T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on a nd i s notpr e c e de nt * e xc e pta s pr ovi de d by 9th C i r . R . 36- 3. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T UN I T E D S T AT E S OF AME R I C A, P l ai nt i ff

- A pp el l ee , v. FRA N K H . H I G H TO W ER, D e f

e n d a n t - A p p e lla n t. N o. 09- 50630 D . C . N o. 2: 07 -c r- 00 13 2-G W -3 ME MOR AN DU M *

A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f o rth e C e n tr a l D is tr ic t o f C a lif o rn ia G e or ge H . W u, D i s tr i c tJ udge , P r e s i di ng A r gue d a nd S ubm i tt e d J une 6, 2012 P a s a d e n a , C a lif

o rn ia B efo re: B . F L E T C H E R , W A R D L A W , an d B Y B E E , C i rcu i tJu d g es. F r a n k H ig h to w e rw a s c o n v ic te d o f c o n s p ir a c y , m a il f

r a u d , a n d w ir e f

r a u d in c onne c t i on w i th a “ ba c k door ” a dve r t i s i ng s c he m e , a nd w a s s e nt e nc e d t o 51 m on ths’ i m pri sonm ent . A tse nt enci ng , the di stri ctcourti m po se d a 16 -l evel up w ar d adj ustm entbecause the t ot al am ou ntof l oss a ttri bu t ed t o the ent i re 

# FI LED JU N 21 2012 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALS2

com pany w as ov er$1 m i l l i on , and a 6-l evel up w ar d adj ustm entbecause the t ot al num be rof

vi c t i m s w a s ove r250. H i ght ow e rappe a l s , a r gui ng tha the s houl d be he l d l i abl e onl y f

orl os s e s a nd vi c t i m s tha the de a l tw i th di r e c t l y . W e ha ve ju r is d ic tio n u n d e r2 8 U .S .C . § 1 2 9 1 , a n d w e a f f ir m . H i gh t ow erar gu es thatthe di stri ctcourterre d i n attri bu t i ng t o h i m the l osse s and v i ct i m s of the ent i re conspi ra cy , ra ther than o nl y tho se for w hi ch he w as pers on al l y r es po nsi bl e. S peci fi ca l l y, H i gh t ow erar gu es thatthe di stri ctcourt ov er st at ed the sc op e of hi s a gree m entt o w ork w i th R A B P ub l i ca t i on s, Inc. ( “R A B ” ) . T he U ni t e d S t a t e s S e nt e nc i ng G ui de l i ne s ( “ U . S . S . G . ” ) pr ovi de tha t , i n the c a s e o f jo in tly u n d e r ta k e n c r im in a l a c tiv ity , a d e f e n d a n t is a c c o u n tab le f

o r“a ll r e a s o n ab ly f

o r e s e e ab le a c ts a n d o m is s io n s o f o th e r s in f

u r th e r a n c e o f

th e jo in tly unde r t a ke n c r i m i na l a c t i vi ty . ” U . S . S . G . § 1B 1. 3( a ) ( 1) ( B ) . T he r e l e va nt de t e r m i na t i on i s “ the s c ope of the c r i m i na l a c t i vi ty tha tthe pa r t i c ul a rde f e nda nt agre ed t o j oi nt l y und ert ake ( i . e. , the sc op e of the spec i fi c c on du ctand o bj ec t i ves em brac ed by the defendant ’ s a gree m ent ). ” I d . c m t . n . 2 . T o m a k e th i s f i n d i n g , we m a y l ook t o “ a ny e xpl i c i ta gr e e m e ntori m pl i c i ta gr e e m e ntf a i r l y i nf e rr e d f r om the cond uctof the defendantand o thers . ” I d.3

A l tho ug h H i gh t ow erw as a l ow -l evel part i ci pant , he w as partof an i nt er depend entsc hem e, thatre l i ed on coop er at i on betw ee n sal es peop l e a nd other e m p lo y e e s o f

R A B . Se e U

n ite d S ta te s v . B litz , 15 1 F . 3d 10 02 , 10 12 –1 3 (9t h C i r. 1998) . H ig h to w e rw a s p a id a c o m m is s io n b a s e d o n s u c c e s s f u l s a le s , a n d th u s d id nots ha r e i n the pr of

i t s de r i ve d f

r om othe rs a l e s m e n, buthi s s uc c e s s a tthe com pany w as depend enton the performance of others . A dd i t i on al l y, H i gh t ow er w o r k e d a n d p a r tic ip a te d in th e s c h e m e f o rap p r o x im a te ly th r e e y e a r s , k n o w in g it w a s f r a udul e ntf

r om the be gi nni ng. B ec ause H i gh t ow erw as m ore than j ustan i nd ependentem pl oyee w orki ng on hi s ow n, and i nst ea d w as partof an i nt ertw i ned s c h e m e , h e a v ily d e p e n d e n t o n o th e rR A B p e r s o n n e l, th e d is tr ic t c o u r t d id n o t e rrin fi n d i n g h i m acco u n t ab l e fo r th e en t i re am o u n to f l o ss an d n u m b er o f v i ct i m s. H i ght ow e rne xtc ont e nds tha tthe di s tr i c tc our te rr e d i n nots ubtr a c t i ng the sa les h e c laim s w er e leg it im ate f ro m th e to tal l o ss an d n u m b ero f v icti m s. “[I]n c a lc u la tin g in te n d e d lo s s , th e d is tr ic t c o u r t s h o u ld g iv e c r e d it f o ra n y le g itim a te se rvi ce s r endered t o the vi ct i m s. ” B litz , 15 1 F . 3d at10 12 . T here i s no evi dence, how e ve r , tha tthe di s tr i c tc our tc ons i de r e d the l e gi t i m a t e s a l e s i n the c a l c ul a t i on of lo s s . A d d itio n a lly , H ig h to w e rf a ile d to s h o w th a t th e s e p u rp o r te d ly le g itim a te s a l e s w oul d ha ve a ny e f f e c ton hi s G ui de l i ne s r a nge , a nd thus hi s s e nt e nc e . T he di stri ctcourtfoun d thatthe l oss w as ov er$1 m i l l i on , and t hatthere w er e m ore than4

2 5 0 v ic tim s . L o w e r in g th e lo s s b y tw o v ic tim s , a n d tw o le g itim a te s a le s , w o u ld n o t c h a n g e th e ap p lic ab ility o f th e e n h a n c e m e n ts . T h e r e f o r e , th e d is tr ic t c o u r t d id n o t p la in ly e rr . Se e U

ni t e d Stat e s v . Sant i ago , 466 F . 3d 801, 803 ( 9th C i r . 2006) ( s t a t i ng tha tw he n a pa r ty doe s notm a ke a s pe c i f i c obj e c t i on be l ow , w e r e vi e w f or pl ai n err or). H i ght ow e ra l s o c l a i m s tha tthe r e s t i tut i on or de rm us tbe va c a t e d a nd r e c a lc u la te d b e c a u s e th e d is tr ic t c o u r t’s G u id e lin e s lo s s c a lc u la tio n w a s in c o rr e c t. T he di s tr i c tc our tf

ound tha t“ [ t ] he de f

e nda ntw i l l be r e s pons i bl e f orpa y i ng re st i tut i on . I w i l l l i stthe re st i tut i on am ou ntas the re st i tut i on of the ov er al l , bu tthat is o b v io u s ly a f

ig u r e th a t h a s to b e p a id b y a ll o f th e d e f e n d a n ts in v o lv e d in th is c a s e . . . . ” T he di s tr i c tc our tde r i ve d the f i gur e of ove r$2 m i l l i on f

r om c a lc u la tio n s a n d v ic tim s s p e c if ic a lly id e n tif

ie d in th e p r e - s e n te n c e r e p o r t. B ecau se w e f i nd tha tthe di s tr i c tc our tdi d note rri n the appl i c a t i on of the s e nt e nc i ng gui de l i ne s a nd the c a l c ul a t i on of l os s , w e r e

j e c tH i ght ow e r ’ s r e que s tf orthe r e s titu tio n o r d e rto b e v a c a te d a n d r e c a lc u la te d . AF F I R ME D.