United States v. Thomas Jennings

Defendants appeal the application of a two-level enhancement imposed by the district court in determining their sentences following convictions for tax fraud, because their offenses involved “sophisticated means,” under section 2Tl.l(b)(2) of the federal Sentencing Guidelines. We affirm the district court’s application of the enhancement. Conduct need not involve highly complex schemes or exhibit exceptional brilliance to justify a sophisticated means enhancement. Defendants’ effort to conceal income by using a bank account with a deceptive name was sufficiently sophisticated to support application of the sentencing enhancement.

I. Background

Defendants Thomas Jennings and David Feuerborn owned and operated Environmental Soil Sciences, Inc. (“ESS”). They purported to possess technology that could separate oil from dirt and other materials without producing hazardous waste. Defendants solicited funding from investors, offering equity in ESS and forecasting billions of dollars in revenue, and raised nearly $16 million.

ESS hired a vendor, Eco-Logic Environmental Engineering, to develop machinery that would use the purported technology to capture oil. ESS paid EcoLogic…