United States v. Waters, No. 14-3045 (8th Cir. 2015)
Annotate this CaseWaters obtained a job at West. Cafesjian was a senior executive. Cafesjian later moved to Florida; retired; sold his shares for $250 million when West was sold; started a foundation and the GLC family office; and hired Waters to manage GLC in Minneapolis. Cafesjian opened a personal account with Northern Trust in Florida. Both men were signatories, Waters opened Minneapolis US Bank account. Both men were signatories. Transfers from Cafesjian’s Northern account funded the US Bank account. Between 1999 and 2004, Waters wrote more than 120 checks on the US Bank account, generally for exactly $5,000, $6,000, or $7,000, totaling $1,373,525. Waters ensured that no one else saw the bank statements and instructed GLC’s bookkeeper on how to record transactions. Much of the money went through accounts held by Waters’ girlfriend, his daughters, and an exchange student. When Waters resigned and was investigated, Waters claimed that Cafesjian was incompetent and that the money was related to deferred compensation. Civil suits were stayed when Waters was charged with mail fraud, wire fraud, and tax-related crimes. Convicted, Waters was sentenced to 108 months. The court found Waters embezzled between $2.5 and $7 million, used sophisticated means to perpetrate the fraud, and obstructed justice. The Eighth Circuit affirmed, rejecting challenges to the sufficiency of the evidence, loss calculations, and sentencing enhancements.
Court Description: Melloy, Author, with Chief Judge Riley and Murphy, Circuit Judges] Criminal Case - conviction and sentence. There was ample evidence to support conviction for mail fraud and wire fraud and to demonstrate Waters's defense was a post hoc falsity to cover his fraud. Waters's defense of the tax crimes that he was unaware he had to report loans against deferred compensation is belied by the lack of an employment agreement or deferred compensation agreement. The district court's loss-amount calculation was not clearly erroneous and the 18-level enhancement was supported by the record; the enhancement for use of sophisticated means was also not clearly erroneous; and the district court did not clearly err in finding Waters committed perjury and applying a 2-level enhancement for obstruction of justice. The 108-month sentence, the low end of the guidelines range, is not substantively unreasonable. After considering the mitigating evidence, the district court did not abuse its discretion in sentencing Waters.
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