01-2213 U.S. v. Mantas

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“Given the evidence, the district court did not clearly err in finding that Mantas intended to sell all of the produce in the warehouse. Underlining this point were Mantas’ brazen attempts to sell adulterated meat after inspectors had red-tagged the cooler and were still inspecting the warehouse. Although he claimed that he intended to destroy or return the spoiled products in the upstairs freezer, this claim is belied by several facts. First, Mantas lied to inspectors about the existence of the upstairs freezer and the products it contained, which implies that he was trying to hide something. Second, Mantas moved the frozen products from Helmos’ old warehouse to its new one rather than simply destroying them or returning them to suppliers. Third, some of the products contained fraudulently marked expiration dates, suggesting that Mantas still intended to sell them. In light of this substantial evidence, the district judge did not err in basing his loss calculation on the entire amount of food stored in the warehouse.

“Few cases have addressed this enhancement outside of the context of bankruptcy fraud. The two circuits that have addressed it in other contexts are somewhat split over what constitutes official process. The Ninth Circuit held that a letter merely informing the defendant that she might be violating the law was not sufficient to trigger the sentence enhancement. See United States v. Linville, 10 F.3d 630, 631 (9th Cir. 1993).

“On the other hand, the Second Circuit held that informal administrative process resulting in an informal decree is enough to trigger the enhancement. See United States v. Spencer, 129 F.3d 246, 252 (2d Cir. 1997).”

“We think the Second Circuit’s more liberal approach to triggering the enhancement beats the more constricted view of the Ninth Circuit. Here, like the defendant in Spencer, Mantas received informal process through the USDA and IDA inspections. The IDA’s red tag was an informal decree notifying Mantas that selling the tagged goods would violate state law. See 410 Ill. Comp. Stat. 620/6. Thus, substantial evidence of Mantas’ aggravated criminal intent existed to support the district court’s use of the sentencing enhancement.”

Affirmed.

Appeal from the United States District Court for the Northern District of Illinois, Holderman, J., Evans, J.