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United States v. Brandriet

United States Court of Appeals, Eighth Circuit

October 27, 2016

United States of America, Plaintiff- Appellee
Leon J. Brandriet, Defendant-Appellant

          Submitted: October 17, 2016

         Appeal from United States District Court for the District of South Dakota - Sioux Falls

          Before MURPHY, BEAM, and GRUENDER, Circuit Judges.

          PER CURIAM.

         Leon J. Brandriet pleaded guilty to one count of mail fraud and now appeals the district court's[1] application of a two-level sentencing enhancement. For the following reasons, we affirm.

         I. BACKGROUND

         In September 2011, a van struck the home of Mary Ann Espelien in Watertown, South Dakota. Espelien hired Brandriet, an independent insurance adjustor, to act as an agent on her behalf to adjust a claim with her insurer, DeSmet Farm Mutual Insurance Company. They agreed that in exchange Brandriet would keep ten percent of payments made for reimbursement for damages to the structure and contents of Espelien's home but that he would not keep any portion of payments made for Espelien's living expenses. They also agreed the payments from DeSmet would go directly to Brandriet, who would then disburse the funds according to their agreement. Espelien was distressed that she would not have enough money to afford housing while her badly damaged house was being repaired. Espelien had apparently moved to Watertown only recently to be near family, and she had spent much of her money fixing up her house. She asked her employer if she could be sent to another area of the country where she could earn more money, and her employer sent her to Pueblo, Colorado. Because Espelien was without much money, she temporarily lived out of her car while she looked for affordable housing in Pueblo. She also occasionally traveled back to South Dakota to check on her home and belongings. The added expenses caused her to dip into her retirement savings, postponing her retirement plans.

         Of the $62, 643.08 paid by DeSmet to Brandriet, $12, 745.31 was earmarked for paying the costs of Espelien's living expenses, moving to a new residence, and cleaning and storing her personal property. In total, Brandriet passed on $18, 709.69 to Espelien, and $7, 561.60 to Mark Kruse, the contractor working on Espelien's home (and Brandriet's nephew). Because the timing of the payments to Espelien for living and moving expenses is germane to this case, we briefly summarize the relevant specifics.[2] DeSmet issued a check to Espelien (but sent to Brandriet) on November 22, 2011, in the amount of $7, 269.49 for cleaning personal property, packing materials, and moving charges. Brandriet deposited that check, along with another check from DeSmet, on November 28, and on November 30 he mailed a check to Espelien for $8, 000. DeSmet sent another check to Brandriet in the amount of $2, 676.82 on December 22, 2011, for rent and living expenses, and Brandriet deposited that amount on January 30, 2012. But he did not forward any funds on to Espelien until April 30, 2012, when he mailed her a check for $735, and on June 1 when he electronically deposited another $735 in Espelien's account. Also on June 1, 2012, DeSmet sent a check to Brandriet for $14, 567.68, of which $2, 175 was for rent and $624 for property storage. Brandriet deposited that check June 6 and that same day sent $561.60 to Kruse for storage fees. (Espelien had been storing her property in Kruse's garage while she was living in Colorado, and so this amount apparently compensated Kruse for doing so.) On June 14, 2012, Brandriet sent Espelien a check for $9, 239.69.

         Brandriet converted roughly $30, 000 of Espelien's insurance payments to his own use. After an investigation by the FBI and an indictment on five counts of mail fraud, he pleaded guilty to one count and agreed to pay restitution for the amount in all five counts. At sentencing and over Brandriet's objection, the district court increased his offense level by two because it found his offense caused Espelien substantial financial hardship. The district court stated:

         Having heard the testimony of Miss Espelien, I find [Brandriet's offense] did result in substantial financial hardship to her. She ended up having to relocate herself, relocate her business. The Defendant was using money that was hers and should have been hers for the purpose of temporary housing. He didn't give the money to her for that purpose. He spent it himself.

         Brandriet now appeals the application of this sentencing enhancement.


         Brandriet argues that the district court erred in finding his crime resulted in substantial financial hardship to Espelien. "In reviewing a sentence for procedural error, we review the district court's factual findings for clear error and its application of the guidelines de novo." United States v. Barker, 556 F.3d 682, 689 (8th Cir. 2009). Under clear error review, we ask whether we have a definite and firm conviction that the district court has committed a mistake. United States v. Sistrunk, 612 F.3d 988, 991 (8th Cir. 2010). The U.S. Sentencing Guidelines Manual (U.S.S.G.) directs the district court to increase a defendant's offense level by two if the offense "resulted in substantial financial hardship ...

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