United States v. Sharif Karie
976 F.3d 800
| 8th Cir. | 2020Background
- Karie operated two Missouri daycares (Karie Day Care Center LLC and later Tima Child Care Center LLC) and was charged with conspiracy, theft of public funds, aggravated identity theft, money laundering, and mail fraud.
- KDCC/TIMA billed Missouri’s Child Care and Development Fund (CCDF); Missouri paid $536,833.75 to the two providers.
- State audit and an agent’s video surveillance showed inadequate/altered attendance records, widespread employee-children enrollment, and improper billing; Agent Blackburn estimated only $165,208.27 of billed services were legitimately provided.
- At trial Karie was convicted; the PSR and district court treated the full $536,833.75 as loss, applied a 12-level Guidelines enhancement, sentenced Karie to 58 months, and ordered restitution of $536,833.75 to Missouri.
- Karie appealed the offense-level (loss amount) and the restitution amount; the Eighth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper loss amount for sentencing under U.S.S.G. § 2B1.1 | Gov't/PSR: total reimbursements ($536,833.75) reflect actual loss because business was permeated by fraud and records cannot distinguish legitimate services | Karie: Agent Blackburn’s conservative surveillance estimates mean only $165,208.27 loss; apply 10-level, not 12-level, enhancement | Court affirmed district court; treating full payments as loss not clearly erroneous and, even if error, harmless because record supports loss > $250,000 (12-level) |
| Restitution amount under MVRA | Missouri suffered pecuniary loss equal to total payments ($536,833.75); defendant failed to produce evidence of legitimate services so full amount is appropriate | Karie: restitution should be reduced to Blackburn’s $165,208.27 estimate | Court affirmed restitution award; district court did not abuse discretion and reasonably found entire payments were loss given pervasive fraud and inadequate records |
Key Cases Cited
- United States v. Luna, 968 F.3d 922 (8th Cir. 2020) (standard for loss review and need to allow offset for legitimate services)
- United States v. Harmon, 944 F.3d 734 (8th Cir. 2019) (clear-error standard where determination plausible on record)
- United States v. Smith, 929 F.3d 545 (8th Cir. 2019) (definition of actual vs intended loss under §2B1.1)
- United States v. Belfrey, 928 F.3d 746 (8th Cir. 2019) (definition of actual loss and foreseeable pecuniary harm)
- United States v. Miell, 661 F.3d 995 (8th Cir. 2011) (pervasive fraud supports using total receipts as loss)
- United States v. Boesen, 541 F.3d 838 (8th Cir. 2008) (extrapolation of fraudulent claims where legitimate services documented)
- United States v. Bikundi, 926 F.3d 761 (D.C. Cir. 2019) (defendant bears burden to produce evidence of legitimacy; pervasive fraud permits treating all payments as loss)
- United States v. Gammell, 932 F.3d 1175 (8th Cir. 2019) (restitution review: abuse of discretion; government burden by preponderance)
- United States v. Frazier, 651 F.3d 899 (8th Cir. 2011) (district court discretion to determine full amount of each victim's loss under MVRA)
- United States v. Lange, 592 F.3d 902 (8th Cir. 2010) (distinction between sentencing loss and restitution loss)
- United States v. Archer, 671 F.3d 149 (2d Cir. 2011) (when prosecution must prove negative, defendant may bear burden of production of legitimate-service evidence)