Court Opinion

ID: 170379
Source: CourtListenerOpinion
Date Created: 2010-08-14 18:07:00+00
Date Added: 2024-06-11T17:25:07.054274
License: Public Domain

FILED
                                                         United States Court of Appeals
                                                                 Tenth Circuit

                                                                 March 3, 2008
                                      PUBLISH                Elisabeth A. Shumaker
                                                                 Clerk of Court
                      UNITED STATES COURT OF APPEALS

                                FOR THE TENTH CIRCUIT

 UNITED STATES OF AMERICA,
          Plaintiff–Appellee,
          v.                                            No. 07-7053
 JASON ALAN TATUM,

          Defendant–Appellant.

           APPEAL FROM THE UNITED STATES DISTRICT COURT
              FOR THE EASTERN DISTRICT OF OKLAHOMA
                     (D.C. No. 07–CR–12–01–RAW)

Submitted on the briefs: *

Terry L. Weber, Tulsa, Oklahoma, for Defendant–Appellant.

Sheldon J. Sperling, United States Attorney, and Ryan M. Roberts, Assistant
United States Attorney, Muskogee, Oklahoma, for Plaintiff–Appellee.

Before BRISCOE, McKAY, and McCONNELL, Circuit Judges.

McKAY, Circuit Judge.

      Defendant pled guilty to one count of uttering a counterfeit check with the

      *
       After examining the briefs and the appellate record, this panel has
determined unanimously to honor the parties’ request for a decision on the briefs
without oral argument. See Fed. R. App. P. 34(f). The case is therefore ordered
submitted without oral argument.
intent to deceive an organization in violation of 18 U.S.C. § 513(a). The pre-

sentencing report calculated Defendant’s total offense level at ten, based on a

base offense level of six under United States Sentencing Guideline Manual

(U.S.S.G.) § 2B1.1(a)(2), a six-level enhancement pursuant to U.S.S.G. §

2B1.1(b)(10), 1 and a two-level reduction pursuant to U.S.S.G. § 3E1.1(a). Based

on a criminal history category of VI, Defendant’s advisory sentencing range was

calculated at twenty-four to thirty months. In response to the PSR and at his

sentencing hearing, Defendant objected to the § 2B1.1(b)(10) enhancement. The

district court overruled his objection, holding that subsections A and B of §

2B1.1(b)(10) were both satisfied by Defendant’s creation of counterfeit checks

and a false driver’s license by means of a computer and scanner. 2 The court then

sentenced Defendant to a term of twenty-four months’ imprisonment, at the

bottom of the advisory Guidelines range. On appeal, Defendant challenges the

application of the six-level enhancement under § 2B1.1(b)(10).

      In reviewing the district court’s sentencing decision, we “must first ensure

that the district court committed no significant procedural error, such as failing to

      1
        Section 2B1.1(b)(10) generally calls for a two-level increase in the
offense level, but it provides that the offense level should be increased to twelve
if it would otherwise be less than twelve. Thus, Defendant’s calculated offense
level was increased six levels to level twelve pursuant to this Guideline.
      2
        The enhancement under § 2B1.1(b)(10) applies if any of the three
subsections are satisfied. The court held that subsection B provided an alternative
ground for imposition of the § 2B1.1(b)(10) enhancement.

                                         -2-
calculate (or improperly calculating) the Guidelines range.” Gall v. United

States, 128 S. Ct. 586, 597 (2007). “Assuming that the district court’s sentencing

decision is procedurally sound, [we] should then consider the substantive

reasonableness of the sentence imposed under an abuse-of-discretion standard.”

Id. Defendant contends that the district court committed a significant procedural

error when it imposed a six-level enhancement pursuant to § 2B1.1(b)(10),

increasing the advisory Guidelines range for Defendant’s sentence from a range

of six to twelve months to a range of twenty-four to thirty months.

      Subsection A of § 2B1.1(b)(10) applies to an offense involving “the

possession or use of any (i) device-making equipment, or (ii) authentication

feature.” 3 Device-making equipment is defined as “any equipment, mechanism,

or impression designed or primarily used for making an access device or a

counterfeit access device.” 18 U.S.C. § 1029(e)(6); see also U.S.S.G. § 2B1.1

cmt n.9(A) (“‘Device-making equipment’ (i) has the meaning given that term in

      3
         An authentication feature is “any hologram, watermark, certification,
symbol, code, image, sequence of numbers or letters, or other feature that either
individually or in combination with another feature is used by the issuing
authority on an identification document, document-making implement, or means
of identification to determine if the document is counterfeit, altered, or otherwise
falsified.” 18 U.S.C. § 1028(d)(1); see also U.S.S.G. § 2B1.1 cmt n.9(A)
(“‘Authentication feature’ has the meaning given that term in 18 U.S.C. §
1028(d)(1).”). The government does not argue that Defendant’s offense involved
the use, possession, production, or trafficking of any authentication feature.

                                         -3-
18 U.S.C. § 1029(e)(6) . . . .”). 4 Subsection B applies to an offense involving

“the production or trafficking of any (i) unauthorized access device or counterfeit

access device, or (ii) authentication feature.” U.S.S.G. § 2B1.1(10)(B). For

purposes of both the statutory definition of device-making equipment and the text

of § 2B1.1(b)(10)(B), an access device is defined as “any card, plate, code,

account number, electronic serial number, mobile identification number, personal

identification number, or other telecommunications service, equipment, or

instrument identifier, or other means of account access that can be used, alone or

in conjunction with another access device, to obtain money, goods, services, or

any other thing of value, or that can be used to initiate a transfer of funds (other

than a transfer originated solely by paper instrument).” 18 U.S.C. § 1029(e)(1).

      At his sentencing hearing, Defendant argued that his conduct did not

involve the production or trafficking of any access device. The district court

overruled this objection, concluding that the account numbers printed on the

counterfeit checks were access devices for purposes of subsections A and B of §

2B1.1(b)(10). The court also indicated that the counterfeit checks themselves

might be considered access devices. We disagree on both counts.

      Although the statute defining access devices is quite broad, it contains a

      4
        Device-making equipment also “(ii) includes (I) any hardware or software
that has been configured as described in 18 U.S.C. § 1029(a)(9); and (II) a
scanning receiver referred to in 18 U.S.C. § 1029(a)(8).” Neither of these
definitions is applicable to Defendant’s conduct in the instant case.

                                         -4-
key limitation. An access device is defined as one of a number of means of

account access that can be used “to obtain money, goods, services, or any other

thing of value, or that can be used to initiate a transfer of funds (other than a

transfer originated solely by paper instrument).” 18 U.S.C. § 1029(e)(1)

(emphasis added). “That parenthetical exclusion unambiguously places the

passing of bad checks and similar conduct outside the scope of the federal

statute.” United States v. Hughey, 147 F.3d 423, 434 (5th Cir. 1998). Indeed, the

legislative history of § 1029 reveals that “Congress was focused on the fraudulent

use of [access] devices in connection with credit transactions,” United States v.

McNutt, 908 F.2d 561, 563 (10th Cir. 1990) (internal quotation marks omitted),

and specifically intended to exclude conduct such as passing bad checks. See S.

Rep. No. 98-368, at 10 (1984), as reprinted in 1984 U.S.C.C.A.N. 3647, 3656

(“By specifically excluding transfers of funds originated solely by paper

instrument, [the statutory definition] covers offenses such as those included in the

Electronic Fund Transfer Act, but does not cover activities such as passing bad

checks.”); H.R. Rep. No. 98-894, at 19 (1984), as reprinted in 1984 U.S.C.C.A.N.

3689, 3705 (“The definition of this term is broad enough to encompass future

technological changes and the only limitation i.e., ‘(other than a transfer

originated solely by paper instrument)’ excludes activities such as passing forged

checks.”).

      In Hughey, the Fifth Circuit considered whether a defendant’s creation and

                                          -5-
presentation of a number of counterfeit checks constituted the production, use, or

trafficking of unauthorized or counterfeit access devices. 147 F.3d at 434-36.

After considering the plain language and legislative history of the access device

definition, the court concluded that the defendant’s conduct did not involve

access devices because his conduct involved only transfers “originated solely by

paper instrument” and “[s]uch conduct is not within the ambit of the conduct that

Congress sought to prohibit in § 1029.” Id. at 435. As in this case, the

government in Hughey argued that the account numbers printed on the counterfeit

checks themselves constituted access devices because they could potentially be

used with other codes, such as wire transfer codes, to obtain access to the

accounts. The court rejected this argument, stating:

             The government’s argument ignores the fact that there is absolutely
      no suggestion in the record that Hughey either possessed or had access to
      the additional codes that would have been required to complete a wire
      transfer with the account numbers. More importantly, the government’s
      interpretation also ignores the plain text of the parenthetical exclusion,
      which is directly application to Hughey’s conduct. The statute excludes
      “transfer[s] originated solely by paper instrument,” without regard to
      whether the transfer involved some component of an access device or some
      device which, but for the parenthetical exclusion, might otherwise have the
      potential [sic] be an access device.

Id.

      We agree with the Fifth Circuit’s reasoning. The statutory definition of

access devices unambiguously excludes “transfer[s] originated solely by paper

instrument,” which is precisely the conduct involved in Defendant’s offense. The

                                         -6-
government introduced no evidence that Defendant used, possessed, produced, or

trafficked in bank account numbers in any way except as part of his scheme to

pass counterfeit checks. We therefore conclude that both the counterfeit checks

and the account numbers printed on those checks fall outside the statutory

definition of an access device. Thus, we hold that Defendant’s conduct did not

involve the use or possession of device-making equipment—equipment designed

or primarily used for making access devices or counterfeit access devices 5—under

subsection A of § 2B1.1(b)(10), nor did it involve trafficking in or producing

      5
         At sentencing, Defendant also argued that the computer and scanner he
used to create the counterfeit checks did not constitute device-making equipment
because computers and scanners are not primarily used to commit crimes. The
district court rejected this argument, stating that Defendant was defining device-
making equipment too narrowly and concluding that § 2B1.1(b)(10)(A) was
satisfied by Defendant’s use of a computer and scanner to counterfeit checks.
Defendant also appeals this portion of the court’s ruling.

       We note that the two circuits to address this issue have both adopted a
middle ground in construing the definition of device-making equipment. See
United States v. Cabrera, 208 F.3d 309 (1st Cir. 2000); United States v. Morris,
81 F.3d 131 (11th Cir. 1996). While rejecting the general-purposes argument that
Defendant proposed to the district court in this case, the First and Eleventh
Circuits have indicated that a district court must enquire whether the defendant
designed or primarily used the equipment at issue to make access devices. See
Cabrera, 208 F.3d at 312-15 (considering whether evidence supported conclusion
that defendant primarily used or designed his computer system for document
production); Morris, 81 F.3d at 133 (“Here, [the defendant’s tumbling cellular]
phone was not primarily used to generate [electronic serial number/mobile
identification number] combinations: it was used to make phone calls.”). Given
our conclusion that Defendant’s conduct fell outside the statutory definition
because it did not involve access devices at all, we need not resolve this issue
here.

                                        -7-
access devices under subsection B. We accordingly hold that the district court

erred in imposing a six-level enhancement pursuant to § 2B1.1(b)(10).

      The district court’s imposition of the § 2B1.1(b)(10) enhancement

constituted a significant procedural error. We therefore REVERSE the

imposition of this enhancement and REMAND for resentencing in accordance

with this opinion.

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