Court Opinion

ID: 4654632
Source: CourtListenerOpinion
Date Created: 2021-01-26 18:00:34.478087+00
Date Added: 2024-06-11T07:58:47.773686
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                               File Name: 21a0051n.06

                                           No. 20-1273

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT
                                                                                       FILED
 UNITED STATES OF AMERICA,                       )                                Jan 26, 2021
                                                 )                            DEBORAH S. HUNT, Clerk
        Plaintiff-Appellee,                      )
                                                 )
                                                          ON APPEAL FROM THE UNITED STATES
 v.                                              )
                                                          DISTRICT COURT FOR THE WESTERN
                                                 )
                                                          DISTRICT OF MICHIGAN
 ZACHARY STEPHEN THOMAS,                         )
                                                 )
                                                                            OPINION
        Defendant-Appellant.                     )

       BEFORE:        BATCHELDER, GRIFFIN, and STRANCH, Circuit Judges.

       JANE B. STRANCH, Circuit Judge. Zachary Thomas pleaded guilty to bank fraud, in

violation of 18 U.S.C. § 1344(2), aggravated identity theft, in violation of 18 U.S.C. § 1028A, and

the passing of a Treasury check with a falsely made and forged endorsement, in violation of

18 U.S.C. § 510(a)(2). As part of the agreement, Thomas admitted that he stole the mail of

numerous Michigan residents, targeting checking and personal identifying information. During

sentencing, the district court denied Thomas’s objections to a ten-level enhancement to his offense

level under the Sentencing Guidelines based on the “intended loss” and two-level sophisticated

means enhancement.      Thomas appeals the district court’s application of the intended loss

calculation and sophisticated means enhancement. Additionally, Thomas argues that his sentence

is substantively unreasonable. We AFFIRM.
Case No. 20-1273, United States v. Thomas

                                     I.   BACKGROUND

       A.      Factual Background

       In 2016, Zachary Thomas pleaded guilty to aggravated identity theft. In exchange for his

guilty plea, the Government dismissed a count of false statements and possession of stolen mail.

Thomas admitted that for six months he stole mail from residents, deposited checks into one of the

many bank accounts he opened online, and cashed fraudulent checks at casinos. He also admitted

that he attempted to obtain $40,000 to $95,000 from the scheme. The district court sentenced

Thomas to the mandatory two years’ imprisonment for his aggravated identity theft conviction and

placed him on one year of supervised release, which began on February 6, 2018. Six months later,

the district court revoked Thomas’s supervised release for failure to follow his probation officer’s

instructions, possession of a controlled substance, and leaving the district without permission,

among other violations. Thomas was released in October 2019, after serving a 12-month sentence.

       Investigators later learned that during the period Thomas engaged in the probation

violations, he also committed mail theft and bank fraud. Between July and October 2018, Thomas

regularly stole mail from Michigan residents, targeting replacement checks, credit card

convenience checks, and other financial and personal identifying information. Thomas used a

web-based platform, USPS Informed Delivery, to track and intercept his targets’ mail. As a part

of the scheme, when Thomas obtained stolen checks, he made the checks payable to his

accomplices or individuals with whom he had a relationship or whose identities he had stolen.

Thomas opened and controlled bank accounts of those individuals in order to deposit the stolen

and forged checks, withdrawing as much money as he could before the bank froze the account. In

one instance, Thomas obtained a U.S. Treasury check for $141,073.69, deposited it into an account

under his control, and withdrew $1,388.31 before the bank froze the account.

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Case No. 20-1273, United States v. Thomas

       The Government charged Thomas in a ten-count indictment related to bank fraud,

aggravated identity theft, passing a treasury check with false or forged endorsement, and

possession of stolen U.S. mail. Thomas pleaded guilty to three counts: Count 3, bank fraud, in

violation of 18 U.S.C. § 1344(2); Count 5, aggravated identity theft, in violation of 18 U.S.C.

§ 1028A; and Count 9, the passing of a Treasury check with a falsely made and forged

endorsement, in violation of 18 U.S.C. § 510(a)(2).

       B.      Procedural Background

       For Guidelines range calculation purposes, the U.S. Probation Office’s Presentence Report

grouped Counts 3 and 9 as “Count Group 1.” The PSR included a base offense level of seven for

Count Group 1, a ten-level enhancement for intending loss over $150,000, a two-level

enhancement for ten or more victims, and a two-level enhancement for sophisticated means,

resulting in a total adjusted offense level of 21. The PSR suggested a two-level departure for

acceptance of responsibility and a one-level departure for assisting authorities with investigation

or prosecution, reducing the total offense level to 18. It also recommended that the term of

imprisonment on Count 5 be served consecutively to any other counts. The Government calculated

a criminal history of six and assigned two additional points for commission of the subject offenses

while on supervised release, for a total of eight points, resulting in a criminal history category of

IV. As a result, the Government asserted that Thomas’s Guidelines range was 41 to 51 months’

imprisonment for each count in Count Group 1; and 24 months for Count 5, consecutive to the

other counts. The Government argued for 48 months’ imprisonment each for Counts 3 and 9,

concurrently; and 24 months for Count 5 to be completed consecutive to Counts 3 and 9.

       At the sentencing hearing, Thomas’s counsel objected to the ten-level enhancement for

causing an intended loss over $150,000. He argued that Thomas did not subjectively intend to

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Case No. 20-1273, United States v. Thomas

obtain the entire U.S. Treasury check and successfully received only $1,388. Thomas also

objected to the sophisticated means enhancement.

       The district court granted a one-level downward departure to reflect Thomas’s cooperation

with the Government and a three-level downward adjustment for acceptance of responsibility,

resulting in a final Guidelines range of 37 to 46 months’ imprisonment for his convictions of bank

fraud (Count 3) and passing a Treasury check (Count 9). The district court then considered the

unique circumstances of Thomas’s case, rejected both of Thomas’s objections, and varied upward

by two-levels for Count Group 1. Accordingly, the Guidelines range for Count Group 1 increased

to 46 to 57 months. The court sentenced Thomas to 54 months each for the bank fraud and passing

a Treasury check counts, to be served concurrently, and 24 months for the aggravated identity theft

count, to be served consecutively.

                                      II.   ANALYSIS

       A. Intended Loss Enhancement

       First, Thomas appeals the district court’s denial of his objection to the calculation of the

Guidelines range based on the interpretation and calculation of “intended loss.” We “review de

novo the district court’s method for calculating [loss], and review its factual findings for clear

error.” See United States v. Maddux, 917 F.3d 437, 450 (6th Cir. 2019) (citing United States v.

Warshak, 631 F.3d 266, 328 (6th Cir. 2010)). Findings of fact on intended loss in a fraud case

“are not to be overturned unless they are clearly erroneous.” United States v. Ellis, 938 F.3d 757,

760–61 (6th Cir. 2019).

       USSG § 2B1.1 addresses offenses involving fraud and deceit and established Thomas’s

Guidelines range. The loss amount “is the greater of actual loss or intended loss.” USSG. § 2B1.1,

comment. n.3(A). Intended loss is the “pecuniary harm that the defendant purposely sought to

inflict.” Id. This loss amount includes harms “impossible or unlikely to occur,” United States v.

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Case No. 20-1273, United States v. Thomas

Murphy, 815 F. App’x 918, 922 (6th Cir. 2020) (quoting USSG § 2B1.1, comment. n.3(A)(ii)), as

“their inclusion better reflects the culpability of the offender,” United States v. McBride, 362 F.3d

360, 374 (6th Cir. 2004) (quoting USSG App. C. at 181 (2003)). “Because of the difficulties often

associated with attempting to calculate loss in a fraud case, the district court ‘need only make a

reasonable estimate’ of the loss using a preponderance of the evidence standard.” United States v.

Wendlandt, 714 F.3d 388, 393 (6th Cir. 2013) (quoting United States v. Jones, 641 F.3d 706, 712

(2011)). The district court’s “determination is entitled to appropriate deference.” USSG § 2B1.1,

comment. n.3(C).

       Thomas contends that he should not be responsible for the entire $141,073.69 Treasury

check because he was aware that there was a limited opportunity to withdraw money and did not

intend or expect to receive all of the funds deposited from stolen or fraudulent checks. He received

less than one percent of the check amount. Thomas argued that the district court should adopt a

loss-amount formula based on the actual loss from the other victims and an averaging formula.

The district court calculated the intended loss to be $214,424.96, including the entire U.S. Treasury

check of $141,073.69. The court relied on United States v. Vysniauskas, 593 F. App’x 518, 524

(6th Cir. 2015), to support Thomas’s responsibility for the entire loss amount because he “was

going to continue to take as much of that $141,[073.69] as he could until he was stopped.”

       In McBride, we recognized that there is “some point at which a perpetrator’s misperception

of the facts may become so irrational that the words ‘intended loss’ can no longer reasonably

apply.” McBride, 362 F.3d at 374. Thomas’s perceptions and actions did not rise to that level of

irrationality. See United States v. Jordan, 544 F.3d 656, 672 (6th Cir. 2008) (approving the district

court’s inclusion of the total check amount in the intended loss calculation even though the account

was frozen before the defendant could actually withdraw the funds). In Vysniaukas, we recognized

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Case No. 20-1273, United States v. Thomas

that an intended loss calculation may include face value amounts of fraudulent checks. 593 F.

App’x at 525–26.

       Similarly, here, Thomas’s intended loss calculation includes the face value of stolen and

fraudulent checks he deposited, including the Treasury check. Moreover, Thomas withdrew

$1,388.31 from the Treasury check before the account was closed. It is reasonable to infer that

Thomas intended to continue, and would have continued, withdrawing and utilizing additional

funds from the check had the bank not intervened and frozen the account. See United States v.

Tate, 136 F. App’x 821, 826–27 (6th Cir. 2005) (upholding an intended loss calculation that

included unused checks because it was reasonable to infer that the defendants would have

benefitted from the checks, but for an interruption). The district court did not err in finding that

the total loss attributable to Thomas’s offenses was sufficient to add ten offense levels.

       B. Sophisticated Means

       Second, Thomas appeals the district court’s denial of his objection to the two-point

sophisticated means enhancement under USSG § 2B1.1(b)(10)(C). “[W]e review the district

court’s determination that his offense involved sophisticated means for clear error.” United States

v. Igboba, 964 F.3d 501, 510 (6th Cir. 2020) (citing United States v. Kraig, 99 F.3d 1361, 1371

(6th Cir. 1996)).

       USSG § 2B1.1(b)(10)(C) prescribes a two-level increase for use of sophisticated means.

The Guidelines’ commentary defines “sophisticated means” as “especially complex or especially

intricate offense conduct pertaining to the execution or concealment of an offense.” USSG § 2B1.1

comment. n.9(B). Further, “[c]onduct such as hiding assets or transactions, or both, through the

use of fictitious entities, corporate shells, or offshore financial accounts also ordinarily indicates

sophisticated means.” Id. A defendant who utilizes an alias to cover up evidence of a crime may

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Case No. 20-1273, United States v. Thomas

demonstrate sophisticated means. See Igboba, 964 F.3d at 512 (citing United States v. Crosgrove,

637 F.3d 646, 667 (6th Cir. 2011)). We have also held that “funneling of transactions through

relatives in order to disguise the origin of funds is sufficient to support an enhancement for

sophisticated means.” United States v. Erwin, 426 F. App’x 425, 437 (6th Cir. 2011) (citing United

States v. May, 568 F.3d 597, 607 (6th Cir. 2009)). Even if the conduct does not appear to be

particularly intricate on its face, the enhancement may still apply. For example, in United States

v. Simmerman, 850 F.3d 829 (6th Cir. 2017), we upheld a sophistication enhancement where the

defendant’s embezzlement actions were not particularly complex, but she employed sophisticated

methods to evade detection, including using dormant accounts or family members accounts to hide

stolen money and manipulating a computerized accounting system. Id. at 833.

       Thomas contends that his sophisticated means enhancement is unmerited because there

was nothing complex or intricate about his conduct beyond the actual commitment of the crime.

The district court found that Thomas used sophisticated means to execute his crime, noting that

Thomas “use[d]. . . technology [to track] mail and numerous other means . . . described in the

presentence investigation report” to commit the fraud.

       Here, viewing the totality of the circumstances, Thomas’s conduct was sufficiently intricate

or complex to warrant a sophistication enhancement. The PSR prepared by the Probation Office

noted that Thomas’s fraudulent conduct involved utilizing a tracking technology to discretely

monitor and intercept mail from his victims to obtain financial information. He used multiple

email and identification aliases to complete financial transactions and funneled transaction through

his associates and loved ones. See Simmerman, 850 F.3d at 833 (recognizing that using a

sophisticated means to conceal a theft qualifies as a predicate for the § 2B1.1(b)(10)(C)

enhancement). In light of the totality of Thomas’s conduct, the district court did not clearly err in

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Case No. 20-1273, United States v. Thomas

imposing the two-point sophistication enhancement. See United States v. Masters, 216 F. App’x

524, 526 (6th Cir. 2007) (“[I]t is the totality of the defendant’s conduct—the entire scheme—that

the district court found was carried out using ‘sophisticated means.’”).

       C. Substantive Reasonableness

       Finally, Thomas challenges his sentence as substantively unreasonable. “[W]e ‘review a

district court’s sentencing determination, “under a deferential abuse-of-discretion standard,” for

reasonableness.’” United States v. Herrera-Zuniga, 571 F.3d 568, 581 (6th Cir. 2009) (quoting

United States v. Bolds, 511 F.3d 568, 578 (6th Cir. 2007)).

       Gall v. United States instructs us to assess whether an otherwise procedurally reasonable

sentence is greater than necessary, considering the defendant’s unique circumstances. 552 U.S.

38, 49–51 (2007). A sentence is substantively unreasonable if a district court “placed too much

weight on some of the § 3553(a) factors and too little on others.” United States v. Boucher, 937

F.3d 702, 707 (6th Cir. 2019). The court does not need to list each § 3553(a) factor by name, but

must offer “more than a simple and conclusory judicial assertion,” to justify a sentencing

determination. United States v. Ferguson, 518 F. App’x 458, 467 (6th Cir. 2013). “[W]e must

respect the district court’s reasoned discretion to weigh the factors ‘to fashion individualized, fact-

driven sentences without interference from appellate courts,” United States v. Perdue, 818 F.

App’x 419, 423 (6th Cir. 2020) (quoting Boucher, 937 F.3d at 708), but the justification for a

deviation must be “sufficiently compelling to support the degree of variance,” id. (quoting Gall,

552 U.S. at 50). Sentences within the advisory Guidelines range are presumptively reasonable;

however, sentences that deviate do not receive the same deference. Herrera-Zuniga, 571 F.3d at

582 (citing Rita v. United States, 551 U.S. 338, 347–51 (2007)). The greater the deviation, the

more compelling the justification must be. Perdue, 818 F. App’x at 423.

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Case No. 20-1273, United States v. Thomas

       The district court sentenced Thomas to 54 months for Count Group 1, an eight-month

upward variance from the 37 to 46-month range suggested by the Guidelines.              The court

“considered all of the defendant’s arguments in support of his request for a lower sentence,” but

ultimately selected a two-level upward variance. The court explained the basis of its upward

variance: (1) Thomas engaged in “brazen[]” conduct that may serve as an entryway to future

fraud; (2) the public needs protection from Thomas’s conduct given that the fraud occurred while

Thomas was on supervised release for a similar crime; and (3) there were many victims.

       Thomas contends that his sentence is substantively unreasonable because the court gave an

“unreasonable amount of weight to certain factors” and “ignor[ed] [his] arguments for a lower

sentence.” He suggests that the factors cited by the court for the upward variance were already

accounted for and reflected in the suggested Guidelines range.

       We have explained that the district court can rely on “the same facts and analyses. . . to

justify both a Guidelines departure and a variance, [but] the concepts are distinct.” United States

v. Tristan-Madrigal, 601 F.3d 629, 635 (6th Cir. 2010) (quoting United States v. Grams, 566 F.3d

683, 687 (6th Cir.2009)). Here, while Thomas was previously punished for violating the terms of

his supervised release, that penalization was for failure to follow his probation officer’s

instructions, possession of a controlled substance, leaving the district without permission, and

other issues unrelated to the conduct leading to his second plea and sentence.

       It is relevant that Thomas’s conduct leading to this case occurred while he was on

supervised release but resulted in a harm that is distinct from that for which he was previously

punished. That Thomas’s conduct increased in severity was also important to the district court’s

reasoning for its upward variance here. See, e.g., United States v. Williams, 664 F. App’x 517,

519 (6th Cir. 2016) (noting that the crimes were increasing in severity). The court noted the

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Case No. 20-1273, United States v. Thomas

“brazenness” of Thomas’s second fraud, which included using tracking technology, obtaining false

identifications, and utilizing the identities and accounts of others. Moreover, no more than eight

months after Thomas “got the benefit of a generous plea agreement” for aggravated identity theft,

one of the counts also charged in this case, Thomas engaged in a more sophisticated identity theft

and bank fraud scheme. The district court appropriately considered the § 3553(a) factors and did

not arbitrarily select Thomas’s sentence.       The sentence imposed was not substantively

unreasonable.

                                   III.   CONCLUSION

       Therefore, for the reasons discussed above, we AFFIRM Thomas’s sentence.

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