Argued March 20, 2014.
Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. (1:12-cr-00249-TDS-1). Thomas D. Schroeder, District Judge.
Charles LeRoy White, II, Greensboro, North Carolina, for Appellant.
Todd Alan Ellinwood, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.
Ripley Rand, United States Attorney, Clifton T. Barrett, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Greensboro, North Carolina, for Appellee.
Before NIEMEYER and DIAZ, Circuit Judges, and HAMILTON, Senior Circuit Judge.
HAMILTON, Senior Circuit Judge:
On appeal, Arthur Weiss (Weiss) challenges his 185-month sentence, following his plea of guilty to one count of wire fraud, 18 U.S.C. § 1343, one count of money laundering, id. § 1957, one count of making a false statement on a loan application to a financial institution, the accounts of which are insured by the Federal Deposit Insurance Corporation (FDIC), id. § 1014, and one count of corrupt interference with the internal revenue laws of the United States, 26 U.S.C. § 7212(a). We affirm.
The following facts either underlie the counts to which Weiss pled guilty or constitute relevant conduct for sentencing purposes.
From sometime in 2003 until mid-2012, Arthur Weiss (Weiss) owned and operated several professional employer organizations in North Carolina. A professional employer organization (PEO) provides human resource functions, including payroll processing, for companies through employee leasing agreements. Under North Carolina law, PEOs are required to be licensed and regulated by the North Carolina Department of Insurance. North Carolina Professional Employer Organization Act, N.C. Gen. Stat. § § 58-89A-1 to 180.
During this time frame, Weiss falsely held himself out as a Certified Public Accountant by using the initials " CPA" on his letterhead, on his business cards, and in his email address (firstname.lastname@example.org). The record also contains evidence that Weiss provided a brochure to a potential client, whom he later acquired as an actual client, outlining the services offered by his PEO named Employee Alternatives, LLC (EA), including payroll processing, tax services,
and securing workers' compensation insurance. The EA brochure stated that " [w]e deposit your payroll taxes, file payroll tax returns and assume full responsibility for the accuracy and timeliness of those processes." (J.A. 244) (internal quotation marks omitted). Other EA services included preparation and filing of Internal Revenue Service (IRS) Form 941 (Employer's Quarterly Federal Income Tax Return) and making deposits for federal unemployment insurance. In the EA brochure, Weiss listed himself as a CTA, which can stand for either " 'Certified Tax Accountant'" or " 'Chartered Tax Advisor," and listed himself as an ATA, which stands for " 'Accredited Tax Advisor.'" Id.
Through his various PEO entities, at least twenty-two companies hired Weiss. Weiss collected funds from client companies to pay the wages of the companies' respective leased employees along with a fee for the payroll services. Weiss then deposited such funds into bank accounts he controlled. Weiss then instructed third-party payroll companies to actually calculate the applicable state and federal income tax withholdings. The third-party payroll companies either paid the employees their net income directly or advised Weiss of the net amounts due; thereafter Weiss would disburse the net paycheck funds to the employees. On many occasions, Weiss failed to pay the state and federal withholdings deposited with his PEO entities to the IRS and relevant state revenue agencies, converting such funds to his own use.
Weiss also collected funds from his client companies to secure workers' compensation insurance for their leased employees, but failed to secure the level of coverage for which he collected premiums. He converted the excess premium payments to his own use.
Weiss stipulated for sentencing purposes that the losses attributable to him totaled $4,132,044.16 in unpaid federal employment taxes, $260,839.00 in unpaid state employment taxes, and $559,663.02 in unpaid workers' compensation insurance premiums.
Another Weiss scam involved a bank insured by the FDIC. Over time, Weiss established a close banking relationship with Branch Bank and Trust (BB& T). From 2002 until 2008, Weiss submitted false federal income tax returns to BB& T reflecting higher income figures for himself than he had actually reported to the IRS. In reliance upon these misrepresentations, between 2004 and 2008, BB& T approved four loans to Weiss, totaling $2,266,500.00, for the purchase of a lot and construction of a home in ...