Full opinion text
MEMORANDUM OPINION AND ORDER REGARDING SENTENCING MARK W. BENNETT, District Judge. TABLE OF CONTENTS I. INTRODUCTION.........................................................907 A. Factual Background....................................................907 1. The burden of proof and scope of information..........................907 2. Defendant’s personal characteristics..................................910 3. Operation of the defendant’s businesses...............................912 4. Offense conduct....................................................915 a. The insurance fraud scheme......................................915 b. The damage deposit fraud scheme................................916 c. Perjury .......................................................920 d. False tax returns...............................................923 e. Evidentiary support for Miell’s objections..........................924 5. Other deceptive conduct.............................................924 a. The false claim of an IRS audit...................................924 b. Other deceptive conduct not considered relevant conduct.............925 B. Procedural Background.................................................926 1. Charges, guilty pleas, and convictions.................................926 2. Post-trial proceedings ..............................................927 a. Revocation of release............................................927 b. The first sentencing hearing .....................................927 c. Filings and proceedings between sentencing hearings ...............928 d. The second sentencing hearing...................................930 e. Post-hearing matters ...........................................930 II. LEGAL ANALYSIS .......................................................931 A. The Methodology For Determination Of A Sentence........................931 B. Determination Of The Guideline Sentence.................................933 1. Miell’s guidelines objections..........................................933 2. Analysis...........................................................934 a. Edition of the Sentencing Guidelines..............................934 b. Grouping......................................................934 c. Amount of loss.................................................935 i. Group 1 loss...............................................936 ii. Group 2 loss...............................................937 iii. Group 4 loss...............................................939 d. Number of victims..............................................940 e. Sophisticated means ............................................940 f. Substantial interference with the administration of justice............941 g. Abuse of a position of trust ......................................942 h. Obstruction of justice ...........................................945 i. Acceptance of responsibility......................................947 3. Guidelines calculations..............................................949 a. Group 1.......................................................949 b. Group 2.......................................................949 c. Group 3.......................................................949 d. Group 4.......................................................950 4. The Total Offense Level.............................................950 5. Criminal history calculation..........................................950 6. Advisory guidelines range calculation .................................950 C. Determination Of Whether To Depart Or Vary.............................951 D. Consideration Of The § 3553(a) Factors.............................. 952 1. The nature and circumstances of the offense...................... 953 2. The history and characteristics of the defendant................... 955 3. The need for the sentence imposed .............................. 956 4. The kinds of sentences available and the sentencing ranges for similar offenses.................................................... 957 5. Any pertinent policy statement.................................. 959 6. The need to avoid unwarranted disparities........................ 959 7. The need to provide restitution.................................. 960 8. Summary..................................................... 960 III. CONCLUSION..................... 960 In Little Dorrit (1855-57), Charles Dickens portrayed a greedy landlord as repeatedly urging his rent collector to “squeeze” the inhabitants of his most squalid property, even though the rent collector believed that he had already “squeezed” them dry. Although this defendant’s properties were not squalid, there is nevertheless a disturbingly Dickensian quality to this case: The defendant, who owned hundreds of rental properties in Cedar Rapids and Linn County, Iowa, and, consequently, was himself worth many millions of dollars, engaged in a fraud scheme involving renters’ damage deposits over many years to “squeeze” an extra few hundred dollars each from people that he thought were too economically vulnerable or unsophisticated to contest his claims. His damage deposit fraud scheme involved creation of fake and inflated invoices for repairs to and cleaning of his rental properties to justify claims and judgments against renters’ damage deposits. He also engaged in another fraud scheme to obtain insurance payments for repair of hail damage to the roofs of more than a hundred of his rental properties based on fake or inflated invoices, whether or not the roofs in question had actually been repaired. The defendant pleaded guilty to eighteen counts of mail fraud arising from these schemes. He also pleaded guilty to two of three counts of perjury and was convicted by a jury of two counts of filing false tax returns. I write this sentencing decision to explain why I find that the defendant’s conduct warrants an upward departure or variance in his sentence for these offenses, from an advisory guidelines sentencing range of 168 to 210 months to 240 months, the statutory maximum sentence for the mail fraud offenses. I. INTRODUCTION A. Factual Background 1. The burden of proof and scope of information Much of my rationale for an upward variance in this case is based on defendant Robert Miell’s personal characteristics and offense conduct. Therefore, I begin with those aspects of this case. Defendant Robert Miell makes only general objections to the recitation of the “Offense Conduct” in the Second Final And Amended Presentence Investigation Report (Final PSIR)(docket no. 291), ¶¶ 17-78, and no objections at all to the recitations of his “Criminal History” or “Offender Characteristics,” id. at ¶¶ 138-157. His general objections to the “Offense Conduct” are that the “allegations” are far beyond the factual basis to which he pleaded guilty on January 2, 2009; that he disputes the accuracy and reliability of the information used to enhance his sentence under an advisory guidelines scheme; that enhancement of his sentence based on any evidence or allegations that have not been tested in court through cross-examination is a violation of due process and the Fifth and Sixth Amendments of the United States Constitution; and that any enhancement to his sentence based on the allegations in these paragraphs should be proved by the prosecution beyond a reasonable doubt. Were Miell’s legal objections to the “Offense Conduct” portions of the Final PSIR matters of first impression, I might be inclined to agree with him, particularly to the extent that facts upon which the sentencing court relies should be proved beyond a reasonable doubt, or at least by clear and convincing evidence, not merely by the greater weight or preponderance of the evidence. At bottom, given that proof beyond a reasonable doubt is the bedrock of the nation’s state and federal criminal justice system, it strikes me as fundamentally unfair to enhance a defendant’s sentence based upon factual findings by only a preponderance of the evidence. While large sums of money routinely change hands in our civil justice system based upon a mere preponderance of the evidence, this minimal burden is a very slim reed by which to deprive a defendant of his liberty. Nevertheless, Miell’s legal objections are not questions of first impression, but matters upon which well-settled law is contrary to his positions. As the probation officer notes, pertinent United States Sentencing Guidelines authorize wide-ranging consideration of information relevant to sentencing against a relaxed standard of proof. See, e.g., U.S.S.G. § 1B1.3, Relevant Conduct (Factors that Determine the Guideline Range), directs that the Base Offense Level, specific offense characteristics, cross references in Chapter Two, and adjustments in Chapter Three, shall be determined on the basis of: all acts and omissions committed, aided, abetted, counseled, commanded, inducted, procured, or willfully caused by the defendant, that occurred during the commission of the offense of conviction, in preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense; U.S.S.G. § 1B1.3, comment, (backg’d) (providing that “[cjonduct that is not formally charged or is not an element of the offense of conviction may enter into the determination of the applicable guidelines sentencing range. The range of information that may be considered at sentencing is broader than the range of information upon which the applicable sentencing range is determined.”); U.S.S.G. § 1B1.4 (Information to be Used in Imposing Sentence (Selecting a Point Within the Guideline Range or Departing from the Guidelines), states, “In determining the sentence to impose within the guidelines range, or whether a departure from the guidelines is warranted, the court may consider, without limitation, any information concerning the background, character and conduct of the defendant, unless otherwise prohibited by law. See 18 U.S.C. § 3661.”); U.S.S.G. § 6A1.3, comment (“In determining the relevant facts, sentencing judges are not restricted to information that would be admissible at trial. See 18 U.S.C. § 3661); U.S.S.G. § 6A1.3, comment (indicating, further, that “[t]he Commission believes use of a preponderance of the evidence standard is appropriate to meet due process requirements and policy concerns in resolving disputes regarding application of the guidelines to the facts of the case.”). So, too, does a controlling statute. See 18 U.S.C. § 3661 (“No limitation shall be placed on the information concerning the background, character, and conduct of a person convicted of an offense which a court of the United States may receive and consider for the purpose of imposing an appropriate sentence.”). Finally, applicable case law is contrary to Miell’s positions. See United States v. Watts, 519 U.S. 148, 154, 117 S.Ct. 633, 136 L.Ed.2d 554 (1997) (holding that a lower evidentiary standard at sentencing permits sentencing court’s consideration of acquitted conduct); Witte v. United States, 515 U.S. 389, 399-401, 115 S.Ct. 2199, 132 L.Ed.2d 351 (1995) (noting that sentencing courts have traditionally considered a wide range of information without the procedural protections of a criminal trial, including information concerning criminal conduct that may be the subject of a subsequent prosecution); Nichols v. United States, 511 U.S. 738, 747-48, 114 S.Ct. 1921, 128 L.Ed.2d 745 (1994) (noting that district courts have traditionally considered a defendant’s prior criminal conduct even when the conduct did not result in a conviction). Any information may be considered, so long as it has sufficient indicia of reliability to support its probable accuracy. Watts, 519 U.S. at 157, 117 S.Ct. 633; Nichols, 511 U.S. at 748, 114 S.Ct. 1921; United States v. Zuleta-Alvarez, 922 F.2d 33 (1st Cir.1990), cert. denied, 500 U.S. 927, 111 S.Ct. 2039, 114 L.Ed.2d 123 (1991); United States v. Beaulieu, 893 F.2d 1177 (10th Cir.), cert. denied, 497 U.S. 1038, 110 S.Ct. 3302, 111 L.Ed.2d 811 (1990). Reliable hearsay evidence may be considered, United States v. Petty, 982 F.2d 1365 (9th Cir.1993), cert. denied, 510 U.S. 1040, 114 S.Ct. 683, 126 L.Ed.2d 650 (1994); United States v. Sciarrino, 884 F.2d 95 (3d Cir.), cert. denied, 493 U.S. 997, 110 S.Ct. 553, 107 L.Ed.2d 549 (1989), including out-of-court declarations by an unidentified informant, where there is good cause for the non-disclosure of the informant’s identity and there is sufficient corroboration by other means. United States v. Rogers, 1 F.3d 341 (5th Cir.1993); see also United States v. Young, 981 F.2d 180 (5th Cir.), cert. denied, 508 U.S. 980, 113 S.Ct. 2983, 125 L.Ed.2d 680 (1993); United States v. Fatico, 579 F.2d 707, 713 (2d Cir.1978), cert. denied, 444 U.S. 1073, 100 S.Ct. 1018, 62 L.Ed.2d 755 (1980). Of course, the court may not consider unreliable allegations. United States v. Ortiz, 993 F.2d 204 (10th Cir.1993). Moreover, the Eighth Circuit Court of Appeals has recognized that “[bjecause the sentencing process does not carry the same evidentiary protections guaranteed during a criminal trial, relevant, reliable evidence” may be considered, even if the defendant was not present, represented, or able to confront and cross-examine the pertinent witnesses. Smith v. United States, 206 F.3d 812, 813 (8th Cir.2000) (per curiam). Due process requires only that the defendant have (1) “notice of the proposed enhancement” and (2) “an opportunity to rebut or explain the evidence to be used against him.” Id.; see also United States v. Brown, 430 F.3d 942, 944 (8th Cir.2005) (concluding that “the admission of hearsay testimony at sentencing does not violate confrontation rights” (quotation omitted)). Miell has certainly had the notice and opportunity to respond that due process requires. Quite recently, in United States v. O’Brien, — U.S.-, 130 S.Ct. 2169, 176 L.Ed.2d 979 (2010), the Supreme Court stated, Elements of a crime must be charged in an indictment and proved to a jury beyond a reasonable doubt. Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974); Jones v. United States, 526 U.S. 227, 232, 119 S.Ct. 1215, 143 L.Ed.2d 311 (1999). Sentencing factors, on the other hand, can be proved to a judge at sentencing by a preponderance of the evidence. See McMillan v. Pennsylvania, 477 U.S. 79, 91-92, 106 S.Ct. 2411, 91 L.Ed.2d 67 (1986). O’Brien, 130 S.Ct. at 2174-2175. What is just as important as the relaxed standard of proof generally applicable at sentencings is my conclusion that, for the most part, a much higher burden of proof has been satisfied here. Specifically, with the exception of the loss amount from the damage deposit fraud scheme, I am convinced beyond a reasonable doubt not only of Mr. Miell’s guilt, but of all of the sentencing enhancements and the variance. Indeed, in light of the prosecution’s evidence, I am convinced beyond all doubt — ■ that mythical standard we tell jurors is unattainable — of everything but that one enhancement. Thus, this statement of the factual background is drawn primarily from the Second Final And Amended Presentence Investigation Report (Final PSIR) (docket no. 291), which I adopt over the defendant’s objections. Where Miell has made more specific objections to particular facts in parts of the Final PSIR other than the “Offense Conduct,” “Criminal History,” or “Offender Characteristics” sections, those objections are addressed below, even if they are waived by failure to object to the pertinent paragraphs in the listed sections. Additional factual background is drawn from the episodic sentencing proceedings on September 2 and 3, 2009, and August 17 and 18, 2010. While I stop short of finding that all of the facts recited below were proved beyond a reasonable doubt, I do find that all were proved at least by the greater weight of the evidence, and most were proved by overwhelming evidence. 2. Defendant’s personal characteristics At the time of the final installments of defendant Robert Miell’s sentencing hearing on August 17 and 18, 2010, Miell was 56 years old. Miell was born and raised in Iowa. He lived in Marion, Iowa City, Des Moines, and Cedar Rapids. He has lived in Cedar Rapids since 1980. His father, Keith Miell, passed away in 1999. His mother, Marilyn Miell (nee: Niemeier), now age 80, resides in Marion, Iowa. Miell has contact with his mother on a weekly basis. He helps her maintain her 400-acre farm by ensuring that the land is rented and well maintained. He reported that he had a very good childhood free from any type of abuse. Miell has one sibling, June (nee: Miell) Locke, age 52, who resides in Elbron, Illinois, and is employed in hotel management. Miell has weekly contact with his sister. Miell is single and has no marital history. He has one child, Marissa DeRue, no longer a minor, from a previous relationship with Brenda DeRue. He has no contact with his daughter. He reported having an agreement with her mother to pay $400 per month for child support. He reported never being court ordered to pay child support. He also represented at the sentencing hearing that he provided other support to his child and her mother, including buying them a house. Miell reports a severe allergy to peanut oil, that he suffers from a pinched disc in his back that may require surgery, and that, in 2003, he broke seven ribs and crushed his collar bone. He takes ibuprofen and vicodin for pain. I do not find that any aspect of Miell’s physical condition is significant for sentencing purposes. Miell did not report to the probation officer any history of mental or emotional health concerns, nor any history of alcohol abuse. Nevertheless, at sentencing, his counsel presented evidence suggesting that Miell has a tendency to “hoard” things, ranging from items of no value to cash and items of significant value, which counsel acknowledged was not enough to support a “Rule 12 [sic: Rule 12.2?] motion,” but which might be enough for a variance. I find nothing in this evidence that suggests either a significant impairment or a basis for a variance. Miell also denied to the probation officer any use of controlled substances, notwithstanding that, during grand jury testimony in 1989, he admitted using marijuana and cocaine and sharing cocaine with others. I find that the contradictory evidence about his drug use is indicative of Miell’s habit of attempting to deceive others — and, perhaps, himself— about his conduct. His five-plus-hour allocution was, likewise, a total denial and dissertation in self-deception. Miell graduated from the University of Iowa in 1976. He attended Drake University School of Law from 1977 to 1978, but he quit law school to begin a real estate business. He obtained his real estate license in 1976 and his broker’s license in 1978. Since 1979, Miell has operated real estate businesses. At the time of his arrest, he owned and operated Equity Realtors in Cedar Rapids. During his pretrial interview, he estimated his monthly income as $25,000. However, he did not return the financial documents provided to him by the U.S. Probation Office. Instead, he submitted his own Personal Financial Statement, in which he claimed total assets of $38,935,925, including rental properties worth $35,165,925, and a personal residence worth $3,500,000; total liabilities of $2,651,000; a net worth of $36,284,925; a total annual income of $6,180,000; total annual expenses of $4,539,000, consisting primarily of property taxes and real estate loan payments; and a net annual income of $1,641,000. The inconsistency between his estimate of his monthly and net yearly income is yet another example of his tendency to prevaricate. The figures from Miell’s Personal Financial Statements submitted to the probation officer contrast sharply with the information in the bankruptcy schedules filed May 28, 2009, and July 13, 2009, in Miell’s Chapter 13 bankruptcy proceedings. Those schedules show total assets of $72,203,023; total liabilities of $56,392,640; a net worth of $15,810,383; total monthly income of $455,577; total monthly expenses of $235,402; and net monthly income of $220,175. The inconsistencies between these figures and those that Miell provided to the probation officer are also examples of his pattern of lying. Although Miell objected to the portions of a prior version of the Presentence Investigation Report (PSIR) recounting the financial information from his Personal Financial Statement, on the ground that “he does not possess anywhere remotely near the assets listed in the draft presentence report, and his bankruptcy filings accurately reflect his financial status,” he does not repeat that objection to the Final PSIR, and he self-reported the information in the Personal Financial Statement. It is difficult to explain a $20 million dollar discrepancy in Miell’s net worth, when both figures are purportedly based on his self-reporting. The discrepancy suggests that Miell is still not being completely honest with either this court or the bankruptcy court about his assets. Moreover, I agree with the probation officer that, whatever figures are used, Miell has substantial net worth and the ability to pay a substantial financial penalty. This is so, notwithstanding that Miell provided the probation office with several notices of foreclosure that were not detailed in the presentence report. Also, Linn County Court records show Miell was named as either plaintiff or defendant in over 200 civil matters. The status of those civil matters is unknown, arid Miell did not report any civil judgments against him or payable to him. Miell’s criminal history is minor, consisting of a $100 fine in 1999 for “failure to assist”; a $500 fine in 2002 for “reckless driving”; and one day in jail and a $250 fine in 2003 for “driving while license under suspension.” As a result, he was assessed no criminal history points in the guidelines sentencing calculation summarized infra. Thus, at first glance, at least until recently, Miell appeared to be a highly successful business man with a negligible criminal record. Such appearances were deceiving. 3. Operation of the defendant’s businesses Miell owned hundreds of rental properties in Linn County, Iowa. The precise number of rental properties grew steadily during the time of the charged conduct (2000 through 2007), from approximately 300 to 500 properties. As such, Miell was the fourth largest property owner in Linn County, Iowa. Miell’s rental properties consisted of single family homes, apartment buildings, and some commercial property. All property was owned in his own name, with two exceptions: For a period, Miell owned an apartment complex with others under the name 21st Avenue Place, but he ultimately bought out his partners (or is in the process of paying off them share); and he is the partial owner of a building at 1855 First Avenue Southeast, Cedar Rapids, Iowa, which is owned by a partnership, H & W Building Partnership. Miell operated and managed his rental properties through several companies, all of which he operated out of an office at 1855 First Avenue Southeast, in Cedar Rapids. Those companies include Miell Property Management; Advanced Equities, Inc.; Equity Associates, Inc., and Realtors; Mayfair Builders, Inc.; 21st Avenue Place, Inc.; and Medallion Park. On July 10, 2008, Miell formed Elite Property Management, L.L.C., the name under which he currently operates his property management business. At about the same time that Miell created Elite Property Management, Miell moved his business operation from 1855 First Avenue to a building approximately one block away at 1956 First Avenue, Cedar Rapids, Iowa. Of greater immediate interest than these business entities is Miell’s association with “The Home Doctor.” Miell registered the name “The Home Doctor” as a trademark in 1989. It appears that he initially used this name as a “doing business as” name for his maintenance workers. The legitimate use of this business name was short-lived, however, as there is no indication of its legitimate use after 1990. The name resurfaced, in about 2000, when Miell created fake invoices under that name and submitted them to Iowa state court judges in support of small claims court actions against renters. “The Home Doctor” figures prominently in Miell’s offense conduct, discussed below. In the course of investigation of the criminal conduct at issue in the numerous charges against Miell, evidence was developed — and subsequently presented during the first part of Miell’s sentencing hearing on September 2 and 3, 2009, or described in the Final PSIR — that fraud was Miell’s everyday way of doing business. Such fraud included using fictitious identities to operate his businesses (“John McManus” and “R. Gordon Sargent”) and fraudulent use of a notary stamp to notarize false signatures. Miell’s use of these fictitious identities and fraudulent use of a notary stamp deserve further discussion. John McManus is a real person who once invested in an apartment complex with Miell. John McManus was a dentist from Anamosa in the 1970s and early 1980s, but ultimately moved to Arizona in 1983, where he continues to be employed as a dentist. When McManus moved to Arizona, Miell bought out his share of the apartment complex. McManus also owned a duplex in Cedar Rapids and had sold it on contract. When the buyer defaulted, Miell took over the contract and eventually purchased the duplex from McManus. Other than these short-term investment arrangements in these two properties, Mc-Manus had no other business relationship with Miell. Nevertheless, Miell used McManus’s name in his business operations in various ways. First, all The Home Doctor receipts bore the name “John McManus.” Miell would sign the invoices “J.J. Mc-Manus” or “John J. McManus.” Miell also used McManus as a straw person allegedly involved in his businesses. Miell filed documents with Iowa officials claiming Mc-Manus was an officer or registered agent of several of Miell’s companies. Miell also claimed that McManus loaned him large amounts of money, but that is not true. Miell also filed mortgages with the Linn County' recorder’s office purporting to show that McManus had a mortgage on millions of dollars worth of properties that Miell owned. By doing this, Miell falsely encumbered his property to suggest that he had no equity in the property, so that it would be judgment proof. At a deposition in a civil case by American Family Insurance (AFI) against Miell, arising from the “insurance fraud scheme” that is the basis for Counts 1 through 6 in this case, Miell also claimed that The Home Doctor was the name used for properties where John McManus loaned him money. Miell claimed that if repairs or improvements were made to those properties, it was done under the name The Home Doctor, and the money was “paid back to him based on how much money he spent.” Miell claimed that McManus billed him on The Home Doctor letterhead and that Miell sent payments to McManus. Miell also claimed that McManus “ran this business.” However, these assertions were not accurate. McManus had nothing to do with The Home Doctor. The invoices were part of Miell’s fraud scheme. Miell ultimately admitted in AFI’s civil case that McManus did not sign any of The Home Doctor invoices. The checks that Miell allegedly wrote to The Home Doctor were never provided to anyone and were never cashed. Rather, Miell presented photocopies of the checks to Iowa state court judges purporting to show that he paid another company for repairs, when he had not. During the trial of AFI’s civil lawsuit, Miell claimed that he did not know where John McManus was living and did not know how to reach him. This was not accurate. While trial on AFI’s civil lawsuit was pending, Miell was in communication with McManus to obtain a release on an old lien that still existed on the duplex. He spoke with McManus on the phone and sent him a check dated January 5, 2008, for $5,000 as payment for release of the lien. He also filed a Release of Lien with the Linn County Recorder’s Office on February 14, 2008. The government’s handwriting expert determined that Miell had also forged the signatures of notaries who allegedly witnessed the signature of John McManus. Among the notaries whose signatures Miell forged was Karla Wilson, a notary living in Des Moines. In the civil case by AFI against Miell, Miell claimed Ms. Wilson notarized his documents and denied having a notary stamp in her name. In relation to the criminal prosecution, Miell stipulated that Ms. Wilson did not know him, had never worked for him, and had not notarized any documents for McManus or R. Gordon Sargent (another straw person discussed below), and had never traveled to Cedar Rapids to notarize documents. It is unclear how Miell became aware of Karla Wilson or got a notary stamp in her name, but he used and directed other employees to use a notary stamp in her name to notarize documents in the office. R. Gordon Sargent is also a real person who once lived in Florida, but has never met Miell and has never had anything to do with him. Lisa Waggoner, a former girlfriend and employee of Miell’s, indicated that Miell told her once that he found the name in a Florida telephone book when he was on vacation. Miell used Sargent’s name to sign leases and other rental documents in an effort to evade tenants: When tenants complained, he and his employees would refer them to Sargent. Miell also used Sargent’s name as someone purportedly connected with his companies. The prosecutor’s handwriting expert established that Miell signed the name “R. Gordon Sargent” to a number of documents. In the course of the civil litigation, Miell gave a description of Sargent, claiming that he was an engineer who worked in Dallas, but Miell was never able to provide anyone with an address, phone number, or any other manner of reaching Sargent. The real Sargent does not match Miell’s description, has not worked in Dallas, and is not an engineer. Miell was questioned at length about McManus and Sargent in AFI’s civil litigation and in a lawsuit brought on behalf of a number of tenants. Miell repeatedly claimed that McManus and Sargent were his business partners and that they had loaned him money. For example, he claimed that, at the time of the hail storm in 2001, Sargent and McManus were directors of his company. These claims were not true. 4. Offense conduct Although Miell had limited criminal history and substantial, apparently legitimately-obtained personal wealth, he pleaded guilty to or was convicted after a jury trial of a plethora of offenses in this case arising from criminal conduct, over several years, to obtain sums ranging from a few hundred dollars from individual tenants to hundreds of thousands of dollars from AFI, lying about his fraudulent schemes and improper use of McManus’s name, and filing of false tax returns. Somewhat more specifically, the Third Superseding Indictment, Miell’s guilty pleas, the Final PSIR, the evidence and verdict at the jury trial, and the evidence at the episodic sentencing hearing on September 2 and 3, 2009, and August 17 and 18, 2010, show that Miell engaged in mail fraud, in violation of 18 U.S.C. § 1341, in furtherance of two fraud schemes, “the insurance fraud scheme” and “the damage deposit fraud scheme,” as well as perjury in depositions and in court, in violation of 18 U.S.C. §§ 1621 and 1623, and the filing of two false federal income tax returns, in violation of 26 U.S.C. § 7206(1). I will summarize the conduct involved in each of these kinds of offenses. a. The insurance fi’aud scheme Miell engaged in an “insurance fraud scheme,” which resulted in the “mail fraud” charges in Counts 1 through 6. That scheme worked as follows. American Family Insurance Company (AFI) provided insurance for Miell’s rental properties. The AFI policies provided “actual cash value” (ACV) coverage for damages to the rental properties. The amount of the ACV payment was calculated as the estimated cost of the damage repairs minus depreciation to the damaged portion of the insured property. The AFI policies also provided additional “replacement cost value” (RCV) coverage for the actual replacement cost of damages to the insured properties. These additional RCV payments for damages would be made only after the following conditions were met: (1) the insured damages were actually repaired; and (2) AFI received proof of the actual cost of the completed repairs. On May 10, 2001, a hail storm damaged the roofs of more than 100 of Miell’s rental properties that were insured by AFI. Miell submitted claims to AFI for damages to his properties, seeking ACV payments for the estimated cost of the damage repairs minus depreciation to the damaged portions of the insured properties. AFI paid Miell in excess of $190,000 comprising the ACV payments. Miell also sought additional RCV payments for the cost of replacing the roofs. However, beginning on December 11, 2001, and ending on December 9, 2002, Miell did so by falsely reporting that roof repairs had been completed on 145 of his insured properties, but the roofs of these 145 properties had not been repaired. To support his false claims to AFI, Miell provided AFI with copies of invoices that he represented were from roofing companies that had completed hail-damage repair on the insured properties. The invoices that Miell provided had been fabricated, in that some of them were from roofing companies that did not exist, and others were from roofing companies that did exist, but had done no work on the insured properties. In support of his false claims to AFI, Miell also provided AFI with copies of checks that he represented were used to pay the hail-damage repair invoices. However, Miell had not used these checks to pay for hail-damage repairs. The copied checks were never disbursed or cashed. The roofing companies, shown as the payees on the checks, either did not exist or had not done work on the insured properties. Relying on, and because of, Miell’s false claims and documentation, AFI mailed to Miell approximately $336,541.26 in RCV payments for nonexistent roof repairs. On the following dates, AFI mailed Miell the following checks to be delivered by the United States Postal Service according to the directions thereon: DATE ITEMS MAILED/ADDRESSEE November 27, Six cheeks (# #758444, 758455, 2002 758457, 758460, 758472, 758475,) mailed to Cedar Rapids, Iowa, from AFI in Des Moines; November 27, Seven checks (# #758464, 758466, 2002 758468, 758471, 758477, 758479, 758480) mailed to Cedar Rapids, Iowa, from AFI in Des Moines; December 11, Nine checks (# #759726, 759728, 2002 759730, 759732, 759733, 759735, 759737, 759740, 759741) mailed to Cedar Rapids, Iowa, from AFI in Des Moines; December 11, Eight checks (# #759779, 759780, 2002 759781, 759782, 759784, 759786, 759787, 759788) mailed to Cedar Rapids, Iowa, from AFI in Des Moines; December 11, Eight checks (# #759725, 759750, 2002 759751, 759752, 759753, 759754, 759755, 759773) mailed to Cedar Rapids, Iowa, from AFI in Des Moines; December 11, Nine checks (# #759756, 759758, 2002 759759, 759760, 759761, 759774, 759775, 759776, 759777) mailed to Cedar Rapids, Iowa, from AFI in Des Moines. A portion of the checks mailed to Miell were not charged in the Third Superseding Indictment as counts, because the statute of limitations passed as to many of the mailings. On October 23, 2004, AFI sued Miell in the United States District Court for the Northern District of Iowa, Cedar Rapids Division, for breach of contract and fraudulent misrepresentations, in American Family Insurance v. Miell, No. 04-CV-142 (hereinafter, AFI’s civil case). In January 2008, AFI’s civil case proceeded to a jury trial, presided over by United States Magistrate Judge Jon Stuart Scoles. On January 15, 2008, the jury returned a verdict, finding that Miell breached the contracts and made fraudulent misrepresentations to AFI; awarding AFI $886,865 in actual damages (reflecting all insurance proceeds paid to Miell); and awarding punitive damages of $1,017,332. The parties have since reached a settlement of $1,565,096.74. Miell paid a $500,000 bond and an additional $10,000 toward the settlement. AFI credited Miell with $99,000 for an unrelated claim. One of the invoices that Miell provided to AFI in support of his fraudulent claims was a Home Doctor invoice. Miell submitted this invoice to AFI as proof that he repaired a roof. Although Miell had, in fact, repaired the roof in question, The Home Doctor did not do that repair. Rather, that roof was repaired by a man named Rob Dixon. In addition, Miell inflated the invoice by $1,000, claiming to AFI that he paid $2,878 to repair the roof, when the records revealed that he paid Dixon $1,878 to repair the roof. The Home Doctor invoice was allegedly signed by John McManus. b. The damage deposit fraud scheme The “insurance fraud scheme” was not the only fraud scheme in which Miell engaged for which he faced criminal charges in this case. He also engaged in a “damage deposit fraud scheme,” which resulted in the “mail fraud” charges in Counts 7 through 18. That scheme worked as follows. Before leasing or renting one of his properties to a tenant, Miell required the tenant to provide a damage deposit. This damage deposit, less the costs of any necessary cleaning, repairs, or replacements, was to be returned to the tenant at the end of the lease period. At the conclusion of a rental period, Miell ordered his staff to inspect, clean, and repair any damage to the rental unit. His employees kept records of the time spent and repairs made to the property. Likewise, if replacements were made to the rental units, those additional expenses were noted. These costs were reflected on a damage-deposit-return form, commonly entitled Summary Of Move-Out Work form, that was provided to Miell by his employees. Beginning at least as early as 2000 and continuing until at least 2007, Miell fraudulently kept some or all of hundreds of renters’ damage deposits at the conclusion of their rental periods by falsely informing the renters that they caused damages to the rental property and that the cleaning, repair, and replacement costs were equal to, or in excess of, the amount of the renters’ damage deposits. Specifically, upon receiving a damage-deposit-return form, Miell inflated the costs and replacements as determined by his staff so as to fraudulently make the costs of cleaning, repairs, and replacements meet or exceed the amount of the renter’s damage deposit. Miell did this by handwriting changes to the Summary Of Move-Out Work form, increasing the alleged costs of repairs. Miell then directed his staff to notify the renter that the renter would either not receive any of his or her damage deposit or that the renter owed Miell money, because the costs of cleaning, repairs, and replacements met or exceeded the renter’s damage deposit. This was done by mailing a copy of the Summary Of Move-Out Work form to the renter’s last known address. In this manner, Miell fraudulently kept portions of renters’ damage deposits. In addition, Miell frequently added additional alleged costs to the Summary Of Move-Out Work form, so that, not only would it show that the tenant was not entitled to a return of the damage deposit, but that the tenant would actually owe Miell money, sometimes more than $1,000. Miell would often file suit in small claims court to obtain a judgment against the former tenant in the amount of the alleged costs in excess of the damage deposit. On occasion, a renter sued Miell for the return of his or her damage deposit. When Miell went to small claims court in Linn County on claims by or against tenants, he would create, or cause his staff to create, false and fraudulent invoices from The Home Doctor that purported to constitute a bill sent to him for the costs of cleaning, repairs, and replacements to the rental unit. Miell would also, at times, write checks or cause checks to be written to The Home Doctor that were never actually disbursed or cashed. He would then produce, or cause others to produce, these false and fraudulent documents, invoices, and checks to the Iowa District Court for Linn County as alleged proof of the costs of cleaning, repairs, and replacements. In this manner, Miell fraudulently kept, or attempted to keep, portions of renters’ damage deposits. The Home Doctor invoices began showing up in about 2000 or 2001. Prior to that time, the state court judges routinely discounted Miell’s claimed costs of repairs. After he began producing The Home Doctor invoices, however, the judges could not summarily discount these invoices, as they had no proof that they were false. One or more judges directly asked Miell whether The Home Doctor was tied to him in any way, and Miell claimed that it was not connected to him. On the following dates, Miell caused the following items to be placed in an authorized depository for mail matter and to be sent and delivered by the United States Postal Service according to directions thereon: DATE ITEMS MAILED/ADDBESSEE December Notice regarding damage deposit 2002 from 1855 First Avenue SE, Cedar Rapids, IA, to 2207 Kenrich Drive, SW, Cedar Rapids, IA; December 2002 Notice regarding damage 2002 deposit from 1855 First Avenue SE, Cedar Rapids, IA, to 4002 Westover Road, SE, Cedar Rapids, IA; December Notice regarding damage deposit 2002 from 1855 First Avenue SE, Cedar Rapids, IA, to 3212 Kenrich Drive, SW, # 10, Cedar Rapids, IA; December Notice regarding damage deposit 2002 from 1855 First Avenue SE, Cedar Rapids, IA, to 603 Olive Drive, NW, Cedar Rapids, IA; 1st Quarter of Notice regarding damage deposit 2003 from 1855 First Avenue SE, Cedar Rapids, IA, to 2922 0 Avenue, NW, # 6, Cedar Rapids, IA; 1st Quarter of Notice regarding damage deposit 2003 from 1855 First Avenue SE, Cedar Rapids, IA, to 1615 C Avenue, NE, Cedar Rapids, IA; 1st Quarter of Notice regarding damage deposit 2003 from 1855 First Avenue SE, Cedar Rapids, IA, to 309 7th Avenue, Hiawatha, IA; 1st Quarter of Notice regarding damage deposit 2003 from 1855 First Avenue SE, Cedar Rapids, IA, to 1917 K Street, SW, Cedar Rapids, IA; 2nd Quarter Notice regarding damage deposit of 2003 from 1855 First Avenue SE, Cedar Rapids, IA, to 1025 3rd Street (east unit), Marion, IA; 3rd Quarter Notice regarding damage deposit of 2003 from 1855 First Avenue SE, Cedar Rapids, IA, to 3417 Eastern Avenue, NE, Cedar Rapids, IA; 3rd Quarter Notice regarding damage deposit of 2003 from 1855 First Avenue SE, Cedar Rapids, IA, to 1911 Northbrook Drive, NE, Cedar Rapids, IA; 2nd Quarter Notice regarding damage deposit of 2004 from 1855 First Avenue SE, Cedar Rapids, IA, to 119 West Post Road, NW, Cedar Rapids, IA. Miell objects to paragraph 3 of the Final PSIR, which also lists these mailings as the basis for the damage deposit fraud scheme. Specifically, he objects to the statement that the items were placed in the mail, he contends the items were faxed, and he asserts “[tjhere was no scheme.” As the probation officer points out in response to this objection, paragraph 3 was taken directly from “mail fraud” charges relating to the damage deposit fraud scheme in the Third Superseding Indictment, to which Miell pleaded guilty. Miell’s belated attempt to challenge the factual basis for his guilty plea to these charges is rejected. As explained in more detail in the legal analysis to follow, under Iowa law, Miell had a fiduciary duty to his tenants as to damage deposits. See Iowa Code § 562A.12(2). While Iowa law prohibits landlords from commingling deposits with other funds, Miell did so. He did not maintain a separate account for damage deposits; instead, he deposited them into his bank account and used them like any other revenue for his operation. For the reasons also explained in more detail in the legal analysis to follow, Miell’s assertion that he had been exempted by the Iowa Real Estate Commission from the requirement to maintain a separate trust account for renters’ deposits is simply not true. Attempts to determine the amount of damage deposits that Miell unlawfully retained during the period of the charged conduct (2000 through 2007) were hampered for a number of reasons. First, Miell’s filing system and record retention is, at best, poor. The government issued forthwith subpoenas on Miell’s companies to obtain 30 or 40 files. The documentation contained in the files was inconsistent and incomplete. For example, some files contained leases going back several years, while others did not. Files contained some Summary Of Move-Out Work forms, but none contained all such forms for all renters. Second, the prosecutor issued non-forthwith subpoenas to Miell’s companies to obtain an additional 140 or so property files. These files had been purged. They contained very little documentation, and especially lacked some of the key documents, such as The Home Doctor invoices, Summary Of Move-Out Work forms, or similar documents. One of Miell’s employees admitted that he burned boxes of files that he discovered shortly after he knew that the prosecutor had sought them by subpoena. Specifically, Brett Emig, one of Miell’s employees who did maintenance work, testified in grand jury proceedings, and again during the first part of the sentencing hearing on September 2, 2009, that he destroyed some of Miell’s property management files that he found in a dumpster at a rental property to which Miell had called him to do some repair work. At the sentencing hearing, Emig testified that, perhaps a month and a half after he became aware of the grand jury subpoena for Miell’s property files, and at a time when he thought the grand jury investigation had already concluded, he saw Miell’s truck at a rental property in Hiawatha, where Emig was going to do repair work. Just about the time that Emig saw Miell’s truck, Miell actually called him on his cell phone to ask him to do some work at another, nearby property that Miell owned. Emig then met Miell to get face-to-face instructions for repair work on the nearby property. After Emig started the repairs, while dumping some materials from the repairs in a dumpster, Emig found what he said “look[ed] like a bunch of leases in boxes” in the dumpster. Realtime Transcript, Sentencing Hearing, September 2, 2009, 171:15-16. Emig testified that he removed two boxes of these documents from the dumpster, because “with all the legal issues [Miell] had, I just thought it was stupid if someone is watching him, you know, why put them in there and I don’t know if he did, but I mean, here they are.” Id. at 172:14-18. Emig took the boxes home and stored them in his garage, then a couple of months later burned them in his wood-burning fireplace, without telling Miell. Emig testified that he did eventually tell Miell that he had taken the files out of the dumpster, but he did not think that he had told Miell that he had burned them. He said Miell’s response was something to the effect that anybody could have put the files in the dumpster. Miell attempted to undermine Brett Emig’s testimony, particularly at the August 2010 installment of the sentencing hearing, with testimony of a former employee, Jacqueline (Jackie) Varner, essentially to the effect that nobody who worked for Miell put much stock in anything Brett Emig said about anything. Yet, no one has offered an adequate explanation for why so much material is missing from Miell’s property management files, nor any reason to reject Brett Emig’s specific testimony about his discovery and destruction of property files. I will discuss, below, in my calculation of Miell’s Sentencing Guidelines range, my determination of the loss resulting from the damage deposit fraud scheme, despite the prosecution’s difficulties in attempting to determine the amount of loss from incomplete property files. c. Perjury Miell was charged with perjury in a deposition in Count 19 and perjury in a civil jury trial in Counts 20 and 21. These charges arose from Miell’s conduct in AFI’s civil case against Miell, brought pri- or to the criminal prosecution for the insurance and damage deposit fraud schemes. Although Count 21 was subsequently dismissed, in return for Miell’s guilty pleas to Counts 1 through 20, it is nevertheless still relevant here pursuant to U.S.S.G. § 5K2.21. As to Count 19, one of the material matters in AFI’s civil case was whether Miell sent a Home Doctor receipt to AFI falsely showing that he paid The Home Doctor to repair one of the hail-damaged roofs. Miell had repaired the roof in question, but The Home Doctor did not perform the repairs. Miell used The Home Doctor invoice to inflate the costs of repairs by $1,000. On April 26, 2006, Miell appeared as a witness at a deposition, was placed under oath, and provided testimony concerning The Home Doctor receipt and other matters related to the submission of documents to AFI to justify RCV payments. During the deposition, counsel for AFI questioned Miell about a certain document: the first page of the document was a phone message and the second page was a Home Doctor invoice dated August 29, 2001, for $4,984.23, signed by J.J. Mc-Manus. Miell had submitted the invoice to AFI to seek an RCV payment in the amount of the invoice. Specifically, the following questions and answers appear in the deposition transcript: Question: I want to hand you what’s been marked as Exhibit 10. Do you recognize the first page? Does that look familiar to you, sir? Answer: No. I’ve not seen the first page. Question: Okay. Let’s go to the second page. Have you ever seen that before? Answer: Not that I recall, no. Question: Is that your handwriting? Answer: Yes. Question: What is the House [sic] Doctor, meaning is it a corporation, sole proprietorship' — • Answer: It was a— Question: Was or is, sir? Pardon me for interrupting. Answer: Was. Question: It doesn’t exist anymore? Answer: Not that I know of. Question: Okay. It was. Go ahead. Answer: On the places that John Mc-Manus had loaned money if there were repairs or things done that were billed out, that’s was that was for. Question: Okay. Who owned the Home Doctor. Answer: It was — At the recorder’s office I think my name was on it. I’m not sure if Mr. McManus’ was or was not. It was not a corporation. Question: What was it? Answer: Basically that’s what it was. Basically an identification of places where he had lent money and of what he had expensed on those to be reimbursed for. Question: ... The House [sic] Doctor never was a corporation; true? Answer: Not to my knowledge. No. Question: Sole proprietorship? Partnership? Answer: If anything, it was a partnership, but it wasn’t filed as a partnership. Question: If anything, it was a partnership? Answer: Well— Question: I’m just trying to understand, not argue with you. This isn’t meant to be a trick question. I’ve just got to get this through my head. Answer: If there were places where John McManus lent me money and there were repairs that were done either if it was purchased or he lent money and there was improvements made to fix the property up, any invoices that were done or expenses that were done were paid back to him based on how much money he spent on that case. Question: Why would repairs be made to these homes where he had loaned you money? Answer: Various things from obviously roofs to new kitchens, bathrooms, finishing basements, putting up two-stall garages, different things. Question: Does the House [sic] Doctor have an address? I don’t see it on the paper. Answer: No. It was basically the 1855 First Avenue. Question: Is that McManus’ signature? Answer: Yes. Well, I would assume so. Question: It’s not your handwriting? Answer: No. The underscored testimony, that the signature was not in Miell’s handwriting, was false. In October 2007, after his deposition in April 2006, a grand jury issued a subpoena to compel Miell to provide handwriting exemplars. Miell was suspected of having forged the signatures of several people, including R. Gordon Sargent, Karla Wilson, and John McManus. Handwriting analysis showed that the handwriting in McManus’s purported signature on The Home Doctor invoice was Miell’s. Miell objects to paragraph 4 of the Final PSIR, which describes the offense charged in Count 19. Miell indicates that he had both a property management agreement and a power of attorney, and contends that paragraph 4 is incorrect where it states that he believed that the invoices were false. Again, as the probation officer points out, paragraph 4 was taken directly from the Third Superseding Indictment and relates to a count to which Miell pleaded guilty. I reject Miell’s belated attempt to challenge the factual basis for his guilty plea to this charge. As to Count 20, when AFI’s civil case went to trial in January 2008, the authorship of the John McManus name came up again. At trial on January 8 and 9, 2008, in testimony under oath, Miell had a different explanation, as shown in the following exchange: Question: Is this a billing from the Home Doctor? Answer: Yes, Sir. Question: From who? Answer: From myself. Question: From yourself. Doesn’t it say under Home Doctor, J.J. Mc-Manus? Answer: Yes, it does. Question: Is that his signature; Mc-Manus? Answer: No, sir. That is mine. Question: It’s yours. Did you tell me that in your deposition? Answer: I presume it’s mine. I think it’s mine. Question: Well, let me ask you this. Does J.J. McManus exist? Answer: Yes, he does. Question: Where is he? Answer: I don’t know where he is. Question: Why did you sign J.J. Mc-Manus’ name? Answer: I had a power of attorney for Mr. McManus. The underscored testimony was false, because Miell had no such power of attorney. The prosecutor questioned approximately a dozen current and former coworkers to determine whether they knew of or had ever seen such a power of attorney, some of whom were questioned before the grand jury. The answer was uniformly negative. In addition, the prosecutor served a grand jury subpoena on the custodian of records for all of Miell’s business entities demanding production of such a power of attorney. Miell chose to appear as the custodian of record and testified that the companies were not in possession of such a document. As to the dismissed perjury count, Count 21, another material matter in AFI’s civil case involved Miell’s reliance on his insurance agent. Miell claimed, for example, that his insurance agent was intimately involved in the claims process and told him that he had a one-year deadline to complete all roof repairs. Thus, the nature and extent of contact between the agent, Brett Throlson, and Miell was an important issue at trial in AFI’s civil case. The specific question was whether AFI sent the RCV payments to Miell directly through the United States Mail or, instead, to his insurance agent. During Miell’s deposition, which took place on May 23, 2006, Miell was asked about how he received the RCV checks. The following question and answer appear in the deposition transcript: Question: And American Family sent you directly a check and not through Brett Throlson? Answer: Correct. In November 2007, after Miell’s deposition testimony, the grand jury returned its first Indictment against him. The Indictment included the insurance fraud counts, and alleged that the RCV checks were mailed directly to Miell at his business address, which was consistent with Miell’s own deposition testimony and the testimony of employees of AFI that RCV payments never go through agents. In contrast to ACV payments, for which the insured need not produce any documents, RCV payments are made only if an insured provides proof of actual repairs. Because of the potential for fraud, RCV payments never go through the agent. On January 8, 2008, and January 9, 2008, while testifying under oath at trial in AFI’s civil case, however, Miell changed his testimony about how he received the RCV checks. The following questions and answers appear in the trial transcript: Question: Is it your testimony to this Judge and this jury that you never received a check from American Family paying you for damage to the roofs from the hailstorm at your offices? Is that your testimony? Answer: I don’t recall that, sir. Question: Don’t recall what? Answer: That I received checks mailed directly to me from American Family’s office in Des Moines. Question: Did you receive any of these payments through the United States Mail? Answer: I don’t recall that. Question: Did you receive these payments in one envelope, two envelopes, three envelopes, or four? Answer: I don’t recall because to my knowledge, Mr. Throlson would call and say that he had checks and I would go to his office and pick them up. Question: Is it your testimony to this Judge and this jury that the checks were not taken — the replacement cost benefit checks were not taken by the United States Postal Service from Des Moines directly to your office? Answer: To the best of my knowledge, that’s correct. Question: And if I understand your testimony yesterday to questions by Mr. Proctor, you testified that all the checks went to Mr. Throlson for settlement of your replacement cost value. Is that what your testimony was yesterday? Answer: Yes it was. Question: And just so I’m clear, it’s your sworn testimony today that you did not receive any of the replacement cost value checks through the mail. Is that your testimony today? Answer: I received them at Mr. Throlson’s office. The underscored testimony was false. As set forth above, the policy and practice of AFI was to mail RCV checks directly to the insured, not to send them through agents. As a result of this false testimony, the prosecutor had to present the case to a grand jury a second time to change the language of the Indictment to allege a mailing from Des Moines to Cedar Rapids, instead of directly to Miell’s business address. d. False tax returns Counts 22 and 23 charged Miell with filing false tax returns. The factual background to these offenses is as follows. On April 15, 2002, and September 15, 2003, Miell filed, under penalty of perjury, false and fraudulent U.S. Individual Income Tax Returns, Form 1040, for the calendar years 2001 and 2002. The returns failed to include as income the RCV payments that Miell received from AFI. Miell obtained those funds through fraudulent means and they were not used for their intended purpose; therefore, they constituted taxable income. The RCV payments that Miell obtained by fraud became taxable income in the year in which he received them. Miell received one check for RCV insurance proceeds in 2001 in the amount of approximately $6,339, and he received the remainder of the $336,000 in RCV insurance proceeds in tax year 2002. Miell failed to report any of this income in his tax returns in the tax years in question. Using a tax rate of 28 % for the non-reported income of $336,000, the total tax loss from the insurance fraud scheme was $94,080. Miell objects to paragraph 7 of the Final PSIR, which describes the offense charged in Count 22, on the ground that he did not have the money that is included in that paragraph. As the probation officer points out, paragraph 7 was taken directly from the Third Superseding Indictment. Moreover, whether or not Miell did or did not “have the money” in question at some point is hardly a defense to the charge that he received the money through a fraudulent scheme and failed to report it as income. This challenge to Miell’s guilt on this charge at sentencing is far too late. Thus, this objection is overruled. Similarly, Miell objects to paragraph 8 of the Final PSIR, which describes the offense charged in Count 23, by stating that “... attorneys Kutmus and Brown [his trial attorneys] withheld