Court Opinion

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Opinions of the United
2000 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

2-10-2000

USA v. Duliga
Precedential or Non-Precedential:

Docket 99-5251

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Recommended Citation
"USA v. Duliga" (2000). 2000 Decisions. Paper 28.
http://digitalcommons.law.villanova.edu/thirdcircuit_2000/28

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Filed February 10, 2000

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 99-5251

UNITED STATES OF AMERICA

v.

DANIEL DULIGA

       Appellant

Appeal from the United States District Court
For the District of New Jersey
D.C. No.: 96-cr-326
District Judge: Honorable Nicholas H. Politan

Before: GREENBERG, ROTH, and ROSENN,
Circuit Judges.

Submitted Under Third Circuit LAR 34.1(a)
January 25, 2000

(Filed February 10, 2000)

OPINION OF THE COURT

ROSENN, Circuit Judge.

This is an appeal from a judgment of conviction and
sentence in the United States District Court for the District
of New Jersey in connection with telemarketing operations.
The defendant, who was convicted on a multi-count
indictment charging conspiracy to commit mail and wire
frauds, contends that in imposing sentence, the district

court incorrectly determined his base level offense under
the United States Sentencing Guidelines by attributing to
him the entire amount of loss generated by the conspiracy
rather than the amount of loss he generated through his
own telemarketing efforts.

The district court had subject matter jurisdiction
pursuant to 18 U.S.C. S 3231. We have appellate
jurisdiction pursuant to 18 U.S.C. S 3742 and will affirm.

I.
A. The Telemarketing Scam

In December of 1990, Rita Holz, her husband Julius
Schurkman, and a third person, Adie Lipton, set up All-Win
Financial Corporation in Del Rey Beach, Florida. The
company began operations in January of 1991. It then
placed advertisements in newspapers across the nation
advertising personal loans and debt consolidation. No
advertisements, however, were placed locally. All-Win
wished to avoid face-to-face confrontations with disgruntled
clients.

The advertisements offered loans of up to $10,000, even
to those with acute credit problems, and included a toll-free
telephone number. When a prospective applicant called the
toll-free number, a telemarketer would solicit basic
background information from the applicant, including
name, social security number, and any credit problems.
The telemarketer would then ask the applicant to call back
in approximately one hour so the loan could be processed.
When the applicant called back, the telemarketer would
congratulate the applicant and tell him that he had
qualified for the loan. Of course, no processing occurred
during that interval, and the time lapse between calls was
merely pretextual.

After "approving" the applicant on the telephone, the
telemarketer would then give the applicant an express mail
or Federal Express number and tell the applicant to use the
number to send All-Win its $199 application fee. Once All-
Win received the fee, it forwarded the applicant's name,

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along with a $25 fee, to North American Acceptance
Exchange ("NAAE"). NAAE was not a real lender, but was a
"denial mill." NAAE helped create the illusion that the loan
process was legitimate by sending loan application papers
to the applicants. The loan application was sent to the
applicants to string them along and add to the illusion of
legitimacy. Upon completing the application and mailing it
to NAAE, or another denial mill used by All-Win, the
applicant would ultimately receive a rejection letter.

In June of 1991, All-Win experienced "legal problems"
and decided to relocate to Cherry Hill, New Jersey. Holz
undertook the majority of the relocation effort. She rented
space, obtained phone lines, and set up a new company
under the name A-1. By July of 1991, the telemarketing
scam was up and running again and continued to utilize
the same procedures as All-Win, except that the application
fee increased to $249. A-1 remained in business until
November of 1991. By that time, A-1 and All-Win had
defrauded their "clients" of approximately $1.2 million.

B. The Defendant's Role in the Telemarketing Scam

The defendant, Daniel Duliga, joined the All-Win
telemarketing scam in January of 1991, shortly after the
company commenced operations. All-Win generally
employed eight to ten telemarketers at any one time, and
Duliga, like the other telemarketers, worked in a single,
large room using a script provided by All-Win. A daily tally
was kept of the application fees received, and all of the
telemarketers, including Duliga, were aware that All-Win
was not engaged in a legitimate business endeavor. The
telemarketers often spoke freely of the fraudulent nature of
their employment and joked about the gullible people from
whom they received application fees. Duliga even admitted
to a Postal Inspector that within the first week of his
employment at All-Win he realized that All-Win was not
processing any loans and that the individuals requesting
the loans never received them.

Despite his awareness of All-Win's illegitimacy, Duliga
developed into one of All-Win's top telemarketers and the
company frequently called upon him to train newly

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recruited telemarketers. For his efforts, he received both a
salary and commissions. In addition, when All-Win decided
to relocate to New Jersey in June of 1991, Holz and the
other principals requested that Duliga join them in setting
up the new business. Holz testified that she considered the
talents of Duliga, as well as those of two other experienced
telemarketers, crucial to a successful relocation. She even
sought their opinions when determining where to relocate
the business.

Duliga agreed to join the telemarketing operation in
Cherry Hill, New Jersey and continued to work as a
telemarketer for the newly established A-1 until November
1991. During his employment with the two companies,
Duliga earned over $42,000 in salary and commissions and
generated application fees in excess of $150,000.

C. Procedural History

On June 4, 1996, a federal grand jury sitting in New
Jersey returned a twenty-six count indictment against
Duliga and several other individuals. Count I charged
Duliga and the others with conspiracy to commit mail and
wire fraud, contrary to 18 U.S.C. SS 1341 and 1343, in
violation of 18 U.S.C. S 371. Counts II through VI charged
him and the others with mail fraud in violation of 18 U.S.C.
SS 1341 and 1342. Counts VII through XV charged him and
the others with wire fraud in violation of 18 U.S.C. SS 1343
and 1342. Prior to trial, the United States Attorney
dismissed several counts of the indictment and proceeded
against Duliga only on counts I through VIII and counts XI
through XV. The jury found Duliga guilty on all of these
remaining counts.

On March 25, 1999, the court imposed sentence in
accordance with the presentence report recommendation.
Pursuant to U.S.S.G. S2F1.1(a), Duliga received a base
offense level of six. Because the loss generated by the
telemarketing scam was more than $800,000 but less than
$1.5 million, Duliga received an eleven level increase in his
base offense level pursuant to U.S.S.G. S 2F1.1(b)(1)(L). He
also received an additional two level increase under
U.S.S.G. S 2F1.1(b)(2) because the offense involved more

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than minimal planning. Duliga's final offense level was 19
and his criminal history category was II, which resulted in
an imprisonment range of 33 to 41 months. The district
court sentenced him to 33 months' imprisonment, three
years' supervised release, and a special assessment of
$650.

II.

On appeal, Duliga contends that the district court
incorrectly determined his base offense level by attributing
to him the entire amount of loss generated by the
conspiracy (approximately $1.2 million) rather than the
amount of loss he generated through his own telemarketing
efforts (approximately $155,000). "When reviewing the
sentencing decisions of the district courts, `[w]e exercise
plenary review over legal questions about the meaning of
the sentencing guidelines, but apply the deferential clearly
erroneous standard to factual determinations underlying
their application.' " See United States v. Fuentes, 954 F.2d
151, 152-53 (3d Cir. 1992) (quoting United States v. Inigo,
925 F.2d 641, 658 (3d Cir. 1991)).

III.

Under U.S.S.G. S 2F1.1(a), a defendant convicted of a
crime of fraud receives a base offense level of six. This
offense level, however, is subject to increase depending on
the amount of loss generated by the fraud. See U.S.S.G.
S 2F1.1(b); see also United States v. Boatner, 99 F.3d 831,
835 (3d Cir. 1996). In calculating the amount of loss
generated by the fraud, a sentencing court obviously may
include amounts directly attributable to the fraudulent
conduct of the defendant. See U.S.S.G. S 1B1.3(a)(1)(A). In
addition, where, as here, the crime of fraud for which the
defendant has been convicted involves jointly undertaken
criminal activity, the sentencing court may also attribute to
the defendant amounts of loss resulting from the
"reasonably foreseeable acts and omissions of others in
furtherance of the jointly undertaken criminal activity." See
U.S.S.G. 1B1.3(a)(1)(B); see also Boatner, 99 F.3d at 835.
However, to do so, the loss resulting from the acts or

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omissions of others must be: (1) in furtherance of the
jointly undertaken activity; (2) within the scope of the
defendant's agreement; and (3) reasonably foreseeable in
connection with the criminal activity the defendant agreed
to undertake. See United States v. Evans, 155 F.3d 245,
254 (3d Cir. 1998); United States v. Price, 13 F.3d 711, 732
(3d Cir. 1994); United States v. Collado, 975 F.2d 985, 995
(3d Cir. 1992).1

Applying this test, we believe that the district court
correctly included the entire amount of the loss generated
by the telemarketing scam when determining Duliga's
offense level.2

First, all of the losses generated by All-Win and A-1 were
in furtherance of the jointly undertaken activity. The goal of
these two companies, and those who worked for them, was
to produce as many fraudulent application fees as possible.
All of the telemarketers used the same script to accomplish
this goal, and all of the telemarketers were aware of the
companies' fraudulent nature.

Second, all of the losses generated by All-Win and A-1
were within the scope of Duliga's agreement. He learned
during his first week of work at All-Win that All-Win was
_________________________________________________________________

1. As a preliminary matter, Duliga suggests that the Second Circuit's
decision in United States v. Studley, 47 F.3d 569 (2d. Cir. 1995)(holding
that the Guidelines require that a district court make a particularized
finding as to the scope of the criminal activity agreed upon by a
defendant and outlining the factors relevant to such a finding), should
guide our disposition of this case. However, we think the resolution of
this case is governed by this Court's decision in Collado and therefore
adhere to the wisdom of that case.

2. We note that the district court did not necessarily undertake a
searching and individualized inquiry before attributing the entire amount
of loss generated by All-Win and A-1 to Duliga. See Collado, 975 F.2d at
995. However, because we are convinced that the attribution of that loss
is firmly supported by the record, we see no reason to remand this case
only to have the district court reach the same sentencing decision. See
id. at 997 ("The district court made no findings regarding the propriety
of attributing to one brother sales made by the other, but after reviewing
the transcripts of the telephone calls cited in the presentence
investigation report, we are convinced that this instance of accomplice
attribution was justified.").

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not a legitimate venture, yet he continued to defraud
individuals into believing that their application fees would
materialize into loans. He also received a substantial salary
from the companies, not just commissions based on his
own application fees. Therefore, he possessed a stake in the
success of the companies as a whole. Moreover, although
Duliga characterizes himself as merely an employee that
agreed to telemarket for the principals, the evidence plainly
contradicts this characterization. Duliga was one of the top
three telemarketers for the two companies, and when, the
All-Win principals decided to relocate to New Jersey as A-1,
they considered Duliga's assistance in the relocation
crucial. Duliga clearly understood the illegal objectives of
All-Win and A-1 and agreed to use his best efforts to
further those objectives.

Third, all of the losses generated by All-Win and A-1 were
reasonably foreseeable in connection with the criminal
activity Duliga agreed to undertake. All of the
telemarketers, including Duliga, worked side by side in one
large room, and the telemarketers frequently joked about
the naive applicants from whom they received application
fees. Moreover, a daily tally was kept of the application fees
received. Thus, far from being unforeseeable, the losses
generated by All-Win and A-1 were within Duliga's plain
view.

In sum, the evidence readily demonstrates that Duliga
was a key player in the telemarketing scam from its
inception to its conclusion and that the losses generated by
that scam were reasonably foreseeable in connection with
the scope of the criminal activity Duliga agreed to jointly
undertake. He was more than aware of the scope of the
operation and of its fraudulent character. Therefore, the
district court committed no error in attributing them to
Duliga.

IV.

Accordingly, the judgment of conviction and sentence of
the district court will be affirmed.

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A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

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