Court Opinion

ID: 4374798
Source: CourtListenerOpinion
Date Created: 2019-03-07 16:00:34.616987+00
Date Added: 2024-06-11T14:22:21.370834
License: Public Domain

Case: 15-15235        Date Filed: 03/07/2019       Page: 1 of 36

                                                                       [DO NOT PUBLISH]

                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT
                              ________________________

                                     No. 15-15235
                               ________________________

                      D.C. Docket No. 6:14-cr-00080-PGB-TBS-1

UNITED STATES OF AMERICA,

                                                                           Plaintiff-Appellee,

versus

BRIAN NEWTON,
VICTORIA SNOW,

                                                                     Defendants-Appellants.

                               ________________________

                      Appeals from the United States District Court
                           for the Middle District of Florida
                             ________________________

                                       (March 7, 2019)

Before JORDAN and JULIE CARNES, Circuit Judges, and SCHLESINGER, *
District Judge.

*
  Honorable Harvey Schlesinger, United States District Judge for the Middle District of Florida,
sitting by designation.
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JULIE CARNES, Circuit Judge:

      Over a six-year period, Defendants Brian Newton and Victoria Snow

conspired to defraud two companies, Amerifactors Financial Group, Inc.

(“Amerifactors”) and Prestige Funding Group LLC (“Prestige”), of millions of

dollars. Following a jury trial, Newton and Snow were convicted of one count of

conspiring to commit mail and wire fraud, in addition to several counts of

substantive mail and wire fraud. The district court sentenced Newton and Snow to

188 months’ imprisonment and 57 months’ imprisonment, respectively. On

appeal, Newton and Snow raise various challenges to their convictions and

sentences. After careful review and with the benefit of oral argument, we affirm.

                                BACKGROUND

I.    Facts

      Newton and Snow were employed by Dataforce International (“Dataforce”):

Newton was a managing partner and Snow was the office manager. Dataforce

provided IT staffing and support services to Fortune 1000 companies, including a

substantial amount of consulting services to Hewlett-Packard. To receive payment

from Hewlett-Packard, Dataforce submitted invoices for completed work.

Initially, Hewlett-Packard processed paper invoices manually but Hewlett-Packard

converted to an online-invoicing system in 2004.

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      After Newton joined Dataforce, Newton and Dataforce’s President Gary

Baran selected Amerifactors to serve as Dataforce’s primary factoring company.

In purchasing accounts-receivable invoices from other companies, a factoring

company pays less than the face value of those accounts, but makes its profit by

collecting the full amount due on the invoices from the party owing the money. As

part of the agreement, Dataforce agreed to have Amerifactors factor invoices for

work completed for Hewlett-Packard. Amerifactors typically purchased each

invoice for 90% of the face value and, in turn, Amerifactors expected Hewlett-

Packard to pay the full amount of the invoice.

      In the meantime, Newton co-founded with Joe Santoro another company,

called Prestige, for the purported purpose of factoring invoices. He successfully

solicited investments of more than $8 million from numerous investors for this

company. Newton told investors that the company would be factoring invoices for

Hewlett-Packard. Unbeknownst to Prestige investors and Santoro, however,

Newton sold invoices to Prestige that had already been sold to Amerifactors.

Obviously, as to those double-sold invoices, one of the two factoring companies

would be unable to collect any money.

      In addition to selling the same invoices to both companies, Newton and

Snow also sold to Amerifactors and Prestige purported Hewlett-Packard invoices

for work that, in fact, had never been done. To avoid having Hewlett-Packard raise

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a fuss about invoices for non-existent work, Newton and Snow never submitted

those invoices to Hewlett-Packard for payment. Further, Newton allayed any

suspicion on the part of Prestige investors by making quarterly payments to them

to create an impression that their investments were generating interest.

      To prevent Baran (Dataforce’s President) from discovering that both

Amerifactors and Prestige were factoring the same invoices, Newton also set up a

company called B&B Investments to act as an intermediary between Dataforce and

Prestige. Newton then directed Santoro (his partner at Prestige) to deposit

payments for the invoices it purchased from Dataforce into B&B Investments.

      An Amerifactors employee, Bonni Jacobi, eventually discovered the fraud

when she began investigating several past-due Hewlett-Packard invoices.

Amerifactors had been submitting invoices to Hewlett-Packard at a specific

address provided by Newton. When Jacobi learned that the address Newton

provided was the home address of a Hewlett-Packard employee and further that

Hewlett-Packard no longer even accepted mailed invoices, having converted to an

online-invoicing system, Jacobi realized that something was greatly amiss. Her

discovery led to the unraveling of Newton and Snow’s scheme.

II.   Procedural History

      A federal grand jury issued an indictment charging Newton and Snow with:

(1) conspiracy to commit mail and wire fraud, in violation of 18 U.S.C. § 1349

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(Count 1); (2) mail fraud, in violation of 18 U.S.C. § 1341 (Counts 2 through 14);

and (3) wire fraud, in violation of 18 U.S.C. § 1343 (Counts 15 through 25). Both

Defendants pled not guilty and proceeded to trial.

       During the 13-day trial, the Government presented testimony from numerous

witnesses. At the close of the Government’s case-in-chief, Newton and Snow

moved for judgment of acquittal. The district court denied their motions. Both

Newton and Snow renewed their motions at the close of all the evidence, which

were again denied by the court. After the jury found Newton and Snow guilty of

all charges, the district court sentenced Newton to 188 months’ imprisonment and

Snow to 57 months’ imprisonment. This appeal followed.

                                        DISCUSSION

I.     Challenges to the Conviction

       A.      Omission of “Willfulness” as an Element in Jury Instructions
               Concerning the Substantive Offenses of Mail and Wire Fraud

       Defendant Snow1 asks that her convictions for mail and wire fraud be

vacated because the district court did not instruct the jury that, to convict on these

counts, it would have to find that the defendants acted “willfully.” We first note

that the relevant statutes do not include willfulness as an element. The statute

1
  In his brief, Newton states that he “adopts by reference all substantive arguments” contained in
Snow’s brief. We consider this particular argument and Snow’s “redaction” argument to be
adopted.

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proscribing mail fraud provides that “[w]hoever, having devised . . . any scheme or

artifice to defraud, or for obtaining money or property by means of false or

fraudulent pretenses, representations, or promises,” performs certain acts involving

the use of the mails is guilty of a crime. See 18 U.S.C. § 1341. The statute

prohibiting wire fraud uses the same language quoted above to make criminal

those same acts undertaken through the use of “wire” communications in interstate

commerce. See 18 U.S.C. § 1343. Although one might reason that a person who

has devised a scheme to defraud or to obtain property by means of false and

fraudulent representations will usually have also acted willfully, 2 the statutes at

issue here do not include willfulness as an element.

       Indeed, at trial, Snow never asked the district court to include a willfulness

element in its instructions concerning mail and wire fraud. To the contrary, she

and her co-defendant Newton, along with the Government, asked the district court

to use the Eleventh Circuit Pattern Jury Instructions for the substantive charges of

mail and wire fraud. The pattern instructions for the substantive offenses of mail

2
  The Pattern Jury Instructions contrast merely doing something “knowingly” with doing
something “willfully.” The instructions provide: “The word ‘knowingly’ means that an act was
done voluntarily and intentionally and not because of a mistake or by accident.” The word
‘willfully’ means that the act was committed voluntarily and purposely, with the intent to do
something the law forbids; that is, with the bad purpose to disobey or disregard the law. While a
person must have acted with the intent to do something the law forbids before you can find that
the person acted ‘willfully,’ the person need not be aware of the specific law or rule that [his]
[her] conduct may be violating.” Eleventh Circuit Pattern Instructions (Criminal) Basic Inst.
9.1A (2010 ed.).

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and wire fraud track the statutory language and do not require the jury to find that

the defendant acted willfully. The district court acceded to Defendants’ request to

use these two pattern instructions, and the particular instruction it read to the jury

was nearly identical to those pattern charges. See Eleventh Circuit Pattern

Instructions (Criminal) Offense Inst. 50.1, 51 (2010 ed.).

      Yet even though the district court gave the instruction that Snow requested,

she now argues that the court should have deviated from that request and instructed

the jury that willfulness was an element of the offenses. Any success based on this

tardy change of mind, however, is precluded by the invited-error doctrine. “It is a

cardinal rule of appellate review that a party may not challenge as error a ruling or

other trial proceeding invited by that party.” United States v. Ross, 131 F.3d 970,

988 (11th Cir. 1997) (quotations omitted). See United States v. Silvestri, 409 F.3d
1311, 1327–28 (11th Cir. 2005) (concluding that the invited-error doctrine

precludes a challenge on appeal by a defendant who accepted at trial the language

of the jury instruction in question). Accordingly, even if we assumed that the

district court could have properly added the element of willfulness into its

instructions on these substantive offenses, Snow cannot succeed in her efforts to

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reverse the mail and wire fraud convictions because she got the very instruction

that she had requested the district court to give.3

       B.      Sufficiency of the Evidence

       Contending that there was insufficient evidence to support her convictions,

Snow argues that the Government failed to establish that she intended to defraud

Amerifactors and Prestige investors or that she willfully joined the conspiracy. 4

       We review a sufficiency-of-the-evidence challenge de novo. United States

v. Gamory, 635 F.3d 480, 497 (11th Cir. 2011). When reviewing for sufficiency of

the evidence, we view the evidence in the light most favorable to the Government,

with all inferences and credibility choices made in the Government’s favor, and we

3
   For what it’s worth, we note that, as also requested by the parties, the district court gave the
pattern instruction for the conspiracy charge, which pattern instruction indicated that willfulness
is required to convict a defendant of conspiracy to commit mail and wire fraud. “It is a federal
crime to knowingly and willfully conspire or agree with someone to do something that, if
actually carried out, would result in the crime of mail fraud or wire fraud.” “The defendants can
be found guilty of this conspiracy offense only if all of the following facts are proved beyond a
reasonable doubt: . . . .2. The defendant knew the unlawful purpose of the plan and willfully
jointed in it . . . .” See Eleventh Circuit Pattern Instructions (Criminal) Offense Inst. 54 (2010
ed.). Both defendants here were convicted of the conspiracy count as well. Thus, the jury knew
that Defendants had to have willfully conspired to be convicted of that count, and the jury
concluded that they had acted willfully.
4
  Newton has not argued that the evidence was insufficient to support his conviction. Nor can
he adopt Snow’s insufficiency-of-the evidence argument, given the fact-intensive nature of such
an argument. See United States v. Khoury, 901 F.2d 948, 963 n.13 (11th Cir. 1990) (explaining
that a sufficiency-of-the-evidence argument requires independent briefing due to the fact-specific
nature of the argument).

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affirm the conviction if, based on this evidence, a reasonable jury could have found

the defendant guilty beyond a reasonable doubt. Id.

      To sustain a conviction for mail and wire fraud, the Government must

establish: “(1) intentional participation in a scheme to defraud, and, (2) the use of

the interstate mail or wires in furtherance of that scheme.” United States v.

Maxwell, 579 F.3d 1282, 1299 (11th Cir. 2009). Intent to defraud can be

established when “the defendant believed that he could deceive the person to

whom he made the material misrepresentation out of money or property of some

value.” United States v. Wetherald, 636 F.3d 1315, 1324 (11th Cir. 2011)

(quotations omitted) (“A jury may infer an intent to defraud from the defendant’s

conduct.”).

      Based on the evidence presented at trial, a reasonable jury could find beyond

a reasonable doubt that Snow was guilty of conspiracy, as well as the substantive

offenses of mail and wire fraud. The evidence revealed that, as Dataforce’s office

manager, Snow was responsible for the day-to-day operations of Dataforce,

including the assembly and approval of invoices that were sold to Amerifactors, as

well as the submission of invoices to Hewlett-Packard for payment. Moreover,

Snow directed a Dataforce employee (1) to sell invoices to Amerifactors but not

submit those invoices to Hewlett-Packard for payment, (2) to create invoices to sell

to Amerifactors for work that had not been completed, and (3) to sell invoices to

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Prestige that had already been sold to Amerifactors. Snow also personally profited

from the scheme. See United States v. Naranjo, 634 F.3d 1198, 1207 (11th Cir.

2011) (indicating that a jury can infer intent to defraud in part from a defendant

personally profiting from the scheme). Viewing this evidence in the light most

favorable to the Government, a reasonable jury could infer that Snow intended to

defraud, and that she acted to effectuate that intent.

      A reasonable jury could also conclude that Snow willfully joined the

conspiracy. See Maxwell, 579 F.3d 1282 (explaining that to sustain a conviction

for conspiracy to commit mail and wire fraud, the Government must prove that the

defendant “knew of and willfully joined in the unlawful scheme to defraud”).

Again, Snow directed a Dataforce employee to submit invoices to Prestige that had

already been sold to Amerifactors. Snow was also the main point of contact at

Dataforce for Amerifactors and Hewlett-Packard. Finally, she took affirmative

steps to cover up the scheme by not submitting the invoices to Hewlett-Packard’s

online-invoicing system and by encouraging an employee at Amerifactors not to

contact Hewlett-Packard about past due invoices.

      In short, because we conclude that a reasonable jury could have found

beyond a reasonable doubt that Snow was guilty of conspiracy and the substantive

offenses of mail and wire fraud, we necessarily conclude that there was sufficient

evidence to support Snow’s convictions.

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      C.     Redaction Error

      Snow argues that she was unfairly prejudiced by the district court’s

admission into evidence of a tax return containing Newton’s wife’s name. Prior to

trial, the district court had granted Newton’s and Snow’s motions in limine to

exclude evidence related to their extramarital affair and Newton’s marital status.

Newton’s counsel made the necessary redactions but inadvertently failed to redact

one document: a 2003 tax return that showed the name of Newton’s wife.

      Because Snow did not object at trial to the admission of the unredacted tax

return before the district court, we review for plain error. See Wetherald, 636 F.3d

at 1320 (explaining that an error raised for the first time on appeal is reviewed for

plain error). Nevertheless, even if we assume that the admission of the tax return

constituted error and that the error was plain, Snow cannot meet the third prong of

the plain-error test, which requires a showing that the error affected her substantial

rights. See Turner, 474 F.3d at 1276. To meet that test, Snow must show that the

error “affected the outcome of the district court proceedings.” United States v.

Rodriguez, 398 F.3d 1291, 1299 (11th Cir. 2005) (quotation omitted).

      Snow has failed to meet this burden. The Government introduced hundreds

of exhibits admitted at trial, and this tax return, from all the way back in 2003, was

hardly a key component of the Government’s case. The tax return merely noted

the name of Newton’s wife in 2003. See id. Given the overwhelming evidence of

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Snow’s guilt presented at trial, the failure to redact Newton’s wife’s name from the

2003 tax return does not leave “grave doubt” that it affected the outcome of the

case. See Turner, 474 F.3d at 1276 (“Errors do affect a substantial right of a party

if they have a ‘substantial influence’ on the outcome of the case or leave ‘grave

doubt’ as to whether they affected the outcome of the case.” (quotations omitted)).

      D.     Constructive Amendment

      Newton argues that the district court’s admission of evidence and

instructions to the jury constructively amended the indictment and permitted him to

be convicted of a crime for which he was not indicted. Specifically, Newton

challenges (1) the district court’s admission of evidence showing that he

misrepresented to Prestige investors that their investments were backed by

Hewlett-Packard and (2) the court’s instruction to the jury that it could convict

based on a finding that Newton engaged in a scheme to defraud involving the use

of false or fraudulent representations. Because Newton did not raise the issue of

constructive amendment before the district court, we review only for plain error.

See Wetherald, 636 F.3d at 1320.

      As to this allegation, Newton has failed to show that any error occurred,

plain or otherwise. “A constructive amendment occurs when the essential

elements of the offense contained in the indictment are altered to broaden the

possible bases for conviction beyond what is contained in the indictment.” United

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States v. Madden, 733 F.3d 1314, 1318 (11th Cir. 2013). Here, the indictment

alleged that Newton and Snow conspired to commit mail and wire fraud by, “with

intent to defraud, devising, and intending to devise, a scheme and artifice to

defraud and for obtaining money and property by means of false and fraudulent

pretenses, representations, and promises that related to material facts.”

      The evidence showing that Newton told Prestige investors that their

investments were guaranteed by Hewlett-Packard provided support for establishing

the means by which Newton furthered the conspiracy to commit mail and wire

fraud. Indeed, the evidence was relevant to establishing Newton’s intent to

defraud because he convinced Prestige investors to invest by misrepresenting that

their investments would be backed by Hewlett-Packard. As one Prestige investor

testified at trial, he believed he was making a safe investment based on Newton’s

representation that Dataforce had a master-vendor agreement with Hewlett-

Packard.

      For the same reason, Newton’s misrepresentation also played a part in the

substantive mail fraud offenses. Indeed, Newton’s act of mailing interest checks to

investors helped maintain the appearance that their investments in Prestige were

safe. See United States v. Lehder-Rivas, 955 F.2d 1510, 1519 n.5 (11th Cir. 1992)

(explaining that the admission of evidence intrinsic to proving the indicted crimes

does not impermissibly broaden the indictment).

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       As for Newton’s argument that the district court’s instruction to the jury

constructively amended the indictment, he invited any error by requesting the

instructions the district court provided to the jury. See discussion supra at I.A. In

short, Newton has not shown error, much less plain error.

II.    Newton’s Challenges to His Sentence 5

       A.      Loss Calculation

       Newton argues that the district court’s calculation of the loss to be attributed

to him is clearly erroneous because it was not supported by specific and reliable

evidence. We review the district court’s interpretation of the Guidelines de novo.

United States v. Barrington, 648 F.3d 1178, 1198 (11th Cir. 2011). We review the

district court’s loss calculation for clear error. United States v. Hernandez, 160
F.3d 661, 667–68 (11th Cir. 1998). “Although review for clear error is deferential,

a finding of fact must be supported by substantial evidence.” United States v.

Robertson, 493 F.3d 1322, 1330 (11th Cir. 2007).

       Newton’s Presentence Investigation Report (“PSR”) was prepared in

October 2015, using the then-applicable 2014 Sentencing Guidelines. Under that

5
  Snow purports to adopt “the relevant issues and arguments, applicable to her appeal” contained
in Newton’s brief. She, however, has raised no sentencing issues in her appeal brief. Similarly,
she never challenged her sentence at oral argument, either in her initial argument or her rebuttal.
At any rate, at best, Snow would be entitled to only plain error review, and she has made no
effort to indicate how any sentencing errors by the district court would have changed the
outcome of her proceedings.

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version of the Guidelines, Newton received a 20-level enhancement under

U.S.S.G. § 2B1.1(b)(1)(K) because the loss was more than $7,000,000 but less

than $20,000,000. By the time of the sentencing hearing on November 5, 2015, the

2015 amendments to the Guidelines had taken effect, that event having occurred on

November 1. Both the district court and the parties agreed that the Guideline

governing loss amounts had been amended and that it was the 2015 calculation that

should control. The court noted that prior to November 1, § 2B1.1(b)(1) had

provided for a 20-level enhancement if the loss exceeded $7,000,000, but that the

2015 Guidelines provided for only an 18-level enhancement if the loss exceeded

$3,500,000 million but was less than $9,500,000 million. The district court found

that the loss was between $3.5 million dollars and $9,500,000, and it imposed an

18-level enhancement.

      Newton objected to this loss calculation, arguing that the loss did not exceed

the $3.5 million threshold for imposition of an 18-level enhancement. In response

to Newton’s objection to the loss-amount calculation, the Government presented

two summary charts setting out the total loss sustained by Amerifactors and

Prestige investors. The first exhibit indicated that the total amount of loss to

Prestige investors was $4,748,373.94, which reflected the difference between the

total amount each investor had invested in Prestige and the amount each investor

had received in quarterly interest payments.

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       The second exhibit indicated that the total amount of loss to Amerifactors

was $2,468,218.86. The Government explained that it had calculated this amount

by adding the value of every invoice purchased by Amerifactors that had not been

bought back by Dataforce.6 The Government then reduced that number to reflect

the amount Amerifactors had actually paid on each invoice, which in most cases

was only 90% of the total invoice amount.7

       The Guidelines’ commentary defines “actual loss” as the “reasonably

foreseeable pecuniary harm that resulted from the offense” and “intended loss” is

the “pecuniary harm that the defendant purposefully sought to inflict . . . [and] that

would have been impossible or unlikely to occur.” Id. § 2B1.1, comment.

(n.3(A)(i)-(ii)). The district court concluded that based on the evidence presented

at trial, it was reasonably foreseeable that the loss to Prestige investors and

Amerifactors was $4,748,373.94 and $2,468,218.86, respectively, or

approximately $7 million. Accordingly, the district court determined that Newton

was subject to an 18-level enhancement under U.S.S.G. § 2B1.1(b)(1)(J), which

called for that enhancement if the loss attributable to the defendant is more than

$3,500,000 but less than $9,500,000. U.S.S.G. § 2B1.1(b)(1)(J) (2015).

6
  Dataforce occasionally bought back invoices from Amerifactors when Hewlett-Packard did not
pay Amerifactors on those invoices within a certain period of time.
7
 The number was further reduced by $50,000 to reflect the amount Amerifactors received from
Hewlett-Packard in separate civil litigation.

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      In reviewing Newton’s challenge to the loss calculation, we note that the

Government must establish the facts by a preponderance of the evidence and

support the loss calculation with reliable and specific evidence. Bradley, 644 F.3d

at 1290. The district court is only required to make a reasonable estimate of the

loss, and we owe appropriate deference to that determination. U.S.S.G. § 2B1.1,

comment. (n.3(C)). When making the loss determination, the district court is

permitted to use evidence from the trial, undisputed PSR facts, and evidence from

the sentencing hearing. Bradley, 644 F.3d at 1290.

      Here, in calculating the loss amount, the district court relied on the evidence

presented at trial and found to be accurate the summary charts presented by the

Government at the sentencing hearing. On appeal, Newton asserts that the

Government failed to establish the loss amount with specific and reliable evidence

because the summary charts were not authenticated by any witness testimony. Yet,

at sentencing, Newton never complained about the absence of authentication. Had

he done so, the Government would have been able to remedy any authentication

concerns. Instead, he objected only to the loss amount represented in those

summary charts. It is that objection on which we focus.

      We conclude that the district court’s calculation of loss attributable to

Newton was not clearly erroneous. To the contrary, the district court was

meticulous and thorough in its assessment, having taken over 90 pages of notes

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during trial and displaying at the sentencing hearing a detailed knowledge of the

evidence and its relation to the calculation of loss. The loss calculation was

supported by specific and reliable evidence, as the summary charts presented by

the Government were based on Special Agent Andrew Culbertson’s testimony at

trial regarding the flow of money and the amount of money lost by Amerifactors

and Prestige investors. Bradley, 644 F.3d at 1290. Indeed, the evidence presented

at trial showed that Prestige investors invested approximately $8,500,000 and

received $3,500,000 back in interest payments, resulting in a net loss of

approximately $5,000,000. As to Amerifactors, Special Agent Culbertson testified

at trial that Amerifactors purchased $2,978,617 worth of invoices from Dataforce

that were never submitted to Hewlett-Packard for payment. Moreover,

Amerifactors’s President Kevin Gowen testified at trial that Amerifactors sustained

a loss of $2,757,965.

       We acknowledge that the loss amounts presented at sentencing—

$4,748,373.94 to Prestige investors and $2,468,218.86 to Amerifactors—were less

than the amounts testified to at trial.8 But that benefitted Newton. Moreover, the

8
   The amount attributed to Amerifactors at sentencing took into account the invoices that had
been bought back by Dataforce, the percentage at which Amerifactors typically purchased the
invoices from Dataforce, and the amount that Amerifactors had received from Hewlett-Packard
as part of separate civil litigation. See Bradley, 644 F.3d at 1292 (explaining that although some
of the evidence relied on by the district court in calculating the loss amount was not introduced at
trial, there was nothing to suggest that the information was not reliable).

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district court is only required to make a reasonable estimate of the loss. See

U.S.S.G. § 2B1.1, comment. (n.3(C)). Because the district court’s loss calculation

was a reasonable estimate based on the evidence presented at trial, the district court

did not clearly err by concluding that the total loss was between $3.5 and $9.5

million. Cf. United States v. Pierre, 825 F.3d 1183, 1197–98 (11th Cir. 2016)

(concluding that the district court did not clearly err in its loss determination

because it was supported by the record); see also United States v. Manoocher

Nosrati-Shamloo, 255 F.3d 1290, 1292 (11th Cir. 2001) (concluding that the

district court did not clearly err in determining the loss amount in part because the

defendant did not present any evidence to rebut the evidence presented by the

Government at the sentencing hearing). Accordingly, the district court’s

application of an 18-level enhancement under § 2B1.1(b)(1)(J) was proper.

      B.     Enhancement of Newton’s Sentence Based on The Number of
             Victims, per U.S.S.G. § 2B1.1(b)(2)

             1.     The “One Book Rule”

      In calculating Newton’s adjusted offense level, the district court started with

the appropriate 7-level base offense level (§ 2B1.1(a)(1) and enhanced that level by

18 levels, based on the loss amount discussed above (§ 2B1.1(b)(1)(J)); by 4

levels, based on the number of victims involved in the scheme (§ 2B1.1(b)(2)); by

2 levels, based on the offense’s use of sophisticated means (§ 2B1.1(b)(10); by 3

levels, based on Newton’s aggravated role in the offense (§ 3B1.1(b)); and by 2
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levels, based on Newton’s obstruction of justice (§ 3C1.1), for a final adjusted

offense level of 36. Combined with a criminal history score of I, this calculation

yielded a sentencing range of 188–233 months. The district court declined

Newton’s request for a variance and imposed a sentence of 188 months.

      Of pertinence to the present discussion is the enhancement based on the

number of victims. As noted earlier, the loss enhancement originally called for by

the 2014 Guidelines would have been a level 20, but by the time of sentencing, the

2015 Guidelines were in effect and the latter had amended the loss guideline to

create a higher threshold for the imposition of loss. Thus, based on the 2015

Guidelines, the amount of loss attributable to Newton yielded only an 18-level

enhancement. The court, the Government, and Newton agreed that he was entitled

to be sentenced under the 2015 Guidelines, and therefore he received this 18-level

enhancement for loss, as opposed to the 20-level enhancement called for by the

2014 Guidelines.

      As we now know, Section 2B1.1(b)(2), which governs an enhancement

based on the number of victims, had likewise been amended by the 2015

Guidelines. As will be discussed in more detail, when compared with its 2014

counterpart, the 2015 version had the potential to reduce the applicable

enhancement for this provision in some circumstances, but it also had the potential

to increase the enhancement in other circumstances. Although the district court

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had been alerted to the fact the guideline governing the loss enhancement had been

amended, apparently no one saw fit to inform the court that the provisions

concerning the number-of-victims enhancement had also changed. Presumably,

this would have been the duty of the probation officer, whose job it is to keep up

with things like Guidelines’ amendments and to recommend to the sentencing

judge the applicable guidelines’ analysis, but one would also have expected

defense counsel and Government counsel, aware already of one amendment to the

Guidelines, to have been vigilant about the possibility that another provision might

also have changed.

         At any rate, whether inadvertent or not, no one advised the district court that

the number-of-victims enhancement9 had been amended by the 2015 manual.10

What this means, in effect, is that the district court used the 2015 manual for

purposes of determining loss, but (unknowingly) used the 2014 manual for

purposes of determining the imposition of the number-of-victims enhancement.

Newton asserts that the district court should have applied the 2015 Manual’s

enhancement provision based on the number of victims.

9
  Likewise, as will be discussed, the provision concerning the sophisticated means enhancement
had also been amended in the 2015 manual.
10
     We use the word “manual” interchangeably with the phrase “version of the Guidelines.”

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      It is true that only one version of the Guidelines should be used in

calculating a defendant’s offense level. That principle has become known as the

“one-book rule.” Here’s how it works. As a general matter, a convicted

defendant’s sentence is based on use of the Guidelines Manual in effect on the date

the defendant is sentenced. United States v. Bailey, 123 F.3d 1381, 1403 (11th Cir.

1997) (citing 18 U.S.C. § 3553(a)(4); U.S.S.G. § 1B1.11(a)). That general rule,

however, gives way to an exception if use of the Guidelines Manual in effect at the

time of sentencing would result in a harsher sentence (translated: higher

Guidelines’ offense level/range) than would have arisen from use of an earlier

manual in effect at the time of the commission of the crime for which the

defendant is being sentenced. The reasoning is that imposition of a harsher

sentence arising out of sentencing provision enacted after the commission of a

defendant’s crime would violate the Ex Post Facto Clause, and when that prospect

arises, the district court must use the Guidelines Manual that was in effect on the

date the crime was committed. Bailey, id.

      Sensitivity to the Ex Post Facto Clause, however, does not mean that a

sentencing court can properly hunt and peck its way through multiple manuals in

effect during the time period in which the defendant’s crimes were committed,

applying the most favorable combination of Guidelines’ provisions to arrive at the

most lenient sentence for a defendant. Instead, the sentencing court must use

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“either the Sentencing Guidelines Manual in effect at sentencing or the one in

effect when the crime was committed,” which “is known as the “one book rule.”

Id. See also U.S.S.G. § 1B1.11(b)(2)11 (codifying the one-book rule). The notion

behind the one-book rule is that “the application of different versions of the

Sentencing Guidelines Manual would contravene the sentencing uniformity

objective of the Sentencing Commission, which intended that the Guidelines be

applied ‘as a cohesive whole’ and not ‘in a piecemeal fashion’ so that a defendant

cannot ‘mix and match amended provisions’ to achieve a more favorable

sentence.” Bailey, 123 F.3d at 1404.

               2.     Application of the Number-of-Victims Enhancement in this
                      Case

       As noted above, Newton’s PSR, which was completed in October 2015,

applied the 2014 version of the Guidelines. The PSR recommended, among other

things, a 4-level enhancement under § 2B1.1(b)(2)(B), which enhancement was

applicable if the offense involved 50 or more victims. 12 At the sentencing hearing

on November 5, 2015, Newton argued that there were fewer than 50 victims. The

district court concluded otherwise and applied the 4-level enhancement.

11
   A court that uses an earlier edition of the Guidelines can apply later amendments to the extent
such amendments are clarifying, rather than substantive. See U.S.S.G. § 1B1.11(b)(2).
12
   In pertinent part, the 2014 Manual provided for a 2-level enhancement if the offense involved
10 or more victims; for a 4-level enhancement if the offense involved 50 or more victims; and a
6-level increase for 250 or more victims.

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      Unbeknownst to the court, the 2015 Manual, however, changed the threshold

and the requirements for two of the enhancement levels under this provision.

Unchanged was the 2-level enhancement. As with the 2014 Manual, under the

2015 Manual a defendant receives a 2-level enhancement when the offense

involved 10 or more victims. The 2015 manual, however, did make significant

changes to the 4- and 6-level enhancements. As to the 4-level enhancement, while

the 2014 Manual required the existence of at least 50 victims, the 2015 Manual

only requires that there be at least 5 victims, but the offense must have resulted in

“substantial financial hardship” to those victims. As to the 6-level enhancement,

although the 2014 Manual required the existence of at least 250 victims, the 2015

Manual only requires the existence of at least 25 victims, but again it requires that

those 25 victims have suffered substantial financial harm as a result of the offense.

Compare U.S.S.G. § 2B1.1(b)(2)(B) (2014) with U.S.S.G. § 2B1.1(b)(2)(B)

(2015).

      As noted, under the one-book rule, the district court should have applied the

2015 Manual as to all enhancements, including the number-of-victims

enhancement. Instead, as to the latter, it used the iteration found in the 2014

Manual. Newton, however, never objected to the court’s use of the 2014 Manual’s

iteration of this enhancement. Because Newton challenges the district court’s use

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of the wrong version of the Guidelines for the first time on appeal, we review only

for plain error. 13 See Wetherald, 636 F.3d at 1320.

       To establish plain error, a defendant must show that there was “(1) error, (2)

that is plain and (3) that affects substantial rights. If all three conditions are met,

an appellate court may then exercise its discretion to notice a forfeited error, but

only if . . . the error seriously affects the fairness, integrity, or public reputation of

judicial proceedings.” United States v. Turner, 474 F.3d 1265, 1276 (11th Cir.

2007).

       We conclude that the district court committed error, that was plain, by

applying the 2014 version of the Guidelines with respect to the number-of-victims

enhancement instead of the 2015 Manual. As noted, the sentencing court is

required to apply the version of the Guidelines in effect at the time of the

sentencing, which here was the 2015 version. See Bailey, 123 F.3d at 1403–05;

United States v. Wilson, 993 F.2d 214, 216 (11th Cir. 1993). The problem for

Newton, however, is the third prong of the plain-error test, which requires the

defendant to show that the error affected substantial rights. For an error to affect

13
   We reject the Government’s contention that our review of this argument is precluded by the
invited-error doctrine. Newton did not request that the district court apply the 2014 version of
the Guidelines, which provided for a 4-level enhancement if the offense involved 50 or more
victims. See U.S.S.G. § 2B1.1(b)(2)(B) (2014). Instead, Newton simply failed to object when
the district court (and parties) assumed that the 2014 version applied. We therefore review for
plain error. See United States v. Dortch, 696 F.3d 1104, 1112 (11th Cir. 2012) (stating that
“failing to object does not trigger the doctrine of invited error”).

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substantial rights, “in most cases it means that the error must have been prejudicial:

It must have affected the outcome of the district court proceedings.” United States

v. De La Garza, 516 F.3d 1266, 1269 (11th Cir. 2008) (quoting United States v.

Olano, 507 U.S. 725, 734 (1993)). And as a complaining party who failed to

object to the error before the district court, the defendant has the burden of

persuasion as to prejudice. United States v. Rodriguez, 398 F.3d 1291, 1299 (11th

Cir. 2005).

      Here, we conclude that Newton has failed to show prejudice because he has

failed to show that the outcome of the proceedings—that is, his sentencing range

under the Guidelines—would have been any different had the district court applied

the 2015 Guidelines as to the number-of-victims enhancement. To explain why,

we contrast this case with Molina-Martinez v. United States, 136 S. Ct. 1338

(2016). In Molina-Martinez, there was no doubt that the sentencing court had

applied the wrong sentencing range because there was no doubt that it had

incorrectly added up the number of criminal history points that should have been

assessed against the defendant. That is, the court had counted up 18 points, when

it was clear that the defendant had earned only 11 points. With 11 points, instead

of 18, the defendant was in criminal history category V, instead of VI, and he

would therefore have been subject to a lower sentencing range. Id. at 1343, 1344.

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      Notably, there was no uncertainty about the fact that the court’s error meant

that it had miscalculated the Guidelines range and that the defendant should have

been subject to a lower sentencing range. Specifically, with the Category VI

criminal history applied by the sentencing court, the defendant was subject to a 77–

96 month range; with the appropriate Category V, however, he was subject to only

a 70–87 month range. Clearly, the district court had committed an error that was

plain. But as the defendant had received a 77-month sentence, which was within

the overlapping guidelines’ range of both calculations, the question before the

Supreme Court was whether the defendant had shown prejudice.

      The Supreme Court concluded that the defendant had been prejudiced. The

Court noted that, notwithstanding the Guidelines’ advisory status, empirical

sources indicate that the Guidelines are “not only the starting point for most federal

sentencing proceedings but also the lodestar.” Id. at 1346. Further, “when a

Guidelines range moves up or down, offenders’ sentences tend to move with it.”

Id. (citation omitted). Although not characterized expressly as a presumption, the

Court observed that “[i]n most cases a defendant who has shown that the district

court mistakenly deemed applicable an incorrect, higher Guidelines range has

demonstrated a reasonable probability of a different outcome.” Id.

      In Molina-Martinez, however, it was plain—that is, clear and obvious—that

the sentencing court had used the wrong Guidelines range. It had incorrectly

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counted the number of criminal convictions for purposes of assigning a criminal

history category number, and that error was apparent from a review of the

presentence report. Thus, the predicate for the Court’s holding—and its

observation concerning the implications of that holding—is the use by the district

court of a Guidelines range that is wrong and whose inaccuracy is clear, obvious,

and subject to no debate.14

       Thus, to take advantage of the assumption/presumption of Molina-Martinez

that a defendant who shows that he was sentenced pursuant to an incorrect

sentencing range is a defendant who has shown a probability that, absent the error,

the outcome of the proceeding would have been different, Newton needs to first

show that he would have been subject to a lower sentencing range had the 2015

Manual been used. Moreover, the traditional principle requiring an appellant who

asserts plain error to show prejudice—that is, that the outcome of the proceedings

would have been different—applies here. See, e.g., United States v. Margarita

Garcia, 906 F.3d 1255, 1267 (11th Cir. 2018); United States v. Rodriguez, 627

14
   Indeed, that is the same scenario that the Supreme Court confronted in Rosales-Mireles v.
United States, 138 S. Ct. 1897 (2018), when it expanded the reasoning of Molina-Martinez to
conclude that the use by a sentencing court of a plainly wrong sentencing range also satisfies the
“fourth’ prong of the plain error test: that the error seriously affects the fairness, integrity, or
public reputation of the proceedings. In Rosales-Mireles, the sentencing court had made a
simple arithmetic mistake when it counted twice a prior conviction and when that miscounting
had jumped the defendant from a Category V to a Category VI. This arithmetic mistake, and its
impact on the calculation of the Guidelines’ range, was clear and obvious. That is, there could
be no debate that the corresponding sentencing range triggered by this mistaken calculation was
incorrect.

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             Case: 15-15235     Date Filed: 03/07/2019    Page: 29 of 36
F.3d 1372, 1380 (11th Cir. 2010); United States v. Gonzalez, 550 F.3d 1319, 1323

(11th Cir. 2008).

      In this case, however, it is not at all clear that a lower sentencing range

would have resulted from the use of the 2015 Manual’s provision concerning the

number-of-victims enhancement. Indeed, it is even possible that Newton might

have been subject to a higher range had the 2015 Manual been used. Specifically,

as set out above, over Newton’s objection and per the PSR’s recommendation, the

district court applied a 4-level enhancement based on § 2B1.1(b)(2)(B), which

under the 2014 Manual imposed that enhancement if the offense involved 50 or

more victims. At the sentencing hearing, Newton argued that there were only 48

victims, while the Government argued that there were 66, and provided a chart in

support of that assertion. The court found for the Government on this point and,

concluding that there were more than 50 victims, he imposed the 4-level

enhancement.

      As noted above, the requirement for receiving a 2-level enhancement based

on § 2B1.1(b)(2) is the same under both the 2014 and the 2015 Manual: an offense

involving 10 or more victims. Clearly, Newton would be subject to a 2-level

enhancement under both versions. The 2015 Manual did change the requirements

for imposition of a 4-level enhancement. While the 2014 Manual required the

existence of at least 50 victims, the 2015 Manual only requires that there be at least

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5 victims. It does, however, also require that the offense have resulted in

“substantial financial hardship” to those victims. In explaining what the

Guidelines mean by “substantial financial hardship,” the relevant commentary

indicates that when determining whether a victim suffered substantial hardship, the

court shall consider in relevant part whether the victim (1) became insolvent,

(2) filed for bankruptcy, (3) suffered retirement losses, (4) changed his or her

employment, (5) changed his or her living arrangements, or (6) had difficulty

obtaining credit. U.S.S.G. § 2B1.1(b)(2), comment. (n.4(F)).

         As the party bearing the burden of persuading us that he would have been

subject to a different Guidelines range had the district court applied the 2015

iteration of § 2B1.1(b)(2), Newton has offered nothing in support of an argument

that there were not at least 5 victims who might have suffered substantial financial

hardship, as that term is defined under the Guidelines.15 Indeed, in his brief,

Newton has not even attempted to explain why he would not still qualify for a

four-level enhancement under the 2015 version of the Guidelines.

         Further, the Government has noted that, of the 66 victims, 15 lost more than

$100,000, with six of the victims losing between $205,438 and $893,397; 34

victims lost more than $25,000. Certainly, it is possible that none of those

15
     His entire argument on this issue is only a paragraph in length.

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victims—or more precisely, less than 5 of those victims—suffered a substantial

financial hardship as a result of being duped by Newton. But possible is not good

enough. In a plain error context, where the person asserting an error has the

burden to prove prejudice, not knowing whether the error had any negative effect

is fatal to the proponent. “As we said in Rodriguez, where ‘we don’t know’ what

the district court would have done, and ‘the record provides no reason to believe

any result is more likely than the other,’ the appellant cannot prevail.” Dell v.

United States, 710 F.3d 1267, 1277 (11th Cir. 2013) (citation omitted). See also

Gonzalez, 550 F.3d at 1322 (in determining whether a Guidelines ruling by the

district court constituted plain error, “Where error could have cut either way and

uncertainty exists, the burden is the decisive factor in the third prong of the plain

error test, and the burden is on the defendant.” (quoting United States v.

Rodriguez, 398 F.3d 1291, 1300 (11th Cir. 2005)).

      Moreover, it is possible that the 6-level enhancement under the 2015 Manual

might have been in play had the 2015 Manual been used. As noted, although the

2014 Manual required the existence of at least 250 victims for this enhancement,

the 2015 Manual only requires the existence of at least 25 victims, but again it

requires that those 25 victims have suffered substantial financial harm as a result of

the offense. With 33 of 66 victims suffering losses of over $25,000, there was at

least a possibility that 25 of those victims suffered a substantial financial hardship.

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This possibility that the 2015 enhancement governing number of victims might

have produced a greater enhancement than that provided for by the 2014 Manual is

another factor disfavoring a finding of prejudice and supporting the rationale

behind the requirement of a contemporaneous objection. Requiring a

contemporaneous objection “fosters finality of judgment and deters ‘sandbagging,”

saving an issue for appeal in hopes of having another shot at trial if the first one

misses.” Rodriguez, 627 F.3d at 1379 (citation omitted). “The daunting hurdles

erected under plain error review are imposed for powerful reasons. Without them,

a defendant would be free to sleep on his rights at trial, and ignore his duty in our

adversarial system to help the district court police the trial process in order to

ensure fair and accurate fact-finding.” Margarita Garcia, 906 F.3d at 1268.

      In summary, Newton has failed to shoulder his burden of proving a

probability that he would have been subject to a lesser sentencing range had he

objected to the district court’s use of the 2014 iteration of the number-of-victims

enhancement. Cf. Rodriguez, 398 F.3d at 1301 (“[W]here the effect of an error on

the result in the district court is uncertain or indeterminate—where we would have

to speculate—the appellant has not met his burden of showing a reasonable

probability that the result would have been different but for the error.”). Having

failed to shoulder his burden, Newton cannot succeed in his request for reversal on

this ground.

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      C.     Sophisticated Means Enhancement

      Newton also argues that the district court clearly erred by imposing a two-

level enhancement for sophisticated means pursuant to U.S.S.G.

§ 2B1.1(b)(10)(C).

      We review for clear error a district court’s finding that sophisticated means

were used. Barrington, 648 F.3d at 1199. The 2014 Sentencing Guidelines

provided for a two-level enhancement if “the offense otherwise involved

sophisticated means.” U.S.S.G. § 2B1.1(b)(10) (2014). This provision was

amended in 2015 to provide for a two-level increase in the defendant’s offense

level if the “the offense otherwise involved sophisticated means and the defendant

intentionally engaged in or caused the conduct constituting sophisticated means.”

(U.S.S.G. § 2B1.1(b)(10) (2015) (2015 amended material is underlined). The

commentary defines “sophisticated means” as “especially complex, or especially

intricate conduct” that pertains to executing or concealing the offense. Id. § 2B1.1,

comment. (n.9(B))).

      Newton’s PSR, which used the 2014 Guidelines, recommended a two-level

enhancement under § 2B1.1(b)(10)(C) because the offense involved sophisticated

means. At the sentencing hearing, Newton argued that the fraud was not complex

or sophisticated, as it merely involved the creation and presentation of fraudulent

invoices to Amerifactors and Prestige. In finding that the offense involved

                                         33
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sophisticated means, the district court concluded that the scheme involved, among

other things: (1) the creation of an investment firm (Prestige) to purchase invoices

that had already been sold to Amerifactors; (2) the solicitation of investors to

invest in the firm; (3) interest payments made to investors; (4) the use of an

intermediary company to go between Dataforce and Prestige; (5) interfacing

between Dataforce, Amerifactors, and Hewlett-Packard to keep the parties

separated from each other; and (6) the creation of false timesheets and invoices.

      We conclude that the district court did not clearly err in concluding that this

offense involved sophisticated means. See United States v. Ghertler, 605 F.3d
1256, 1267 (11th Cir. 2010) (explaining that each of a defendant’s actions need not

be sophisticated in order to warrant the enhancement, as it is sufficient that the

totality of the scheme is sophisticated).

      As to the newly-added language in the 2015 amendments requiring that the

defendant intentionally engaged in or caused the conduct constituting sophisticated

means, neither Newton nor the Government mentioned the existence of that new

requirement to the Court, hence it was never discussed. That being so, and as with

the enhancement for number of victims, this means that Newton must demonstrate

that the court plainly erred in applying the sophisticated means enhancement. Like

the victim enhancement, we conclude that it was error for the district court not to

apply the 2015 amendment concerning the sophisticated means enhancement. But

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to prevail on this claim, Newton must prove prejudice arising from the error and,

once again, he has failed to prove that the result of the proceedings would have

been any different had the district court acknowledged the additional requirement

that Newton intentionally engaged n or caused the conduct constituting the

sophisticated means. Again, he offers nothing to support such an inference.

Indeed, on this record, it seems clear that Newton intentionally engaged in the

conduct giving rise to the enhancement. Although the district court did not

specifically state that Newton engaged in or caused the conduct constituting

sophisticated means, its findings support that conclusion. Newton helped create

Prestige, he solicited Prestige investors by representing that their investments were

guaranteed by Hewlett-Packard, and he kept the charade going by making interest

payments to Prestige investors. Because the record establishes that the fraud was

both sophisticated and that Newton personally caused or engaged in conduct

constituting sophisticated means, the district court did not err by applying the two-

level enhancement pursuant to § 2B1.1(b)(10)(C).

       Accordingly, we affirm the district court’s enhancement of Newton’s

adjusted offense level based on the use of sophisticated means.

III.   CONCLUSION

       For the foregoing reasons, we affirm the convictions and sentences imposed

by the district court.

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AFFIRMED.

                          36