United States v. David Donadeo
910 F.3d 886
| 6th Cir. | 2018Background
- From 2007–2011 a group led by Cuyahoga Heights School District IT director Joseph Palazzo used shell companies to obtain about $3.3 million from the District; Donadeo joined in 2009.
- Donadeo formed DDR Technologies and later co-owned Impact Global (The Jump Yard); checks from the District were deposited into those entities and funds were split with Joseph Palazzo.
- Donadeo initially claimed he thought the outsourcing arrangement was lawful but, after moving to Ohio, learned no IT services were being provided and nonetheless continued to participate until the scheme was discovered in 2011.
- Donadeo left the U.S., relocating to North Carolina, Germany, and Spain, limited communications, and was arrested in Spain in 2016 and extradited in 2017.
- He pled guilty to conspiracy to commit mail fraud and money laundering; the PSR applied a 16-level loss enhancement (about $2.6M) and a 2-level obstruction enhancement, producing a Guidelines range of 63–78 months; the district court sentenced him to 70 months.
- Donadeo appealed, arguing (1) improper attribution of co-conspirators’ losses and inadequate factual/findings/legal standard for loss, and (2) erroneous obstruction-of-justice enhancement.
Issues
| Issue | Plaintiff's Argument (Government) | Defendant's Argument (Donadeo) | Held |
|---|---|---|---|
| Amount of loss attributable under U.S.S.G. §§ 2B1.1, 1B1.3 | Loss from the jointly undertaken scheme (≈ $2.6M attributable to Donadeo) may be counted because the conduct of co-conspirators was within scope, in furtherance, and reasonably foreseeable. | Donadeo argued only his companies should be counted ($916,948.77); he lacked involvement/knowledge of other shell corporations. | Court affirmed: applied Salem factors (single scheme, modus operandi, coordination, pooling, knowledge, participation) and held the district court correctly attributed the $2.6M. |
| Adequacy of district court factual findings about scope and foreseeability | Findings in the sentencing hearing and adoption of the PSR sufficiently addressed scope and foreseeability. | Objected that district court failed to make particularized findings as required. | Court held findings—though "less than optimal"—were sufficient and not clearly erroneous; reviewed for plain error where not preserved. |
| Standard of proof for loss amount (preponderance vs. probable cause) | Government relied on preponderance; district court’s references to "probable cause" were inadvertent but court applied correct standard. | Donadeo claimed the court used a lower (probable cause) standard. | Court held the district judge understood and applied the preponderance standard; the stray phrase “probable cause” was not reversible error. |
| Obstruction enhancement under U.S.S.G. § 3C1.1 for flight/avoidance | Flight plus additional deliberate evasive conduct (cutting communications, no ties abroad, canceled flights, cutting off counsel) significantly impeded investigation—warranting +2 levels. | Donadeo argued mere departure from the U.S. without other obstructive acts does not trigger the enhancement. | Court adopted the majority approach requiring flight plus other obstructive conduct; held Donadeo’s deliberate, calculated avoidance and cutting communications justified the § 3C1.1 enhancement. |
Key Cases Cited
- United States v. Salem, 657 F.3d 560 (7th Cir. 2011) (factors for scope of jointly undertaken criminal activity)
- United States v. Hodge, 805 F.3d 675 (6th Cir. 2015) (treatment of relevant conduct under § 1B1.3)
- United States v. Kennedy, 714 F.3d 951 (6th Cir. 2013) (attributing co-conspirator conduct and loss)
- United States v. Anderson, 795 F.3d 613 (6th Cir. 2015) (actual knowledge satisfies foreseeability)
- United States v. Bliss, 430 F.3d 640 (2d Cir. 2005) (flight alone insufficient for § 3C1.1; look for additional obstructive conduct)
- United States v. Nduribe, 703 F.3d 1049 (7th Cir. 2013) (flight likely to burden investigation can support § 3C1.1)
- United States v. Madera-Gallegos, 945 F.2d 264 (9th Cir. 1991) (mere flight immediately after crime without other obstructive acts does not warrant enhancement)
- Wright v. United States, 182 F.3d 458 (6th Cir. 1999) (preponderance standard for sentencing adjustments)
- United States v. Campbell, 279 F.3d 392 (6th Cir. 2002) (need for particularized findings on scope and foreseeability)
- United States v. Sanchez, 928 F.2d 1450 (6th Cir. 1991) (departure to avoid arrest discussed in context of obstruction enhancement)