Court Opinion

ID: 2999887
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:58:46.530408+00
Date Added: 2024-06-11T15:03:27.419859
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                       ____________

No. 05-4244
UNITED STATES OF AMERICA,
                                           Plaintiff-Appellee,
                             v.

MATTHEW R. SCHUSTER,
                                       Defendant-Appellant.
                       ____________
          Appeal from the United States District Court
              for the Western District of Wisconsin.
        No. 04 CR 175—Barbara B. Crabb, Chief Judge.
                       ____________
 ARGUED SEPTEMBER 26, 2006—DECIDED OCTOBER 27, 2006
                   ____________

 Before BAUER, EASTERBROOK, and ROVNER, Circuit
Judges.
  BAUER, Circuit Judge.      Matthew Schuster pleaded
guilty to intentionally accessing and recklessly causing
damage to a protected computer in violation of 18 U.S.C.
§ 1030(a)(5)(A)(ii). He was sentenced to fifteen months
imprisonment and ordered to pay $19,060 in restitution.
Schuster appeals his sentence, arguing that the district
court erred in calculating both the loss amount resulting
from the offense and the amount of restitution. We affirm
Schuster’s sentence.
2                                              No. 05-4244

                     I. Background
  From 2000 until his termination, Schuster worked as a
computer technician for Alpha Computer Services, Wausau,
Wisconsin (“Alpha”). As an Alpha employee, Schuster
provided computer technical support to Central Wisconsin
Wireless Internet Services (“CWWIS”), a Wausau-area
wireless internet service provider, and its customers. He
was also a paying customer of CWWIS, using CWWIS’s
service for his home computer.
  On May 14, 2003, Alpha terminated Schuster for refusing
to provide technical support to a CWWIS client. The same
day, CWWIS sent Schuster a registered letter informing
him that it had terminated his CWWIS wireless internet
access and refunded the balance of his monthly payment.
  Schuster continued to access CWWIS wireless network
with his home computer, however, by using the internet
access information of various CWWIS customers:
T.D. Fischer Group, Riverbend Properties, the Wausau/
Central Wisconsin Convention & Visitors Bureau, and
Straight Shot Express. By connecting to CWWIS’s network
with the internet access information of these companies,
Schuster disrupted their wireless internet connection,
which adversely affected their productivity. Schuster
continued his unauthorized use of CWWIS’s network
until October 6, 2003, when a police officer who was execut-
ing a search warrant at Schuster’s house disconnected his
computer.
  A federal grand jury returned a two-count indictment
against Schuster on October 27, 2004. Count I charged
Schuster with violating 18 U.S.C. § 1030(a)(5)(A)(I) by
knowingly causing the transmission of a code, program,
command, or information to a protected computer used
in interstate commerce and communication and inten-
tionally causing damage of at least $5,000 to the com-
puter and to the computer’s user and customers. Count II
No. 05-4244                                                3

charged Schuster with violating 18 U.S.C § 1030(a)(5) (A)(ii)
by intentionally accessing a protected computer used in
interstate commerce and communication without authoriza-
tion and recklessly causing damage of at least $5,000 to the
computer and its user and customers.
  On May 13, 2005, Schuster pleaded guilty to count II,
conceding that the criminal conduct occurred between
September 1, 2003 and October 6, 2003. He acknowledged
that the government could prove at trial that he ac-
cessed the CWWIS system, a protected system, without
authorization. He further conceded that his access of
the CWWIS system caused damage by impairing the
availability of the CWWIS system to its customers and
impairing the availability of information over the CWWIS
network to their customers. Schuster also agreed to pay
restitution and all losses covered by the same course of
conduct or common scheme or plan as the offense of convic-
tion.
   At the sentencing hearing, the district court considered
and rejected several objections raised by Schuster to the
Pre-Sentence Investigation Report (“PSR”), finding that the
loss amount and restitution amount were both $19,060. The
district court determined that Schuster’s total offense level
was fourteen and the guideline imprisonment range was
fifteen to twenty-one months. The district court then
sentenced Schuster to fifteen months in prison to be
followed by three years of supervised release and ordered
him to pay $19,060 in restitution. This timely appeal
followed.

                       II. Analysis
  Schuster appeals the district court’s determination of both
the loss amount and amount of restitution. He argues that
the loss amount should be below $10,000, which would
result in an offense level of twelve and a guideline range of
4                                                No. 05-4244

ten to sixteen months imprisonment. Schuster contends
that the district court erred by including in its calculation
of the loss amount (1) $5,850 for T.D. Fischer Group based
on lost productivity for approximately five days; (2) $164
that T.D. Fischer Group spent to switch internet providers;
(3) $2,700 for travel by victims to meet with the FBI; and
(4) $1,400 for two victims to testify at the sentencing
hearing on behalf of the government. He also asserts that
the amount of restitution should be $13,046, not $19,060,
because the government failed to meet its burden of proving
by a preponderance of the evidence that Schuster’s actions
caused T.D. Fischer Group to lose $6,014.
   Our review of a district court’s sentencing decision is
deferential. We review the district court’s assessment of the
amount of loss for clear error and will reverse “only if the
district court’s calculation evokes ‘a definite and
firm conviction that a mistake has been made.’ ” United
States v. Schaefer, 291 F.3d 932, 936-37 (7th Cir. 2002)
(quoting United States v. Vivit, 214 F.3d 908, 914 (7th
Cir. 2000)). The meaning of “loss” under the sentencing
guidelines, however, is a question of law that we review
de novo. Vivit, 214 F.3d at 914.

    A. T.D. Fischer Group’s Loss of $6,014
  Schuster challenges the district court’s inclusion of T.D.
Fischer Group’s entire claim for $9,524 in its calculation
of the actual loss amount, arguing that this amount
should be reduced by $6,014: $5,850 based on T.D. Fischer
Group’s lost productivity preceding October 1, 2003 and
$164 for its costs in switching internet providers. He asserts
that the government failed to prove by a preponderance of
the evidence that he was responsible for T.D. Fischer
Group’s lost productivity and associated costs. We find that
the district court did not clearly err in including the $6,014
in its calculation of the loss amount attributable to
No. 05-4244                                                5

Schuster’s conduct and affirm the district court’s order of
restitution in the amount of $19,060.
   At the sentencing hearing, the district court heard
testimony from two witnesses: Curt Brodjieski, who testi-
fied on behalf of Alpha and CWWIS, and Robert Fischer,
who testified on behalf of T.D. Fischer. Both witnesses
testified regarding the existence of technologically unex-
plainable problems with CWWIS’s internet service and
T.D. Fischer Group’s internet connection. They testified
that these problems were consistent with Schuster’s use of
T.D. Fischer’s internet access information. These problems
arose before September 30, 2003 and ended once Schuster’s
equipment was removed from his home in connection with
the search warrant. Such evidence was sufficient to raise
the reasonable inference that Schuster had caused the
inexplicable problems before October 1, 2003.
  This inference is bolstered by Schuster’s threats of
causing interference with the services delivered by Alpha
and CWWIS. The PSR reported that Schuster had tele-
phoned an Alpha employee on October 2, 2003 and, during
the course of the conversation, informed the Alpha em-
ployee that he was leaving his home’s wireless antenna and
equipment “plugged in” to harass Alpha and CWWIS. Later,
while playing an on-line game, Schuster wrote in a “chat”
session with other game players that he was experiencing
a poor wireless connection because he was not on any
internet service provider’s customer list. He explained that
the provider was making encryption changes and that he
was having difficulty keeping up with these changes.
Schuster then wrote that he needed to find a way to
broadcast interference from his wireless antenna “just to
fuck with them.” The following day, October 3, 2003,
Schuster ran a “Google” search over CWWIS’s network
using the following search terms: “how to broadcast inter-
ference over wifi 2.4 GHZ,” “interference over wifi 2.4 Ghz,”
6                                                No. 05-4244

“wireless networks 2.4 interference,” and “make device
interfere wireless network.”
  The inference that Schuster caused the pre-October 1,
2003 problems is supported further by the existence of
“denial of service attacks” against CWWIS’s customers
throughout the summer. The PSR reported that Brodjieski
had received a customer complaint on October 3, 2003
that the customer’s website was down. Brodjieski investi-
gated the computer that hosted that company’s website. He
discovered that the computer was under a “denial of service
attack,” which, in this instance, had occurred because the
computer was overwhelmed with information or requests
and could not keep up with the demand. Brodjieski had
encountered similar denial of service attacks during the
summer. Aware that Schuster was connected to CWWIS’s
network, Brodjieski terminated Schuster’s connection and
saw that the denial of service attack had ended.
  Schuster argues, however, that the district court’s finding
that he was responsible for problems occurring before
October 1, 2003 was contrary to the evidence. He asserts
that from the day he was fired until September 30, 2003, he
used CWWIS’s internet service like any other customer by
using the same “MAC address”1 and “IP address”2 that
CWWIS had given him as a paying customer. In support of
this assertion, Schuster points to Brodjieski’s testimony at
the sentencing hearing that Schuster had continued to use
the same MAC address that he had been assigned previ-
ously by CWWIS before CWWIS terminated his access to
the service on September 30, 2003. Brodjieski’s testimony,

1
  A “MAC address,” or media access control address, is a unique
number assigned to the hardware of a particular computer or
other device.
2
  An “IP address,” or internet protocol address, identifies a
computer or device attached to a network.
No. 05-4244                                                  7

however, is not evidence that Schuster only used the MAC
address that CWWIS had assigned him. Moreover, this
testimony fails to substantiate Schuster’s claim that he
used the same IP address.
  Schuster was caught using the MAC addresses of T.D.
Fischer Group, Straight Shot Express, and others be-
tween September 30 and October 6, 2003. Only after
CWWIS terminated the MAC address and IP address that it
had assigned to him as a paying customer did Schuster go
so far as to access and password-protect the wireless
antennae that these companies used to access CWWIS’s
wireless network. In taking these steps, Schuster gave
himself exclusive use of these businesses’ MAC addresses.
In light of such evidence, it was not unreasonable for the
court to infer that Schuster had used the MAC addresses of
these companies before October 1, 2003, even if he had used
his previously assigned MAC address as well. Thus, the
district court did not clearly err in holding Schuster respon-
sible for attacks occurring before October 1, 2003 and the
$5,850 in costs associated with these attacks.
  In a similar vein, Schuster argues that the district court
erred in including in its calculation of the loss amount
the $164 that T.D. Fischer Group had spent to switch
internet providers. T.D. Fischer Group had begun to look for
a different internet provider approximately two
months before October 3, 2003. Schuster therefore contends
that his conduct in September and early October 2003 had
nothing to do with T.D. Fischer Group’s decision to change
to a different internet provider. As explained above, how-
ever, the district court did not clearly err in holding
Schuster responsible for T.D. Fischer Group’s internet
connection problems arising before October 1, 2003, includ-
ing the inexplicable technological problems that it had
experienced prior to September 30, 2003. As such, the
district court did not clearly err in attributing to Schuster’s
conduct the need of T.D. Fischer Group to find a different
8                                                No. 05-4244

internet provider and its payment of $164 to change
internet providers. Because the district court did not err in
including the $6,014 in its loss calculation, we also affirm
the district court’s order of $19,060 in restitution.

    B. Losses of $2,700 and $1,400 for Assisting Govern-
       ment
  Finally, Schuster challenges the district court’s inclusion
in its calculation of the loss amount $2,700 in costs for two
victims’ meetings with the FBI during the course of the
FBI’s investigation of Schuster and $1,400 in costs for two
victims to testify on behalf of the government at the
sentencing hearing. Schuster argues that such costs are
excluded from the loss calculation under the sentencing
guidelines. In response, the government asserts that
Schuster waived or forfeited his argument regarding the
$1,400 by failing to object to its inclusion in the loss
calculation at the sentencing hearing. We need not decide
whether Schuster adequately preserved this argument
because the point is academic. The district court’s inclusion
of both the $2,700 and $1,400 in its calculation of the loss
amount did not affect the offense level, and we conclude
that the same sentence would have been im-
posed irrespective of whether the loss calculation ex-
cluded these amounts.
  Under U.S.S.G. § 2B1.1(b), loss is to be calculated as “the
greater of actual loss or intended loss.” U.S.S.G. § 2B1.1,
application note 3(A). “Actual loss” under the sentencing
guidelines, “means the reasonably foreseeable pecuniary
harm that resulted from the offense.” U.S.S.G. § 2B1.1,
application note 3(A)(i). “Intended loss,” by contrast, is “the
pecuniary harm that was intended to result from the
offense,” including the “intended pecuniary harm that
would have been impossible or unlikely to occur . . . .”
U.S.S.G. § 2B1.1, application note 3(A)(ii). Additionally, in
No. 05-4244                                                 9

cases involving fraud and related activity in connection
with computers, the sentencing guidelines include in the
calculation of actual loss, regardless of whether such
pecuniary harm was reasonably foreseeable,
    any reasonable cost to any victim, including the cost of
    responding to an offense, conducting a damage as-
    sessment, and restoring the data, program, system, or
    information to its condition prior to the offense, and any
    revenue lost, cost incurred, or other damages incurred
    because of the interruption of service.
U.S.S.G. § 2B1.1, application note 3(A)(v)(III). The commen-
tary to the sentencing guidelines expressly excludes from
loss calculations “[c]osts to the government of, and costs
incurred by victims primarily to aid the government in, the
prosecution and criminal investigation of an offense.”
U.S.S.G. § 2B.1.1, cmt. n.3(D)(ii).
  Schuster notes that the imperatives contained in ap-
plication note 3(A)(v)(III) and commentary note 3(D)(ii) to
U.S.S.G. § 2B1.1 appear to conflict with one another. On the
one hand, the commentary is explicit in its exclusion from
the loss calculation those costs associated with assisting the
government in investigating and prosecuting an offense. On
the other hand, application note 3(A)(v)(III) allows victims
of computer-related fraud and similar activity to recover
“any reasonable cost.” He argues that under basic principles
of statutory construction, this apparent conflict is readily
resolved in favor of excluding from the loss calculation those
costs attributable to assisting the government, even for
offenses involving computer-related fraud and similar
activity. We agree.
  Courts must interpret the sentencing guidelines “so no
words are discarded as meaningless, redundant or
surplusage.” United States v. Arnaout, 431 F.3d 994, 1001
(7th Cir. 2005) (citing Witzke v. Femal, 376 F.3d 744, 753
(7th Cir. 2004)). Allowing victims to recover as “reasonable
10                                               No. 05-4244

costs” those costs primarily associated with their assistance
of the government, even with regard to offenses
in connection with computer-related fraud and similar
activities, would render the commentary to § 2B1.1 mean-
ingless. We cannot countenance such a result.
  Additionally, losses associated with assisting the govern-
ment are excluded from application note 3(A)(v)(III) to
§ 2B1.1 under the principle of noscitur a sociis, or “[i]t
is known from its associates, the meaning of questionable
words or phrases in a statute may be ascertained by
reference to the meaning of words or phrases associated
with it.” Ortloff v. United States, 335 F.3d 652, 659 (7th Cir.
2003) (internal quotations and citation omitted). Applica-
tion note 3(A)(v)(III) specifies the types of reasonable costs
that are recoverable: “the cost of responding to an offense,
conducting a damage assessment, and restoring the data,
program, system, or information to its condition prior to the
offense, and any revenue lost, cost incurred, or other
damages incurred because of the interruption of service.”
U.S.S.G. § 2B1.1, application note 3(A)(v)(III). Such costs
are those attributable to identifying and correcting the
technological problems resulting from the offense. Costs
associated with assisting the government, by contrast, are
unrelated to these functions and, as a consequence, ex-
cluded from the purview of application note 3(A)(v)(III).
  The $2,700 loss incurred by victims for their travel to
an FBI office to meet with the FBI and assist with the FBI’s
investigation of the offense easily falls within the exclusion
in the commentary to § 2B1.1. The victims incurred these
costs while assisting the government in building its case
against Schuster. The district court erred by including the
$2,700 in its calculation of the loss amount. Whether the
$1,400 loss falls within this exception is less obvious.
  The $1,400 loss is attributable to the costs incurred by the
victims in gathering documents to respond to Schuster’s
No. 05-4244                                                 11

subpoenas duces tecum and in testifying at the sentencing
hearing. Neither Schuster nor the government allocates a
percentage of this loss between responding to the subpoenas
and testifying at the sentencing hearing. Instead, Schuster
merely asserts that these victims testified favorably to the
government at the sentencing hearing. We cannot conclude
from this assertion that the victims incurred these costs
primarily to aid the government in the prosecution and
criminal investigation of an offense.
  Even if we were to presume that the $1,400 loss was
incurred by the victims primarily in their aid of the govern-
ment, we agree with the government that the district
court’s inclusion of the $2,700 and $1,400 in its calculation
of the loss amount was harmless. The loss amount exceeds
$10,000 without the addition of either amount, resulting in
the district court’s proper application of an offense level of
fourteen and guideline range of fifteen to twenty-one
months. And the district court imposed the lowest possible
sentence within the guideline range. Thus, we need not
remand this case to the district court for resentencing
because the record, as a whole, demonstrates that the
asserted error did not affect the district court’s selection of
the sentence that it imposed. See Williams v. United States,
503 U.S. 193, 203, 112 S. Ct. 1112, 117 L. Ed. 2d 341 (1992)
(holding that a remand is only necessary if the sentence
was “imposed as a result of an incorrect application” of the
sentencing guidelines) (emphasis in original). See also
United States v. Saunders, 129 F.3d 925, 932-33 (7th Cir.
1997).

                      III. Conclusion
  For the foregoing reasons, we AFFIRM the sentence
imposed by the district court.
12                                        No. 05-4244

A true Copy:
      Teste:

                    ________________________________
                    Clerk of the United States Court of
                      Appeals for the Seventh Circuit

               USCA-02-C-0072—10-27-06