887

(10th Cir. 1998) (citing United States v. Rodriguez, 30 F.3d 1318, 1319 (10th Cir.

1994)). However, we retain the ability to review a refusal to depart when the

denial is based on an illegal factor, or an incorrect application of the Guidelines.

See Castillo, 140 F.3d at 888; Rodriguez, 30 F.3d at 1319; United States v.

Garcia, 919 F.2d 1478, 1479, 1481 (10th Cir. 1990); 18 U.S.C. § 3742(a)(1),

(a)(2), and (e). Certain factors – “race, sex, national origin, creed, religion, and

socio-economic status” – may never be bases for departure. See Koon v. United

States, 518 U.S. 81, 93 (1996); U.S.S.G. § 5H1.10. A sentencing decision based

on race qualifies as both a violation of law and an incorrect application of the

Guidelines, and therefore can be reviewed by this court. Neary, 183 F.3d at 1198;

United States v. Onwuemene, 933 F.2d 650, 651 (8th Cir. 1991); Garcia, 919 F.2d

at 1480.

Mrs. Guidry argues the district court’s reference to the “black community”

constituted consideration of her race for sentencing purposes. We disagree.

While the district court’s reference to race was most unfortunate and

inappropriate, we do not read the judge’s comments as taking any action or

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refusing action relating to Mrs. Guidry based on race. Rather, the court was

rejecting, inartfully, her argument that her service to the minority community

somehow atoned for her crimes. Simply put, the court was responding to a chorus

of Mrs. Guidry’s supporters with a reference to the fact that the same community

Mrs. Guidry had served so ably had also been deeply damaged by her actions.

Standing alone, the court’s comments might suggest stereotyping and bias that

would give us grave concern and require a remand. However, given the context

of the sentencing hearing and the nature of the court’s remarks taken in their

entirety, we determine the district court did not consider Mrs. Guidry’s race in its

sentencing decision. See generally United States v. Munoz, 974 F.2d 493 (4th

Cir. 1992). The district court did not base its sentencing decision on an illegal

factor, or an incorrect application of the Guidelines, and therefore we lack

jurisdiction to review its discretionary denial of the requested downward

departure.

Accordingly, we AFFIRM in part, VACATE the portion of the sentence

enhanced for abuse of a position of trust, and REMAND for resentencing.

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98-3287, United States of America v. Anita L. Guidry

LUCERO, Circuit Judge, concurring in part, dissenting in part.

I join in the majority opinion with the exception of Section IV.C., as to

which I dissent. Race is never relevant to sentencing determinations. U.S.S.G. §

5H1.10. There is no doubt in my mind that the trial court’s comments on race

uttered at Mrs. Guidry’s sentencing were motivated by good intent. Nonetheless,

it is impossible to overlook the fact that Mrs. Guidry’s race played some role in

the denial of the motion for downward departure. In making this sentencing

decision, the trial court expressly and unequivocally sought to send a message—or

not send the “wrong” message—to the African-American community of Wichita, a

community to which Mrs. Guidry belonged. While it may be permissible to use a

sentence to send a message to criminal groups, it is impermissible to use a

sentence to send a message to racial groups. Cf. United States v. Munoz, 974

F.2d 493, 496 (4th Cir. 1992) (“[T]he connection between the group targeted for

deterrence and the defendant must be the criminal conduct and not the defendant’s

national origin.”). Similarly, while a sentencing court has discretion to disregard

a defendant’s benevolent activities, see U.S.S.G. § 5K2.0, it may not to do so for

the explicit purpose of sending a message to the racial community that benefits

from those activities.
 Because U.S.S.G. § 5H1.10 prohibits the consideration of race in

sentencing determinations, and because the sentencing court controverted that

principle, I would reverse and remand for resentencing for this reason as well.

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