United States v. Kent
2016 U.S. App. LEXIS 8916
| 2d Cir. | 2016Background
- From 2007 onward Thomas J. Kent ran an "advance fee" loan fraud through a series of sham companies (FDP Capital, Phoenix Global, Wilshire entities, Vouyer, Midwest Global, Northeast) that collected fees from small businesses but never funded loans.
- Co‑conspirators included Brad Robinson, Sanford Gottesman, and Beno Matthews; Kent recruited and at times delegated tasks (site visits, marketing, letters).
- Kent pleaded guilty to conspiracy to commit wire fraud; PSR and plea calculations produced a Guidelines range of 41–51 months.
- Two days before sentencing the district court signaled it would apply two enhancements, including a four‑level leadership/organizer enhancement under U.S.S.G. § 3B1.1(a) ("five or more participants or otherwise extensive").
- At sentencing the court found Kent to be the mastermind, credited factors such as establishment of corporate entities, development of the business model, high contact with victims, greatest take, aliases, and geographic spread, applied the § 3B1.1(a) enhancement, and sentenced Kent to 78 months.
- The Second Circuit vacated and remanded Kent's sentence because the district court failed to make adequate factual findings on the core "otherwise extensive" inquiry required by precedent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 3B1.1(a)'s "otherwise extensive" prong supported a 4‑level leader/organizer enhancement | The Government contends there was sufficient factual basis (scheme reach, victims, some additional individuals who provided necessary services) to support the enhancement. | Kent argued "otherwise extensive" focuses primarily on organizational size/headcount (knowing + unknowing participants whose services were peculiar and necessary) and that the court failed to perform the required participant analysis; factors relied on were duplicative of other Guidelines adjustments. | Vacated and remanded: district court erred by not making requisite factual findings about number/role of knowing and unknowing participants and by failing to explain how non‑headcount factors justified the enhancement without impermissible double counting. |
Key Cases Cited
- United States v. Carrozzella, 105 F.3d 796 (2d Cir. 1997) (articulates "otherwise extensive" inquiry—primary focus on participant count but allows other factors if not duplicative)
- United States v. Ware, 577 F.3d 442 (2d Cir. 2009) (construing scope of § 3B1.1(a) leadership enhancement)
- United States v. Cavera, 550 F.3d 180 (2d Cir. 2008) (standards for reviewing sentence procedural and substantive reasonableness)
- United States v. Mandell, 752 F.3d 544 (2d Cir. 2014) (harmless‑error standard for procedural sentencing errors)
- United States v. Jass, 569 F.3d 47 (2d Cir. 2009) (remand required unless district court would clearly have imposed same sentence)
- United States v. Archer, 671 F.3d 149 (2d Cir. 2011) (Government bears preponderance burden; review of fact findings for clear error)
- United States v. Napoli, 179 F.3d 1 (2d Cir. 1999) (unknowing participants may count if services are peculiar and necessary)
- United States v. Chacko, 169 F.3d 140 (2d Cir. 1999) (district court need not recite every fact but must address pertinent considerations)
- United States v. Skys, 637 F.3d 146 (2d Cir. 2011) (remand to supplement record with appropriate factual findings regarding participant involvement)