Court Opinion

ID: 73633
Source: CourtListenerOpinion
Date Created: 2010-04-26 08:14:28+00
Date Added: 2024-06-11T11:50:26.487717
License: Public Domain

PUBLISH

                    IN THE UNITED STATES COURT OF APPEALS

                              FOR THE ELEVENTH CIRCUIT
                             ________________________________
                                                                                       FILED
                                        No. 98-4432          U.S. COURT OF APPEALS
                             ________________________________ ELEVENTH CIRCUIT
                               D.C. Docket No. 96-CR-562-DLG        04/19/99
                                                                                 THOMAS K. KAHN
                                                                                     CLERK
UNITED STATES OF AMERICA,

                                                         Plaintiff-Appellee,

      versus

LUIS CABRERA, a.k.a. Luis Rafael Cabrera,

                                                         Defendant-Appellant.

          ---------------------------------------------------------------------------------------
                              ________________________________

                                         No. 98-4434
                             ________________________________
                                D.C. Docket No. 98-CR-77-DLG

UNITED STATES OF AMERICA,

                                                         Plaintiff-Appellee,

      versus

LUIS CABRERA,

                                                         Defendant-Appellant.

         ____________________________________________________________
                      Appeals from the United States District Court
                           for the Southern District of Florida
           ____________________________________________________________

                                         (April 19, 1999)

Before HATCHETT, Chief Judge, BARKETT, Circuit Judge, and RONEY, Senior Circuit
Judge.

HATCHETT, Chief Judge:

       Appellant Luis Cabrera appeals his conviction and sentence for knowingly possessing

cellular telephone cloning equipment, in violation of 18 U.S.C. § 1029(a)(4). Because the

government failed to provide reliable and specific evidence regarding the fraud loss attributable

to Cabrera, we vacate Cabrera’s sentence and remand the case to the district court for

resentencing.

                                       I. BACKGROUND

       In June 1996, a confidential informant told Secret Service agents than an individual

known to him as “Shorty” had a small black box known as a “copy-cat,” a device that allows

individuals to clone cellular telephones illegally. Witnesses later identified “Shorty” as the

appellant Cabrera. During a recorded telephone conversation between Cabrera and the

informant, Cabrera offered to clone a cellular telephone for the informant in exchange for ten

Electronic Serial Number/ Mobile Identification Number (ESN/MIN) combinations.1 In

       1
          A cellular service provider assigns a combination of an ESN and a MIN to each cellular
telephone subscriber to access service. A combination of the two numbers also furnishes the
cellular service provider with a means to bill customers for their service usage.
         A cellular telephone cloning operation exists where an individual or group of individuals
acquire ESN/MIN combinations illegally from subscribers’ cellular telephones to permit the
unauthorized use of those accounts; the “cloner” utilizes an electronic serial number reader (ESN
reader) to obtain the combinations. Cloners reprogram the victim subscriber’s ESN/MIN

                                                 2
addition, Cabrera told the informant that he could sell him a copy-cat for $1899. Later that day

at a meeting, the informant, who was wearing a wire, gave Cabrera a cellular telephone and a

piece of paper containing ten fictitious ESN/MIN combinations. Using his copy-cat, Cabrera

cloned the cellular telephone, replacing its original ESN/MIN combination with one of those

provided from the informant. 2

       After Secret Service agents, who were surveilling the meeting, arrested Cabrera, he

admitted that he owned the copy-cat and cloning cables and had used them to clone two or three

cellular telephones. Cabrera also stated that his “scanner”(ESN reader) was broken, making it

necessary for him to purchase ESN/MIN combinations. Cabrera stated he used the “scanner” for

one month before it became inoperable, and that he purchased nine ESN/MIN combinations

from an individual named “Tony.”3

       When the agents later searched Cabrera’s home, they seized an entire cloning operation

consisting of a computer, cloning software, computer disks containing ESN/MIN combinations,

cloning interface cables, an ESN reader, various cellular telephones, a computer-generated list of

combination into the cloned cellular telephone. The cloned cellular telephone user can then gain
access to cellular service; the cellular service provider charges the unauthorized usage to the
victim subscriber’s telephone. The cloned cellular telephone user utilizes the telephone
simultaneously with the authorized user until the victim discovers and reports the unauthorized
calls. When the victim reports the fraud, the cellular provider normally removes the
unauthorized calls from the victim’s cellular telephone bill and changes the cellular telephone’s
ESN/MIN combination. Thus, ESN/MIN combinations are usually only “good” for
approximately thirty days; once the victim subscribers receive their monthly cellular telephone
bill and report the fraud, the cellular service provider invalidates the ESN/MIN combinations.
       2
         A copy-cat can reprogram the ESN/MIN combination assigned to a cellular telephone
originally and replace it with a different ESN/MIN combination.
       3
        The record does not indicate how many of the ESN/MIN combinations found at
Cabrera’s home “Tony” provided to Cabrera.

                                                3
ESN/MIN combinations and an EPROM programmer, which cloners use to reprogram cellular

telephones. Cabrera shared his home with a roommate.

       At the time of his arrest, Cabrera gave the agents a list of ESN/MIN numbers that he had

cloned.4 The agents gave all of the ESN/MIN combinations found on Cabrera’s handwritten list,

the computer-generated list, the computer and the computer disks to cellular service providers so

that they could determine whether any of the legitimate owners of the cellular telephones

assigned the combinations were defrauded. In addition, the agents interviewed Nelson Diaz, the

owner of the air conditioning business where the agents arrested Cabrera. Diaz signed a

statement acknowledging that he had known Cabrera for one and a half years and that Cabrera

had cloned telephones during that entire period.

                                II. PROCEDURAL HISTORY

       A grand jury in the Southern District of Florida indicted Cabrera on one count of

possessing telephone cloning equipment in violation of 18 U.S.C. § 1029(a)(4).5 Before

Cabrera’s sentencing, a probation officer prepared a Presentence Investigation Report (PSI) that

calculated Cabrera’s base offense level at six, pursuant to U.S. Sentencing Guidelines Manual §

2F1.1. The PSI recommended that the district court adjust this offense level upward eleven

additional levels, pursuant to Sentencing Guidelines § 2F1.1(b)(1)(L), to reflect a fraud loss of

$850,897.32. The PSI based the fraud loss figure on the total amount of fraud the cellular

       4
       The sentencing transcript refers to a page and one half handwritten list of ESN/MIN
numbers that Cabrera provided to the agents. The list is not in the record.
       5
           Section 1029 (a) provides in relevant part: “Whoever-- (4) knowingly, and with intent to
defraud, produces, traffics in, has control or custody of, or possesses device- making equipment;
shall, if the offense affects interstate or foreign commerce, be punished as provided in subsection
(c) of this section.”

                                                   4
service providers reported for all of the ESN/MIN combinations contained on Cabrera’s

handwritten list, the computer-generated list, the computer and the computer disks found in

Cabrera’s home. The PSI also recommended that Cabrera receive a two-level enhancement to

reflect that his offense involved more than minimal planning and/or more than one victim; and it

also recommended a three-level decrease for his acceptance of responsibility and his timely

guilty plea. Based on a total offense level of 16 and a nonexistent criminal history, the PSI

calculated Cabrera’s presumptive guidelines sentencing range to be between 21 and 27 months.6

       Cabrera filed a motion for the government to produce specific evidence regarding the

fraud loss calculation in the PSI. The government filed a responsive pleading with several

attachments, including one attachment that summarized the fraud loss each cellular service

provider suffered. Although the government stated that all of the loss occurred within a one-year

period, the summary failed to provide a time period for each loss. Moreover, the compilation

did not associate the loss with the ESN/MIN combinations found on the list Cabrera provided

containing combinations that he used to clone telephones, the computer generated list found in

Cabrera’s home, or the computer and accompanying disks, also found in Cabrera’s home.

       Cabrera filed objections to the PSI challenging the fraud loss figure and moved to strike

the government’s fraud loss amount. Cabrera also argued that the government failed to prove

that he was the person responsible for the fraud loss amount it advanced and that he cloned

       6
         The probation officer later prepared a second PSI that increased the sentencing
recommendation from 27 to 33 months after Cabrera failed to appear at his first sentencing
hearing.

                                                 5
cellular telephones for only a short time.7 In addition, Cabrera requested that the government

identify what portion of the loss came from the ESN/MIN combinations that he provided to the

agents when they arrested him.

       Cabrera pleaded guilty to possessing cellular telephone cloning equipment.8 At the

sentencing hearing, Cabrera argued that the government had failed to support its fraud loss figure

through specific and reliable evidence that linked him to the loss. Although Cabrera admitted

that he possessed the cellular telephone cloning equipment, he stated that the government’s

evidence did not show that he had used the computer and software seized from his home, which

he shared with another individual, to clone telephones. Cabrera also argued that it is “well

known” that different cloners use the same ESN/MIN combinations and that the government

failed to show that these other individuals were not responsible for the loss.

       When the district court asked Cabrera whether he wanted to present any evidence to

establish that someone else used the cellular telephone cloning equipment found in his home,

Cabrera instead discussed a sworn affidavit that he obtained from Diaz recanting his prior

       7
        The record does not contain a more specific figure for the time period that Cabrera
admits he cloned cellular telephones.
       8
         Cabrera initially failed to appear for sentencing. The government issued a bench
warrant for his arrest. The police arrested Cabrera and the grand jury indicted him for failing to
appear at sentencing and disobeying a court order to appear for sentencing pursuant to 18 U.S.C.
§§ 3146 and 401(3). The court consolidated the failure to appear case with the cellular telephone
cloning case. The issues in this appeal only relate to facts underlying the cellular telephone
cloning case.

                                                 6
statement and asserting that he was aware Cabrera cloned cellular telephones for only three

months, rather than a year and a half.9

          In response, the government argued that Cabrera admitted cloning cellular telephones for

two years.10 The government stated that it attributed only one year of the fraud loss associated

with the stolen ESN/MIN combinations to Cabrera. The district court overruled Cabrera’s

objection to the government’s fraud loss figure, finding that the one-year period was appropriate

and noting that Cabrera presented no evidence to contradict the government’s figure. The

district court granted Cabrera’s request for the three level downward departure for acceptance of

responsibility. The district court sentenced Cabrera to 33 months of imprisonment, including 6

months on the failure to appear charge.

                                              III. ISSUES

          The issues we discuss are whether the district court erred when: (1) it failed to require the

government to provide “reliable and specific evidence” regarding the amount of fraud loss; and

(2) it adopted the PSI without making “any” findings on the issue of the disputed fraud loss

figure.

                                          IV. DISCUSSION

          9
         No such statement from the investigator or Diaz exists in the record. The sentencing
transcript, however, reflects Cabrera’s assertion that the investigator was present and that the
government received a copy of Diaz’s statement. The PSI and the government both refer to
Nelson Diaz as the person who made both statements and owned the air conditioning company.
Cabrera’s brief refers to Jorge Diaz as making the second statement and owning the company.
The record also contains a sworn statement from a Carlos Diaz, who states that he owns the
company where Nelson Diaz works.
          10
        Cabrera’s statement, however, does not contain this admission. Further, the
government presented no direct evidence of this admission.

                                                    7
       A. The fraud loss estimate

       We review the district court’s loss determination for clear error. See United States v.

Goldberg, 60 F.3d 1536, 1539 (11th Cir. 1995). The guidelines do not require the government to

make a fraud loss determination with precision; the figure need only be a reasonable estimate

given the information available to the government. See United States v. Dominguez, 109 F.3d

675, 676 (11th Cir. 1997). Upon challenge, however, the government bears the burden of

supporting its loss calculation with “reliable and specific evidence.” See United States v.

Sepulveda, 115 F.3d 882, 890 (11th Cir. 1997) ; United States v. Lawrence, 47 F.3d 1559, 1566

(11th Cir. 1995). Cabrera argues that the district court impermissibly imposed an obligation on

him to produce evidence disputing the government’s figure rather than requiring the government

to meet this standard.

       Cabrera first argues that, pursuant to Sepulveda, the government must proffer a “cell site”

analysis. See Sepulveda, 115 F.3d at 889. A cell site analysis identifies the geographic area

producing the calls. See Sepulveda, 115 F.3d at 890. Sepulveda, however, is factually

distinguishable from this case. In Sepulveda, the defendants operated a “call sell center” where

customers rented cellular telephones, with all the calls emanating from one location, the call sell

center. The call sell center was located between two portions, or sectors, of a cell site. After the

government arrested the Sepulveda defendants, it made numerous test calls at the call sell center

to determine the cell sector that handled the calls. Cell sector A handled all the test calls. The

government, however, charged the Sepulveda defendants with all the unauthorized calls made

from cell sector A and cell sector B. This court remanded the case for resentencing because the

cell site analysis the government proffered in response to the Sepulveda defendants’ challenge

                                                 8
was inconclusive about whether the unauthorized cell sector B calls more likely than not

originated from the defendants’ store. See Sepulveda, 115 F.3d at 891-92.

       A cell site analysis is necessary in a case like Sepulveda where the cellular air time theft

occurs in one location and the government charges the defendant with possession of cloned

telephones in violation of 18 U.S.C. § 1029(a)(3). In this type of case, courts limit liability

appropriately to the amount of loss that the defendant’s cloned telephone caused. A cell site

analysis, however, is not helpful in a case involving device making equipment and the

production and distribution of cloned telephones in violation of 18 U.S.C. 1029 (a)(4), because

the origin of the loss cannot be pinpointed to one geographic area.11 Thus, a cell site analysis in

this case would not be helpful.

       When the government convicts an individual for possession of cloning “tools,” and

wishes to enhance the sentence based on the amount of use associated with the illegally obtained

ESN/MIN combinations, the government must provide evidence specifically linking the amount

of fraud loss to the defendant’s cloning activities. Multiple unauthorized users often use the

same ESN/MIN combinations simultaneously. See Sepulveda, 115 F.3d at 890. Further, sellers

provide the same ESN/MIN combinations to multiple buyers. Because the ESN/MIN numbers

are a commodity that many individuals can utilize, the government must provide proof to

attribute the unauthorized calls made with the ESN/MIN combinations to the defendant. See

Sepulveda, 115 F.3d at 889 (holding that the government failed to carry its burden of proving the

amount of loss used to enhance the defendants’ sentence).

       11
         Once a cloner programs a telephone with a valid ESN/MIN combination, the user can
normally make calls to any number, from any location.

                                                  9
       The government attempted to attribute the loss corresponding with all the ESN/MIN

combinations found on Cabrera’s handwritten list, the computer-generated list and all the

numbers acquired from the computer and computer disks to Cabrera. The loss summary that the

government produced fails to attribute each cellular provider’s loss to specific ESN/MIN

combinations, and thus fails to identify the origin of the loss clearly. The losses could be

associated with the ESN/MIN combinations found on either of the two lists, the computer disks,

the computer itself or a combination. The government failed to sufficiently link all of these

ESN/MIN combinations to Cabrera’s cloning activities.

       The computer-generated list of ESN/MIN combinations found at Cabrera’s home

contained handwritten notes, but the government did not offer any evidence that the handwriting

was Cabrera’s. Additionally, the government failed to offer any testimony or other evidence that

Cabrera actually used the computer to clone cellular telephones or sold the ESN/MIN

combinations to others.12 The only direct evidence regarding the fraud loss is Cabrera’s own

handwritten list of ESN/MIN combinations that he provided to the Secret Service agents upon

arrest. Cabrera admitted that he used these combinations to clone cellular telephones.

Therefore, the fraud loss associated with these ESN/MIN combinations are properly attributable

to Cabrera.

       The government argues that Cabrera did not properly preserve the issue of whether it

provided sufficient evidence to support its calculations. The record shows, however, that

       12
            In fact, Cabrera testified that he purchased nine of the ESN/MIN combinations from
“Tony.”

                                                10
Cabrera objected repeatedly before and during sentencing regarding the fraud loss attributable to

him.

       The government also argues that we should accept the Ninth Circuit’s holding in United

States v. Clayton, 108 F.3d 1114 (9th Cir. 1997). In Clayton, the police seized several cellular

telephones, connecting cables, adapters, a computer containing cloning software, a computer log

file containing ESN/MIN combinations and a calendar book containing several additional

ESN/MIN combinations. At least 2 of the telephones were cloned, and at least 29 of the log file

numbers were used to clone telephones. Clayton argued that the government could attribute to

him only a fraction of the fraud loss associated with the ESN/MIN combinations he possessed

because others could have obtained the same combinations and cloned them. The Ninth Circuit

rejected Clayton’s argument and held him responsible for the loss associated with all of the

ESN/MIN combinations he possessed. Clayton, 108 F.3d at 1118-19. Although Clayton appears

factually similar to this case, two important distinctions are present. First, in Clayton the

government pinpointed the loss to one specific source: the computer log file. In this case, the

government failed to specifically attribute the losses to any of the sources for the ESN/MIN

combinations. Second, in Clayton no evidence exists that anyone other than Clayton used the

truck, which contained all of the cloning “tools.” In this case, Cabrera asserted that he did not

have sole use of his home, which contained all of the ESN/MIN combinations except those on

the handwritten list. To the extent that our holding conflicts with Clayton, however, we reject

the proposition that the government can attribute the entire fraud loss associated with ESN/MIN

combinations to the defendant solely because the defendant possessed those combinations.

                                                 11
       We hold that telephone cloning fraud loss is attributable to a defendant, and therefore can

be utilized to enhance the defendant’s sentence, only if the government provides reliable proof

linking the defendant to the ESN/MIN combinations fraudulently used.

       B. The district court’s findings

       Cabrera next argues that the district court abused its discretion in adopting the fraud loss

amount attributed to him in the PSI because a sentencing court cannot adopt the government’s

figures if they amount to “conclusory factual recitals.” See United States v. Bernardine, 73 F.3d

1078, 1081 (11th Cir. 1996). A sentencing court must make factual findings sufficient to support

the government’s claim of the amount of fraud loss attributed to a defendant in a PSI. See

United States v. Butler, 41 F.3d 1435, 1442 (11th Cir.), cert. denied, 514 U.S. 1121 (1995). The

district court found explicitly that the amount of loss attributed to Cabrera was correct because

he admitted that he possessed the equipment that caused the losses. Because we hold that mere

possession, without more, is insufficient to attribute the entire loss to Cabrera, the district court

did not make the specific factual findings necessary to support the government’s fraud loss

amount.

                                        IV. CONCLUSION

       Because we find insufficient evidence to support the amount of loss attributed to Cabrera,

we vacate the sentence and remand to the district court for resentencing consistent with this

opinion.

                                  VACATED and REMANDED.

                                                  12