Court Opinion

ID: 9911916
Source: CourtListenerOpinion
Date Created: 2023-12-21 01:02:07.641445+00
Date Added: 2024-06-11T12:58:02.471053
License: Public Domain

Case: 22-11039      Document: 00517009757       Page: 1    Date Filed: 12/20/2023

            United States Court of Appeals
                 for the Fifth Circuit
                                ____________
                                                                   United States Court of Appeals
                                                                            Fifth Circuit
                                  No. 22-11039
                                ____________                              FILED
                                                                  December 20, 2023
   United States of America,                                         Lyle W. Cayce
                                                                          Clerk
                                                           Plaintiff—Appellee,

                                      versus

   Adam Joseph Schultz,

                                            Defendant—Appellant.
                   ______________________________

                   Appeal from the United States District Court
                       for the Northern District of Texas
                            USDC No. 4:22-CR-162-1
                   ______________________________

   Before Higginbotham, Smith, and Elrod, Circuit Judges.
   Jennifer Walker Elrod, Circuit Judge:
          After pleading guilty to one count of conspiracy to commit wire fraud
   and receiving a 120-month sentence, Defendant Adam Joseph Schultz
   challenged his sentence. We REMAND to the district court to conform the
   written judgment to the oral pronouncement of his sentence and AFFIRM
   in all other respects.
                                        I
          From November 2020 through February 2021, Schultz and his co-
   conspirators, Kevin Michael Davis, Charles Wayland Lanier, and Matthew
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                                          No. 22-11039

   Pace Sharp, engaged in a scheme to fraudulently obtain vehicles. They used
   the dark web 1 to obtain car dealerships’ log-in credentials for Manheim, an
   online vehicle exchange. They used the credentials to purchase and pay for
   vehicles with the car dealerships’ money. Once the payment was made,
   Schultz and his co-conspirators used the purchase documents to pick up the
   vehicles. In total, they purchased or attempted to purchase nineteen vehicles
   worth a combined $766,249. They physically obtained eleven of those
   vehicles, which were worth a combined $442,213.
           Schultz pleaded guilty to one count of conspiracy to commit wire
   fraud in violation of 18 U.S.C. § 1349 (18 U.S.C. § 1343). The PSR
   recommended a base offense level of seven. It recommended a fourteen-level
   increase based on the loss amount attributable to the nineteen vehicles
   Schultz intended to steal ($766,249). The PSR also recommended two-level
   enhancements for: (1) using sophisticated means; (2) engaging in a scheme
   to steal or receive stolen vehicles; (3) being an organizer or leader in the
   criminal activity; and (4) obstructing justice. The PSR subtracted three
   levels for acceptance of responsibility, resulting in a total offense level of
   twenty-six.
           Regarding Schultz’s criminal history, the PSR classified an April 2021
   incident in which Schultz was stopped while driving a stolen vehicle as
   criminal history, not relevant conduct. 2 During the April 2021 arrest, officers
   found debit cards and addresses belonging to other individuals, as well as a

           _____________________
           1
            The dark web is an area of the internet accessible only by using an encryption tool.
   It provides anonymity and privacy online, and perhaps consequently, frequently attracts
   those with criminal intentions. Gareth Owen & Nick Savage, The Tor Dark Net, Global
   Commission on Internet Governance, Paper Series No. 20, 1 (2015).
           2
              Following the arrest, Schultz pleaded guilty to fraudulent possession of
   identifying information.

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   syringe containing methamphetamine, in the car.           Schultz received a
   criminal-history score of fifteen, putting him in criminal-history category VI.
   With a total offense level of twenty-six and a criminal-history category of VI,
   Schultz received an advisory guideline range of 120 to 150 months in prison.
          Schultz objected to the PSR on the grounds that it: (1) improperly
   classified his April 2021 offense as criminal history, rather than relevant
   conduct, resulting in two extra criminal-history points; and (2) failed to give
   him a two-level reduction for a partially completed offense under U.S.S.G.
   §§ 2B1.1 and 2X1.1. The district court rejected both of Schultz’s objections.
   The district court imposed a sentence of 120 months and stated that it would
   have imposed the same sentence even if it was wrong about either of
   Schultz’s objections. In its oral pronouncement of the sentence, the district
   court stated that Schultz’s federal sentence would run concurrently with any
   sentence imposed in his state cases. In the court’s written judgment, entered
   the same day that the oral pronouncement was made, the court stated that
   the federal sentence would run consecutively with any state sentences.
                                         II
          Because Schultz preserved his objections to the district court’s
   findings, we review the district court’s interpretation of the Sentencing
   Guidelines de novo and its factual findings for clear error. United States v.
   Sanchez-Rodriguez, 830 F.3d 168, 171 (5th Cir. 2016).
                                         A
          Schultz argues that the district court committed reversible error by
   treating his state conviction for fraudulent use or possession of identifying
   information as criminal history instead of relevant conduct.
          To determine whether an offense is part of the same course of conduct
   as the offense for which the defendant was convicted, courts look to: (1) the

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   similarity of the offenses; (2) the regularity of the offenses; and (3) the time
   interval between the offenses. United States v. Lindsey, 969 F.3d 136, 141 (5th
   Cir. 2020) (citing U.S.S.G. § 1B1.3, cmt. n.5(B)(ii)). A weak showing as to
   any of the factors does not preclude a finding of relevant conduct, but it does
   require a stronger showing from one of the other factors to compensate for
   the deficiency. United States v. Rhine, 583 F.3d 878, 886 (5th Cir. 2009). To
   determine the similarity of the offenses, courts must consider whether “there
   are distinctive similarities between the offense of conviction and the remote
   conduct,” or whether the offenses are merely “similar in kind.” Id. at 888
   (citations omitted).
          The April 2021 offense was appropriately classified as criminal
   history. The similarity factor strongly favors the government’s position. The
   car in the April 2021 offense was physically stolen, while the vehicles
   underlying the wire fraud offense were fraudulently obtained through an
   online vehicle exchange. There is no suggestion that the instruments of
   identity theft found during the April 2021 arrest were used to obtain the
   vehicle. By contrast, when Schultz was arrested in January 2021 for the
   conduct for which he ultimately pleaded guilty, he was in a vehicle
   fraudulently purchased from the Manheim online vehicle exchange and the
   identity theft materials found in the vehicle were used for other Manheim
   transactions. These differences show the offenses were at most “similar in
   kind.” Rhine, 583 F.3d at 888–89 (finding offenses were merely similar in
   kind where one cocaine offense involved a small sale to an individual and the
   other involved participation in a major drug-trafficking ring). The April 2021
   arrest did not involve any of the same accomplices or victims as the Manheim
   scheme, and it occurred after Manheim learned of Schultz’s scheme and shut
   it down.
          The regularity factor also favors the government’s position because of
   the differences in how the cars were obtained. See Lindsey, 969 F.3d at 142

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   (explaining that the regularity analysis asks whether there is a repeated
   pattern of similar unlawful conduct directly linking the purported relevant
   conduct and the offense of conviction).               The Manheim vehicles were
   fraudulently obtained using identity theft, not physical theft. Therefore,
   those vehicles support the proposition that Schultz regularly engaged in
   fraud, not that he regularly physically stole vehicles. The record does not
   contain any instance in which Schultz physically stole a vehicle other than
   the April 2021 incident.
           The time-interval factor favors Schultz, but it does not compensate
   for the weakness in the other factors. The benchmark for temporal proximity
   is generally one year. Rhine, 583 F.3d at 886. The April 2021 arrest occurred
   about ten weeks after the last Manheim vehicle was stolen. While ten weeks
   is well within the benchmark, it does not make up for the lack of similarity
   and regularity between the charged conduct and the April 2021 arrest. 3
   Accordingly, the district court did not err by classifying the April 2021 arrest
   as criminal history rather than relevant conduct.
                                               B
           Schultz argues that he should have received a reduction for a partially
   completed offense under U.S.S.G. §§ 2B1.1 and 2X1.1 because his conspiracy
   to commit wire fraud was part of a larger theft.
           Application Note 19 of U.S.S.G. § 2B1.1 states:
           In the case of a partially completed offense (e.g., an offense
           involving a completed theft or fraud that is part of a larger,
           attempted theft or fraud), the offense level is to be determined
           _____________________
           3
             Schultz points to United States v. Ocana, in which this court found subsequent
   conduct was relevant conduct despite a lack of similarity with the charged conduct. 204
   F.3d 585, 589–92 (5th Cir. 2000). Ocana is distinguishable. In Ocana, the regularity factor
   also favored the defendant. Id. at 591. Here, only temporal proximity favors Schultz.

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          in accordance with the provisions of §2X1.1 (Attempt,
          Solicitation, or Conspiracy) whether the conviction is for the
          substantive offense, the inchoate offense (attempt, solicitation,
          or conspiracy), or both.
   U.S.S.G. § 2B1.1 cmt. (n.19.)
          Application Note 4 of U.S.S.G. § 2X1.1 states:
          In certain cases, the participants may have completed (or have
          been about to complete but for apprehension or interruption)
          all of the acts necessary for the successful completion of part,
          but not all, of the intended offense. In such cases, the offense
          level for the count (or group of closely related multiple counts)
          is whichever of the following is greater: the offense level for the
          intended offense minus 3 levels (under §2X1.1(b)(1), (b)(2), or
          (b)(3)(A)), or the offense level for the part of the offense for
          which the necessary acts were completed (or about to be
          completed but for apprehension or interruption). For example,
          where the intended offense was the theft of $800,000 but the
          participants completed (or were about to complete) only the
          acts necessary to steal $30,000, the offense level is the offense
          level for the theft of $800,000 minus 3 levels, or the offense
          level for the theft of $30,000, whichever is greater.
   U.S.S.G. § 2X1.1 cmt. n.4.
          No reduction is warranted when the failure to complete the
   substantive offense is the result of intervention by the victim or law
   enforcement. U.S.S.G. § 2X1.1, cmt. (backg’d.)
          Schultz’s argument turns on whether §§ 2B1.1 and 2X1.1 apply only
   to situations in which the defendant was charged with the larger offense or
   whether they also apply to situations in which the defendant intended a larger
   offense for which he was not charged. Though there is some textual basis for
   Schultz’s position, it is clearly foreclosed by our precedent.

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          While we have not specifically held that a defendant must be charged
   with the larger crime to be eligible for a partially completed offense reduction,
   we have repeatedly upheld sentences when the charged crime was arguably
   part of a larger intended theft, provided the elements of the charged crime
   were completed. United States v. Popa, 835 F.3d 506, 508 (5th Cir. 2016)
   (explaining that the focus is on the substantive offense, not additional
   criminal activity needed to cause the intended loss); United States v. Neal,
   294 F. App’x 96, 102 (5th Cir. 2008) (unpublished); United States v. Thomas,
   585 F. App’x 869, 870 (5th Cir. 2014) (unpublished). For example, in Popa,
   the defendant was charged with attempting to fraudulently possess
   unauthorized access devices. Popa, 835 F.3d at 507. He intended to use the
   devices to steal $200,000, but he did not obtain any of the money. Id. We
   held it was proper not to apply a § 2X1.1 sentence reduction because the
   defendant completed all the elements of the crime for which he was charged.
   Id. at 508. It did not matter that he could have been charged with attempted
   theft, making the completed crime part of that larger crime.
          United States v. John, which Schultz mistakenly contends supports his
   position, proves, rather than contradicts, the rule. 597 F.3d 263 (5th Cir.
   2010), abrogated on other grounds by Van Buren v. United States, 141 S. Ct. 1648
   (2021). In John, the defendant fraudulently accessed 76 bank accounts. Id.
   at 269. Because the defendant only made purchases with eight of the
   accounts, we held the district court clearly erred by failing to apply a partially
   completed offense reduction. Id. at 281–84. As explained in Thomas and
   Popa, the uncompleted conduct in John was an element of the crime for which
   the defendant was convicted. 585 F. App’x at 870; 835 F.3d at 508. It was
   not additional criminal activity needed to cause the loss. John is consistent
   with cases such as Popa, which hold that an incomplete offense reduction is
   inapplicable where the elements of the charged crime have been completed.

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                                    No. 22-11039

          Here, Schultz completed each of the elements of the charged crime.
   Wire fraud requires: (1) a scheme to defraud; (2) use of wire communications
   in interstate commerce to further that scheme; and (3) specific intent to
   defraud. United States v. Sanders, 952 F.3d 263, 277 (5th Cir. 2020) (citation
   omitted) (listing elements of fraud). Wire fraud does not require obtaining
   the targeted money or property. E.g., United States v. Tulaner, 512 F.3d 576,
   580–81 (9th Cir. 2008). Failure to physically possess eight of the vehicles,
   the sole basis for Schultz’s argument, does not implicate any of the fraud
   elements. The district court did not err by declining to apply a reduction for
   a partially completed offense.
                                         C
          When there is a conflict between a written sentence and an oral
   pronouncement, the oral pronouncement controls. United States v. Martinez,
   250 F.3d 941, 942 (5th Cir. 2001). Here, there is a conflict between the
   written sentence and the oral pronouncement. In the oral pronouncement,
   the district court stated:
          It is the judgment of the Court that the defendant is committed
          to the Federal Bureau of Prisons for a period of 120 months.
          This sentence shall run concurrent to any future sentence which
          may be imposed in Case No. 12573, 46th Judicial District Court
          of Wilbarger County; Case Nos. 00683773-2021, and
          00683774-2021 out of Collin County Court of Law, No. 6; and
          Case No. CM-2021-00154 out of Ryan County District Court,
          all of which are unrelated in the case, and concurrent with any
          sentence in Case No. 40185020-2021, and 40185021-2021,
          which is pending in the 468th Judicial District Court of Collin
          County, Texas; and Case No. 00683772-2021 which is in
          Collin County, Court No. 6.
          In the written judgment, the district court wrote:

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                                      No. 22-11039

          The defendant, ADAM JOSEPH SCHULTZ, is hereby
          committed to the custody of the Federal Bureau of Prisons
          (BOP) to be imprisoned for a term of ONE HUNDRED
          TWENTY (120) MONTHS as to Count One of the
          Information filed on June 7, 2022. This sentence shall run
          consecutively to any future sentence which may be imposed in
          Case No. 12,573 in the 46th Judicial District Court, Wilbarger
          County; Case Nos. 006-83773-2021 and 006-83774-2021 in
          Collin County Court at Law 6; and Case No. CM-2021-00154
          in the Bryan County District Court, all of which are unrelated
          to the instant offense. This sentence shall run concurrently with
          any future sentence which may be imposed in Case Nos. 401-
          85020-2021 and 401-85021-2021, both in the 468th Judicial
          District Court, Collin County, and Case No. 006-83772-2021
          in Collin County Court at Law 6, which are related to the
          instant offense.
          Because the written judgment and oral pronouncement conflict, we
   REMAND to the district court to amend the written judgment to conform
   with the oral announcement. See United States v. Wheeler, 322 F.3d 823, 828
   (5th Cir. 2003).

                                  *        *         *
          For the foregoing reasons, the district court’s sentence is
   AFFIRMED in part and REMANDED in part so that the written
   judgment can be amended to conform with the court’s oral pronouncement
   at sentencing.

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