United States v. Sutton

CourtCourt of Appeals for the Tenth Circuit
DecidedJuly 26, 2024
Docket23-2022
StatusUnpublished

This text of United States v. Sutton (United States v. Sutton) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Sutton, (10th Cir. 2024).

Opinion

Appellate Case: 23-2022 Document: 010111085512 Date Filed: 07/26/2024 Page: 1 FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit

FOR THE TENTH CIRCUIT July 26, 2024 _________________________________ Christopher M. Wolpert Clerk of Court UNITED STATES OF AMERICA,

Plaintiff - Appellee,

v. No. 23-2022 (D.C. No. 1:22-CR-01390-KWR-1) ALEXANDER SUTTON, (D. N.M.)

Defendant - Appellant. _________________________________

ORDER AND JUDGMENT* _________________________________

Before McHUGH, EID, and ROSSMAN, Circuit Judges. _________________________________

For nearly seven years, information-technology employee Alexander Sutton

used payment processors to illegally divert about half a million dollars from his

employer, a small non-profit wellness center, into his personal accounts. After

Sutton pleaded guilty to wire fraud, the sentencing court imposed two enhancements

on his sentence over his objections, one for causing a “substantial financial hardship”

to a victim under U.S.S.G. § 2B1.1(b)(2)(A)(iii), and another for using “sophisticated

means” to carry out his crime under U.S.S.G. § 2B1.1(b)(10)(C). Sutton appeals,

arguing that the district court erred because no evidence supported either

* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. Appellate Case: 23-2022 Document: 010111085512 Date Filed: 07/26/2024 Page: 2

enhancement. We find no error and affirm because the record supports the district

court’s findings underlying the two enhancements.

I.

Over the course of nine years, Alexander Sutton provided information-

technology support for a wellness center in Albuquerque, New Mexico—that is, until

the small business fired him because of his substance abuse and unrelated criminal

charges. Following Sutton’s exit, the small business noticed a dramatic decrease in

sales and reported its concerns to the Albuquerque Police Department. The

Department thereafter referred the matter to the FBI as a potential wire fraud case.

As it turns out, Sutton had been rerouting payments before and after the small

business fired him. For about seven years, he had managed to illegally divert

$485,598.42 from the center into several personal accounts.

Sutton pleaded guilty without a plea agreement to one count of wire fraud. In

his Presentence Report, the Probation Office determined that his offense had resulted

in substantial financial hardship to a victim, warranting a two-level Sentencing

Guidelines increase under U.S.S.G. § 2B1.1(b)(2)(A)(iii). The Probation Office

further determined that Sutton had used sophisticated means to carry out his crime,

warranting a second two-level Guidelines increase under U.S.S.G. § 2B1.1(b)(10)(C).

Sutton objected to each of the enhancements. At sentencing, the district court

overruled both of Sutton’s objections and explained why the two enhancements

apply.

2 Appellate Case: 23-2022 Document: 010111085512 Date Filed: 07/26/2024 Page: 3

First, relying on the Guidelines’ commentary, the district court found that a

preponderance of the evidence supported imposing the substantial financial hardship

enhancement. For this enhancement, the court took judicial notice of a victim impact

statement written by the owner of the small non-profit business, Dr. Sunil Pai. The

court relied on the statement to find that, because of Sutton’s fraud scheme, the “loss

of this money [] not only . . . delayed . . . [Dr. Pai’s] ability to retire but it[] affected

significantly and substantially his ability to refinance or get lines of credit despite his

good credit score.” R. Vol. II at 49–50.

The court found that Dr. Pai had been “forced to work longer, which is a

change of lifestyle.” Id. at 50. And not only that, the court found that as a result of

the scheme, banks considered Dr. Pai to be a high risk borrower, which “significantly

and substantially increas[ed] the level of interest rate . . . , costing him more money

long-term.” Id. The court also found that Dr. Pai had suffered other “financial hits,”

such as “having to totally restructure his payment platform which is continuing to

bother him, costing him money.” Id. For example, he no longer could use “payment

platforms” like “PayPal.” Id. And lastly, the court found that Dr. Pai could not

“afford to expand his building or product lines as he would like to do so.” Id.

Second, the district court concluded that applying the sophisticated means

enhancement was also “appropriate.” Id. at 56. The court overruled Sutton’s

objection against this enhancement because he was an “IT person” in “a position to

know information otherwise unavailable to others.” Id. at 55. And due to Sutton’s

expertise, the district court reasoned that “he was able to navigate payment processor

3 Appellate Case: 23-2022 Document: 010111085512 Date Filed: 07/26/2024 Page: 4

accounts, create accounts, [and] transfer money” to himself in a complex way that

would “avoid detection” for a “period of almost seven years.” Id.; see id. at 56 (“He

created his own accounts with various payment processors such as PayPal, Stripe,

Square and then reset the authorized Shopify account back to the business

accounts.”). As such, the court concluded that for several years, “his use of multiple

accounts” and “technical know-how” allowed Sutton to “evade detection” in a

“sophisticated” manner. Id. at 56.

In the end, the district court sentenced Sutton to 48 months’ imprisonment, a

sentence at the higher end of Sutton’s Guidelines range of 41 to 51 months, and to

three years of supervised release. Sutton timely appealed, challenging the imposition

of the two enhancements.

II.

Sutton objected to both enhancements at his sentencing. “When evaluating the

district court’s interpretation and application of the Sentencing Guidelines, we review

legal questions de novo and factual findings for clear error, giving due deference to

the district court’s application of the guidelines to the facts.” United States v.

Mollner, 643 F.3d 713, 714 (10th Cir. 2011) (citation omitted).

We will only find a factual finding clearly erroneous if the record does not

support the finding “or if, after reviewing all the evidence, we are left with a definite

and firm conviction that a mistake has been made.” United States v. Morales, 961

F.3d 1086, 1090 (10th Cir. 2020) (citation omitted). In other words, “we must be

convinced that the sentencing court’s finding is simply not plausible or permissible in

4 Appellate Case: 23-2022 Document: 010111085512 Date Filed: 07/26/2024 Page: 5

light of the entire record on appeal, remembering that we are not free to substitute

our judgment for that of the district judge.” United States v. McClatchey, 316 F.3d

1122, 1128 (10th Cir. 2003) (citation omitted). So much so that if “two permissible

views of the evidence” exist, “the factfinder’s choice between them cannot be clearly

erroneous.” Anderson v. City of Bessemer City, 470 U.S. 564, 574 (1985).

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Related

Anderson v. City of Bessemer City
470 U.S. 564 (Supreme Court, 1985)
United States v. Weiss
630 F.3d 1263 (Tenth Circuit, 2010)
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316 F.3d 1122 (Tenth Circuit, 2003)
United States v. Jones
530 F.3d 1292 (Tenth Circuit, 2008)
United States v. Mollner
643 F.3d 713 (Tenth Circuit, 2011)
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648 F.3d 1178 (Eleventh Circuit, 2011)
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663 F.3d 1156 (Tenth Circuit, 2011)
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681 F.3d 1143 (Tenth Circuit, 2012)
United States v. Rashid Minhas
850 F.3d 873 (Seventh Circuit, 2017)
United States v. Alfredo Castaneda-Pozo
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949 F.3d 1181 (Ninth Circuit, 2020)
United States v. Morales
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