United States v. Ghaddar
2012 U.S. App. LEXIS 9301
7th Cir.2012Background
- Ghaddar was the sole shareholder of Tobacco House, a Chicago-area tobacco retailer.
- Currency receipts comprised about half of Tobacco House’s revenue, and Ghaddar directed employees to separate currency from credit-card/check receipts.
- Ghaddar channeled substantial currency to foreign bank accounts, including an account not in his name, using cash, cashier’s checks, and multiple intermediaries.
- He engaged in structuring deposits under reporting thresholds and “washing” funds through relatives’ and associates’ accounts to conceal origins.
- Ghaddar pled guilty to mail fraud and impeding the Internal Revenue Code; at sentencing, the district court added 2 levels for sophisticated means, which Ghaddar challenged on appeal.
- The Seventh Circuit affirmed, holding the record supported a finding of sophisticated means and that the adjustment applied to Ghaddar’s overall scheme.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ghaddar’s conduct constitutes sophisticated means for sentencing | Ghaddar argues actions were typical cash-skimming, not sophisticated | Ghaddar contends his conduct was not beyond ordinary fraud | Yes; the record supports sophisticated means given the overall concealment and planning. |
| Whether the district court appropriately applied the enhancement | Banking and structuring tactics qualify for the adjustment | Actions were not unusually elaborate when viewed individually | Yes; when viewed as a whole, Ghaddar's scheme was sophisticated. |
| Whether the court erred in relying on concealment of assets and offshore transfers | Concealment and offshore transfers justify the increase | No exceptional concealment beyond typical tax evasion | No error; multiple concealment steps supported the enhancement. |
Key Cases Cited
- United States v. Kontny, 238 F.3d 815 (7th Cir.2001) (concealment inherent in tax fraud; need for greater planning than typical)
- United States v. Tin Yat Chin, 371 F.3d 31 (2d Cir.2004) (cash payments not inherently sophisticated; context matters)
- United States v. Hart, 324 F.3d 575 (8th Cir.2003) (not recording personal income not, by itself, sophisticated)
- United States v. Green, 648 F.3d 569 (7th Cir.2011) (sophisticated-means requires greater planning or concealment than typical fraud)
- United States v. Landwer, 640 F.3d 769 (7th Cir.2011) (sophisticated means analysis framework)
- United States v. Wayland, 549 F.3d 526 (7th Cir.2008) (totality of conduct can establish sophisticated means)
- United States v. Ghertler, 605 F.3d 1256 (11th Cir.2010) (illustrates aggregate acts supporting sophistication)