Court Opinion

ID: 805087
Source: CourtListenerOpinion
Date Created: 2012-07-24 19:10:41+00
Date Added: 2024-06-11T18:00:14.360704
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 11-4549

UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

          v.

IHEANYI FRANK CHINASA,

                Defendant - Appellant.

Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond.    James R. Spencer, Chief
District Judge. (3:10-cr-00169-JRS-1)

Submitted:   June 19, 2012                 Decided:   July 24, 2012

Before TRAXLER, Chief Judge, and WILKINSON and DUNCAN, Circuit
Judges.

Affirmed by unpublished per curiam opinion.

John O. Iweanoge, II, IWEANOGE LAW CENTER, Washington, D.C., for
Appellant.     Neil   H.   MacBride,  United   States  Attorney,
Alexandria, Virginia, Michael C. Moore, Assistant United States
Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Richmond,
Virginia; Denis J. McInerney, Chief, Fraud Section, Kevin B.
Muhlendorf, Trial Attorney, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

           Iheanyi      Frank    Chinasa        appeals   his    convictions       and

sentence for crimes arising from a scheme to fraudulently obtain

millions of dollars worth of computer parts.                    Finding no error,

we affirm.

                                         I.

           Cisco        Systems,        Inc.,      manufactures      and         sells

telecommunications       and     information       technology      equipment       and

related products.       It sells products directly as well as through

authorized    resellers.         It     also     offers   warranties       for    its

products, that, depending on the price, entitle the customer to

different levels of service or product replacement.

           Customers experiencing problems with a Cisco product

and in need of technical assistance may communicate with Cisco

via   telephone    or   email,     or    through    Cisco’s     website.         Cisco

maintains a worldwide network of Technical Assistance Centers

(TACs) that process service requests concerning its products.

When a TAC receives a service request, a Cisco employee will

determine whether the problem can be resolved without replacing

the product in question, which is the case 70-80% of the time.

If replacement is necessary, then in some cases Cisco’s warranty

will require a process known as advance replacement, in which

                                          2
Cisco replaces the product in question with a new or refurbished

product before the customer has even returned the faulty part.

            Robert Chambliss was employed from August 2007 through

June   2010    at   Packet    360,   an       authorized       reseller    of    Cisco

products    based   in    Glen   Allen,       Virginia.         During    that   time,

Chambliss      worked     extensively         with     Cisco     equipment,      often

initiating service requests with Cisco on behalf of Packet 360

clients.      Before and during this time, Chambliss also had a side

business selling computer equipment on eBay.

            Chambliss      met   Chinasa        in     2004     through    his   side

business.      Chinasa told Chambliss that he lived in Gaithersburg,

Maryland,     and   ran   a   business        called    DataNet       Communications.

When   Chambliss     began    working     for     Packet       360,    Chinasa   asked

Chambliss to help him by using warranties purchased for Packet

360 clients to replace malfunctioning Cisco products.                      Chambliss

agreed, using a warranty contract held by Medicorps Health, even

though Chinasa had no right to make claims under Medicorps’s

warranty.      Chinasa also eventually purchased his own warranty to

use for some returns.

            From September 2006 to May 2010, Chinasa and Chambliss

initiated hundreds of service requests with Cisco, causing Cisco

to ship parts worth millions of dollars.                   These requests shared

many common characteristics.             First, each contained a specific

complaint that the referenced part was either not responding or

                                          3
not    powering       up,    and       that    other    parts       worked     in     the    same

chassis.        Chambliss had told Chinasa that use of such wording

would cause Cisco to send a replacement part instead of trying

to resolve the problem through on-line trouble-shooting.                                  Use of

that verbiage was important to the scheme because normally only

20-30%     of    service          requests      received       by     Cisco    resulted       in

shipment of a replacement part.

               Chinasa      and     Chambliss       had    the       parts     delivered      to

different       addresses         in    order    to     avoid       detection.         Chinasa

instructed Chambliss to have the parts shipped to Chambliss’s

house,     to    Chinasa,         and     to    Chambliss’s          friends       located    in

Richmond, Virginia.               Chinasa (and others) periodically travelled

from    Gaithersburg         to    Chambliss’s         house    to    pick    up    the     parts

Cisco had sent and to drop off the parts Chambliss was to send

to Cisco.

               In the fall of 2009, Cisco became aware of Chinasa’s

and    Chambliss’s          scheme      and     started        tracking       their    service

requests and intercepting parts that they returned.                                    Initial

inspections of intercepted parts revealed that the “returned”

parts in fact were not genuine Cisco products.                              Indeed, none of

the intercepted parts were found to be genuine Cisco products.

               The transactions also contained considerable indicia

of    fraud.      For    example,         Chambliss       often      used    the    warranties

purchased       for   Packet        360    customers       even      though     the    product

                                                4
sought was for Chinasa.             He also started using a second Cisco

user name after Cisco flagged the first one for initiating too

many service requests.            Additionally, Chambliss did business in

the names of shell companies and fictitious entities.                           Finally,

Chambliss      had    replacement         parts     shipped      to    friends’       home

addresses and to the home address of Zainab Kamara, a DataNet

employee.

             Chinasa      and    Chambliss       were    eventually     charged       in    a

superseding indictment with one count of conspiracy to commit

mail and wire fraud, in violation of 18 U.S.C.A. § 1349 (West

Supp. 2012) (Count 1); nine counts of mail fraud, in violation

of   18   U.S.C.A.     § 1341      (West    Supp.       2012)    (Counts     2-10);    two

counts of wire fraud, in violation of 18 U.S.C.A. § 1343 (West

Supp.     2012)   (Counts       11-12);    and    one    count    of   obstructing         an

official proceeding, in violation of 18 U.S.C.A. § 1512(c)(2)

(Count 13).       Chinasa pled not guilty and proceeded to trial.

             At the close of evidence, the district court dismissed

Count 12 on the government’s motion and granted Chinasa’s motion

to   dismiss      Count   7.      The     jury    found    Chinasa     guilty    of    the

remaining counts.

             The district court imposed a sentence of 84 months’

imprisonment.         Chinasa      was     also    held    jointly     and    severally

responsible with Chambliss for $18,761,825 in restitution.

                                            5
                                       II.

                                           A.

             Chinasa     first       argues        that      the      evidence       was

insufficient to support his convictions for conspiracy to commit

mail and wire fraud and for the substantive offenses of mail and

wire fraud.     We disagree.

          We     must    sustain       a        jury     verdict     “if    there     is

substantial    evidence,     taking    the        view    most     favorable   to    the

Government, to support it.”           Glasser v. United States, 315 U.S.

60, 80 (1942).         When we undertake this review, “the relevant

question is whether, after viewing the evidence in the light

most favorable to the prosecution, any rational trier of fact

could have found the essential elements of the crime beyond a

reasonable    doubt.”      Jackson     v.       Virginia,     443    U.S.    307,    319

(1979) (emphasis omitted).

          The     evidence     was    easily       sufficient        to    prove    that

Chinasa committed mail and wire fraud and that he and Chambliss

conspired to do so.        Chambliss explicitly testified that he and

Chinasa conspired to defraud Cisco.                      As Chambliss explained,

each of their transactions with Cisco began with, and was based

on, a lie that a particular part purportedly was not responding

or not powering up.        Chinasa gave Chambliss the serial numbers

to use, and Chinasa knew the statements Chambliss was making

about the parts were false, as Chinasa did not even deliver a

                                           6
part       to   Chambliss       until       after         Chambliss     had     filed     the

corresponding         claim.         Moreover,       the     parts     Chinasa    provided

Chambliss to be “returned” to Cisco were counterfeit.                               And, in

light of the evidence that the scheme was a coordinated effort

between Chambliss and Chinasa, the jury certainly could have

reasonably         found   that      each     of     the     mailings     and    the     wire

transmissions on which the substantive counts against Chinasa

were       based    were   reasonably         foreseeable        to      Chinasa.        See

Pinkerton v. United States, 328 U.S. 640, 646-47 (1946).

       Chinasa      argues     that     the   conspiracy        conviction       under    18

U.S.C.A. § 1349 should be overturned because the indictment did

not allege any overt act in furtherance of the conspiracy and

the    government      did     not    prove        such    an   act.      However,       even

assuming that Chinasa has properly preserved this issue, 1 § 1349

does not contain any overt act requirement.                            See United States

v. Fishman, 645 F.3d 1175, 1195 (10th Cir. 2011).                             An overt act

is    an    element     under     the    general          conspiracy     statute,       which

requires as an element that one or more of the conspirators “do

an[] act to effect the object of the conspiracy.”                              18 U.S.C.A.

       1
       The government maintains that the issue is not preserved
because Chinasa did not object to the jury instructions in the
district court and did not challenge the indictment before
trial.

                                              7
§ 371        (West    2000).      Section 1349,         however,    does     not   contain

equivalent           language.        The   Supreme        Court,    construing      other

conspiracy statutes that do not explicitly state that proof of

an overt act is an element, has held that their plain language

demonstrates that an overt act is in fact not an element.                               See

Whitfield v. United States, 543 U.S. 209, 214 (2005) (construing

18 U.S.C. § 1956(h)); Salinas v. United States, 522 U.S. 52, 63

(1997)        (construing        18   U.S.C.        § 1962(d));     United    States     v.

Shabani, 513 U.S. 10, 17 (1994) (construing 21 U.S.C. § 846).

As   the      Whitfield     Court     explained,        “Congress    has     included    an

express        overt-act       requirement      in    at    least   22     other   current

conspiracy statutes, clearly demonstrating that it knows how to

impose such a requirement when it wishes to do so.”                          543 U.S. at

216. 2

                                               B.

                At trial, the government introduced Government Exhibit

14A,     a    compact    disc     that   contained         the   service    requests    and

         2
       Chinasa cites United States v. Hedgepeth, 418 F.3d 411
(4th Cir. 2005), and United States v. Dozie, 27 F.3d 95 (4th
Cir. 1994) (per curiam), for the proposition that commission of
an overt act is an element of conspiracy to commit mail or wire
fraud in violation of 18 U.S.C. § 1349. However, the statements
in Hedgepeth and Dozie indicating that proof of an overt act is
an element of conspiracy under § 1349 are merely non-binding
dicta. See Hedgepeth, 418 F.3d at 420; Dozie, 27 F.3d at 97.

                                               8
shipping information for 557 product returns that Chinasa and

Chambliss      initiated     between    2007     and    2010.        Over    a    defense

objection,      the    government       also     introduced      a     compact       disc

containing a chart prepared by Cisco employee Tony Barberi that

summarized the contents of the service requests and shipping

information contained in Government Exhibit 14A.                      The court also

admitted:      (a) a summary chart establishing the total number of

shipments linked with certain user names and shipping addresses,

as well as the value of those parts; and (b) a summary chart of

transactions specifically charged in the superseding indictment.

            Chinasa      argues     that       the   district    court       erred       in

admitting the summary charts.              We review for abuse of discretion

a   district    court’s      decision     to    admit   evidence.           See    United

States v. Lighty, 616 F.3d 321, 351 (4th Cir. 2010).                        We find no

abuse of discretion here.

            Summary charts may be used when they aid the jury in

understanding the summarized evidence.                    See United States v.

Loayza, 107 F.3d 257, 264 (4th Cir. 1997).                       Chinasa contends

that the admission of the three charts was improper for three

reasons:       (1)    they   were   not    relevant      under   Federal          Rule   of

Evidence 401; (2) they were unduly prejudicial under Federal

Rule of Evidence 403 as they unfairly suggested that all of the

parts underlying the claims were counterfeit; and (3) he was not

permitted to inspect every piece of equipment underlying the

                                           9
charts.      None of these reasons warranted excluding the charts,

however.

             First, the charts were undoubtedly relevant.                             If for

no other reason, the sheer number of the requests and the use of

the shell companies and multiple delivery addresses tended to

show Chinasa’s intent to defraud.                   Chinasa argues that admission

of the charts was prejudicial in that they “caused the jury to

believe [Chinasa] was responsible for far more fraud than the

government      was     actually    able       to    prove       beyond    a    reasonable

doubt.”      Appellant’s brief at 12.                  However, Chinasa does not

explain how that was the case.                  Barberi specifically testified

that   the     charts   do   not   “contain         any   representation            that    any

specific     transaction      is    fraudulent.”              J.A.   316.           Chinasa’s

contention that the charts were not admissible because he was

not    given     the    opportunity       to        inspect      each     of    the       parts

referenced in the charts fails for the same reason.                             The charts

purported      only     to   summarize     Chinasa’s          service      requests        and

shipping       information;        they    did        not        purport       to     provide

information about the parts returned to Cisco.

                                           C.

             Chinasa next challenges his sentence, specifically the

guideline       offense-level       enhancements            he    received          for    loss

calculation and leadership role.                     Because Chinasa’s arguments

                                           10
relate     solely         to     the      district              court’s      factual       findings

concerning the loss amount and leadership role rather than any

question       regarding         the     interpretation              of    the    guidelines,      we

review for clear error only.                         See United States v. Miller, 316

F.3d 495, 503 (4th Cir. 2003).

               Chinasa first objects to application of an enhancement

for    leadership         role     pursuant           to       U.S.S.G.     § 3B1.1(a),         which

requires       a    four-level          increase           in    offense         level   when     the

defendant was an “organizer or leader of a criminal activity

that     involved         five     or     more        participants          or     was   otherwise

extensive.”              Chinasa        does     not       challenge        the     determination

regarding the extensiveness of the criminal activity, but he

does challenge the finding that he was an organizer or leader.

However, the evidence was plainly sufficient to support that

finding.        Evidence showed that Chinasa recruited Chambliss to

participate         in    this     scheme.            See       U.S.S.G.     § 3B1.1       cmt.    n.4

(explaining that “recruitment of accomplices” is a factor in

determining         leadership          role).            It    also      showed    that    Chinasa

directed the activities of the other individuals involved in the

scheme, including instructing Chambliss what parts to order and

where to have them shipped and directing Chambliss to recruit

others    to       sign   for     parts        and    to       use   multiple      addresses       and

business       names      in     shipping        the        parts.         Chinasa       also     paid

Chambliss.          Indeed, the fact that the conspiracy netted Chinasa

                                                     11
parts valued at millions of dollars while Chinasa paid Chambliss

only   a    few     hundred   thousand         dollars     is    further     evidence

supporting    the     enhancement.        See     U.S.S.G.      § 3B1.1     cmt.    n.4

(providing that “claimed right to a larger share of the fruits

of the crime” is a factor in determining leadership role).

            Chinasa’s argument concerning the loss amount fares no

better.     In calculating the loss, the district court estimated

the retail list price of the parts obtained in the scheme, then

discounted     that    amount      by    40%    to    reflect     the     approximate

discount     that     Cisco     gives     its        distributors,        which    left

$20,160,766.      Recognizing that this amount was very close to the

bottom of the more-than-$20-million-to-$50-million loss range,

and noting the possibility that Cisco may have recovered some of

its losses by refurbishing some “returned” parts and reselling

them, the court gave Chinasa “the benefit of the doubt over into

the 7 million to 20 million range,” holding him responsible for

$18,761,625.      J.A. 1012.       On appeal, Chinasa does not challenge

the correctness of the $20,160,766 figure but maintains that the

district    court     erred   in    determining        that     Cisco’s    loss    even

exceeded $400,000 in light of the amounts Cisco may have netted

by   refurbishing     some    of   the    parts      and   reselling      them.      We

disagree.

            In calculating loss, the district court need only make

a “reasonable estimate.”           U.S.S.G. § 2B1.1 cmt. n.3(C).                  Here,

                                          12
the evidence indicated the purpose of the scheme was to use

counterfeit     Cisco   parts   to     obtain     the    real       thing.      Thus,

regardless of whether each returned part was individually shown

to be counterfeit, the district court had reason to conclude

that the vast majority of the “returned” parts were counterfeit

and therefore not able to be refurbished and resold.                    In holding

Chinasa   responsible    for    only    $18,761,625,         the    district    court

certainly gave Chinasa the benefit of the doubt, and Chinasa’s

responsibility for at least that amount was well supported by

the evidence.

                                       III.

           In    sum,    finding       no     error,    we     affirm        Chinasa’s

convictions     and   sentences.        We    dispense       with    oral    argument

because the facts and legal contentions are adequately presented

in the materials before the court and argument would not aid the

decisional process.

                                                                             AFFIRMED

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