“Tracing by Spreadsheet”: United States v. Dermen and the Tenth Circuit’s Clarification of Summary-Witness Testimony, Forfeiture Standards, and Post-Apprendi Sentencing Proof

1. Introduction

United States v. Dermen, No. 23-4074 (10th Cir. July 9 2025), is a sprawling, 147-page opinion that affirms the convictions, 40-year sentence, and $442.6 million restitution and forfeiture package imposed on Lev Aslan Dermen for a billion-dollar bio-fuel tax-credit fraud and laundering scheme. Beyond its fact-intensive narrative, the decision delivers three doctrinal clarifications that will echo through white-collar and complex-fraud litigation:

It re-confirms—post-Apprendi, Alleyne, and Southern Union—that district judges may make Sentencing-Guideline loss findings by a preponderance of the evidence without jury participation.
It declares that IRS or other financial investigators can testify as Rule 701 summary witnesses—even when tracing hundreds of transactions—so long as they employ basic arithmetic and case-specific knowledge rather than specialized “pattern-and-practice” expertise.
It endorses the continued vitality of Libretti v. United States by holding that criminal forfeiture remains a sentencing matter proven by a preponderance—even when combined with in personam money judgments and “general orders” targeting property overseas.

The opinion simultaneously rejects a panoply of trial-error claims (juror misconduct, COVID-19 prejudice, Brady, hearsay in forfeiture) and reiterates the Tenth Circuit’s deferential posture toward district-court management of long, multi-defendant trials.

2. Background and Procedural Posture

2.1 The Bio-fuel Tax Credit Fraud

Between 2012 and 2018 Dermen, Jacob and Isaiah Kingston (Washakie Renewable Energy) and others filed over $1 billion in false biodiesel-credit claims with the IRS and the EPA’s Renewable-Fuel-Standard program. Treasury mailed $500 million in checks; roughly $164 million was deposited in a single month. Fraud proceeds were routed through more than 55 bank accounts, foreign entities in Turkey/Luxembourg, and luxury assets (homes, super-cars, a yacht).

2.2 Charges, Trial, and Conviction

Counts 1–2: Conspiracy to commit mail fraud & conspiracy to launder.
Counts 3–10: Eight substantive laundering transactions (18 U.S.C. §§ 1956(a)(1)(B)(i), 1957).

After a seven-week jury trial concluding 16 March 2020—the first business day of the COVID-19 lockdown—Dermen was convicted on all counts and later sentenced to 40 years. Extensive post-trial motions, a 5-day forfeiture bench trial, and a $181.8 million money judgment followed.

3. Summary of the Judgment

The Tenth Circuit (Holmes, C.J., joined by Seymour & Ebel, JJ.) rejected all seven appellate issues:

Juror misconduct / extraneous information: no prejudice; model Remmer hearing; effective curative instruction.
COVID-19 mistrial motion: reasonable precautions; no manifest necessity.
Brady: withheld material (Kazi phone, Kazi civil suit, LA BEST files, Sargsyan plea) immaterial.
Improper expert testimony: IRS Agent Washburn’s “tracing-by-spreadsheet” was Rule 701 summary testimony.
Insufficiency (Counts 3-7): ample evidence that loan/repayment transactions used fraud proceeds and concealed their source.
Sentencing: Guideline loss found by preponderance is proper under Zar/Robertson.
Forfeiture/money judgment: preponderance standard, hearsay admissible, hybrid forfeiture orders permissible post-Honeycutt.

4. Detailed Analysis

4.1 Precedents Cited and Their Influence

Remmer v. United States (1954) & Smith v. Phillips (1982): Ground rules for mid-trial juror-contact inquiries. Dermen illustrates a textbook “two-stage” voir-dire protocol.
Apprendi, Alleyne, Southern Union: Court re-affirms that those Sixth-Amendment holdings do not alter Guideline-loss or forfeiture determinations (Zar, Robertson control).
James River Ins. (10th Cir. 2011): Governs dividing line between Rule 701 lay and Rule 702 expert testimony; accepted here by analogizing “tracing” to the “simple average” in Bryant, not the complex model in LifeWise.
Honeycutt v. United States (2017): Limits joint-and-several forfeiture under §853. Dermen reads Honeycutt narrowly, following United States v. Channon, and finds no plain error in a hybrid money-judgment model.
Libretti v. United States (1995): Still good law—criminal forfeiture is a sentencing question; Rules of Evidence do not apply.

4.2 Legal Reasoning

4.2.1 Summary Testimony vs. Expert Opinion

The core evidentiary fight was whether IRS SA Washburn’s “certainty” that funds were fraud proceeds transformed him into an un-noticed expert. The panel reasoned:

He merely added/subtracted deposits across 55 accounts—an “elementary” task within Rule 701.
He drew conclusions from case-specific knowledge, not generalized expertise about laundering practices (distinguishing Starks / “pattern” testimony).
Under Bryant such ledger arithmetic is admissible lay opinion; volume alone does not require Rule 702.

4.2.2 Loss Amount & Forfeiture Burden of Proof

Re-invoking Zar, the panel found no constitutional infirmity in a judge finding >$550 million loss by preponderance. For forfeiture, the court leaned on Rule 32.2(b)(1)(B), holding:

Hearsay is admissible if “relevant & reliable.”
General orders are proper when assets are overseas and unidentified at sentencing.
Hybrid forfeiture (specific assets + personal money judgment) remains authorized post-Honeycutt.

4.2.3 Harmlessness of Juror Issues and COVID-19

Applying both “slight-possibility” and “presumption-of-prejudice” tests for extraneous information, the panel gave “great weight” to the district judge’s Remmer inquiry and found harmlessness beyond a reasonable doubt. The quick verdict during early pandemic days raised no manifest necessity for mistrial.

4.3 Impact on Future Litigation

Investigators as Summarizers. The decision emboldens prosecutors to use case agents as Rule 701 summary witnesses to present voluminous tracing without formal expert designation—so long as they eschew “pattern” opinions.
Forfeiture Practice. Confirms that hybrid forfeiture money judgments remain viable in the Tenth Circuit; defense will need to object contemporaneously and develop better plain-error showings post-Honeycutt.
Post-Apprendi Sentencing. Reinforces that Guideline findings (loss, quantity, sophisticated means) stay within judge-found, preponderance territory.
COVID-19 Trial Management. Provides blueprint for upholding verdicts rendered during the pandemic if district courts documented safety measures and juror wellbeing.

5. Complex Concepts Simplified

Summary Witness vs. Expert Witness: A summary witness condenses documents already in evidence; an expert introduces independent technical opinion. IRS Agent Washburn merely added and subtracted deposits—no special laundering theory required.
General Order of Forfeiture: A placeholder order describing property “in general terms” when the government cannot yet locate or value all assets; later amended under Rule 32.2(e).
Hybrid Forfeiture: Combination of (a) forfeiting identified assets and (b) entering an in personam money judgment for any remaining proceeds.
BIFO (Bad-In-First-Out): Tracing method presuming illicit funds are withdrawn before clean funds, useful when accounts commingle proceeds and legitimate income.
Manifest Necessity: The high bar (from Perez) required to declare mistrial—applies equally to COVID-19 disruptions.

6. Conclusion

United States v. Dermen is less about Dermen himself than about the Tenth Circuit’s housekeeping of several post-2000 doctrinal questions. By reaffirming a preponderance standard for both Guideline loss and criminal forfeiture, sanctioning spreadsheet-based “tracing” as lay testimony, and upholding hybrid money-judgment forfeiture orders, the court supplies prosecutors with a robust blueprint for high-value fraud cases. Defense counsel should note that, after Dermen, objections must be laser-specific at trial and sentencing; general Rule 29 motions or broad hearsay objections will not preserve nuanced appellate theories. More broadly, the decision underscores appellate deference to meticulous district-court management: when judges document Remmer hearings, pandemic precautions, and Rule 32.2 findings, the Tenth Circuit will rarely intervene.