United States v. Verita Hines-Flagg
2015 U.S. App. LEXIS 10084
7th Cir.2015Background
- Hines-Flagg, a Detroit resident, and her nephew ran an identity-fraud scheme: they created fake IDs using victims’ credit info in Detroit, traveled out-of-state to open store credit accounts, bought merchandise, then returned to Detroit to fence or keep goods.
- In October 2012 they were arrested in Brown Deer, Wisconsin, with about $20,000 of fraudulently purchased merchandise; earlier they had fraudulently leased luxury vehicles in Illinois that were later found in Michigan.
- A federal grand jury in the Eastern District of Wisconsin indicted Hines-Flagg on one count of conspiracy to commit mail and wire fraud and five counts of aggravated identity theft; she pled guilty to the conspiracy count and one identity-theft count.
- At sentencing the district court applied a two-level Guidelines enhancement under U.S.S.G. § 2B1.1(b)(10)(A) for ‘‘relocating a fraudulent scheme to another jurisdiction to evade law enforcement,’’ raising her offense level and resulting Guidelines range; the court imposed a 36-month sentence on the conspiracy count (plus the mandatory consecutive two years).
- Hines-Flagg appealed, arguing (1) her scheme was not ‘‘relocated’’ under the Guideline and (2) in any event it was not relocated to evade law enforcement; the Seventh Circuit vacated and remanded.
Issues
| Issue | Plaintiff's Argument (Hines-Flagg) | Defendant's Argument (Government / District Court) | Held |
|---|---|---|---|
| Whether the scheme was "relocated" under U.S.S.G. § 2B1.1(b)(10)(A) | Temporary out-of-state trips to commit fraud are not a ‘‘relocation’’; ordinary meaning requires establishing in a new place | Enhancement applies because the fraud was carried out in other jurisdictions as part of the scheme | Court: No relocation — scheme had Detroit as its hub; out-of-state trips were temporary "spokes," so enhancement misapplied |
| Whether misapplication of the enhancement was harmless error | N/A (argued that enhancement was improper) | Enhancement was factually supported and affected Guidelines range; district court’s sentence should stand | Court: Error was not harmless — government offered no assurance district court would have imposed same sentence; vacated and remanded for resentencing |
Key Cases Cited
- United States v. Savarese, 686 F.3d 1 (1st Cir. 2012) (upheld relocation enhancement where critical hub activity moved across jurisdictions)
- United States v. Paredes, 461 F.3d 1190 (10th Cir. 2006) (explaining enhancement focuses on relocation of the scheme, not merely the defendant)
- United States v. Jumah, 599 F.3d 799 (7th Cir. 2010) (standard of review: legal questions de novo, factual findings for clear error)
- Gall v. United States, 552 U.S. 38 (2007) (requires correct Guidelines calculation as a component of procedural reasonableness)
- United States v. Smith, 367 F.3d 737 (8th Cir. 2004) (relocation to evade law enforcement shown where defendant moved operations after repeated arrests)
- United States v. Vega-Iturrino, 565 F.3d 430 (8th Cir. 2009) (noting relocation need not be motivated by a specific arrest threat; general intent to evade can suffice)