Court Opinion

ID: 212478
Source: CourtListenerOpinion
Date Created: 2011-03-16 15:45:13+00
Date Added: 2024-06-11T17:28:11.928659
License: Public Domain

[DO NOT PUBLISH]

                        IN THE UNITED STATES COURT OF APPEALS

                              FOR THE ELEVENTH CIRCUIT
                               ________________________           FILED
                                                         U.S. COURT OF APPEALS
                                      No. 10-10801         ELEVENTH CIRCUIT
                                  Non-Argument Calendar       MARCH 16, 2011
                                ________________________        JOHN LEY
                                                                 CLERK
                          D.C. Docket No. 1:08-cr-00190-WSD-AJB-1

UNITED STATES OF AMERICA,

lllllllllllllllllllll                                      Plaintiff-Appellee,

                                          versus

KAREN CLARK,

                                                           Defendant-Appellant.

                                ________________________

                                      No. 10-10925
                                  Non-Argument Calendar
                                ________________________

                          D.C. Docket No. 1:08-cr-00190-WSD-AJB-8

UNITED STATES OF AMERICA,

lllllllllllllllllllll                                      Plaintiff-Appellee,

                                          versus

REGINALD SMITH,
a.k.a. Reginald L. Smith,

lllllllllllllllllllll                                        Defendant-Appellant.

                               ________________________

                                     No. 10-11170
                                 Non-Argument Calendar
                               ________________________

                        D.C. Docket No. 1:08-cr-00190-WSD-AJB-4

UNITED STATES OF AMERICA,

lllllllllllllllllllll                                        Plaintiff-Appellee,

                                           versus

VIOLA HILL,

lllllllllllllllllllll                                        Defendant-Appellant.

                               ________________________

                        Appeals from the United States District Court
                            for the Northern District of Georgia
                               ________________________

                                     (March 16, 2011)

Before EDMONDSON, WILSON and PRYOR, Circuit Judges.

PER CURIAM:

         Karen Clark, Viola Hill, and Reginald Smith appeal their sentences for

conspiracy to commit bank fraud in violation of 18 U.S.C. § 1349, and aggravated

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identity theft in violation of 18 U.S.C. § 1028A(a) and (b)(2). They argue that the

district court erred in imposing a two-level enhancement for sophisticated means,

pursuant to U.S.S.G. § 2B1.1(b)(9)(C). Hill also argues that the district court

erred in finding that she was subject to a four-level increase for being an organizer

or leader, pursuant to U.S.S.G. § 3B1.1(a). Finally, Clark argues that her sentence

was procedurally and substantively unreasonable. For the following reasons, we

affirm Hill’s and Smith’s sentences, and we vacate Clark’s sentence and remand

for resentencing.

                                          I.

      From September 2005 through May 2008, Hill ran a check-cashing scheme.

Smith was an employee of the United States Postal Service (“USPS”), and Hill

paid him $250 per box to steal boxes of checks from the Atlanta Bulk Mail Center.

Hill paid another individual to obtain account identifiers, such as dates of birth

and social security numbers, to match the identities on the stolen checks. Hill and

her husband then paid a different person $100 per document to create fraudulent

identification documents, including drivers licenses. These fraudulent documents

matched the stolen information, but used the Hills’ photos and the photos of their

co-defendants.

      The Hills distributed the stolen checks and fake identifications to at least

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five check runners, including defendant Clark. Then, Hill and the other check

cashers traveled to casinos in Mississippi and Louisiana to cash the fraudulent

checks, where they could cash them for larger amounts. The conspirators

occasionally cashed the checks in Colorado and negotiated some of the stolen

checks in retail stores. Sometimes Hill requested phone cards or household items

as payment from the check runners for providing them with the stolen checks. The

Hills took half of the money that the check cashers received. This scheme

victimized 203 account holders, for a total loss amount of $622,900.24.

                                          II.

A.    Sophisticated Means

      We review a district court’s factual finding that a defendant used

“sophisticated means” for clear error. United States v. Robertson, 493 F.3d 1322,

1329–30 (11th Cir. 2007). The Guidelines state that two levels are added to a

defendant’s base offense level if the offense involved sophisticated means.

U.S.S.G § 2B1.1(b)(9)(c). “Sophisticated means” refers to “especially complex or

especially intricate offense conduct pertaining to the execution or concealment of

an offense,” and may include conduct like hiding assets or transactions “through

the use of fictitious entities, corporate shells, or offshore financial accounts.”

U.S.S.G. § 2B1.1 cmt. n.8(B). And “[t]here is no requirement that each of a

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defendant’s individual actions be sophisticated in order to impose the

enhancement. Rather, it is sufficient if the totality of the scheme was

sophisticated.” United States v. Ghertler, 605 F.3d 1256, 1267 (11th Cir. 2010).

      All three defendants argue that the district court clearly erred in finding that

they used sophisticated means. Clark and Smith argue that the district court

applied an improper standard because the court found that the check-cashing

scheme involved “practical sophistication.” They also argue that the scheme did

not involve sophisticated means because the group did not research their victims’

lives, extend their lines of credit, or change their billing addresses. Smith argues

that there was nothing especially complex or intricate about his conduct. He urges

us to follow the approach adopted by other circuits, in which a scheme involves

“sophisticated means” when the scheme is distinguishable from routine or garden-

variety offenses. Clark and Hill argue that the district court’s factual findings

were without support in the record because the conspirators’ roles were not

compartmentalized, because there is nothing especially complex or intricate about

cashing stolen checks at casinos, and because there was no evidence that the

conspirators cashed checks at casinos for the purpose of evading detection.

      The district court did not clearly err in finding the defendants’ check-

cashing scheme involved sophisticated means of execution and concealment. The

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scheme took years of planning, coordination, and efforts of the many individuals

involved in the criminal operation. The conspirators obtained information about

the account holders, created and used fraudulent identification documents, cashed

the checks at casinos, and traveled across state lines. The totality of the scheme

was complex in execution, satisfying U.S.S.G § 2B1.1(b)(9)(c). See Ghertler, 605

F.3d at 1267. Moreover, these facts indicate a sophisticated means of concealing

the offense from authorities.

      The district court did not apply an improper definition of sophisticated

means, nor did it create a new legal standard, by recognizing the “practical

sophistication” of this scheme. The sentencing guidelines do not require

technological or intellectual sophistication. Nor do they limit the enhancement to

schemes involving fictitious entities, corporate shells, and offshore accounts. See

United States v. Campbell, 491 F.3d 1306, 1315–16 (11th Cir. 2007) (stating that

“the fact that [the appellant] did not use offshore bank accounts or transactions

through fictitious business entitles [wa]s unavailing”). The guidelines also do not

require that the defendants research their victims’ lives, extend their lines of

credit, or change their billing addresses for the district court to find that an offense

involved sophisticated means. In light of the nature and extent of the scheme, we

have no definite and firm conviction that the district court clearly erred when it

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enhanced the defendants’ sentences for sophisticated means. We accordingly

affirm the enhancement, and Smith’s final sentence.

B.    Organizer or Leader

      A defendant’s role as an organizer or leader is a factual finding that we

review for clear error. See United States v. Jimenez, 224 F.3d 1243, 1250–51

(11th Cir. 2000). We will not find clear error unless “‘we are left with a definite

and firm conviction that a mistake has been committed.’” United States v.

Crawford, 407 F.3d 1174, 1177 (11th Cir. 2005) (quoting Glassroth v. Moore, 335

F.3d 1282, 1292 (11th Cir. 2003)).

      To assess whether a defendant was an “organizer or leader of a criminal

activity,” we consider several factors, including:

             (1) the exercise of decision making authority, (2) the nature
             of participation in the commission of the offense, (3) the
             recruitment of accomplices, (4) the claimed right to a larger
             share of the fruits of the crime, (5) the degree of
             participation in planning or organizing the offense, (6) the
             nature and scope of the illegal activity, and (7) the degree
             of control and authority exercised over others.

United States v. Gupta, 463 F.3d 1182, 1198 (11th Cir. 2006) (citing U.S.S.G. §

3B1.1 cmt. n.4). Not all of these considerations need to be present. United States

v. Ramirez, 426 F.3d 1344, 1356 (11th Cir. 2005) (per curiam). “‘Section 3B1.1

requires the exercise of some authority in the organization, the exertion of some

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degree of control, influence, or leadership.’” United States v. Yates, 990 F.2d

1179, 1182 (11th Cir. 1993) (per curiam) (quoting United States v. Brown, 944

F.2d 1377, 1385 (7th Cir. 1991)).

      Although Hill recruited Jennings into the conspiracy, obtained the checks,

and, along with her husband, received a larger share of the crime proceeds than the

other conspirators, she argues that a four-level increase was not warranted because

there was no evidence that she exercised control over the other defendants or

directed their activity. Hill also argues that she should not be considered the

leader or organizer of this criminal enterprise because her husband’s family had a

history of committing similar crimes before they ever met her.

      The district court’s finding that Hill was a organizer or leader, rather than

merely a manager or supervisor, was not clearly erroneous. Rather, it is supported

by Hill’s own admissions and the undisputed facts in the record. Further, the past

criminal history of Hill’s co-conspirators is irrelevant to an assessment of her role

in this particular offense, as the factors look only at the defendant’s conduct in and

control over a given enterprise. See U.S.S.G. § 3B1.1 cmt. n.4. Accordingly, the

district court did not err in finding that Hill was eligible for a four-level increase

as an organizer or leader of the scheme, and we affirm her sentence.

C.    Procedural Reasonableness

                                           8
      On appeal, the party challenging the sentence bears the burden of

establishing that the sentence is unreasonable. United States v. Talley, 431 F.3d

784, 788 (11th Cir. 2005) (per curiam). We review sentences under a deferential

abuse-of-discretion standard. Gall v. United States, 552 U.S. 38, 51, 128 S. Ct.

586, 597 (2007). Clark argues that her sentence on count one was procedurally

unreasonable because the district court failed to rule on the government’s § 5K1.1

motion for a downward departure, explain the extent of the departure it granted, or

state what basis it considered in departing downward. We agree.

      Procedural errors include “failing to calculate (or improperly calculating)

the Guidelines range, treating the Guidelines as mandatory, failing to consider the

§ 3553(a) factors, selecting a sentence based on clearly erroneous facts, or failing

to adequately explain the chosen sentence—including an explanation for any

deviation from the Guidelines range.” Id. The district court must “adequately

explain the chosen sentence to allow for meaningful appellate review and to

promote the perception of fair sentencing.” Id. at 50, 128 S. Ct. at 597.

      Once the government has made a motion for downward departure pursuant

to U.S.S.G. § 5K1.1, the government has no control over whether the district court

will depart from the guidelines. United States v. Livesay, 525 F.3d 1081, 1091

(11th Cir. 2008). But in determining the extent of a § 5K1.1 departure, the district

                                          9
court must consider the five non-exclusive § 5K1.1 factors: “(1) the usefulness of

the defendant’s assistance; (2) the truthfulness and completeness of the

defendant’s information and testimony; (3) the nature and extent of the

defendant’s assistance; (4) any injury suffered or risk of injury or danger to the

defendant and his family as a result of his assistance; and (5) the timeliness of the

assistance.” See id. at 1092; U.S.S.G. § 5K1.1(a)(1)–(5). Even where the district

court has erred, it is unnecessary to remand if the § 5K1.1 procedural error did not

affect the ultimate sentence imposed. Livesay, 525 F.3d at 1092.

      In this case, the district court committed procedural error because it failed to

explain adequately the extent of the § 5K1.1 departure. Clark requested a

three-level departure, which would have implicated a guideline range of 51 to 63

months. The government requested a two-level departure, which would have

made Clark’s guideline range 57 to 71 months. The district court ruled, “All right.

Well, I will grant the [§ 5K1.1] motion, but as I consider a reasonable sentence I

will determine what is the proper reduction to make.” The court, however, failed

to provide any further explanation of the extent of the departure, or any analysis of

the five mandatory factors in § 5K1.1(a). The district court, without any reference

to the departure or the final guideline range, imposed a sentence of 60-months’

imprisonment on count 1, which was within the guideline range requested by both

                                          10
parties. What, if any, reduction it gave for the §5K1.1 motion remains unclear.

We have no idea whether the district court considered impermissible factors in

imposing the downward departure, and it is impossible to know whether this

procedural error affected the ultimate sentence imposed. See Livesay, 525 F.3d at

1092 (finding that the § 5K1.1 procedural error did not require remand because the

district court “clearly indicated that it would have imposed the same sentence even

if its § 5K1.1 downward departure was erroneous”). Thus, based on the facts of

this case, we find the district court committed procedural error.1

       We affirm with respect to Smith and Hill, and we vacate and remand for

Clark’s resentencing, noting that the district court should articulate the extent of

its departure under § 5.K1.1.

       AFFIRMED in part; VACATED and REMANDED in part.

       1
          Because the Clark’s sentence was not procedurally sound, we do not address whether
the sentence imposed was substantively reasonable. See Gall v. United States, 552 U.S. 38, 51,
128 S. Ct. 586, 597 (2007) (explaining how if the sentence is procedurally reasonable, this Court
then evaluates the “substantive reasonableness” of the sentence imposed).

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