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. e du/thir dc ir c uit_1998/115Filed May 19, 1998

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 97-5409

UNITED STATES OF AMERICA

v.

BARDUL TAFTSIOU, Appellant

No. 97-5473

UNITED STATES OF AMERICA

v.

JAMES TAFTSIOU,

aka James Taft, aka Gezim Taftsiou

James Taftsiou, Appellant

On Appeal from the United States District Court for the District of New Jersey

(D.C. Crim. Nos. 95-cr-00681-1, 95-cr-00681-6)

Submitted Pursuant to Third Circuit LAR 34.1(a) May 18, 1998

Before: SLOVITER and GREENBERG, Circuit Judges , and POLLAK, District Judge*

___________________________________________________ ______________

* Hon. Louis H. Pollak, United States District Cour t for the Eastern District of Pennsylvania, sitting by designation.(Filed May 19, 1998)

Jerome A. Ballarotto

Mel Sachs

Charles O. Lederman Trenton, N.J. 08610

Attorneys for Appellants

Faith S. Hochberg United States Attorney Kevin McNulty George S. Leone Office of United States Attorney Newark, N.J. 08101

Attorneys for Appellee

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Bardul Taftsiou was convicted in the United States District Court for the District of New Jersey of po ssessing, delivering, passing and conspiring to pass approxim ately $1 million in counterfeit Federal Reserve Notes. At the same trial, his son James Taftsiou was convicted of deal ing and conspiring to pass approximately $1 million in coun terfeit Federal Reserve Notes. On appeal, both defendants challenge their convictions and sentences, raising the same issues. For the reasons that follow, we will affirm

.

I.

In late 1994, Bardul Taftsiou and his brother Kadri discussed with Mostafa Mahamoud the possibility of obtaining counterfeit United States currency, but u ltimately Bardul decided to print his own counterfeit notes w ith the help of his 33-year old son James. In March and Apr il of 1995, James Taftsiou, using a false identity, purch ased an extremely high capability computer for $7,300, a to p-of-theline color printer for $8,000-9,000 and a very larg e,

2accurate commercial paper cutter. With this equipme nt,

father and son began printing double-sided full-col or counterfeit $100 notes. Several months later, they also began printing counterfeit $50 notes. Both denomina tions of counterfeit bills were printed with magnetic ink so that they would be accepted by slot machine bill validat ors in Atlantic City, New Jersey and Las Vegas, Nevada.1

After the printing operations were underway, Bardul gave Mahamoud a bag of counterfeit notes and suggested t hat he recruit a group of people to go to Atlantic City over Memorial Day weekend to use the notes in casino slo t machines. Once in Atlantic City, Mahamoud and the o thers would insert the notes in various slot machines, pl ay the machine for a short period of time or not at all, h it the "cash out" button and exchange the tokens paid out by the machine for genuine currency. Mahamoud would then bring the genuine currency to Bardul and Kadri Taft siou in exchange for more counterfeit notes.

On May 28, 1995, during the Memorial Day weekend trip, one of the men in Mahamoud's group successful ly passed three of the counterfeit $100 bills to a pro stitute, who informed the police when she realized the bills were counterfeit. Thereafter, both genuine and counterfe it notes were found in Mahamoud's room and on his person, so me of which matched the bills given to the prostitute.

An additional $55,000 of the Taftsious' counterfeit notes was passed in slot machines in various Atlantic Cit y casinos over the Memorial Day weekend. Secret Servi ce agents testified that they could trace the notes to the Taftsiou group because they had never before encoun tered notes exactly like those recovered from Mahamoud an d the others during the Memorial Day weekend. The notes exhibited several distinct patterns that did not ap pear

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1. Bill validators allow a casino's customers to pl ay slot machines using paper currency. Once a customer inserts a bill into the validator, the validator scans the bill for the presence of magnet ic ink as used in genuine United States currency. If the bill is acce pted, the customer can either play the machine or "cash out" and receive c asino tokens

redeemable for cash.

3anywhere in the Secret Service's nationwide databas e of

recovered counterfeit currency.

In the summer of 1995, James Taftsiou began passing the counterfeit notes in Las Vegas. On the July 4th weekend, James and his friend Bujar Musa were captu red on casino surveillance videotapes passing the count erfeit notes in various slot machines. By July 13, 1995, t he Secret Service in Las Vegas had received $79,000 of the
Taftsious' counterfeit notes.

From June 1 through November 17, 1995, Secret Servi ce agents apprehended fourteen individuals for passing the Taftsious' counterfeit currency in both Atlantic Ci ty and Las Vegas and collected over $325,000 of the Taftsious' notes. Those arrested included relatives, friends, friends of relatives and individuals randomly recruited by Jam es Taftsiou to pass the counterfeit notes in the casin os.

Mahamoud began cooperating with the investigating
authorities in October of 1995. Bardul and some of his family members were arrested in November 1995 at Tropworld Casino in Atlantic City where they passed
counterfeit bills into slot machines while Bardul c ollected the casino tokens from them and exchanged them for genuine currency. The agents recovered $9,000 in bo th counterfeit and genuine currency from the arrestees , their car, and the slot machines they had been playing. J ames Taftsiou was subsequently arrested on February 6, 1 996.

Count One of the five-count superseding indictment charged Bardul, James, Nazmije Taftsiou (Bardul's w ife), Julie Hasimi (Bardul's daughter) and Ilim Asimi (Ju lie Hasimi's brother-in-law) with conspiring with each other and seventeen other named co-conspirators plus othe rs known and unknown to buy, sell, exchange, transfer, deliver, pass, utter conceal and keep in their poss ession approximately $1 million in counterfeit $100 and $5 0
Federal Reserve Notes in violation of 18 U.S.C. SS 371, 472 and 473.2 Bardul and Nazmije Taftsiou, Julie Hasimi and Ilim Asimi were charged in Count Two with passing

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2. Arzija Taftsiou, Bardul's mother, was indicted w ith the others, but the charges against her were dismissed.

4approximately 17 counterfeit $50 notes with intent to

defraud in violation of 18 U.S.C. SS 472 and 2, and in Count Three with possessing and concealing approxim ately 90 counterfeit $50 notes in violation of 18 U.S.C. SS 472 and 2. Count Four charged James Taftsiou with deali ng in approximately 60 counterfeited $50 notes in violati on of 18 U.S.C. SS 473 and 2. Count Five charged Bardul Taft siou with dealing in approximately 17 counterfeit $50 no tes, also in violation of 18 U.S.C. SS 473 and 2. Approximate ly twenty other individuals were charged for related o ffenses in separate indictments.

Following a seven-week trial, Bardul and James Taft siou were found guilty on all counts with which they had been charged. Nazmije Taftsiou and Julie Hasimi were acq uitted.

Bardul was then sentenced to four 51-month terms of imprisonment to be served concurrently, and James w as sentenced to two concurrent 54-month terms. Both we re ordered to pay $25,000 in restitution, but were giv en no fine. These consolidated appeals followed.

II.

A.

Appellants argue first that the district court erre d in denying their motion for acquittal which they filed at the close of the government's case-in-chief. Defendants do not contest the relevant facts but argue that there was insufficient evidence to support a finding that the y intended to pass the counterfeit notes to any person or that the notes appeared sufficiently genuine to be considere d "counterfeit" within the meaning of 18 U.S.C. SS 47 2 and 473. At the end of the trial, the district court de nied the motion, finding that the "bills were two-sided. The y were both $100's and $50's. They bore a close resemblanc e in terms of the images on both sides to a genuine bill , and they also bore a close resemblance to the color and colors found both on the backs and the fronts of genuine b ills." App. at 143.

Our review is plenary and, in exercising that revie w, we must interpret the evidence in the light most favor able to

5the government as the verdict winner. See United St ates v.

Rieger, 942 F.2d 230, 232 (3d Cir. 1991).

Section 472 of Title 18 of the United States Code provides, in relevant part, that "[w]hoever, with i ntent to defraud, passes . . . or keeps in possession or con ceals any . . . counterfeited . . . obligation . . . of the U nited States, shall be fined under this title or imprisoned not m ore than fifteen years, or both." 18 U.S.C. S 472. Section 4 73 provides in relevant part that "[w]hoever buys, sel ls, exchanges . . . any . . . counterfeited . . . oblig ation . . . of the United States, with the intent that the same be passed . . . as true and genuine, shall be fined under thi s title or imprisoned not more than ten years, or both." 18 U. S.C. S 473. Neither statute on its face requires that a defendant have intended to pass the counterfeit notes to a pe rson or that the notes closely resemble genuine currency.

Over fifty years ago, however, this court held in U nited States v. Lustig, 159 F.2d 798 (3d Cir. 1947), rev' d in part on other grounds, 338 U.S. 74 (1949), that

the proper test to be applied is whether the fraudulent obligation bears such a likeness or resembla nce to any of the genuine obligations or securities iss ued under the authority of the United States as is cal culated to deceive an honest, sensible and unsuspecting person of ordinary observation and care when dealing w ith a person supposed to be upright and honest.

Id. at 802.

Only those counterfeit notes that are sufficiently similar to genuine currency so as to meet this definition m ay be
considered "counterfeit." Id. Since we issued Lusti g, our reasoning and the language we employed there have b een adopted by virtually every court that has addressed the issue. See, e.g., United States v. Gomes, 969 F.2d 1290 (1st Cir. 1992); United States v. Ross, 844 F.2d 187 (4t h Cir. 1988); United States v. Cantwell, 806 F.2d 1463 (10 th Cir. 1986); United States v. Johnson, 434 F.2d 827 (9th Cir. 1970).

Defendants argue that because the paper notes they circulated were not of high enough quality to pass hand-to-

6hand, they could not be characterized as "counterfe it." They

rely almost exclusively on the opinion of the Unite d States Court of Appeals for the Fourth Circuit in Ross, 84 4 F.2d 187, where the $1 bill defendants were charged with counterfeiting was a one-sided photocopied black an d white reproduction on plain white paper. The defendants h ad attempted to insert the photocopy into a change mac hine at
a car wash. Their convictions under 18 U.S.C. SS 47 1 and 472 were reversed on the ground that the reproducti on was not sufficiently similar to genuine notes. Accordin g to the court, the photocopies were "patently fake,""obviou sly false and bogus," and could not be mistaken for genuine f rom "one hundred feet away." Id. at 189-90. In addition , the court pointed out that there had been no testimony that the reproduction had actually deceived anyone. Id. at 1 90.

The evidence in this case differs from that in Ross

. Bardul's daughter Julie Hasimi testified that she b elieved the counterfeit notes were genuine, and there was e vidence
in the record that three of the bills had been succ essfully passed to at least one person. Supp. App. at 86. A Secret Service expert in the analysis of counterfeit curre ncy testified that the Taftsious' bills were "average" and that she was aware of worse quality bills having been succes sfully passed in other cases. Supp. App. at 246A.

In addition to the testimony adduced at trial, phys ical examples of the Taftsious' counterfeit notes were a dmitted into evidence. See Addendum to Appellee's Br.; Gov' t. Exh. 183, 220. Therefore, presumably each juror could to uch
and examine the notes and come to his or her own conclusion regarding the reasonableness of their be ing accepted by an honest, unsuspecting person. Thus, i t was not improper for the district court to have describ ed the
bills on the record and to have commented that "the evidence speaks for itself." App. at 143. In doing so, the judge did not, as appellants claim, improperly weig h the evidence. The judge merely acknowledged that the ju rors were entitled to examine and consider the Taftsious ' notes in reaching their conclusion, based on the totality of the evidence, that the bills were sufficiently similar to genuine currency to be "counterfeit" within the meaning of 18

U.S.C. SS 472 and 473.

7Finally, we reject appellants' suggestion that the

counterfeiting statutes at issue require them to ha ve passed or intended to pass their notes to persons, as oppo sed to machines. Our decision in Lustig with its emphasis on whether the bills could deceive "an honest, sensibl e and unsuspecting person" was written in a time when mac hines were not regularly used to process money. There see ms little reason why false bills that are successfully processed through machines, whether slot machines, vending machines or others, should not be treated the same for purposes of the counterfeiting statutes as false bi lls that were passed to a person. The intent to defraud is t he same,
as is the effect. The statutes themselves do not co ntain language requiring passing to a person. A slight clarification by Congress to expressly require trea tment of counterfeit bills passed through machines equal to that of counterfeit bills passed to persons would eliminate any question of a different interpretation. However, we need not
resolve this issue because the record before us is adequate for us to affirm the district court's denial of app ellants' Rule 29 motion for judgment of acquittal even under the Lustig

standard.

B.

Defendants next argue that the district court erred in refusing to charge a misdemeanor violation of 18 U. S.C.
S 491 as a lesser included offense of the counterfe iting charges. Following some period of uncertainty as to the interpretation of Rule 31(c) of the Federal Rules o f Criminal Procedure with respect to when a jury may convict a defendant "of an offense necessarily included in th e offense charged," there are now some clear guidelines. A di strict court is required to charge an offense as a lesser included of a greater offense when requested if "the element s of the

lesser offense are a subset of the elements of the greater offense." United States v. Mosley, 126 F.3d 200, 20 3 (3d Cir. 1997). On the other hand, "[w]here the lesser offense requires an element not required for the greater of fense, no instruction is to be given under Rule 31(c)." Schmu ck v. United States, 489 U.S. 705, 716 (1989). "This stan dard involves a textual comparison, looking solely to th e

8elements of the two offenses; inferences arising fr om the

evidence and similarities as to the interests serve d by the statutes are not relevant." Mosley, 126 F.3d at 203 -04 (citing Schmuck, 489 U.S. at 720).

In the case at bar, a most cursory review of the re levant statutory language reveals that the lesser offense of S 491 requires elements not required by SS 472 and 473.3 Namely,

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3. The full text of S 472 is as follows:

Whoever, with intent to defraud, passes, utt ers, publishes, or sells, or attempts to pass, utter, publish, or sell , or with like intent brings into the United States or keeps in possessio n or conceals any falsely made, forged, counterfeited, or altered obli gation or other security of the United States, shall be fined under this title or imprisoned

not more than fifteen years, or both.

18 U.S.C. S 472.

Section 473 provides in full:

Whoever buys, sells, exchanges, transfers, r eceives, or delivers

any false, forged, counterfeited, or altered obl igation or other security of the United States, with the intent that the same be passed, published, or used as true and genuine, shal l befined under this title or imprisoned not more than ten years, or both.

18 U.S.C. S 473.

The relevant subsections of the misdemeanor statute that the appellants contend the district court should have c harged as a lesser
included offense are as follows:

(a) Whoever, being 18 years of age or over, not la wfully authorized, makes, issues, or passes any coi n, card, token, or
device in metal, or its compounds, intended to be u sed as money, or whoever, being 18 years of age or over, with intent to defraud, makes, utters, inserts, or uses any card, to ken, slug, disk, device, paper, or other thing similar in size and sh ape to any of the

lawful coins or other currency of the United States or any coin or othercurrency not legal tender in the United Stat es, to procure anything

of value, or the use or enjoyment of any pro perty or service from

any automatic merchandise vending machine, posta ge-stamp machine, turnstile, fare box, coinbox telephone, park ing meter or other

lawful receptacle, depository, or contrivance desig ned to receive or to be operated by lawful coins or other currency o f the United States, shall be fined under this title, or imprison ed not more than one year, or both.

9S 491 requires that a fraudulent card, slug or pape r be

used or intended to be used in a vending machine, s tamp machine, turnstile, fare box, or other "contrivance designed to receive or to be operated by lawful coins or oth er currency of the United States." 18 U.S.C. S 491. Se ctions 472 and 473 have no such requirement.

Thus, if one were to pass counterfeit notes to a hu man being, the perpetrator could be convicted underS 47 2, but would not be guilty of having violated S 491. Likew ise, one who buys or sells counterfeit notes could be convic ted under S 472, but would not necessarily be guilty of having violated S 491. The mere coincidence that, in this case, defendants' conduct may have simultaneously violate d SS 472, 473, and 491 does not affect the Rule 31(c) analysis. See Schmuck, 489 U.S. at 716-17 (the "comparison is appropriately conducted by reference to the statutory elements of the offenses in question, and not . . . by reference to conduct proved at trial. . . .")."[ L]ooking solely to the elements of the two offenses," Mosley , 126 F.3d

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(b) Whoever manufactures, sells, offers, or advert ises for sale,

or exposes or keeps with intent to furnish or s ell any token, slug, disk, device, paper, or other thing similar in siz e and shape to any of

the lawful coins or other currency of the United States, or any token, disk, paper, or other device issued or autho rized in connection
with rationing or food and fiber distribution by any agency of the
United States, with knowledge or reason to believe that such tokens, slugs, disks, devices, papers, or other things are intended to be used unlawfully or fraudulently to procure anythi ng of value, or the use or enjoyment of any property or service from any automatic merchandise vending machine, postage-stamp m achine, turnstile, fare box, coin-box telephone, parking meter, or other lawful receptacle, depository, or contrivance desig ned to receive or to be operated by lawful coins or other currency o f the United States

shall be fined under this title or imprisoned not more than one year, or

both.

Nothing contained in this section shall crea te immunity from criminal prosecution under the laws of any S tate, Commonwealth of Puerto Rico, territory, possession, or the D istrict of Columbia.

18 U.S.C. S 491.10at 203, S 491 is not a lesser included offense of S S 472 and

473.

Accordingly, we will affirm the district court's de nial of the Taftsious' Rule 31(c) motion to charge 18 U.S.C .S 491 as a lesser included offense of the counterfeiting violations of which they were convicted.

C.

Finally, the Taftsious challenge their sentences on two different grounds. First, they argue that the distr ict court erred in enhancing their sentences by 11 levels pur suant to U.S.S.G. SS 2B5.1(b)(1) on the ground that the "amo unt of loss" was allegedly unsubstantiated by the evidence

. Second, they contend that the 11-level enhancement was improper in light of the poor quality of the notes.

Under the United States Sentencing Guidelines, a
violation of 18 U.S.C. SS 472 and 473 carries with it a base offense level of 9. U.S.S.G. S 2B5.1(a). "If the fa ce value of the counterfeit items exceeded $2,000," the court s hould increase the offense level using the table in S 2F1 .1. U.S.S.G. S 2B5.1(b)(1). That table provides for an increase
of 11 levels where the value of the counterfeit ite ms is between $800,000 and $1.5 million. U.S.S.G. S 2F1.1(b)(1)(L).

In this case, the Probation Office quantified the f ace value
of the counterfeit notes attributable to these defe ndants at $1.2 million. At sentencing, the district court fou nd by a preponderance of the evidence that the amount in is sue for purposes of S 2F1.1 was between $800,000 and $1.5 million. Accordingly, following SS 2B5.1 and 2 F1.1, the court increased the Taftsious' offense level by 11 levels.

We review the district court's factual findings for clear error and may reverse those findings only where the y are "completely devoid of a credible evidentiary basis or bear[ ] no rational relationship to the supporting data." U nited States v. Haut, 107 F.3d 213, 218 (3d Cir. 1997) (q uoting American Home Prod. Corp. v. Barr Labs., Inc., 834 F.2d 368, 370-71 (3d Cir. 1987)).

11At trial, Secret Service Agent Brian Donovan testif ied that

approximately $210,000 in counterfeit notes was rec overed directly from the defendants and their co-conspirat ors and in casino machines which they were playing when fou nd. Lorelei Pagano, a Secret Service Agent expert in th e analysis of counterfeit currency, testified that vi rtually all of the $1.2 million in counterfeit notes, including th e $210,000 identified by Agent Donovan, had a "common origin" and were made from a "common source." Supp. App. at 234. Susan Fortunato, another agent expert in th e analysis of counterfeit currency, testified that al l of the notes comprising the approximately $1.2 million in the possession of the Secret Service had been printed u sing the same brand of computer equipment purchased by James
Taftsiou.

In an attempt to counter this evidence, appellants challenge Agent Pagano's analysis on the ground tha t she actually examined only a handful of the notes at is sue. However, Agent Pagano testified in detail regarding the analysis she employed in identifying the $1.2 milli on in counterfeit notes as being of common origin. Her te stimony was sufficient to support a finding that all $1.2 m illion originated from a common source. In turn, other evi dence in the record, including the testimony of Agents Fo rtunato
and Donovan as well as that of James Taftsiou and s everal of his co-conspirators, was sufficient to support a finding
that the source was the Taftsious.

Moreover, appellants' general assertion that "only a fraction of the $1.2 million charged was directly l inked to this case and any related cases" does not demonstra te clear error. Given the district court's finding that the face value of the notes at issue was between $800,000 and $1.5 million, the Taftsious would have to show that Agent Pagano's calculations were off by more than $400,00 0-- something they have not attempted to do -- before t hey could succeed in proving reversible error. See U.S. S.G. S 2F1.1, Appl. Note 8 ("For the purpose of subsecti on (b)(1), the loss need not be determined with precision. The court need only make a reasonable estimate of the loss, g iven the available information.").

12Defendants next challenge the $1.2 million lossfigu re on

the ground that "this is the age of technology" and argue they should not "be held accountable for such an am algam of printed material while the various components ar e certainly available to millions of people within th e ether of the Internet." Appellants' Br. at 27-28. They cite nothing in the record to suggest that copies of their counterf eit bills were available on the Internet or that any of the n otes at issue were in fact obtained by anyone from that sou rce. Such wild speculation is inadequate to demonstrate clear error on the part of the district court.

The Taftsious seek some assistance from application note 4 to U.S.S.G. S 2B5.1 which provides, in full, that "[s]ubsection (b)(2) [of S 2B5.1] does not apply to persons who merely photocopy notes or otherwise produce ite ms that are so obviously counterfeit that they are unl ikely to be accepted even if subjected to only minimal scrutiny ." They contend that theirs are examples of the "so obvious ly counterfeit" notes to which the application note is addressed. However, note 4 is limited by its terms to enhancements under subsection (b)(2) of S 2B5.1 whi le the district court in the case at bar proceeded under s ubsection (b)(1). Nonetheless, appellants argue that the "sam e sort of limiting analysis should have been applied to the enhancement under S 2B5.1(b)(1)." Appellants' Br. a t 29.

The Sentencing Commission has expressly and unambiguously limited the reach of note 4 to subsec tion (b)(2), and we are not at liberty to extend its app lication to other subsections by judicial fiat alone. According ly, we find no error in the district court's finding that the f ace value of the Taftsious' counterfeit currency was between $80 0,000 and $1.5 million and that appellants' offense level should be increased by 11 levels pursuant to U.S.S.G. SS 2B5.1(b)(1) and 2F1.1(b)(1)(L).

III.

For the reasons stated above, we will affirm the judgments of conviction and sentence entered by the
district court.

13A True Copy:

Teste:

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

14