Opinion ID: 2977670
Heading Depth: 3
Heading Rank: 3

Heading: Salem

Text: Salem challenges, for the first time on appeal, four components of the advisory Guidelines calculation that resulted in an offense level of 34. He argues that the district court committed plain 21 United States v. Abdelsalam, 05-4063 error in using a base offense level of seven, computing the amount of loss, and in determining the total number of victims and that Salem was an organizer or leader of the money laundering scheme.
Salem argues that the district court plainly erred in using a base offense level of seven, rather than six. In this argument he is correct. Salem first argues that the use of an offense level of six in the plea agreement should prevent the district court from using a base offense level of seven. To be sure, the plea agreement used a base offense level of six, not seven. By the terms of the plea agreement, however, these calculations were binding on neither the district court nor probation, and both could calculate different base offense levels.3 Salem also argues that the base offense level should be six, rather than seven, on the merits. The money laundering count is brought under 18 U.S.C. § 1956(h), which is sentenced under U.S.S.G. § 2S1.1. When calculating the base offense level for a count of money laundering, the court must determine the underlying offense from which the laundered funds were derived and whether the defendant committed the underlying offense. The underlying offense here is receipt of stolen property in violation of 18 U.S.C. § 2315. See U.S.S.G. § 2S1.1(a)(1). Appendix A to the Sentencing Guidelines specifies that a sentence for money laundering with an underlying offense of 3 The plea agreement stated, “The defendant understands that the Probation Department will conduct an advisory pre-sentence investigation and will recommend to the Court a sentencing guideline range. The defendant understands that the Probation Department’s recommendations are not binding on the Court and the terms of this Plea Agreement are not binding upon the Court or Probation Department.” 22 United States v. Abdelsalam, 05-4063 receipt of stolen property is calculated under U.S.S.G. § 2B1.1. Pursuant to U.S.S.G. § 2B1.1(a)(1), the appropriate base offense level for money laundering is seven “if (A) the defendant was convicted of an offense referenced to this guideline; and (B) that offense of conviction has a statutory maximum term of imprisonment of 20 years or more.” Otherwise, the applicable base offense level is six. U.S.S.G. § 2B1.1(a)(2). Thus, the dispute concerns whether money laundering is “referenced to this guideline.” The commentary explains the meaning of “referenced to this guideline.” It states, in relevant part, “For purposes of subsection (a)(1), an offense is ‘referenced to this guideline’ if (i) this guideline is the applicable Chapter Two guideline determined under the provisions of § 1B1.2 (Applicable Guidelines) for the offense of conviction . . .” U.S.S.G. § 2B1.1, application notes 2(A). According to Appendix A of the Sentencing Guidelines, 18 U.S.C. § 2315, receipt of stolen property, is an offense referenced to this guideline. The base offense level is six because the offense of conviction, although it has a maximum term of twenty years, is not “referenced to” § 2B1.1. Thus, § 2B1.1(a)(2) would apply. Salem was convicted of money laundering, which is an offense referenced to § 2S1.1, and not (or only indirectly) to § 2B1.1. If indirectly referenced offenses of conviction were included in § 2B1.1(a)(1)(A), then subsection (A) would be surplusage, without independent meaning. Thus, the district court committed error that was plain. Because the district court used the wrong base offense level in computing Salem’s sentence, the error affected substantial rights and the fairness of the sentencing hearing. Furthermore, at oral argument, the government conceded that the base offense level should be six, rather than seven. We reverse Salem’s sentence and remand for resentencing using a base offense level of six, rather than seven. 23 United States v. Abdelsalam, 05-4063
Salem challenges the district court’s finding on the amount of loss as clearly erroneous, arguing the loss figures presented at the evidentiary hearing were inflated and not supported by sufficient evidence. As previously noted, see page 7 supra, the district court held an evidentiary hearing regarding sentencing issues in Salem’s case and found that the amount of loss was between $1,000,000.00 and $2,500,000.00 and enhanced the sentence by 16 points for this amount of loss. At the hearing, the government presented two different methods for calculating the loss. First, it calculated the fair market retail value of products sold to the conspiracy as $1,078,123.83. Secondly, it examined five bank accounts that were part of the organization and concluded the total loss was $2,633,802.50. Salem did not offer any evidence. We review the district court’s loss calculation under the Sentencing Guidelines for clear error. United States v. Mickens, 453 F.3d 668, 670 (6th Cir. 2006). The government was required to prove the loss amount by a “preponderance of the evidence.” U.S.S.G. § 6A1.3 comment. The offense conduct on which the amount could be based included (A) all acts and omissions committed, aided, abetted, counseled, commanded, induced, procured, or willfully caused by the defendant; and (B) in the case of a jointly undertaken criminal activity (a criminal plan, scheme, endeavor, or enterprise undertaken by the defendant in concert with others, whether or not charged as a conspiracy), all reasonably foreseeable acts and omissions of others in furtherance of the jointly undertaken criminal activity. U.S.S.G. § 1B1.3(a)(1)(A), (B). “‘Loss’ means the value of the property taken, damaged, or destroyed. Ordinarily, when property is taken or destroyed the loss is the fair market value of the particular property at issue.” U.S.S.G. § 2B1.1 comment 2; see also United States v. Moore, 225 24 United States v. Abdelsalam, 05-4063 F.3d 637, 642 (6th Cir. 2000). The comments further explain, “For the purposes of subsection (b)(1), the loss need not be determined with precision. The court need only make a reasonable estimate of the loss, given the available information. This estimate, for example, may be based upon the approximate number of victims and the average loss to each victim, or on more general factors such as the scope and duration of the offense.” Id. § 2B1.1 comment 3. “In challenging the court's loss calculation, [a defendant] must carry the heavy burden of persuading this Court that the evaluation of the loss was not only inaccurate, but outside the realm of permissible calculations.” United States v. Hamilton, 263 F.3d 645, 654 (6th Cir. 2001). This court has created a methodology to determine loss. Moore, 225 F.3d at 642. “First, we determine whether a market value for the stolen property is readily ascertainable; second, if a market value is ascertainable, we determine whether that figure corresponds with the greater figure between the harm suffered by the victim and the gain realized by the defendant.” Id. “Moreover, ‘the price a willing buyer would pay a willing seller at the time and place the property was stolen or at any time during the receipt or concealment of stolen property’ is the customary test for determining market value.” Id. (citing United States v. Warshawsky, 20 F.3d 204, 213 (6th Cir. 1994)). The government’s two methods of calculation utilize this approach, and the district court made a reasonable estimate of loss. Salem attacks the loss calculations, arguing that the government’s two methods of calculation were both flawed and that the government relied on calculations involving retail value when it should have relied, at least in part, upon calculations using wholesale value. Salem is correct that the record does not explain whether the property seized came from retail or wholesale locations. 25 United States v. Abdelsalam, 05-4063 Salem’s attack on the intricacies of the calculations fails, however, because the loss calculation need not be precise and can be a reasonable estimate given the available information. See U.S.S.G. § 2B1.1 comment 3. The district court’s loss calculation was reasonable and based upon the evidence presented at the hearing. The court did not commit error, clear or otherwise, in calculating the loss.
Salem argues the district court erred in applying a four-level enhancement for between 50 and 250 victims. He argues that insufficient evidence of the number of victims was presented. Barnhart testified that Salem purchased purported stolen property on 49 occasions from undercover agents and that these purchases had a retail value of $343,000.00. He also testified that there were a total of 288 undercover transactions from Salem’s co-conspirators that had a retail value of about $618,000.00. He speculated that there were “hundreds if not thousands” of total victims. Based upon this evidence, the district court did not clearly err in estimating there were between 50 and 250 victims. See United States v. Walton, 908 F.2d 1289, 1301 (6th Cir. 1990).
The district court enhanced the sentence by four levels because Salem was an organizer or leader of the money laundering scheme, a finding that Salem challenges. Salem argues the four-level enhancement pursuant to U.S.S.G. § 3B1.1 is not warranted because the district court did not make a finding that the criminal activity involved five or more persons and there was insufficient evidence that Salem was an organizer or leader. At an evidentiary hearing, the testimony of Awwad Oweida, 26 United States v. Abdelsalam, 05-4063 a co-defendant, indicated that Salem was his boss in the conspiracy. Furthermore, another codefendant, Fadi Mardini, testified that Salem controlled the organization. Agent Barnhart testified Salem was the “boss” in the conspiracy, received the largest profits, and controlled the key decisions. Salem recruited multiple persons to join the organization. The conspiracy resulted in the indictment of 19 other persons. Given this evidence, the district court correctly determined that Salem was an organizer or leader of the money laundering scheme involving five or more persons. C. The Forfeiture and Money Judgments Imposed Upon Defendant Salem This court reviews the district court’s interpretation of federal forfeiture laws de novo. United States v. Jones, 502 F.3d 388, 391 (6th Cir. 2007). The government has the burden to prove forfeiture by a preponderance of the evidence. Id. “Findings of fact are reviewed for clear error. The issue of whether those facts are sufficient to constitute a proper criminal forfeiture is reviewed de novo.” Id. (citing United States v. O’Dell, 247 F.3d 655, 679 (6th Cir. 2001)). Salem presents several arguments as to why the forfeiture money judgments in the amounts of $2,633,802.50 and $36,046.30 are not reasonable. He argues (1) the evidence was insufficient to establish he possessed assets sufficient to trigger the statutory “substitute assets” provisions of forfeiture laws, (2) the $2,633,802.50 money judgment is clearly erroneous, and (3) the district erred by failing to rule whether the money seized from Salem’s residence should be criminally forfeited and failed to order the return of certain jewelry as the parties had agreed. Salem argues that the evidence was insufficient to establish that he possessed assets sufficient to trigger the statutory “substitute assets” provisions of forfeiture laws, which renders the money 27 United States v. Abdelsalam, 05-4063 judgments invalid. A forfeiture action can take the form of a money judgment, forfeiture of specific assets, or forfeiture of substitute assets. United States v. Candelaria-Silva, 166 F.3d 19, 42 (1st Cir. 1999) (citation omitted); 21 U.S.C. § 853(p)(1). A statute provides for forfeiture following a conviction in violation of 18 U.S.C. § 1956, one of the counts to which Salem pled guilty. See 18 U.S.C. 982(a)(1) (“The court, in imposing sentence on a person convicted of an offense in violation of section 1956 . . . of this title, shall order that the person forfeit to the United States any property, real or personal, involved in such offense, or any property traceable to such property.”) We agree with the First and Third Circuits that an in personam money judgment is authorized under the forfeiture statute. However, we also agree with those circuits that, because any future assets Salem obtains to satisfy such a money judgment will necessarily be substitute assets, the government must comply with the requirements of Section 853(p)(1). See Candelaria-Silva, 166 F.3d at 42; United States v. Voigt, 89 F.3d 1050, 1084-88 (3d Cir. 1996). Salem argues the $2,633,802.50 money judgment, the amount of one of the loss calculations presented at the evidentiary hearing, is clearly erroneous and was not based on sufficient evidence. In its brief the government states, “The United States concedes that the Court should vacate that money judgment [the $2,633,802.50 money judgment] and remand this matter in order to have the district court make more definite factual findings to support a money judgment up to an amount of $2.5 million.” Given the district court’s finding that the amount of loss was between $1,000,000.00 and $2,500,000.00, this money judgment is clearly erroneous. We vacate the $2,633,802.50 money judgment and remand to the district court for factual findings under Section 853(p)(1) and a revised 28 United States v. Abdelsalam, 05-4063 figure of up to $2,500,000.00 should the government succeed in meeting its burden under the section. Salem argues the district erred by failing to rule whether the money seized from Salem’s residence should be criminally forfeited and failed to order the return of certain jewelry as the parties had agreed. Specifically, the plea agreement provided that the district court would determine whether money seized from Salem’s residence should be criminally forfeited to the United States and also provided that certain pieces of jewelry seized from his residence would be returned after sentencing. “A case becomes moot when the issues presented are no longer ‘live’ or parties lack a legally cognizable interest in the outcome.” Cleveland Branch, N.A.A.C.P v. City of Parma, Ohio, 263 F.3d 513, 530 (6th Cir. 2001) (internal quotation marks and citations omitted). On August 17, 2005, the district court granted a default judgment and decree of forfeiture in the civil forfeiture action that covers the money seized from the residence, which renders the argument concerning the money seized from the residence moot. In its brief the government states, “On August 28, 2007, the United States Attorney’s Office notified Salem’s appellate defense counsel in writing of its willingness to make appropriate arrangements for the immediate return of the requested single item of jewelry seized from Salem’s residence as discussed in ¶ 9 of the Plea Agreement.” As the parties agree to the return of the item of jewelry, that issue also is moot.