United States v. Karasarides & DiPietro: Sixth Circuit Clarifies “Affirmative Acts” for Tax Evasion and Sentencing Duties in Complex Cash-Based Schemes

I. Introduction

In United States v. Christos Karasarides, Jr. & Ronald A. DiPietro, Nos. 24-3545/3553 (6th Cir. Nov. 17, 2025), the Sixth Circuit issued a published opinion affirming the convictions and sentences of two key figures in a long-running illegal gambling and tax-evasion operation in northern Ohio. Judge Nalbandian, writing for a unanimous panel, addressed a broad array of issues:

• When must a district court sever co-defendants’ trials?
• What counts as an “affirmative act” of tax evasion within the six-year statute of limitations under 26 U.S.C. § 7201?
• Does it matter that a tax professional is no longer a taxpayer’s “power of attorney” for purposes of the affirmative-act requirement?
• What level of explanation and factual findings must district courts make under Federal Rule of Criminal Procedure 32 when tax loss is disputed?
• When does a tax-evasion scheme warrant the “sophisticated means” enhancement under the Sentencing Guidelines?
• Can a district court correct an inconsistent restitution-interest checkbox on the written judgment under Rule 36 after a notice of appeal has been filed?

The case arises out of two “skilled” gambling parlors—Redemption and Skilled Shamrock—that paid cash winnings in violation of Ohio law. The businesses operated almost entirely in cash, with their owners and accountant using a range of stratagems to conceal gambling income, avoid employment taxes, and obscure assets from the IRS.

A jury convicted:

• Christos Karasarides Jr. of multiple conspiracies (illegal gambling, tax fraud, money laundering), substantive gambling offenses, tax evasion, filing false returns, witness tampering, falsification of records, and a money-laundering conspiracy.
• Ronald DiPietro, an accountant, of tax-evasion and aiding-and-assisting counts, based largely on his role in preparing false tax returns and structuring the finances of Skilled Shamrock.

On appeal, they attacked both trial procedures (especially the joint trial) and sentencing determinations (especially the tax-loss calculation and enhancements). The Sixth Circuit rejected each challenge, but in doing so clarified several points of law that will be important in future tax, fraud, and conspiracy prosecutions.

II. Summary of the Opinion

The Sixth Circuit’s key holdings can be summarized as follows:

1. Denial of severance was proper. DiPietro failed to show “specific, substantial, undue, or compelling prejudice” from being tried together with Christos. His claims of potential exculpatory co-defendant testimony, “spillover” prejudice, and inadmissible evidence all failed under Zafiro v. United States and Sixth Circuit precedent. Limiting instructions were sufficient to cure any risk.
2. Affirmative act requirement for § 7201 and the statute of limitations. The indictment adequately alleged affirmative acts of tax evasion within the six-year limitations period, including filing false tax returns and related documentation. The court explicitly rejected DiPietro’s novel argument that he could not commit affirmative acts because he was no longer Christos’s IRS “power of attorney.” The statutory phrase “in any manner” in § 7201 does not require any agency or fiduciary relationship.
3. Reading the indictment (including overt acts) to the jury is permissible with proper instructions. The district court did not err by reading the overt acts for Count 1 to the jury where it had repeatedly instructed that the indictment was not evidence, distinguishing older cases where judges effectively directed a verdict of guilt.
4. Tax-loss calculation of over $3.5 million was upheld. The court approved the government’s methodology, which:
   • included Christos’s personal unpaid taxes, co-conspirators’ reasonably foreseeable tax losses, and unpaid employment taxes;
   • used conservative extrapolation from Skilled Shamrock’s detailed records to estimate Redemption’s profits where defendants had destroyed records; and
   • aggregated different tax liabilities without double counting.
5. Rule 32(i)(3)(B) – duty to make findings. The district court erred by summarily adopting the PSR’s tax-loss figure as to Christos without explicit findings after he disputed it, but the error did not amount to plain error because the record amply supported the loss figure and no prejudice was shown. As to DiPietro, his vague and undeveloped objections did not trigger a duty to provide a more detailed explanation.
6. “Sophisticated means” enhancement was proper. Christos’s use of shell entities, land contracts designed to shield property from IRS liens, sham employment, off-the-books cash payments, and falsified documents supported the two-level enhancement under U.S.S.G. § 2T1.1(b)(2). The tax evasion was intertwined with a broader, highly structured illegal gambling and laundering scheme.
7. Variance and policy disagreement with the Guidelines. The sentencing transcript showed the district court understood it could vary downward but chose not to, based on the scale and duration of the scheme and the investigative resources required. Its comments about the “high” Guidelines for financial loss did not reflect a misunderstanding of its discretion.
8. Restitution interest and Rule 36. Because 18 U.S.C. § 3612(f) presumptively requires interest on restitution over $2,500 absent a finding of inability to pay, and no such finding was sought or made, the original judgment’s selection of both “interest payable” and “interest waived” checkboxes was a clerical inconsistency. The district court lacked jurisdiction to enter an amended judgment after the notice of appeal, but on remand it may correct that scrivener’s error under Rule 36 to conform the written judgment to the sentence authorized by law.

Ultimately, the court affirmed all convictions and sentences, and remanded only to permit correction of the incomplete/contradictory restitution-interest language in DiPietro’s judgment.

III. Detailed Analysis

A. Joint Trials, Severance, and Prejudice

1. Governing Law and Precedents

The starting point is Zafiro v. United States, 506 U.S. 534 (1993), where the Supreme Court stressed a strong federal preference for joint trials of defendants indicted together, particularly in conspiracy cases. Joint trials promote efficiency and consistency and are common where evidence overlaps.

Federal Rule of Criminal Procedure 14 permits severance if a joint trial “appears to prejudice” a defendant, but Zafiro holds that severance is warranted only where a joint trial:

• compromises a specific trial right (e.g., confrontation), or
• prevents the jury from making a reliable determination of guilt or innocence.

Moreover, “less drastic measures,” such as limiting instructions, are normally adequate to address any risk of prejudice.

Sixth Circuit precedents build on this framework:

• United States v. Phibbs, 999 F.2d 1053 (6th Cir. 1993): Endorses joint trials where there is “common evidence” and emphasizes limiting instructions as a cure for prejudice.
• United States v. Causey, 834 F.2d 1277 (6th Cir. 1987): Sets the demanding criteria when a defendant claims severance is needed to obtain a co-defendant’s exculpatory testimony.
• United States v. Breinig, 70 F.3d 850 (6th Cir. 1995): A rare case where severance should have been granted because extremely inflammatory “bad character” evidence against a co-defendant (about adultery and mental abuse) spilled over in a way deemed compelling and unfair.
• United States v. Warner, 690 F.2d 545 (6th Cir. 1982); United States v. Fields, 763 F.3d 443 (6th Cir. 2014): Articulate the “spillover prejudice” standard and reiterate that disparity in evidence alone rarely justifies severance.

Procedurally, United States v. Swift, 809 F.2d 320 (6th Cir. 1987), requires that a motion to sever be renewed at the close of the evidence to preserve full review on appeal. More recent cases (Sherrill, Raymore) have wrestled with whether failure to renew constitutes waiver (no review) or mere forfeiture (plain-error review).

2. Application to DiPietro

DiPietro moved pretrial to sever his case from Christos’s; the district court denied the motion. He conceded he did not renew it at the close of the evidence. The panel noted the tension in its prior cases (waiver vs. plain-error review) but, in light of the strong modern preference for resolving claims on the merits, signaled unease with treating the failure to renew as complete waiver. Nonetheless, it “left resolution for another day” because there was no error under any standard.

DiPietro advanced three severance theories; the court rejected each:

1. Lost exculpatory testimony from Christos (the Causey test).
   DiPietro provided an affidavit asserting that Christos would have testified at a separate trial that:
   • he had divested any interest in gambling establishments before June 2014;
   • he gave DiPietro accurate information for his returns;
   • his income and assets were supporting a gambling addiction; and
   • DiPietro ceased representing him in November 2015.
   Under Causey, a defendant seeking severance on this basis must show:
   1. a bona fide need for the testimony;
   2. the substance of the testimony;
   3. its exculpatory nature and effect; and
   4. that the co-defendant will in fact testify if the cases are severed.
   The Sixth Circuit concluded the proposed testimony was not meaningfully exculpatory:
   • Even if Christos said he had divested interests, DiPietro’s liability rested on his role in preparing false returns and concealing income, not just on Christos’s purported ownership status.
   • Christos’s assurance that he provided accurate information does not negate DiPietro’s duty not to be “willfully blind” to obvious omissions—a point underscored by the trial court’s willful-blindness instruction.
   • Christos’s gambling addiction explained his use of funds, not DiPietro’s intent or knowledge.
   • The fact of representation ending in November 2015 was already in evidence via IRS witnesses; it was not contested nor crucial to DiPietro’s defense.
   Result: no severance, because the proffer was either non-exculpatory, cumulative, or irrelevant.
2. “Spillover” prejudice from Christos’s greater culpability.
   DiPietro argued the jury would be overwhelmed by evidence of Christos’s extensive criminality, particularly after Christos’s counsel allegedly pursued a “jury nullification” theme in closing.

   The court emphasized that:

   • Disparity in culpability do not automatically warrant severance (Causey).
   • Closing arguments are not evidence and do not reflect the legal weight of evidence as to each defendant.
   • There was substantial, independent evidence tying DiPietro to Skilled Shamrock’s detailed cash operations and the false returns, including weekly audit spreadsheets and proof of profit distributions.
   • The district court repeatedly instructed the jury to consider each defendant and each count separately, which Sixth Circuit cases (Phibbs, Pierce, Gibbs, Elder) deem generally sufficient to cure potential prejudice.
   DiPietro failed to show “specific, substantial, undue, or compelling prejudice” rather than general discomfort with being tried alongside a more obviously culpable co-defendant.
3. Evidence admissible only against Christos.
   DiPietro contended certain evidence (Christos’s large tax debts, a cash-deposit video, and the entire Redemption scheme) would have been inadmissible in a solo trial.

   The panel disagreed:

   • The cash nature of the operations, including bank deposits by Christos, was relevant to the overall conspiracy and to the tax-evasion charges, and would likely have been admissible in a separate trial.
   • Although DiPietro was not a Redemption owner, he prepared false returns that concealed income derived from Redemption; evidence about Redemption’s operation was probative of his knowledge and intent.

   The court distinguished Breinig as an “exceptional case” involving truly inflammatory character evidence (adultery, mental abuse) that overwhelmed the jury’s ability to judge the ex-husband fairly. Nothing comparable was introduced here.

In sum, the court reaffirmed that severance remains an “extreme remedy,” rarely required where limiting instructions and individualized verdict forms are used, and where each defendant’s conduct is clearly delineated at trial.

B. Statute of Limitations and the “Affirmative Act” Requirement for § 7201

1. Legal Framework

Felony tax evasion under 26 U.S.C. § 7201 requires:

1. the existence of a tax deficiency;
2. an “affirmative act” constituting an attempt to evade or defeat the tax or its payment; and
3. willfulness.

The limitations period is six years. 26 U.S.C. § 6531(2). The government must prove at least one affirmative act within that period. See United States v. Butler, 297 F.3d 505, 511 (6th Cir. 2002).

The Supreme Court in Sansone v. United States, 380 U.S. 343 (1965), emphasized that what separates felony evasion (§ 7201) from the misdemeanor failure to file/pay (§ 7203) is the presence of an affirmative act—e.g., filing a false return or otherwise acting to mislead the IRS.

Other circuits have consistently treated the signing and filing of false returns or supporting documents as classic affirmative acts: Hoskins (10th Cir.), Yurek (10th Cir.), Mal (9th Cir.), Pollen (3d Cir.).

2. Allegations Against DiPietro

The second superseding indictment alleged multiple affirmative acts by DiPietro after June 23, 2016, including:

• incorrectly listing social security numbers or names on Christos’s wife’s 2015 and 2016 returns (Sept. 2016, March 2017);
• submitting misleading supporting documents for Christos’s 2014 return (around Sept. 2016); and
• causing Christos’s 2016 return to omit income from Skilled Shamrock.

Under Sansone and the other circuit cases, these are textbook affirmative acts: each is an active step that has the tendency to mislead the IRS as to the existence or amount of tax liabilities.

3. Rejection of the “No Power of Attorney” Theory

DiPietro advanced a novel theory: once he ceased to be Christos’s designated “power of attorney” in the IRS civil investigation (as of November 2015), he supposedly could not commit an “affirmative act” of evasion on Christos’s behalf. The panel rejected this argument on textual and functional grounds:

• Textual breadth of § 7201 – “in any manner.”
  Section 7201 punishes anyone who “willfully attempts in any manner to evade or defeat any tax . . . or the payment thereof.” The phrase in any manner is capacious and “undefined and unlimited” in scope (citing United States v. Hook, 781 F.2d 1166, 1169 (6th Cir. 1986)). Nothing in the text hints that an agent-principal relationship is required.
• Functional definition of an affirmative act.
  The Third Circuit’s definition in McGill was endorsed: an affirmative act is anything done to mislead the government or conceal funds to avoid payment of an admitted and accurate deficiency. Whether the actor is formally authorized as power of attorney is irrelevant—the question is whether the act makes IRS detection harder.
• Analogy to § 7206(2).
  Just as § 7206(2) (aiding and assisting in the preparation of a false return) does not require a formal preparer role (United States v. Crum, 529 F.2d 1380 (9th Cir. 1976)), § 7201 does not require a formal agency relationship. One can facilitate tax evasion by preparing or submitting false documents, regardless of formal designation.

By holding that “any means any, so no agent relationship is required,” the panel makes clear that accountants, advisors, or others who file or facilitate false returns or records—even after a formal IRS representation ends—may still commit affirmative acts for § 7201 purposes.

C. Jury Instructions and Reading the Indictment

DiPietro argued that the district judge erred by reading the list of overt acts for Count 1 (Skilled Shamrock conspiracy) as though they were established facts, without reiterating that these were mere allegations.

Under Sixth Circuit law (Smith, Maselli, Stapleton, Scales), a trial judge may read the indictment to the jury so long as:

• the jury is clearly instructed that the indictment is not evidence and does not raise any presumption of guilt, and
• the indictment is used solely to inform the jury of the charges.

Here, before reading the overt acts, the judge had already given the standard instructions multiple times:

• The indictment “is not any evidence at all of guilt,” does not even raise suspicion, and is merely the formal charging document.

The judge then said he would “read you the overt acts,” but did not again say he was reading from the indictment. DiPietro analogized this to:

• Sandals v. United States, 213 F. 569 (6th Cir. 1914): where the judge essentially told the jury that the business “did operate as a fraud” and that there was “no use for the jury to spend very much time” on that proposition, effectively directing a finding on a disputed element.
• United States v. El-Bey, 873 F.3d 1015 (7th Cir. 2017): where the judge’s explanatory comments blurred the line between the indictment’s allegations and factual conclusions about mail fraud.

The Sixth Circuit distinguished those cases: in Sandals and El-Bey, the judges went beyond the indictment’s language and expressly endorsed the prosecution’s theory of fraud. Here, by contrast, the judge simply read the overt acts as framed in the indictment and repeatedly emphasized elsewhere that the indictment was not evidence. That sufficed; there was no error under either abuse-of-discretion or plain-error standards.

D. Sentencing: Tax-Loss Calculations in Cash Businesses and Conspiracies

1. Guidelines Framework

For tax offenses, U.S.S.G. § 2T1.1 governs, with the base offense level determined by the “tax loss” figure cross-referenced in § 2T4.1. Critical principles include:

• “Reasonable estimate” standard: the court need not find an exact figure, only make a reasonable estimate of loss. § 2T1.1 cmt. n.1; Igboba, 964 F.3d at 508.
• All relevant conduct: All conduct violating tax laws that is part of the same course of conduct or common scheme or plan is included, unless “clearly unrelated.” § 2T1.1 cmt. n.2; Daniel, 956 F.2d at 544.
• Standard of proof: preponderance of the evidence. Riccardi, 989 F.3d at 481.

2. Government’s Four-Component Loss Calculation

The government argued that Christos’s total tax loss between 2012 and 2018 was $5,451,520, consisting of:

1. $849,012 – Unpaid income tax on gambling operations and personal gambling.
   - Skilled Shamrock: Detailed weekly audit spreadsheets (2009–2017) recorded machine-level profitability, cash wages, and distributions to owners, allowing a straightforward computation of Christos’s share of income. - Redemption: Because financial records were destroyed, the IRS assumed Redemption’s profitability mirrored Skilled Shamrock’s. Since Redemption had twice as many machines and testimony showed it was at least as profitable, this was a conservative estimate. Combined, unreported income (from both Christos’s professional gambling and business ownership) yielded $849,012 in unpaid tax.
2. $1,233,704 – Co-conspirators’ tax losses (Kachner and Dayton).
   As co-owners and participants in the same illegal businesses and tax-evasion scheme, their unreported income and unpaid taxes were deemed reasonably foreseeable to Christos. Under conspiracy and relevant-conduct principles (Lombardo), those losses are attributable to him.
3. $3,112,527 – Christos’s unpaid self-assessed taxes for 2012–2014.
   Christos filed returns for those years but never paid the assessed tax. With accruing interest and penalties, this unpaid liability grew to approximately $3.1 million by the relevant timeframe. Importantly, this figure did not include his earlier (2009–2010) civil tax debts.
4. $256,277 – Employment (payroll) tax losses for Skilled Shamrock.
   The business paid employees in cash 24/7 without withholding or remitting payroll taxes. Using employment records and reasonable assumptions about wages, the IRS estimated unpaid payroll tax liabilities over 2012–2018 at $256,277.

Adding these components yielded the $5,451,520 tax-loss figure used to set Christos’s and DiPietro’s base offense levels. For Guidelines purposes, both were treated as above the $3.5 million threshold.

3. Christos’s Challenges and the Court’s Responses

Christos raised three main objections:

1. Co-conspirator losses should not be attributed to him.
   He argued the government “abandoned” its request to attribute Kachner’s and Dayton’s losses to him. He seized on an apparent misstatement at sentencing where the prosecutor said, “He is not responsible for the tax loss from his co-conspirators,” before almost immediately clarifying that even without them, the loss remained above $3.5 million.

   The Sixth Circuit treated this as a verbal slip, not a substantive concession. The government’s position throughout was that co-conspirator losses were reasonably foreseeable and therefore properly included. The panel confirmed this approach accords with Sixth Circuit law on relevant conduct in conspiracies.

2. Redemption loss was too speculative.
   Christos argued it was improper to “import” Skilled Shamrock’s profitability to Redemption because Redemption kept no records.

   The court pointed to two critical facts:

   • Redemption was by all accounts at least as profitable as Skilled Shamrock (it had more machines and similar operations).
   • Defendants themselves destroyed Redemption’s financial records; the government’s extrapolation was conservative under the circumstances.
   On clear-error review, the use of extrapolation from a similar operation—especially when records were destroyed by the defendants—was “as accurate as it could be” and well within the zone of reasonable estimates contemplated by § 2T1.1.
3. Alleged double counting between the $849,012 and the $3.1 million.
   Christos claimed the gambling-income component overlapped with the self-assessed unpaid taxes.

   But the evidence showed:

   • The $849,012 represented tax associated with unreported income (professional gambling + business ownership, including shamrock/Redemption profits).
   • The $3.112 million represented unpaid taxes that Christos himself had self-assessed and reported for 2012–2014 but never paid, which grew with interest.

   Under § 2T1.1(c)(3) and United States v. May, 568 F.3d 597 (6th Cir. 2009), the tax loss is the tax “owed and did not pay,” and distinct sources of unpaid tax can be aggregated so long as they are not counting the same liability twice. The panel concluded there was no overlap: one bucket captured tax on undisclosed income; the other captured tax Christos admitted but refused to pay. Both harmed the Treasury and were properly aggregated.

The court emphasized that it would reverse only if left with a “definite and firm conviction” of error. Given the extensive records, testimony, and conservative assumptions, it found the $3.5+ million figure comfortably “within the realm of permissible computations.”

E. Rule 32(i)(3)(B) and the Duty to Make Findings

Rule 32(i)(3)(B) provides that, for any disputed portion of the PSR, the court must:

• “rule on the dispute” or
• determine that a ruling is unnecessary because it will not affect sentencing or will not be considered.

The Sixth Circuit insists on “literal compliance” with this requirement (White, 492 F.3d at 415) to ensure accuracy and a clear appellate record (Fry, Corrado, Solorio). However, unpreserved Rule 32 errors are reviewed for plain error, requiring a showing of prejudice.

1. Christos – Error, but No Plain Error

Christos plainly and repeatedly disputed the tax-loss figure at sentencing. The court initially adopted the PSR’s total offense level (which depended on the $3.5+ million loss) but did not revisit or explicitly resolve his specific loss objections. This, the panel held, violated Rule 32’s demand that the court “actually find facts” by a preponderance of the evidence when a material dispute is raised.

However, Christos did not object contemporaneously when the judge failed to address the tax-loss dispute in detail, and he answered “no” when asked the standard Bostic question about remaining objections. Thus, the issue was reviewed only for plain error.

On that standard, the court concluded that:

• The error (lack of explicit findings) was clear, but
• no prejudice was shown: the record “amply supported” the tax-loss estimates, analogously to Bradley, where a Rule 32 error was deemed harmless because the PSR’s conservative estimate was well supported by trial evidence.

Accordingly, although the decision reinforces the formal importance of Rule 32, it offers little practical relief to defendants who cannot show that more detailed findings would likely have altered the sentence.

2. DiPietro – Vague/Frivolous Objections Do Not Require Detailed Response

DiPietro filed PSR objections raising five technical points about the tax-loss computation (related to acquittals on specific years, which returns he did or did not prepare, and alleged duplication). But:

• He did not develop any of these points in his sentencing memorandum.
• At the hearing, he simply argued the overall loss figure was “speculative” and should be reduced by two levels, without tying that argument to the earlier PSR objections or explaining how they affected the bottom-line loss figure.

The district court responded in kind: “The loss computation is as accurate as it can be . . . and I think the loss computation is correct.” DiPietro did not object to this explanation or press for more detail.

On appeal, he invoked United States v. Wallace, 597 F.3d 794 (6th Cir. 2010), where the court remanded because the judge failed to address a specific, nonfrivolous disparity argument concerning codefendants’ sentences. The panel distinguished Wallace:

• In Wallace, the argument was clearly presented at sentencing and directly concerned the judge’s rationale.
• In DiPietro’s case, his PSR objections were either frivolous (e.g., denying responsibility for returns on which the jury convicted him) or too vague to require an express ruling, under Judge, Satterfield, and similar cases.

The panel noted that “arguments clearly without merit can, and for the sake of judicial economy should, be passed over in silence” (quoting Gale and Cunningham). Because DiPietro’s only real sentencing argument was generic speculation about the accuracy of the estimate, the court’s brief response sufficed.

F. The “Sophisticated Means” Enhancement

1. Legal Standard

U.S.S.G. § 2T1.1(b)(2) imposes a two-level enhancement “[i]f the offense involved sophisticated means.” The accompanying commentary defines:

• “Sophisticated means” as “especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense,” including but not limited to:
  • hiding assets or transactions through fictitious entities,
  • corporate shells, or
  • offshore financial accounts.

Sixth Circuit cases have applied this enhancement broadly:

• United States v. Paul, 57 F. App’x 597 (6th Cir. 2003): paying employees via mixed cash and checks from different businesses, structuring to avoid reporting, and failing to keep proper records supported the enhancement.
• United States v. Middleton, 246 F.3d 825 (6th Cir. 2001): failure to record transactions or maintain receipts for a tax-evasion scheme can contribute to sophistication.

2. Application to Christos’s Scheme

The panel catalogued an array of tactics that went far beyond “simple” under-reporting:

• Use of ALCAK Properties, nominally owned by his son, to:
  • purchase commercial property for a cigar bar with concealed $30,000 cash payments (reflected only in a reduced stated purchase price), and
  • take in a $70,000 “investment” from a friend, immediately repaying it in cash and documenting the net-zero transaction with a sham promissory note.
• Use of a land contract and an LLC (One Dunkeith) to keep title to his residence out of his name, frustrating IRS liens and valuation, while repaying his lawyer’s $27,000 advance in cash.
• Arranging sham employment with a company called Enterprise Internet Solutions to satisfy supervised release conditions that he have non-gambling employment; this was disguising his lack of legitimate work while laundering illegal cash through a fake job and fake promissory note to his lawyer.
• Keeping the trapping of ownership of gambling businesses out of his own name, using straw owners (Dayton, Helmick, Phillips) while continuing to run the operations and receive cash distributions.

Christos argued that, even if his gambling operations were complex, his tax evasion itself was not sophisticated. The court rejected this artificial separation: his unpaid taxes and false filings were part of a holistic scheme to conceal cash proceeds and assets from the IRS. Since the tax offenses were intertwined with the use of shell entities, land contracts, and sham investments, the enhancement applied.

The panel also resolved a procedural point under plain-error review: Christos’s bare statement at sentencing that “I don’t see it as a situation where it is a substantially sophisticated scheme” was deemed too vague to trigger a full Rule 32 finding obligation. As in Holt and Lang, a conclusory denial without specific factual dispute is insufficient to require detailed fact-finding.

G. Variances, Policy Disagreements, and the Guidelines’ “Gravitational Pull”

Christos argued the district court believed it could not vary downward based solely on policy disagreement with how harshly the Guidelines treat large monetary losses. He pointed to the judge’s remarks:

• acknowledging that Guidelines sentences for financial crimes can exceed those for street-level drug dealing or robbery, and
• stating that, absent a reason “not considered by the Sentencing Commission,” the court did not think it appropriate to vary “just because the Guidelines are so high.”

Under Gall and Kimbrough, a district court retains discretion to vary on policy grounds and is not bound by the Commission’s choices, as reaffirmed in Sixth Circuit cases like Thomas-Mathews and Hensley. However, the reviewing court presumes district judges know they can vary unless the record shows otherwise (Santillana, Douglas).

Here, the panel read the transcript as:

• the judge recognizing the “gravitational pull” of the Guidelines; but
• consciously deciding not to vary based on the seriousness of the scheme, the length of time it persisted, and the massive investigative resources it consumed, aggravated by Christos’s persistent dishonesty.

The court also:

• did depart downward on criminal-history grounds (moving Christos from Category IV to III), confirming it understood it could depart/variance; and
• considered the § 3553(a) factors and asked both sides to address them.

Thus, unlike in Thomas-Mathews, there was no “legally erroneous belief” that Congress or the Commission dictated the sentence. The judge exercised discretion but was simply unpersuaded that the Guidelines were too harsh for this case.

H. Restitution Interest and Rule 36 Corrections After Appeal

1. Statutory Presumption of Interest

18 U.S.C. § 3612(f)(1) provides that a defendant shall pay interest on any fine or restitution of more than $2,500, unless the court explicitly finds under § 3612(f)(3) that the defendant lacks the ability to pay interest and waives or limits it.

Here, no party raised the issue of interest at sentencing; no evidence was offered about DiPietro’s ability to pay; and the court made no waiver finding. Under cases like Bagdy (3d Cir.) and Rostan (11th Cir.), interest thus attaches “by operation of law” to such restitution orders.

2. Clerical Error and Rule 36

The original written judgment made an obvious drafting mistake: both checkboxes were marked—

• “The defendant must pay interest on restitution,” and
• “The interest requirement is waived.”

Shortly after sentencing, the district court issued an amended judgment removing the waiver box so that only “must pay interest” remained. But by then DiPietro had filed his notice of appeal, which ordinarily divests the district court of jurisdiction over the judgment (Holloway).

The panel characterized the inconsistency as a scrivener’s error suitable for correction under Federal Rule of Criminal Procedure 36, which allows correction of “clerical error[s] in a judgment” at any time, as long as the change does not substantively alter the sentence. Rule 36 covers:

• typos in a defendant’s name (Marmolejos),
• correction of supervised release length to match the oral pronouncement (Bates), and
• rectifying numerical errors in restitution amounts (Ervasti).

Because:

• interest was required by default under § 3612(f) absent a specific waiver finding;
• no such finding had been made; and
• no arguments about inability to pay were raised at sentencing;

the court reasoned that the only legally correct judgment is one requiring interest. Thus, the double-checkmark in the initial judgment was an error of “recitation, of the sort that a clerk might commit” (Carr, Ferguson).

Because the amended judgment was entered after the notice of appeal, the panel held the district court technically lacked jurisdiction to do so—but the error can and should be corrected on remand via Rule 36. The appellate court therefore:

• affirmed the sentence itself, and
• remanded for the limited purpose of correcting the clerical error concerning interest.

IV. Complex Concepts Simplified

1. “Affirmative Act” of Tax Evasion

It is not enough that someone owes tax and simply fails to pay or file (which is a misdemeanor). Felony evasion requires an affirmative act—something a person does to mislead the IRS, such as:

• filing a false return;
• creating fake documents or records;
• using nominees or shell entities to hide ownership or assets; or
• moving money through complex transactions meant to conceal the source or existence of funds.

In this case, preparing and filing false returns for Christos and his wife, and submitting misleading supporting documentation, were the key affirmative acts.

2. Statute of Limitations in Tax Evasion

For § 7201, the government has six years from the last affirmative act of evasion to bring charges. If a person files a false return or submits false documents within that six-year window—even if the underlying deficiency arose earlier—the limitations clock is reset by that later act.

3. Rule 32 Fact-Finding at Sentencing

When a defendant says, “The PSR is wrong about X, and that matters to my sentence,” the judge must either:

• decide who is right (and make findings on the record), or
• say, “Even if the defendant is right, I am not relying on this fact.”

But “bare denials” or vague statements without explanation (“I don’t think the tax loss is that high”) may not be enough to trigger this duty; defendants must clearly put a specific factual issue in dispute.

4. “Sophisticated Means” Enhancement

This is a sentencing bump for tax or fraud schemes that show more planning and concealment than a simple underreporting of income. Indicators include:

• Use of shell companies or trusts;
• Structuring transactions and records to hide the true source or owner of funds;
• Exploiting legal forms (like land contracts, promissory notes, nominal ownership) primarily to obstruct detection.

The enhancement looks at the overall pattern, not each single act in isolation.

5. Joint Trial vs. Severance

In federal court, when multiple people are accused of jointly committing crimes (especially conspiracies), they are usually tried together. To get a separate trial, a defendant must show serious prejudice: for example, that:

• the jury cannot fairly separate the evidence for each defendant;
• evidence admissible against a co-defendant (but not against him) will likely spill over unfairly; or
• he will lose access to crucial exculpatory testimony.

General concerns that a co-defendant looks worse or is more “morally culpable” are not enough.

6. Restitution Interest

For large restitution orders, the default rule is that interest is owed, like interest on a debt. Interest can only be waived if:

• the defendant shows inability to pay, and
• the judge explicitly decides to waive interest.

Silence on the issue means interest automatically applies.

V. Impact and Future Litigation

1. For Criminal Tax and Fraud Practitioners

• No “agency shield” for tax professionals.
  Accountants and lawyers cannot argue they are immunized from § 7201 liability merely because their formal power-of-attorney status ended. If they prepare or file misleading documents or returns, they can still commit affirmative acts of evasion.
• False returns as anchor points for limitations.
  Filing false returns (including for a spouse) or supporting documents years after a deficiency arises can reset the limitations clock. Prosecution timelines can be extended by later concealment acts.
• Extrapolation where records are destroyed.
  Where defendants destroy records, courts may endorse conservative extrapolations from comparable operations (e.g., a similar business with good records) to estimate tax loss. Defendants who caused the informational vacuum are poorly positioned to complain.
• Co-conspirator tax losses count.
  In tax conspiracies, one participant can be held responsible for co-conspirators’ unpaid taxes if those losses were reasonably foreseeable. This significantly ratchets up guideline exposure.

2. For Sentencing Advocacy

• Importance of specific, developed objections.
  Vague protests (“this loss is speculative” or “this was not sophisticated”) are unlikely to force detailed judicial findings or create reversible error. Counsel must:
  • tie objections to discrete factual issues,
  • proffer evidence or reasoning, and
  • press for rulings at sentencing and respond to the Bostic question.
• Rule 32 remains powerful—but mostly when preserved.
  The Sixth Circuit continues to insist on “literal compliance” with Rule 32, but plain-error review will limit relief unless a defendant can plausibly show the outcome would have differed.
• “Sophisticated means” is broad in cash-heavy operations.
  Where defendants use multiple entities, fake contracts, and cash flows to obscure income and evade IRS collection, the enhancement is likely to apply—even if some aspects of evasion (like simply not paying self-assessed taxes) are individually simple.
• Policy disagreements with the Guidelines must be clearly framed.
  Although courts can vary based on disagreements about loss tables or tax Guidelines, they are not required to do so. Defense counsel must clearly articulate why, in the particular case, the Guideline’s loss-driven severity misaligns with § 3553(a).

3. For Trial Judges

• Record clarity on tax loss and enhancements.
  Even when the evidence overwhelmingly supports the government’s estimates, district courts strengthen their sentences against appeal by:
  • expressly adopting the government’s methodology (or PSR) and briefly explaining why it is reasonable; and
  • making short but specific findings on disputed issues (e.g., co-conspirator foreseeability, extrapolation methods).
• Use of limiting instructions in joint trials.
  This opinion underscores that repeated, clear instructions that:
  • the indictment is not evidence, and
  • each defendant and count must be separately considered,
  are usually sufficient to avoid severance even in multi-defendant, multi-count conspiracies.
• Care with written judgments.
  Internal inconsistencies (like checking “interest waived” by mistake) may appear minor but can require remand. Meticulous review before entry reduces post-judgment correction and jurisdictional complications.

4. For Accountants, Lawyers, and “Consultants” in Cash Businesses

• Criminal exposure beyond preparer penalties.
  The opinion is a reminder that tax professionals can face felony evasion charges, not just § 7206(2) preparer counts, when they actively help clients conceal income or assets.
• Post-representation acts still risky.
  Even after a formal representation ends, assisting in false filings or providing misleading documents for prior years can generate new criminal exposure and extend limitations periods.

VI. Conclusion

United States v. Karasarides & DiPietro is a significant Sixth Circuit decision in the intersection of illegal gambling, tax evasion, and complex sentencing issues. While the case ultimately affirms all convictions and long prison terms, its precedential value lies in the doctrinal clarifications it provides.

Substantively, the court:

• reaffirmed the breadth of the affirmative-act requirement for § 7201, holding that any conduct that misleads the IRS—whether or not tied to a formal power-of-attorney status—can qualify;
• endorsed the use of conservative extrapolations and co-conspirator liability in tax-loss calculations where defendants have destroyed records or operated through opaque cash systems;
• confirmed that sophisticated multi-entity laundering arrangements justify the “sophisticated means” enhancement even when some acts of evasion are comparatively simple.

Procedurally, the decision:

• underscored the strong presumption in favor of joint trials, and the high bar for demonstrating spillover prejudice sufficient to compel severance;
• reiterated the duty of district courts under Rule 32 to resolve disputed sentencing facts, while also reinforcing that unpreserved or vague challenges often fail under plain-error review;
• clarified that restitution interest is the default under § 3612(f), and that inconsistencies in the written judgment regarding interest can be corrected as clerical errors under Rule 36, even after appeal, via remand.

For practitioners, the opinion is both a cautionary tale and a roadmap: it warns of the sweeping reach of federal tax and conspiracy law in cash-based enterprises, while also illustrating how detailed documentation, carefully framed objections, and clear sentencing records can shape appellate review. As illegal gambling, unlicensed gaming parlors, and cash-intensive operations continue to attract federal scrutiny, Karasarides will likely be cited in future cases involving tax evasion, joint trials, and complex Guideline calculations.