Opinion ID: 4531772
Heading Depth: 2
Heading Rank: 3

Heading: The District Court Correctly Applied the

Text: Sentencing Guidelines In Fashioning Resnick’s Sentence Resnick next challenges several of the District Court’s findings at sentencing. We “review factual findings relevant to the Guidelines for clear error and … exercise plenary review over a district court’s interpretation of the Guidelines.” United States v. Grier, 475 F.3d 556, 570 (3d Cir. 2007). 29 First, Resnick claims that by adopting the government’s proposed timeline for VOG’s operations the District Court allowed the government to inflate its victim and loss figures. He argues that, because the government limited the timeframe for its evidence at trial, any victims found outside of that limited timeframe should not count. Of course, because the VOG-conspirators continued operations during their trial— through 2014—some victims arose after the government’s limited timeframe. It was appropriate for those victims to be included. And we again note that the government’s calculation of victims’ losses did not affect Resnick’s ultimate Guidelines range. The Sentencing Guideline that applies to Resnick’s fraud is § 2B1.1, covering various forms of theft. Following the 2015 amendment, a six-level enhancement should be applied when the crime “resulted in substantial financial hardship to 25 or more victims.” U.S.S.G. § 2B1.1(b)(2)(C). That is the highest-level enhancement for number of victims. The definition of “substantial financial hardship” includes “suffering substantial harm to his or her ability to obtain credit.” See U.S.S.G. application notes § 4(F)(vi). As the credit ratings of all the victims of VOG were severely damaged by VOG’s schemes, Resnick began on the wrong side of that threshold. That the government ultimately identified more than 250 victims was immaterial for the Guidelines calculation. And, as discussed in section IV(B), whether using the initial victim and loss estimates in 2014, or the more comprehensive totals following the 2015 amendment, Resnick’s victims’ loss total yields the same 16-level enhancement. Second, Resnick challenges the District Court’s finding that VOG was a fraudulent enterprise from beginning to end. Resnick argues that not all VOG’s employees knew that they were part of a fraudulent scheme, so there must have been some non-fraudulent work at VOG. This conclusion does not follow from Resnick’s premise because those employees’ alleged ignorance is not imputed to Resnick and his co-defendants. A conviction for mail or wire fraud requires both objective misrepresentations and the defendant’s subjective knowledge of the misrepresentations. See 18 U.S.C. §§ 1341, 1343. The jury found that Resnick knowingly participated in VOG’s 30 fraud, so the argument based on others’ alleged knowledge does not help him. Resnick also argues that the finding is inconsistent with the District Court’s willingness to consider his argument that not all VOG victims were equally victimized. The District Court noted that VOG had engaged in various types of fraud. That the Court recognized that some instances of VOG’s fraud were more flagrant than others does not undermine the District Court’s overall finding that VOG was a wholly fraudulent enterprise. Rather, having carefully reviewed this case, we conclude that the Court’s finding was supported by substantial evidence and will be affirmed. Third, like Lacerda, Resnick argues that services like debt cancellation and the sale of new timeshares should be credited against the victims’ losses. We addressed this argument in section III(D)(1), and our analysis applies equally to Resnick. Cancellation was achieved only because the victims defaulted on their loans, not because of some valueadding intervention from VOG. The defaults impacted the victims’ credit ratings in significant and negative ways. The District Court was correct to not credit VOG’s alleged “services” against the losses suffered by Resnick’s victims. And like Lacerda, Resnick is not entitled to credit against his victim’s losses for payments VOG made to perpetuate its fraudulent schemes. See Hartstein, 500 F.3d at 800; Whatley, 133 F.3d at 606; Blitz, 151 F.3d at 1012. Fourth and finally, Resnick argues that, under U.S.S.G. § 2B1.1, refunded monies by third parties should be credited against his victim’s losses. The Guidelines provides that the victim’s loss “shall be reduced by … [t]he money returned … by the defendant or other persons acting jointly with the defendant, to the victim before the offense was detected.” U.S.S.G. § 2B1.1(3)(E)(i) (emphasis added). Resnick argues that he is entitled to credit for refunds to victims made by “escrow compan[ies] utilized to procure third party timeshares” and other “timeshare developers.” Appellant Resnick’s Br. 71. But there is no evidence that the escrow agents and timeshare developers were “acting jointly” with Resnick, or that the refunds were made “before the offense was 31 detected.” The District Court correctly denied any credits against Resnick’s victims’ losses.