Monday, February 3rd, 2014

Court Affirms Fraud and Identity Theft Convictions and Sentences Over Claims of Insufficient Evidence and Sentencing Error


In this case, a jury convicted two defendants (Johnson and Jones) after trial for multiple counts of bank fraud and aggravated identity theft, as well as conspiracy to commit bank fraud.  A third defendant (Williams) pleaded guilty to one count of each of these offenses, entered into a cooperation agreement, and testified against Johnson and Jones.  The district court imposed sentences of 264 and 240 months’ imprisonment for Johnson and Jones respectively, and 109 months’ custody for Williams.  Jones challenged the sufficiency of the evidence against him at trial.  All three defendants challenged their sentences as procedurally and substantively unreasonable.  The Court denied all claims.

In his sufficiency of the evidence claim, Jones argued that his mere presence did not make him a member of the conspiracy and that the government’s witnesses were not credible based upon their entering into cooperation agreements.  As to the former, the Court disagreed after and cited the testimony of five “cashers” who were recruited to help carry out the scheme, which entailed stealing checkbooks and identities from locked cars, impersonation of those individuals whose identities were stolen, and fraudulently cashing checks against bank accounts belonging to those same individuals.  The “cashers” testified that they were recruited by Jones, who also facilitated their participation.  According to testimony, Jones rented a car for at least one of the “cashers” to drive while cashing checks.  Jones also followed and spoke via cell phone to this “casher” throughout the thefts.  Williams also testified about Jones’s involvement in the conspiracy, including his committing the car burglaries, obtaining the stolen identities, confirming with banks that accounts had enough money to cover the cashed checks, and recruiting women to act as “cashers.”  According to the Court, “plentiful evidence” existed to prove the charges at trial.  Moreover, the credibility of witnesses in light of any cooperation agreements was a question for the jury, which is assumed to have been resolved against Jones.  There mere fact of such cooperation agreements is insufficient to warrant vacating the conviction.

All three defendants argued that the district court erred factually in calculating the intended loss amount of $4.17 million, which they claimed exceeded the amount documented at trial.  Relying upon United States v. Uddin, 551 F.3d 176, 180 (2d Cir. 2009), the Court explained that “[a] district court may make a reasonable estimate by extrapolating the average amount of loss from known data and applying that average to transactions where the exact amount of loss is unknown.”  The district court reasonably estimated the loss and permissibly adopted the probation office’s calculations, which extrapolated from trial testimony the assumption that the scheme involved three days of work per week from September 2007 and May 2010, that the average theft was $2,000 per bank, and that the defendants visited five banks per day.

The Court also affirmed application of various Guideline enhancements against Jones and Johnson and the procedural reasonableness of their sentences.  It affirmed a two-level enhancement for the use of “sophisticated means” pursuant to the U.S.S.G. § 2B1.1(b)(10) after assessing the defendants’ scheme in the “aggregate” rather by its piecemeal activities.  Based upon checks and identity documents recovered during the government’s investigation it affirmed the enhancement pursuant to U.S.S.G. § 2B1.1(b)(2)(B) for fifty or more victims.  It affirmed a three-level role enhancement pursuant to § 3B1.1(b) for Jones given the evidence of his participation in the conspiracy and the number of “cashers” involved.

Finally, the Court declined to hold that any of the sentences were substantively unreasonable.  None of them “shocks the conscience” given the length and nature of the scheme.  The Court also rejected arguments that the “Guidelines calculation involved multiple ‘overlapping’ enhancements,” which produced an inflated total offense level.  Though the Court has vacated and remanded sentences based upon the “cumulative effect” of enhancements present to a degree not considered by the Sentencing Commission, nothing in the record indicated that the district court misapprehended the scope of its departure authority in this regard.  Absent such evidence, the claim was not appealable.

One very noteworthy portion of the Court’s decision comes at the end of this “summary” order.  Williams challenged the district court’s refusal to recommend her participation in the BOP’s RDAP program.  Her challenge failed, which does not bode well for clients in need of drug treatment while held in BOP custody.  According to the Court, because this “requested recommendation would merely be a non-binding recommendation to the [BOP], the district court’s refusal is not appealable.”  Despite this holding and past cases in this vein, defense attorneys should make sure that the PSR adequately memorializes their client’s history of drug addiction so that their RDAP placement request have some basis in fact even in the absence of a judicial recommendation for treatment.


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