United States District Court, D. Maine
A. WOODCOCK, JR. UNITED STATES DISTRICT JUDGE
Nygren pleaded guilty to sixty-three counts of bank fraud,
one count of using an unauthorized access device, and one
count of tax evasion. The Government and Mr. Nygren raise a
series of sentencing issues. The Court concludes:
1. Mr. Nygren employed sophisticated means in the course of
his tax evasion pursuant to U.S.S.G. § 2T1.1(b)(2) but
not his fraud pursuant to § 2B1.1(b)(10)(C).
2. Mr. Nygren did not further the execution or concealment of
his fraud activities through the abuse of a position of trust
pursuant to § 3B1.3.
3. Mr. Nygren attempted to obstruct justice pursuant to
§ 3C1.1 by malingering during competency evaluations.
4. Mr. Nygren is not entitled to a reduction in offense level
for acceptance of responsibility pursuant to § 3E1.1.
5. Mr. Nygren's criminal history is not substantially
underrepresented by the guideline calculation pursuant to
September 16, 2015, Mr. Nygren was arrested by the Maine
State Police and charged with related state offenses.
Presentence Investigation Report ¶ 1
(PSR). He was released on bail on September 23,
April 9, 2016, Mr. Nygren suffered a stroke and was
hospitalized. Def. Ex. 1 (Massachusetts General
Hospital Records). On April 22, Mr. Nygren had surgery
to create a shunt in order to relieve pressure in his head.
Id. On April 26, 2016, he was discharged for
rehabilitation. Id.; See also Def. Ex. 1
(Spaulding Rehabilitation Hospital Records).
Although Mr. Nygren made progress in his recovery, in July
2016, the Defendant's primary treating neurologist, Dr.
Alvin Das, M.D., opined that the Defendant experienced
significant cognitive impairment as a result of the stroke.
Mot. to Determine Competency and Exclude Time Under the
Speedy Trial Act Attach 1 (ECF No. 20).
August 10, 2016, a federal grand jury returned an indictment
charging Mr. Nygren with sixty-three counts of bank fraud,
one count of unauthorized use of an access device, and one
count of tax evasion. Indictment (ECF No. 1). On
August 25, 2016, Mr. Nygren appeared before the Magistrate
Judge and was released pursuant to a $15, 000 unsecured bond.
Min. Entry (ECF No. 9). On August 30, 2016, the
arraignment was continued for sixty days until October 24,
2016 to allow defense counsel to review medical records and
prepare an expert witness on competency. Notice of
Hr'g (ECF No. 13). On October 18, 2016, defense
counsel moved to continue the arraignment to allow more time
to review Mr. Nygren's neuropsychological evaluations in
order to determine his competency. Opposed Mot. to
Continue Initial Appearance/Arraignment (ECF No. 14).
The Magistrate Judge denied the motion, indicating that
defense counsel should file a motion for a competency
hearing. Order (ECF No. 16). The arraignment went
forward and Mr. Nygren pleaded not guilty to all counts on
October 24, 2016. Min. Entry (ECF No. 17).
November 7, 2016 Mr. Nygren filed a motion for a competency
hearing and submitted an October 15, 2016 psychiatric
evaluation from Dr. Peter Donnelly, Psy. D., expressing
doubts about Mr. Nygren's ability to assist in his own
defense. Mot. to Determine Competency and Exclude Time
Under the Speedy Trial Act Attach 2 Forensic
Evaluation (ECF No. 20) (First Donnelly
Report). On January 11, 2017, the Government filed a
motion for a psychiatric exam. Mot. for Psychiatric
Evaluation (ECF No. 35). On January 12, 2017, the Court
issued an order for an evaluation of Mr. Nygren's
competency to stand trial. Order (ECF No. 36).
February 21, 2017, Mr. Nygren reported to Federal Medical
Center Devens for the evaluation. PSR ¶ 2. He
was released on March 23, 2017. Id. The Court
received the psychological report from the Bureau of Prisons
evaluator, Dr. Miriam Kissin, Psy. D., on May 12, 2017 and
received a supplemental report from Dr. Donnelly on June 19,
2017. Forensic Report (ECF No. 39) (Kissin
Report); Forensic Evaluation (ECF No. 46)
(Second Donnelly Report). Dr. Kissin found that Mr.
Nygren was exaggerating his reported memory problems and
concluded that his current functioning was not consistent
with any significant cognitive deficits. Kissin
Report at 23-24. Dr. Donnelly also concluded that Mr.
Nygren was competent. Second Donnelly Report at 3-4.
Court scheduled a competency hearing for June 20, 2017.
Notice of Hr'g (ECF No. 40). At the hearing, Mr.
Nygren no longer contested his competency. The Court received
evidence, including two forensic reports and medical records
from Spaulding Rehabilitation Hospital, and the Court found
him competent to stand trial. Min. Entry (ECF No.
47); Ct. Ex. List (ECF No. 48). Immediately after
this conclusion, Mr. Nygren pleaded guilty to all sixty-five
October 19, 2017, the Government filed its sentencing
memorandum. Gov't's Sentencing Mem. (ECF No.
51) (Gov't's Mem.). On November 20, 2017,
Mr. Nygren filed his response to the Government's
sentencing memorandum. Def.'s Resp. to
Gov't's Sentencing Mem. (ECF No. 59)
(Def.'s Opp'n). The Government filed its
reply on December 4, 2017. Gov't's Reply to
Def.'s Sentencing Mem. (ECF No. 60)
Tax Evasion Conduct
Nygren has been in collection with the IRS since at least
2005 for outstanding taxes, penalties, and interest he owed
the United States for seven of the years from 1996 through
2009. Prosecution Version of the Offense at 4 (ECF
No. 45). To defeat the IRS's ability to collect his
outstanding tax debt, Mr. Nygren engaged in a course of
conduct to disguise his income and his control of assets.
Id. He used a false social security number on an
employment form, had an employer wire compensation into
accounts under his wife's name, and directed an employer
to treat him as an independent contractor, not an employee.
Id. at 4. Mr. Nygren also directed another
individual, a relative, to open a bank account in
Massachusetts for his use, and he created and operated an LLC
in the relative's name for a business venture - the
Brooklin General Store. Id. at 5.
2013, Mr. Nygren performed consulting work for Brooklin Boat
Yard (BBY) in Maine. Id. at 1. In June 2014, BBY
hired Mr. Nygren as Financial Manager or Chief Financial
Officer. Id. His duties included maintenance of
accurate financial records and controls, as well as reporting
the company's financial status to ownership. Id.
Mr. Nygren wrote sixty-three unauthorized checks from
BBY's operating account at Camden National Bank to
“Continuum”, his consulting business.
Id. at 1-2. Mr. Nygren forged the signatures of two
other BBY officers and deposited the checks into the
Massachusetts bank account his relative had opened for him.
Id. The amounts on the checks totaled more than
$732, 000. Id. at 1. Mr. Nygren also used two
company credit card numbers without authorization, totaling
roughly an additional $83, 000. Id. at 3;
PSR ¶ 9. Mr. Nygren used nearly all of the
stolen funds for personal expenses. Id. at 2. Nearly
half of the money funded Mr. Nygren's purchase and
operation of the Brooklin General Store, and he used roughly
$70, 000 to pay for his daughter's wedding. Id.
THE PRESENTENCE INVESTIGATION REPORT
Probation Office (PO) determined that the base offense level
for the tax fraud count group is twenty, which is increased
two levels for failing to report proceeds of criminal
activities. PSR ¶¶ 34-35. The PO
recommended applying the two-level sophisticated means
enhancement to the tax fraud count. PSR ¶ 36.
the fraud count group, the PO determined that the base
offense level is seven, which is increased fourteen levels
for the amount of loss. PSR ¶¶ 27-28. The
PO recommended against applying the two-level sophisticated
means enhancement to the fraud counts, PSR ¶
29, but did recommend applying the two-level enhancement for
abuse of a position of trust. PSR ¶ 31.
recommended applying the two-level enhancement for
obstruction of justice to both count groups because there is
evidence that Mr. Nygren was malingering in order to delay or
avoid punishment. PSR ¶¶ 19-22; 32, 39.
The PO also recommended against applying the two or
three-level reduction under U.S.S.G. § 3E1.1 for
acceptance of responsibility. PSR ¶¶
determined that Mr. Nygren's combined total offense level
is twenty-eight. PSR ¶ 47.
concluded that Mr. Nygren's criminal history category is
II. PSR ¶ 52.
Nygren received one criminal history point for a February 3,
2014 Massachusetts conviction for larceny less than $250 and
two additional points because he committed the instant
offenses while under probation for that crime. PSR
THE PARTIES' POSITIONS
The Government's Memorandum
Government argues that Mr. Nygren's conduct
“fall[s] within the heartland of the sophisticated
means by the use of various identities, tax identification
numbers, and the movement of funds between
jurisdictions.” Gov't's Mem. at 5. The
Government suggests that the tax evasion conduct was
sophisticated because he used a false social security number
as well as bank accounts and a corporate entity in a
relative's name to hide his assets. Id. at 7.
Government contends Mr. Nygren's fraud was sophisticated
because using an out-of-state bank account associated with a
corporate identity meant that “the payments were less
obviously fraudulent than they would have been if he had made
the checks payable to himself. . . .” Id. at
6. The Government asserts that using a relative to open bank
accounts shows sophistication and “a high level of
planning aimed at avoiding detection, and thus effecting
perpetuation of the scheme.” Id. The
Government also insists that Mr. Nygren used a
“fictitious” or “shell” corporate
entity by employing a defunct Massachusetts corporation,
Continuum. Id. at 7-8.
Mr. Nygren's Response
Nygren argues that all acts of tax evasion involve some
degree of concealment and that not all acts of tax evasion
involve sophisticated means. Def.'s Opp'n at
7. He distinguishes cases cited by the Government where
defendants used a series of false social security numbers and
identification cards and received a sophisticated means
enhancement. Id. Mr. Nygren argues that his acts of
evasion and fraud were not more sophisticated than other acts
of tax evasion and bank fraud. Id.
the fraud, Mr. Nygren argues that he did not use any
fictitious or shell corporations, rather he used the name of
his actual preexisting consulting corporation which was only
technically “defunct” because he had simply
failed to pay state renewal fees. Id. at 5, 8. Mr.
Nygren points out that he used the name of his consulting
business, Continuum, on the forged checks, which was known to
the other BBY officials and could hardly have concealed his
involvement. Id. at 4.
The Government's Reply
Government replies that Mr. Nygren's use of the real
Continuum name that was known to BBY management could very
well have aided in the concealment of the fraudulent nature
of the checks because if other managers happened to see a
record of one of those transactions Mr. Nygren would have
been able to represent those expenditures as legitimate.
Gov't's Reply at 2. The Government also
contends that the “relativity” test that Mr.
Nygren advocates - a comparison to the level of
sophistication of typical comparable crimes of the same type
- is not valid under First Circuit law. Id. at 4.
Abuse of a Position of Trust
The Government's Memorandum
Government claims that Mr. Nygren abused a position of trust
because he helped draft the job description for his position
and he knew that it was his job alone to monitor and manage
cash flow and reconcile accounts. Gov't's
Mem. at 10-11. The Government emphasizes that if anyone
else had held his position and he had held a different one,
his fraud would have been discovered immediately after the
first forgeries. Id. at 11. The Government also
suggests that the owners of BBY placed extraordinary trust in
Mr. Nygren because he had worked for the business before and
delivered positive results. Id. at 12.
Mr. Nygren's Response
Nygren does not dispute that he held a position of trust with
BBY and its owner. Def.'s Opp'n at 9.
Instead, he argues his position did not enable him to commit
or conceal the offense. Id. Mr. Nygren contends that
his position did not enable his fraud because he had no check
writing authority. Id. at 9-10. He asserts that his
job duties were ill-defined and he lacked the requisite
discretion for the enhancement because there were other
officials responsible for monitoring the accounts.
Id. at 10-11.
The Government's Reply
Government replies that Mr. Nygren's position enabled him
to perpetuate his fraud because he “was the
watcher” and was well positioned to know what the other
managers did and did not do regarding the monitoring of their
financial accounts and records. Gov't's
Reply at 5.
Obstruction of Justice
The Government's Memorandum
Government asserts that Mr. Nygren attempted to obstruct
justice by feigning or exaggerating his memory problems in an
effort to delay or avoid the proceedings against him.
Gov't's Mem. at 16-19. The Government also
argues that Mr. Nygren attempted to unlawfully influence a
witness during a secretly recorded conversation with
BBY's owner. Id. at 13-15. The Government
construes a certain exchange of words as a threat to destroy
the reputation of the victim if he did not make a deal with
Mr. Nygren to avoid criminal prosecution, a ...