            Case: 19-11891   Date Filed: 03/12/2020   Page: 1 of 8



                                                         [DO NOT PUBLISH]



             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                             No. 19-11891
                         Non-Argument Calendar
                       ________________________

                  D.C. Docket No. 2:18-cr-14016-RLR-1



UNITED STATES OF AMERICA,

                                                               Plaintiff-Appellee,

                                   versus

ARTHUR JOHN KRANZ,

                                                         Defendant-Appellant.

                       ________________________

                Appeal from the United States District Court
                    for the Southern District of Florida
                      ________________________

                             (March 12, 2020)



Before WILSON, BLACK and HULL, Circuit Judges.

PER CURIAM:
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       Arthur Kranz appeals his 51-month total sentence for mail and wire fraud,

theft of government funds, failure to disclose an event affecting the right to

payment, and income tax evasion. Kranz asserts three issues on appeal, which we

address in turn. After review,1 we affirm Kranz’s sentence.

                                       I. DISCUSSION

A. Tax Loss Calculation

       First, Kranz contends he should not have been liable for lost taxes on the

portions of income at two companies—EPP Services, Inc. (EPP) and Pakan, Inc.

(Pakan), which he admitted were nominees used to conceal his wages—that were

assigned to his brother, mother, and son. Kranz asserts his family members spent

their payments on themselves, reported it as income to the Internal Revenue

Service (IRS), and paid taxes on the income, including the money paid to his son in

2012 used to purchase property.

       The sentencing guidelines provide the base offense level for tax evasion will

be determined by the amount of tax loss listing in the U.S.S.G. § 2T4.1 table.

U.S.S.G. § 2T1.1(a)(1). The base offense level for a tax loss between $250,000

and $550,000 is 18, and for a tax loss between $550,000 and $1,500,000 is 20.


       1
           “We review the district court’s interpretation of the sentencing guidelines de novo and
its factual findings for clear error.” United States v. Taber, 497 F.3d 1177, 1179 (11th Cir.
2007). We review both the district court’s calculation of the tax loss figure and its determination
regarding a reduction for acceptance of responsibility for clear error. United States v. Tejas, 868
F.3d 1242, 1247 (11th Cir. 2017); United States v. Zitron, 810 F.3d 1253, 1261 (11th Cir. 2016).


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U.S.S.G. § 2T4.1(G)-(H). The “tax loss is the total amount of loss that was the

object of the offense (i.e., the loss that would have resulted had the offense been

successfully completed).” U.S.S.G. § 2T1.1(c)(1). When the amount of tax loss is

uncertain, “the court will simply make a reasonable estimate based on the available

facts.” U.S.S.G. § 2T1.1, comment. n.1. The government is not required to

establish fraud loss with precision as “the figure need only be a reasonable estimate

given the information available to the government.” United States v. Renick, 273

F.3d 1009, 1025 (11th Cir. 2001). “Upon challenge, however, the government

bears the burden of supporting its loss calculation with reliable and specific

evidence.” Id. (quotations omitted).

      It is well-established that a taxpayer cannot assign his income to a third party

to avoid tax liability. See Helvering v. Horst, 311 U.S. 112, 120 (1940) (“[T]he

purpose of the statute to tax the income to him who earns, or creates and enjoys it

[cannot] be escaped by ‘anticipatory arrangements . . . however [skillfully]

devised’ to prevent the income from vesting even for a second in the donor”).

“[T]he mere assignment of the right to receive income is not enough to insulate the

assignor from income tax liability” where “the assignor actually earns the income

or is otherwise the source of the right to receive and enjoy the income.” Comm’r v.

Sunnen, 333 U.S. 591, 604 (1948).




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      As the district court noted, Kranz’s argument on loss computation is flawed,

in part, because it reduced his income by amounts paid to nominees, which would

allow him to escape tax liability by assigning his income to others. See Sunnen,

333 U.S. at 604; Helvering, 311 U.S. at 120. To the extent Kranz argues on appeal

that EPP, Pakan, his brother, mother, and son were not nominees, he admitted they

were nominees used to conceal his wages as part of his guilty plea. See United

States v. Martinez, 584 F.3d 1022, 1027 (11th Cir. 2009) (stating the sentencing

court’s factual findings may be based upon facts admitted by the defendant’s guilty

plea). Moreover, the revenue agent’s reports credited employee payroll taxes to

Kranz, and Kranz’s accountant’s analysis did not consider the funds distributed to

his brother that were transferred back to his account. Therefore, the district court

did not clearly err in making a reasonable tax loss estimate based on the testimony

of the IRS agents and the revenue agent’s report. Accordingly, we affirm in this

respect.

B. Use-of-a-Minor Enhancement

      Second, Kranz asserts the district court erred in applying a two-level

enhancement under U.S.S.G. § 3B1.4 for using a minor to assist with the

commission of the offense conduct because he did not use his 16-year-old son to

commit the offenses or conceal their commission.




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      The sentencing guidelines provide for a two-level upward adjustment if the

defendant used or attempted to use a person less than 18 years of age to commit the

offense. U.S.S.G. § 3B1.4. “Used or attempted to use” includes “directing,

commanding, encouraging, intimidating, counseling, training, procuring,

recruiting, or soliciting.” U.S.S.G. § 3B1.4, comment. (n.1). A § 3B1.4

adjustment is warranted only where the defendant takes some affirmative step to

involve a minor in the commission of the offense. United States v. Futch, 518 F.3d

887, 896 (11th Cir. 2008) (citing United States v. Taber, 497 F.3d 1177, 1181

(11th Cir. 2007)). The unambiguous legislative design of § 3B1.4 is to protect

minors as a class from being used. See id. (citing United States v. McClain, 252

F.3d 1279, 1288 (11th Cir. 2001)). We have declined to rule on whether mere

partnership or mere participation constitutes an “affirmative act.” See Taber, 497

F.3d at 1181 (citing circuit split and declining to resolve the issue). For example,

in Futch, the defendant placed an infant on top of cocaine in an effort to hide the

drugs and avoid detection. Futch, 518 F.3d at 896. We stated the use of the minor

went beyond mere presence. Id. Rather, the defendant took the affirmative step of

physically placing the infant on top of the cocaine and we upheld the district

court’s application of the § 3B1.4 enhancement. Id. at 896-97.

      The district court did not clearly err in applying a two-level use-of-a-minor

enhancement, under U.S.S.G. § 3B1.4. In an effort to conceal his wages, Kranz



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used his minor son as a nominee and listed his son on Pakan’s corporate filings.

On at least one occasion, he also directed his son to move $20,000 via a cashier’s

check. Furthermore, Kranz had his son meet with an accountant to prepare tax

returns showing income going to his son from Pakan. As in Futch, it does not

matter whether his son understood the true purpose of his actions. See Futch, 518

F.3d at 896. Therefore, we affirm the use-of-a-minor enhancement.

C. Acceptance of Responsibility

      Finally, Kranz contends the district court erred in refusing to reduce his

offense level for acceptance of responsibility because he pled guilty and the

evidence of acceptance of responsibly was not outweighed by other conduct.

      Because the sentencing judge is in a unique position to evaluate a

defendant’s acceptance of responsibility, the determination of the sentencing judge

is “entitled to great deference on review.” U.S.S.G. § 3E1.1, comment. (n.5). The

district court’s decision on acceptance of responsibility will not be overturned

unless the facts in the record clearly establish the defendant actually accepted

personal responsibility. United States v. Sawyer, 180 F.3d 1319, 1323 (11th Cir.

1999). The defendant bears the burden of proving he clearly accepted

responsibility. Id. The starting point for measuring acceptance of responsibility is

the commencement of federal charges. United States v. Wade, 458 F.3d 1273,

1280-81 (11th Cir. 2006).



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      A defendant is entitled to a two-level reduction in his offense level if he

“clearly demonstrates acceptance of responsibility.” U.S.S.G § 3E1.1(a). “A

defendant who enters a guilty plea is not entitled to an adjustment under this

section as a matter of right.” Id., comment. (n.3). The entry of a guilty plea

combined with a truthful admission of the conduct comprising the offense charged

constitutes significant evidence of acceptance of responsibility. Id. However,

those acts may be outweighed by conduct that is inconsistent with acceptance of

responsibility. Id.

      The district court did not clearly err in declining to reduce Kranz’s offense

level for acceptance of responsibility. Kranz made false statements in a Social

Security Administration application to receive Title II benefits after pleading guilty

to similar conduct. Notably, while he attempts to justify his false statements about

his employment history in the application, he does not address his false statement

regarding his status as a felon. Furthermore, despite his alleged attempts to correct

the false statements at the time, he did not submit a written clarification until after

the Government objected to him receiving credit for acceptance of responsibility.

Considering the “great deference” given to district courts, it is also relevant that the

court found Kranz’s assertion that he did not knowingly or intentionally provide

false information was not credible. U.S.S.G. § 3E1.1, comment. (n.5). Therefore,

the district court did not clearly err in declining to reduce Kranz’s offense level



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because his post-guilty plea actions, which were remarkably similar to his offense

conduct, were inconsistent with acceptance of responsibility. Accordingly, we

affirm in this respect.

                                 II. CONCLUSION

      The district court did not clearly err in (1) calculating the tax loss,

(2) applying the use-of-a-minor enhancement, and (3) declining to reduce Kranz’s

offense level for acceptance of responsibility.

      AFFIRMED.




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