United States v. Cohen

Summarized by:

  • Court: 9th Circuit Court of Appeals Archives
  • Area(s) of Law: Sentencing
  • Date Filed: 08-22-2013
  • Case #: 12-10240
  • Judge(s)/Court Below: Circuit Judge Christen for the Court; Circuit Judges Fletcher and Gould
  • Full Text Opinion

Adding the charitable sentencing enhancement provision of U.S. Sentencing Guidelines § 2.B1.1(b)(9)(A) to a criminal sentence is permitted when an individual misrepresents themselves to an organization in order to obtain money for charitable purposes from the organization.

Samuel Cohen approached the Vanguard Foundation ("Vanguard"), offering to sell them shares of Ecast. Cohen falsely represented to Vanguard that the Ecast shares would soon increase in value because the company was going to be acquired by Microsoft. In reality, Cohen had been fired from Ecast, Microsoft was not in any talks to purchase Ecast, and Cohen never transferred his Ecast shares to Vanguard. A jury convicted Cohen of fifteen counts of wire fraud, eleven counts of money laundering, and three counts of tax evasion. During sentencing, the district court “applied a two-level upward sentencing enhancement to Cohen’s Guidelines range under U.S. Sentencing Guidelines § 2B1.1(b)(9)(A) because his offense involved ‘a misrepresentation that the defendant was acting on behalf of a charitable…organization’.” The Ninth Circuit held that the district court correctly applied the sentencing enhancement. The panel relied on its previous holding in United States v. Treadwell. that upheld the “application of the charitable enhancement to the operator of a Ponzi scheme who represented to potential investors that the companies they were investing in would donate a portion of the companies’ returns to charity.” Cohen argued that Treadwell is distinct from his case because the investors in Treadwell could have known that “charitable organizations were involved,” unlike in his case, where Vanguard knew Ecast and Cohen were not part of a charitable organization. The panel disagreed, and held that “Cohen’s conduct qualifie[ed] for the enhancement because, by presenting the investment opportunity as his means of donating to the Vanguard Foundation, Cohen misrepresented that he was acting ‘to obtain a benefit on behalf of’ the Vanguard Foundation.” AFFIRMED.

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