Opinion ID: 71480
Heading Depth: 3
Heading Rank: 3

Heading: Harris's Intended Loss

Text: Harris makes three major arguments in support of her assertion that the district court erred in sentencing her based on the aggregate limit of the cards she compromised. The first is that, while sentencing based on the credit limits of compromised cards is supported by Sowels, her case is distinguishable. Her second major argument is that the district court erred by relying on a First Circuit case, United States v. Alli, 444 F.3d 34 (1st Cir.2006), that is not good law in the Fifth Circuit. Her final argument is that, even if Alli is good law in this circuit, its holding is inapplicable to her case, because the record reflects that she controlled the third parties whom she provided with credit card account information. We examine each argument in turn, but find no error in the district court's sentence.
Harris argues that the method of assessing intended loss as being equal to the aggregate limit of stolen credit cards, which we approved in Sowels, cannot be applied to her case, because our holding in Sowels was conditioned on the fact that the defendant had not yet used the cards he had stolen at the time he was apprehended. See generally Sowels, 998 F.2d at 251. She contends that, while the method used in Sowels is appropriate in cases where the cards have not been used, the actual charges are better indicators of a defendant's intended loss in cases where the defendant managed to make fraudulent charges before being apprehended. See generally id. She notes that in Sowels, the sentencing court had calculated the loss on cards that had actually been charged by adding the actual charges, rather than the credit limits. Id. at 250. She concludes that it was improper for the district court to hold that she intended to inflict a loss of the aggregate limit of the cards she compromised, because most of the cards she compromised were charged well below their limits. Harris is correct that the reasoning in Sowels rests in part on the fact that the defendant was not able to establish a pattern of charges due to the intervention of law enforcement. See Sowels, 998 F.2d at 251 (Had Sowels completed or withdrawn from his offense before being apprehended, he might have been able to rebut the evidence that he intended to charge the cards to their limit.). However, the broader principle behind our result in Sowels was the rule of Wimbish. This is evident from the fact that Sowels relied heavily on our unpublished opinion in United States v. Mordi. See Sowels, 998 F.2d at 251. In Mordi, the defendant was arrested for using stolen credit cards to purchase merchandise. 1993 WL 152261, at . At sentencing, the district court found that he had inflicted an actual loss of $45,368.00. Id. It further found that his intended loss was $90,768.00, because at the time the defendant was arrested, there remained $45,400.00 in unused credit on the accounts the defendant had compromised. Id. The district court used the larger number to determine his sentence, in accordance with the Guidelines. Id. at . On appeal, we affirmed this sentence. Id. at . Citing Wimbish for support, we held that the defendant recklessly had put his victims at risk for the aggregate amount of the credit cards' limits. Id. We held that he could therefore be held to have intended a loss of the cards' aggregate limit. Thus, the central rationale behind Sowels is derived from our opinion in Mordi, which itself is based on the rule of Wimbish. As is illustrated by our opinion in Mordi, whether or not a stolen credit card has sustained charges does not dispositively determine whether or not its full credit limit was recklessly jeopardized by the defendant's crime. See Mordi, 1993 WL 152261, at . A defendant can more easily establish a modus operandi defense where his offense was completed before he was apprehended by the authorities. See Sowels, 998 F.2d at 251-52. But even in a case involving a completed offense, it may still be reasonable for the sentencing court to find that the defendant intended to inflict a loss of the entire credit limit of a stolen card if he committed his crime in such a way that the entire limit was recklessly jeopardized. See Mordi, 1993 WL 152261, at  (holding that a defendant had intended to inflict the loss of the aggregate limit of stolen cards, because his crime had recklessly jeopardized this limit, even though the actual fraudulent charges on the cards did not exceed it). Therefore, we disagree with Harris that Sowels 's application of the rule of Wimbish to a case of credit card theft wholly relied on the fact that the defendant in Sowels had not actually made any fraudulent charges at the time he was apprehended by the authorities. [15] The fact that Harris's co-conspirators had made charges on the cards she compromised before they were stopped by the authorities merely means that it was easier for her to mount a modus operandi defense to the PSR's finding that she intended to inflict a loss of the entire aggregate limit. It did not guarantee that this defense would succeed.
Harris also argues that the district court erred in relying on the First Circuit case of United States v. Alli. 444 F.3d at 34. The district court cited that case as support for the proposition that, because Harris gave account information to other people, including her codefendant [ sic ], Keasha Turner, the aggregate credit limit of the accounts she compromised was the proper measure of her intended loss, since she had no control over the amount of charges [these] other people made to the victim's [ sic ] accounts. Harris argues that the district court's reliance on Alli was improper, because the facts of Alli involved no actual loss, and because the First Circuit declined to follow what it viewed as the law of this circuit in reaching its holding. In Alli, the First Circuit held that a defendant's `intended loss' includes `losses that might naturally and probably flow from' his unlawful conduct and therefore that a defendant who sold (or intended to sell) cards to a third party without making any charges himself could be held to have intended to inflict the loss of their aggregate limit. 444 F.3d at 38 (quoting United States v. Jacobs, 117 F.3d 82, 95 (2d Cir. 1997)). In reaching this holding, the panel rejected our requirement that a sentencing court's intended loss calculation be based on actual, not constructive, intent. Id. (citing Morrow, 177 F.3d at 301). We do not need to decide whether the First Circuit's examination of losses that might naturally and probably flow from a defendant's conduct is equivalent to our examination of what property was recklessly jeopardized. We also do not need to determine whether Alli 's holding relied upon the fact that there was no actual loss inflicted in Alli. These inquiries are irrelevant, because the record reflects that the district court cited Alli to support the proposition that, generally, a defendant who transfers stolen property to a third party whom he does not control recklessly jeopardizes the face value of that property. This proposition is amply supported by our case law. See, e.g., Morrow, 177 F.3d at 300-01; Sowels, 998 F.2d at 251. Therefore, the district court did not err by referring to Alli to support it.
Harris's final argument is that, even if Alli is good law in this circuit, its holding is inapplicable to her case because the record reflects that she controlled the third parties whom she provided with credit card account information. If the assertion that she controlled her co-conspirators' actions were supported by the district court's findings of fact, the rule of Wimbish might be inapplicable to her case, since it then likely could not be shown that she had recklessly jeopardized the full credit limits of the cards she compromised. If reckless jeopardy could not be shown, then arguably her intended loss could only have been assessed as the aggregate limit if a finding were made that the intent or hope of the conspiracy had been to ultimately charge the cards to their limits. That may have been difficult to establish, given that Harris's co-conspirators did not charge most of the cards to their limits and usually did not make any charges on a card after the first day it was used. However, the record does not compel acceptance of Harris's assertion that she controlled the actions of her co-conspirators. In fact, the district court explicitly found that she had no control over the amount of charges other people made to the victim's [ sic ] accounts. This is a finding of fact, which we must review for clear error. See Cisneros-Gutierrez, 517 F.3d at 764. While Harris was able to remove obstacles to the processing of her co-conspirators' fraudulent charges, there is no indication in the record that she ever intervened to erase a fraudulent charge that she felt was too large, nor is there any indication that she even had the power to do so. In fact, when Harris's co-conspirators exceeded the limit of one of the cards, there is no indication in the record that Harris did anything about it. If she were truly the controlling figure in a conspiracy with an understood goal of never reaching the limits of any cards, this inaction would be difficult to explain. But we think this inaction makes sense, because the record supports the inference that Harris was little more than a pawn in Turner's conspiracy. Harris was pressured into helping Turner by her (Harris's) boyfriend. Harris's only knowledge of Turner's plan to purchase gift cards came through this boyfriend. Harris did not even know that there was another participant in the conspiracy, Christine Wright. Given these facts, we cannot conclude that the district court clearly erred in failing to find that Harris controlled the actions of the third parties to whom she gave the account information. That Harris's co-conspirators might have avoided overcharging the cards does not change this analysis. The question before us is whether or not the district court clearly erred in determining that Harris intended to inflict a loss of the credit limits of the cards. This determination was supported by the fact that Harris recklessly jeopardized this amount by transferring it to third parties whom she does not appear to have known or controlled. That the record might support a finding that these third parties never intended to inflict a loss of the credit limits does not excuse Harris's recklessness in giving the credit card information to them.
Under the rule of Wimbish, a sentencing court may infer intent to inflict a loss equal to the face value of property based on the fact that the defendant recklessly jeopardized that property during the commission of his crime. See Wimbish, 980 F.2d at 315-16. That a defendant recklessly jeopardized property that he obtained fraudulently may be reasonably supported by a finding that he transferred it to a third party whom he did not control. See Morrow, 177 F.3d at 301. We find that the record in Harris's case supports a finding that she transferred confidential credit card information to third parties whom she did not control. Therefore, we hold that the district court did not err in calculating her intended loss as being equal to the credit limits of the cards she compromised.