United States v. Craig Nash
2013 U.S. App. LEXIS 18163
| 5th Cir. | 2013Background
- Craig Nash operated Goodfellas (later Goodfellas Grocery) and became an authorized SNAP retailer in 2004, agreeing to comply with SNAP rules prohibiting trafficking (e.g., exchanging benefits for alcohol/cash).
- USDA investigated in 2007, found four violations (Jan–Apr 2007), sent a July 1 charge letter and a July 9 final letter imposing a $14,742 civil money penalty; the letter warned of disqualification, further fines, and possible prosecution and informed Nash of his right to reply. Nash acknowledged the violation and paid the fine.
- USDA OIG opened a criminal investigation in 2009; undercover operations showed continued trafficking at Nash’s stores, yielding substantial fraudulent SNAP redemptions (over $1.7 million fraudulently obtained across both stores).
- Nash was indicted (conspiracy to defraud SNAP, food stamp fraud, wire fraud); he pled guilty to conspiracy and one wire-fraud count.
- At sentencing the government sought a two-level enhancement under U.S.S.G. § 2B1.1(b)(9)(C) for violating a prior specific administrative order or warning; the district court applied the enhancement based on the July letters and imposed concurrent prison terms (60 and 78 months). Nash appealed the enhancement.
Issues
| Issue | Plaintiff's Argument (Nash) | Defendant's Argument (Government) | Held |
|---|---|---|---|
| Whether § 2B1.1(b)(9)(C) two‑level enhancement applies where defendant violated a prior administrative warning/decision | July 9 letter was not a directive to stop future fraud; it only assessed a fine (which Nash paid) and did not explicitly order cessation of illegal conduct, so enhancement improper | The July letters were the product of an administrative proceeding that finalized a penalty and warned of disqualification, further fines, and prosecution; that constituted a prior official warning/order that Nash knowingly defied by continuing fraud | Court affirmed: enhancement applies — the administrative penalty and warning constituted a prior official directive/warning and Nash’s subsequent fraud showed aggravated criminal intent |
Key Cases Cited
- United States v. Cisneros-Gutierrez, 517 F.3d 751 (5th Cir. 2008) (standards of review: de novo for guideline interpretation; clear-error for factual findings)
- United States v. Goldberg, 538 F.3d 280 (3d Cir. 2008) (discusses need for a definitive directive and limits of mere warning letters)
- United States v. Spencer, 129 F.3d 246 (2d Cir. 1997) (upholds enhancement where informal administrative negotiation produced an agreement/decree)
- United States v. Malol, 476 F.3d 1283 (11th Cir. 2007) (emphasizes that finalized administrative orders/processes justify enhancement)
- United States v. Linville, 10 F.3d 630 (9th Cir. 1993) (distinguishes formal orders from mere letters; refusal to apply enhancement where no formal order compelled compliance)
- United States v. Rayo-Valdez, 302 F.3d 314 (5th Cir. 2002) (Guidelines commentary is binding when consistent with Guideline text)