Opinion ID: 683208
Heading Depth: 2
Heading Rank: 2

Heading: Account

Text: 13 On appeal, Defendant argues that no account was involved because the ESNs broadcast by his invention did not correspond to accounts of real customers. The government responds that the statute was not meant to be so narrowly construed. The statute, unfortunately, does not define account. The McNutt court looked to the dictionary and came up with a definition: a formal record of debits and credits. 908 F.2d at 563 (quoting Random House Dictionary of the English Language 13 (2d ed. 1987)). We feel that definition does not really capture the meaning of the word as used in the statute. After all, it seems unlikely that Congress was worried about the literal numbers on a ledger; instead, the purpose of the statute is to deal with the abuse of new technologies that increasingly allow individuals and businesses access to goods and services without immediate payment by cash or familiar, paper instruments. When the statute refers to account access, it evidently means access to the privileges permitted by virtue of the maintenance of an account. An alternative dictionary definition provides a better starting point for our purposes. [A] formal business arrangement providing for regular dealings or services (as banking, advertisement, or store credit) and involving the maintenance of an account. Webster's Ninth New Collegiate Dictionary 50 (1984). See also Black's Law Dictionary 18 (6th ed. 1990) (A detailed statement of the mutual demands in the nature of debit and credit between parties, arising out of contracts or some fiduciary relation.). In other words, an account is a contractual relationship that makes possible the provision of goods, services, or money based on payment, or the expectation of payment, at some later point in time, as described by the entry of credits and debits in a formal record. 14 The district court's holding turns on the idea that no account was accessed because the fabricated ESNs did not correspond to any particular customer's account for cellular service. Two other circuits, however, have decided that Sec. 1029 reaches access to unassigned accounts. In United States v. Brewer, 835 F.2d 550 (5th Cir.1987), the Fifth Circuit held that unassigned but functioning long distance access codes, discovered by a trial-and-error process, were access device[s] within the meaning of Sec. 1029. The court observed that the legislative history of the statute indicated that Congress intended that the definition be broad enough to encompass technological advances. 835 F.2d at 553. The Fifth Circuit was apparently unconcerned that accounts to which the defendants charged calls did not result in any customer being billed. United States v. Taylor, 945 F.2d 1050 (8th Cir.1991), involved a defendant who had discovered a method for determining valid, but unassigned, American Express card numbers. He was convicted of use of an unauthorized access device. The Eighth Circuit held that [t]he method used here falls within section 1029. The unauthorized use of an account number covering a valid, but unassigned account, constitutes an access device by which the fraud was perpetrated. 945 F.2d at 1051. Once again, the fact that the credit card company had no recourse against actual customers was not a bar to application of the statute. 15 We agree with those cases that actual or potential recourse by the provider of the goods or services against the party for whose benefit the account is maintained is not a necessary element of account access under Sec. 1029. It matters only that the user of the access device be able to obtain goods or services from which he would otherwise be excluded. 16 As for the claim that no actual account was implicated by defendant's activities, we need not worry about whether or not the ESNs broadcast by the tumbling phones correspond to valid or assigned customer accounts (or whether any such condition is imposed by the statute) because we find that there unquestionably was a valid, preexisting account between the local and distant carriers. Contra Brady, 13 F.3d at 339 (dismissing accounts between carriers as no more than a list of unmatched telephone calls, which are not billable). The statute nowhere implies that the only account protected against improper access is one maintained by an end consumer. In this case, services were provided by the local carrier to the users of the tumbling phones with the expectation of repayment by the distant carrier. That account was invoked by the MIN. The ever-changing ESN played the role of a password to go along with the MIN, and is therefore a component of the access device. The local carrier received and relied upon those numbers in providing the service, and did so because of the expectation that it would receive payment for those services upon settlement of the account with the distant carrier. Whatever the status of accounts of individual customers, the tumbling phones were intended, and used, fraudulently to access the benefits of the account between the local and distant carriers. 17 McNutt is distinguishable on this point. The code numbers used to construct the descramblers were not represented to the broadcasters in an attempt to obtain services on account. Instead, the signal was openly broadcast, and anyone could receive it. In deciding to provide the signal, the broadcaster never relied on any representation of the existence of an account. In effect, it was not the signal that was sold; instead, the descramblers were rented to make that signal useable. In the case of cellular carriers, on the other hand, the sale of air time is the primary good sold; cellular carriers frequently have nothing to do with the production or sale of the phones themselves. Contrary to Defendant's arguments, the ESN and MIN are not just part of an after-the-fact billing device; they are part of a system designed to permit access only by those so entitled because of an account. 18 The fact that the cloning of descramblers is prohibited by a separate statutory scheme is also indicative of the differences involved. The Electronic Communications Privacy Act prohibits the manufacture, possession, or sale of devices primarily useful for the purpose of the surreptitious interception of wire, oral, or electronic communications, including cloned satellite television descramblers. 18 U.S.C. Secs. 2512(1); see United States v. Lande, 968 F.2d 907, 909-911 (9th Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 1299, 122 L.Ed.2d 689 (1993). Defendant's activities were more than just surreptitious interception of cellular phone signals. A call on a tumbling phone includes the representation of a falsified MIN and ESN to the carrier in an attempt to induce the carrier to connect the call to the desired number and to broadcast the desired signals. Such a transmission constitutes an attempt to defraud the cellular carrier, and intent to defraud is an element, along with the involvement of an access device, of any violation of 18 U.S.C. Sec. 1029. We see no reason why the construction and sale of tumbling phones should not fall within the proscriptions of Sec. 1029. 19