United States v. L. Brian Whitfield
663 F. App'x 400
| 6th Cir. | 2016Background
- Brian Whitfield co-founded and ran Sommet Group, a payroll and HR services firm that collected client funds for payroll, taxes, benefits, and 401(k) contributions and held them in an operational account.
- From 2009 onward Whitfield diverted client-designated funds from Sommet’s operational account to personal uses and affiliate/company expenses, causing unpaid taxes, unpaid employee benefits (including millions in unpaid health claims), and shortfalls in client 401(k) contributions.
- Sommet’s federal tax Form 941 filings prepared by Whitfield significantly underreported wages compared to internal payroll spreadsheets and W-2s prepared by payroll specialist Paula Byrd.
- A federal investigation led to Whitfield’s indictment and jury convictions on counts of conspiracy, wire fraud, ERISA embezzlement (18 U.S.C. § 664), filing false tax returns (26 U.S.C. § 7206(1)), and money laundering.
- The district court sentenced Whitfield to 240 months’ imprisonment (well below the PSR recommendation). Whitfield appealed, challenging evidentiary rulings, sufficiency of the evidence, and sentencing loss calculations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of healthcare-related evidence | Govt: Healthcare misappropriation was probative of the fraudulent scheme and conspiracy | Whitfield: Healthcare language should be struck from indictment and excluded under Fed. R. Evid. 403 as unfairly prejudicial | Court: No abuse of discretion; evidence was probative of wire-fraud/conspiracy and not unfairly prejudicial |
| Admissibility/use of IRS agent’s summary charts | Govt: Summaries accurately distilled admitted underlying spreadsheets and were admissible (authentic, nonprejudicial) | Whitfield: Charts were pedagogical devices or inadmissible under Rules 602/1006 and inaccurate because underlying Darwin data was unreliable | Court: No abuse of discretion; underlying spreadsheets were admitted, Runkle authenticated summaries, accuracy not shown to be compromised; late challenge to jury use forfeited |
| Sufficiency of evidence for fraud, ERISA embezzlement, tax fraud, money laundering, and conspiracy | Govt: Evidence (misrepresentations, interstate wires, misapplied funds, Byrd’s spreadsheets, coconspirator testimony) supports each element beyond a reasonable doubt | Whitfield: Government failed to tie designated funds to misappropriations; 941s could reflect error, not fraud; conspiracy and knowledge not proven | Held: Evidence was sufficient on all counts—jurors could reasonably find misrepresentations, interstate transfers, willful diversion of client/plan funds, false tax filings, and tacit agreements to defraud |
| Sentencing — loss amount and issue preclusion | Govt: Sentencing loss may include foreseeable harms (e.g., unpaid medical claims); forfeiture and loss are distinct | Whitfield: Issue preclusion limits Guidelines’ loss to the jury’s forfeiture finding ($1.8M); unpaid medical claims should not count in loss | Held: No issue preclusion—the forfeiture determination differs from judicial loss calculation; unpaid medical claims were foreseeable pecuniary harms and properly included in loss |
Key Cases Cited
- United States v. Boyd, 640 F.3d 657 (6th Cir.) (standard of review for evidentiary rulings)
- United States v. Emuegbunam, 268 F.3d 377 (6th Cir.) (trial-court evidentiary discretion)
- United States v. Gold Unlimited, Inc., 177 F.3d 472 (6th Cir.) (wire-fraud elements)
- Gomez v. Great Lakes Steel Div., Nat’l Steel Corp., 803 F.2d 250 (6th Cir.) (distinguishing pedagogical summaries and Rule 1006)
- United States v. Bray, 139 F.3d 1104 (6th Cir.) (district court leeway on summary evidence)
- Scottsdale Ins. Co. v. Flowers, 513 F.3d 546 (6th Cir.) (forfeiture of issues raised too late)
- United States v. Bourjaily, 781 F.2d 539 (6th Cir.) (sufficiency-review standard)
- United States v. Sadler, 750 F.3d 585 (6th Cir.) (wire-fraud instruction and elements)
- United States v. Busacca, 936 F.2d 232 (6th Cir.) (§ 664 willfulness requirement)
- United States v. Whiting, 471 F.3d 792 (7th Cir.) (ERISA embezzlement precedent)
- United States v. Kington, 875 F.2d 1091 (5th Cir.) (circumstantial evidence may suffice in tax prosecutions)
- United States v. Pearce, 912 F.2d 159 (6th Cir.) (tacit agreements suffice to prove conspiracy)
- United States v. Blakeney, 942 F.2d 1001 (6th Cir.) (accomplice testimony can support conviction)
- United States v. Frost, 914 F.2d 756 (6th Cir.) (conspiracy proof principles)
- United States v. Christian, 786 F.2d 203 (6th Cir.) (knowledge element for conspiracy)
- Montana v. United States, 440 U.S. 147 (U.S. 1979) (issue preclusion doctrine)
- Hammer v. I.N.S., 195 F.3d 836 (6th Cir.) (identity requirement for issue preclusion)
- United States v. Boring, 557 F.3d 707 (6th Cir.) (distinguishing forfeiture and sentencing loss calculations)