Running a legitimate business doesn’t insulate you from federal sentencing enhancements if that business becomes the vehicle for a crime. The Third Circuit made that clear earlier this month in United States v. Lyttle, No. 24-3207 (3d Cir. Mar. 16, 2026).
The Scheme
Rohan Lyttle ran an auto body shop in Queens — Ro-Cars Auto — along with related businesses in New York and Jamaica. He had help: his ex-wife, his former girlfriend, and his son. Together, they formed the operational backbone of an advance-fee lottery scam that defrauded at least eight elderly victims.
The scam worked like this: an unidentified person posing as “Andrew Goldberg,” the supposed former CEO of Publishers Clearing House, called elderly Americans and told them they’d won a prize. The catch was they had to pay fees and taxes first to collect their winnings. Victims mailed cash, wired money, and even purchased car parts and shipped them to Lyttle’s businesses in New York. The cash was then laundered through a network of bank accounts, ATMs, and cashier’s checks. Lyttle’s Jamaica operation resold the vehicles the scheme funded.
After a nine-day trial, Lyttle was convicted on all counts — conspiracy, mail fraud, wire fraud, transportation of fraudulently obtained goods, and money laundering conspiracy.
The Sentencing Issue
At sentencing, the district court applied a three-level enhancement to Lyttle’s offense level under Section 3B1.1(b) of the United States Sentencing Guidelines — the provision that increases a defendant’s sentencing range when he acted as a “manager or supervisor” of criminal activity involving five or more participants.
Lyttle pushed back. His argument was essentially: yes, I supervised the businesses, but I didn’t supervise the crime. “Goldberg” was the one running the scam. Lyttle was just the guy on the other end receiving packages.
The Third Circuit didn’t buy it.
What the Guidelines Require
Section 3B1.1 creates a tiered structure based on a defendant’s role. A four-level increase applies to “organizers” and “leaders.” A three-level increase — what Lyttle received — applies to “managers” and “supervisors.” A two-level increase applies to defendants who played a minor organizational role.
The Court had previously worked through the organizer/leader tier in United States v. Adair, 38 F.4th 341 (3d Cir. 2022), concluding that those terms describe someone with high-level directive power over a criminal enterprise. Lyttle deals with the tier below that: manager and supervisor. The Court confirmed that those terms describe a person with “some degree of control” over others in the offense — less than an organizer or leader, but meaningfully more than a rank-and-file participant.
The question, then, is whether that control must be specifically over the criminal activity, or whether supervision of the legitimate business wrapping around the crime is enough.
The Answer
The Third Circuit held that the relevant inquiry is control over the criminal activity, not just the business. But on the facts here, the distinction didn’t help Lyttle.
The evidence showed that Lyttle educated his co-defendants on the purpose of each business entity, delegated tasks to each of them, and structured their roles specifically to maximize cash flow from the fraud. He allowed Pitter to sign for incoming cash packages. He enabled both Pitter and Marshall to launder funds through the business accounts. That’s not incidental business supervision — that’s managing a money laundering operation.
The Court was careful to note the limits of its holding: a defendant doesn’t automatically receive the enhancement just because he supervised a legitimate business that was later connected to criminal conduct. The enhancement applies when the evidence shows he supervised the criminal conduct itself.
Here, it did.
The Takeaway
The lesson from Lyttle is that the manager/supervisor enhancement doesn’t require a defendant to have recruited participants, orchestrated the fraud from the top, or known every detail of the scheme. It requires evidence that he exercised some degree of control over the criminal activity of at least some of his co-participants.
When a defendant’s business is the mechanism for the crime — and when he’s directing the people who use that business to launder money or commit fraud — the enhancement is well within play, even if the ringleader is someone else entirely.