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D ock e t 99-5251

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. e du/thir dc ir c uit_2000/28Filed February 10, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 99-5251

UNITED STATES OF AMERICA

v.

DANIEL DULIGA

Appellant

Appeal from the United States District Court For the District of New Jersey

D.C. No.: 96-cr-326 District Judge: Honorable Nicholas H. Politan

Before: GREENBERG, ROTH, and ROSENN, Circuit Judges.

Submitted Under Third Circuit LAR 34.1(a) January 25, 2000

(Filed February 10, 2000)

OPINION OF THE COURT

ROSENN, Circuit Judge.

This is an appeal from a judgment of conviction and
sentence in the United States District Court for th e District of New Jersey in connection with telemarketing oper ations. The defendant, who was convicted on a multi-count indictment charging conspiracy to commit mail and w ire frauds, contends that in imposing sentence, the dis trict

court incorrectly determined his base level offense under the United States Sentencing Guidelines by attribut ing to him the entire amount of loss generated by the cons piracy rather than the amount of loss he generated through his own telemarketing efforts.

The district court had subject matter jurisdiction pursuant to 18 U.S.C. S 3231. We have appellate jurisdiction pursuant to 18 U.S.C. S 3742 and will affirm.

I.A. The Telemarketing Scam

In December of 1990, Rita Holz, her husband Julius Schurkman, and a third person, Adie Lipton, set up All-Win Financial Corporation in Del Rey Beach, Florida. Th e company began operations in January of 1991. It the n placed advertisements in newspapers across the nati on advertising personal loans and debt consolidation. No advertisements, however, were placed locally. All-W in
wished to avoid face-to-face confrontations with di sgruntled
clients.

The advertisements offered loans of up to $10,000, even to those with acute credit problems, and included a toll-free telephone number. When a prospective applicant call ed the toll-free number, a telemarketer would solicit basi c background information from the applicant, includin g name, social security number, and any credit proble ms. The telemarketer would then ask the applicant to ca ll back in approximately one hour so the loan could be proc essed. When the applicant called back, the telemarketer wo uld congratulate the applicant and tell him that he had qualified for the loan. Of course, no processing oc curred during that interval, and the time lapse between ca lls was merely pretextual.

After "approving" the applicant on the telephone, t he telemarketer would then give the applicant an expre ss mail or Federal Express number and tell the applicant to use the number to send All-Win its $199 application fee. On ce AllWin received the fee, it forwarded the applicant's name,

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along with a $25 fee, to North American Acceptance Exchange ("NAAE"). NAAE was not a real lender, but was a "denial mill." NAAE helped create the illusion that the loan process was legitimate by sending loan application papers to the applicants. The loan application was sent to the applicants to string them along and add to the illu sion of legitimacy. Upon completing the application and mai ling it to NAAE, or another denial mill used by All-Win, th e applicant would ultimately receive a rejection lett er.

In June of 1991, All-Win experienced "legal problem s" and decided to relocate to Cherry Hill, New Jersey. Holz undertook the majority of the relocation effort. Sh e rented space, obtained phone lines, and set up a new compa ny under the name A-1. By July of 1991, the telemarket ing scam was up and running again and continued to util ize the same procedures as All-Win, except that the app lication fee increased to $249. A-1 remained in business unt il November of 1991. By that time, A-1 and All-Win haddefrauded their "clients" of approximately $1.2 mil lion.

B. The Defendant's Role in the Telemarketing Scam

The defendant, Daniel Duliga, joined the All-Win telemarketing scam in January of 1991, shortly afte r the company commenced operations. All-Win generally employed eight to ten telemarketers at any one time , and Duliga, like the other telemarketers, worked in a s ingle, large room using a script provided by All-Win. A da ily tally was kept of the application fees received, and all of the telemarketers, including Duliga, were aware that Al l-Win was not engaged in a legitimate business endeavor. The telemarketers often spoke freely of the fraudulent nature of their employment and joked about the gullible peopl e from whom they received application fees. Duliga even ad mitted to a Postal Inspector that within the first week of his employment at All-Win he realized that All-Win was not processing any loans and that the individuals reque sting
the loans never received them.

Despite his awareness of All-Win's illegitimacy, Du liga developed into one of All-Win's top telemarketers a nd the company frequently called upon him to train newly

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recruited telemarketers. For his efforts, he receiv ed both a salary and commissions. In addition, when All-Win d ecided to relocate to New Jersey in June of 1991, Holz and the other principals requested that Duliga join them in setting up the new business. Holz testified that she consid ered the talents of Duliga, as well as those of two other ex perienced telemarketers, crucial to a successful relocation. She even sought their opinions when determining where to rel ocate
the business.

Duliga agreed to join the telemarketing operation i n Cherry Hill, New Jersey and continued to work as a telemarketer for the newly established A-1 until No vember 1991. During his employment with the two companies, Duliga earned over $42,000 in salary and commission s and generated application fees in excess of $150,000.

C. Procedural History

On June 4, 1996, a federal grand jury sitting in Ne w Jersey returned a twenty-six count indictment again st Duliga and several other individuals. Count I charg ed Duliga and the others with conspiracy to commit mai l and wire fraud, contrary to 18 U.S.C. SS 1341 and 1343, in violation of 18 U.S.C. S 371. Counts II through VI charged
him and the others with mail fraud in violation of 18 U.S.C.SS 1341 and 1342. Counts VII through XV charged him and
the others with wire fraud in violation of 18 U.S.C . SS 1343 and 1342. Prior to trial, the United States Attorne y dismissed several counts of the indictment and proc eeded against Duliga only on counts I through VIII and co unts XI through XV. The jury found Duliga guilty on all of these remaining counts.

On March 25, 1999, the court imposed sentence in accordance with the presentence report recommendati on. Pursuant to U.S.S.G. S2F1.1(a), Duliga received a b ase offense level of six. Because the loss generated by the telemarketing scam was more than $800,000 but less than $1.5 million, Duliga received an eleven level incre ase in his base offense level pursuant to U.S.S.G. S 2F1.1(b)( 1)(L). He
also received an additional two level increase unde r U.S.S.G. S 2F1.1(b)(2) because the offense involved more

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than minimal planning. Duliga's final offense level was 19 and his criminal history category was II, which res ulted in an imprisonment range of 33 to 41 months. The distr ict court sentenced him to 33 months' imprisonment, thr ee years' supervised release, and a special assessment of $650.

II.

On appeal, Duliga contends that the district court incorrectly determined his base offense level by at tributing to him the entire amount of loss generated by the conspiracy (approximately $1.2 million) rather than the amount of loss he generated through his own telemar keting efforts (approximately $155,000). "When reviewing t he sentencing decisions of the district courts, `[w]e exercise plenary review over legal questions about the meani ng of the sentencing guidelines, but apply the deferentia l clearly
erroneous standard to factual determinations underl ying their application.' " See United States v. Fuentes, 954 F.2d 151, 152-53 (3d Cir. 1992) (quoting United States v . Inigo, 925 F.2d 641, 658 (3d Cir. 1991)).

III.

Under U.S.S.G. S 2F1.1(a), a defendant convicted of a crime of fraud receives a base offense level of six . This offense level, however, is subject to increase depe nding on the amount of loss generated by the fraud. See U.S. S.G. S 2F1.1(b); see also United States v. Boatner, 99 F .3d 831, 835 (3d Cir. 1996). In calculating the amount of lo ss generated by the fraud, a sentencing court obviousl y may include amounts directly attributable to the fraudu lentconduct of the defendant. See U.S.S.G. S 1B1.3(a)(1 )(A). In

addition, where, as here, the crime of fraud for wh ich the defendant has been convicted involves jointly under taken criminal activity, the sentencing court may also at tribute to the defendant amounts of loss resulting from the "reasonably foreseeable acts and omissions of other s in furtherance of the jointly undertaken criminal acti vity." See U.S.S.G. 1B1.3(a)(1)(B); see also Boatner, 99 F.3d at 835. However, to do so, the loss resulting from the acts or

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omissions of others must be: (1) in furtherance of the jointly undertaken activity; (2) within the scope o f the defendant's agreement; and (3) reasonably foreseeab le in connection with the criminal activity the defendant agreed to undertake. See United States v. Evans, 155 F.3d 245, 254 (3d Cir. 1998); United States v. Price, 13 F.3d 711, 732 (3d Cir. 1994); United States v. Collado, 975 F.2d 985, 995 (3d Cir. 1992).1

Applying this test, we believe that the district co urt correctly included the entire amount of the loss ge nerated by the telemarketing scam when determining Duliga's

offense level.2

First, all of the losses generated by All-Win and A -1 were in furtherance of the jointly undertaken activity. The goal of these two companies, and those who worked for them, was to produce as many fraudulent application fees as p ossible. All of the telemarketers used the same script to ac complish this goal, and all of the telemarketers were aware of the companies' fraudulent nature.

Second, all of the losses generated by All-Win and A-1 were within the scope of Duliga's agreement. He lea rned during his first week of work at All-Win that All-W in was

___________________________________________________ ______________

1. As a preliminary matter, Duliga suggests that th e Second Circuit's decision in United States v. Studley, 47 F.3d 569 ( 2d. Cir. 1995)(holding that the Guidelines require that a district court m ake a particularized finding as to the scope of the criminal activity ag reed upon by a defendant and outlining the factors relevant to suc h a finding), should guide our disposition of this case. However, we thi nk the resolution of this case is governed by this Court's decision in C ollado and therefore
adhere to the wisdom of that case.

2. We note that the district court did not necessar ily undertake a searching and individualized inquiry before attribu ting the entire amount of loss generated by All-Win and A-1 to Duliga. See Collado, 975 F.2d at 995. However, because we are convinced that the att ribution of that loss is firmly supported by the record, we see no reason to remand this caseonly to have the district court reach the same sent encing decision. See

id. at 997 ("The district court made no findings re garding the propriety of attributing to one brother sales made by the oth er, but after reviewing the transcripts of the telephone calls cited in the presentence investigation report, we are convinced that this in stance of accomplice attribution was justified.").

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not a legitimate venture, yet he continued to defra ud individuals into believing that their application f ees would
materialize into loans. He also received a substant ial salary from the companies, not just commissions based on h is own application fees. Therefore, he possessed a sta ke in the success of the companies as a whole. Moreover, alth ough Duliga characterizes himself as merely an employee that agreed to telemarket for the principals, the eviden ce plainly contradicts this characterization. Duliga was one o f the top three telemarketers for the two companies, and when , the All-Win principals decided to relocate to New Jerse y as A-1, they considered Duliga's assistance in the relocati on crucial. Duliga clearly understood the illegal obje ctives of All-Win and A-1 and agreed to use his best efforts to further those objectives.

Third, all of the losses generated by All-Win and A -1 were reasonably foreseeable in connection with the crimi nal activity Duliga agreed to undertake. All of the telemarketers, including Duliga, worked side by sid e in one large room, and the telemarketers frequently joked about the naive applicants from whom they received applic ation fees. Moreover, a daily tally was kept of the appli cation fees received. Thus, far from being unforeseeable, the l osses generated by All-Win and A-1 were within Duliga's p lain
view.

In sum, the evidence readily demonstrates that Duli ga was a key player in the telemarketing scam from its inception to its conclusion and that the losses gen erated by that scam were reasonably foreseeable in connection with the scope of the criminal activity Duliga agreed to jointly undertake. He was more than aware of the scope of t he operation and of its fraudulent character. Therefor e, the district court committed no error in attributing th em to Duliga.

IV.

Accordingly, the judgment of conviction and sentenc e of
the district court will be affirmed.

7A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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