Court Opinion

ID: 2775060
Source: CourtListenerOpinion
Date Created: 2015-01-30 16:00:50.587151+00
Date Added: 2024-06-11T11:27:55.655333
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                          File Name: 15a0093n.06

                                       Case No. 14-1042

                         UNITED STATES COURT OF APPEALS
                              FOR THE SIXTH CIRCUIT

                                                                              FILED
                                                                         Jan 30, 2015
UNITED STATES OF AMERICA,                           )
                                                                     DEBORAH S. HUNT, Clerk
                                                    )
       Plaintiff-Appellee,                          )
                                                    )     ON APPEAL FROM THE UNITED
v.                                                  )     STATES DISTRICT COURT FOR
                                                    )     THE WESTERN DISTRICT OF
CHARLES FINLEY,                                     )     MICHIGAN
                                                    )
       Defendant-Appellant.                         )
                                                    )
                                                    )

       BEFORE: SUTTON, McKEAGUE, and KETHLEDGE, Circuit Judges.

       SUTTON, Circuit Judge. Charles Finley and several cohorts used cards encoded with

stolen credit card numbers to make fraudulent purchases at Meijer stores in Grand Rapids,

Michigan. Finley pled guilty to conspiracy to commit wire fraud and aggravated identity theft.

After enhancing Finley’s advisory sentencing range based on his leadership role, the scheme’s

sophistication, and the number of victims, the district court sentenced him to a 126-month prison

term. Finley challenges his plea and sentence. Finding no error, we affirm.

                                               I.

       A federal grand jury indicted Charles Finley and several others for crimes arising from

nearly a year of credit card fraud.     According to the indictment, Finley stole numerous

unactivated stored-value cards (SVCs) from a Rite Aid store in August 2011. The indictment
Case No. 14-1042
United States v. Finley
does not mention what became of the cards, but months later Finley used similar cards encoded

with stolen credit card numbers (“cloned” cards) to make tens of thousands of dollars in

fraudulent purchases at Meijer stores in Grand Rapids. Count I charged Finley with conspiracy

to commit wire fraud. See 18 U.S.C. §§ 1343, 1349. Count III charged him with aggravated

identity theft “during and in relation to” that fraud. Id. § 1028A.

       Finley pled guilty to both counts, and the district court sentenced him to 126 months.

                                                     II.

       On appeal, Finley challenges the validity of his convictions on the ground that the district

court failed to establish a sufficient “factual basis” for his guilty plea. See Fed. R. Crim. P.

11(b)(3). His wire-fraud conspiracy conviction must fall, he maintains, because there is no

evidence that he knowingly used the wires. So, he adds, must his aggravated identity-theft

conviction fall because there is no evidence that he used a real person’s identity, as opposed to an

invented one. Because Finley did not raise these arguments below, we review them for plain

error. See United States v. Vonn, 535 U.S. 55, 59 (2002).

       Finley’s plea did not contain any error, plain or otherwise. The factual-basis requirement

of Criminal Rule 11 protects defendants from pleading guilty “without realizing that [their]

conduct does not actually fall within the charge.” McCarthy v. United States, 394 U.S. 459, 467

(1969) (internal quotation marks omitted).       A defendant’s own account of the crime that

establishes the elements of the offense satisfies the requirement. See United States v. Tunning,

69 F.3d 107, 112 (6th Cir. 1995). Just that happened here.

       To prove a wire-fraud conspiracy, the government must show an overt act in furtherance

of an agreement to commit wire fraud, which requires (1) willful participation in a scheme to

defraud, (2) use of interstate wires in furtherance of the scheme, and (3) the intent to deprive the

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United States v. Finley
victim of money or property. United States v. Cunningham, 679 F.3d 355, 370 (6th Cir. 2012).

Use of the wires, the sole element contested here, “need only be . . . reasonably foreseeable as a

result of the defendant’s actions.” United States v. Frost, 125 F.3d 346, 354 (6th Cir. 1997)

(internal quotation marks omitted).       Finley’s own description of the offense meets that

requirement, as he admittedly “conspired to use other people’s credit cards,” R. 292 at 21, and

“in using a credit card it is foreseeable that interstate communications will be used to obtain”

approval for purchases, United States v. Vanover, 815 F.2d 81, 1987 WL 36406, at *1 (6th Cir.

1987) (unpublished table decision).

       Finley protests that a conviction for wire-fraud conspiracy differs because it requires

proof that he knew the scheme entailed use of the wires, not just that such use was foreseeable.

Not so. Finley’s knowledge “is relevant to the same issues and to the same extent as it [is] for

conviction of” wire fraud itself. United States v. Feola, 420 U.S. 671, 695 (1975). Nothing

requires that he “have a greater degree of knowledge” about use of the wires in the context of a

conspiracy charge. Id. at 687. Foreseeability suffices. United States v. Reed, 721 F.2d 1059,

1060–61 (6th Cir. 1983).

       The plea colloquy also supports Finley’s aggravated identity-theft conviction, which

requires proof he “knowingly transfer[red], possesse[d], or use[d], without lawful authority, a

means of identification of another person.” 18 U.S.C. § 1028A(a)(1) (emphasis added). The

italicized language requires a showing that Finley knew that the stolen account numbers

belonged to real people. See Flores-Figueroa v. United States, 556 U.S. 646, 657 (2009). No

problem there: Finley admitted to using “other people’s” accounts. R. 292 at 21. And when the

district court asked whether there were “other people’s credit card information . . . logged onto”

the cards Finley used, Finley replied, “Yes.” Id. at 22.

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                                                III.

       Finley attacks his sentence on five separate grounds. None hits the mark.

       The statutory maximum. Finley claims that his 102-month sentence for Count I is illegal

because he was found guilty of conspiracy to defraud the United States, which carries a

maximum penalty of only 60 months. See 18 U.S.C. § 371. As proof, Finley points to the

judgment, which labels Count I as “Conspiracy to Defraud the United States.” R. 277 at 1. But

referencing the wrong crime in a judgment amounts to a clerical error, correctible by the trial

court or on appeal. See Fed. R. Crim. P. 36; United States v. Davis, 707 F.2d 880, 884 (6th Cir.

1983); United States v. Barnes, 313 F.2d 325, 327–28 (6th Cir. 1963); see also 3 Charles Alan

Wright & Sarah N. Welling, Federal Practice and Procedure § 641, at 770 (4th ed. 2011). The

record confirms the district court found Finley guilty of conspiracy to commit wire fraud,

punishable by up to 240 months in jail—far above his sentence. See 18 U.S.C. §§ 1343, 1349.

The indictment, plea agreement, plea colloquy, magistrate’s Report & Recommendation, and

sentencing transcript all describe wire fraud, and none says anything about fraud against the

United States.   The court’s unambiguous oral judgment sentencing Finley for wire fraud

controls. See United States v. Penson, 526 F.3d 331, 334 (6th Cir. 2008). The written judgment

thus reflects a mistake “merely of recitation[,] . . . mechanical in nature.” United States v.

Robinson, 368 F.3d 653, 656 (6th Cir. 2004).

       Finley offers two rejoinders. He first invites us to construe the judgment in his favor

under the rule of lenity. But that interpretive canon applies to ambiguous statutes, not to

judgments or orders. See United States v. Booth, 551 F.3d 535, 541 (6th Cir. 2009). Finley next

attempts to distinguish clerical-error cases like Barnes because, at the very end of Count I, the

indictment cites the U.S. Code section for fraud against the United States. This purportedly

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United States v. Finley
suggests that the error in the judgment is more than clerical. We disagree. All this shows is

another typo, this time in the indictment. Again, Count I describes wire fraud in detail, cites the

correct code sections, and gives no hint that the United States was a victim. The extraneous code

citation does not muddy the judgment’s evident intent.

       The sophisticated-means enhancement. Finley objects to the two-point enhancement to

his offense level for use of “sophisticated means,” U.S.S.G. § 2B1.1(b)(10)(C), which we review

for clear error, see United States v. Kraig, 99 F.3d 1361, 1371 (6th Cir. 1996). The enhancement

applies to conduct that is “especially complex or especially intricate.” U.S.S.G. § 2B1.1 cmt.

9(B). Finley maintains that this type of credit card fraud scheme is so well-known that it is no

more sophisticated than ordinary retail fraud. We see it differently. Perhaps no individual step

of Finley’s conspiracy is sophisticated, but a scheme may be sophisticated even when none of its

component parts standing alone is complex or intricate.          See United States v. Masters,

216 F. App’x 524, 525 (6th Cir. 2007). Finley and his coconspirators: (1) traveled to the

Western District because the stores there were less familiar with this type of fraud; (2) switched

license plates; (3) stole unactivated stored-value cards; (4) converted them into cloned credit

cards (either by encoding the cards themselves or outsourcing the job); (5) bought store gift cards

at self-checkout lanes to avoid detection; (6) used the seemingly legitimate gift cards to buy

expensive electronics; and (7) sold the loot. Facing a nearly identical credit card fraud scheme,

we upheld the sophisticated means enhancement “given the cross-jurisdictional conduct and

technical knowledge necessary to commit the offense.” United States v. Shifu Lin, 508 F. App’x

398, 403 (6th Cir. 2012). Both features exist here. Finley may not have handled the card

encoding, the scheme’s most advanced step, but he is still responsible for it because, judging by

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United States v. Finley
his theft of unactivated (otherwise useless) SVCs, that step “was reasonably foreseeable to him.”

United States v. Crosgrove, 637 F.3d 646, 666 (6th Cir. 2011).

       Finley suggests the Sentencing Commission’s recent proposal to limit the sophisticated-

means enhancement to the defendant’s own conduct shows the commission rejects the

foreseeability rule announced in Crosgrove. See Notice of Proposed Amendments to Sentencing

Guidelines, Policy Statements, and Commentary, 80 Fed. Reg. 2,570, 2,588–89 (Jan. 16, 2015).

In contrast to that rule, the proposed new wording of U.S.S.G. § 2B1.1(b)(10)(C) would apply

the enhancement only if “the defendant engaged in or caused the conduct constituting

sophisticated means.” Id. at 2,589. “[C]larifying amendments may be applied retroactively to

discern the Sentencing Commission’s intent regarding the application of a pre-amendment

guideline.” United States v. Geerken, 506 F.3d 461, 465 (6th Cir. 2007). As a clarifying

amendment, the argument goes, this proposal reveals the Sentencing Commission’s

understanding of the leadership guideline. But any such inference is premature here. The

commission has not adopted the change yet. Even assuming a nascent proposal might tell us

something about the commission’s intent, this proposed change is not a mere clarification. All

signs point to a substantive amendment: The commission characterizes it as a “revis[ion]” that

“narrows the scope” of the enhancement; it alters the language of the guideline itself, not just the

commentary; and it frames none of this as resolving an ambiguity in the current wording. See

80 Fed. Reg. at 2,589; Geerken, 506 F.3d at 465. The proposal thus tells us little (if anything)

about how the commission interprets the sophisticated-means enhancement as it now stands.

       The leadership-role enhancement. Finley also challenges the four-level enhancement for

his role as an “organizer or leader” of a scheme “involv[ing] five or more participants.”

U.S.S.G. § 3B1.1(a). He initially argued that the district court misapplied this enhancement by

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United States v. Finley
crediting unreliable statements from codefendants Sharonique Pointer and Donald Peterson, who

identified Finley as the leader. At oral argument, however, Finley conceded this argument lacks

merit—and with good reason. Their independent statements corroborate each other. See United

States v. Hunt, 487 F.3d 347, 353 (6th Cir. 2007). And codefendant Mark Houston’s statement

that Finley recruited him, provided the fraudulent cards, and paid him cash for his trouble

confirms Finley’s leadership role. See United States v. Lewis, 444 F. App’x 882, 885–86 (6th

Cir. 2011).

       Finley insists the leadership enhancement remains unwarranted because he led only three

others, not the required five. This argument flies wide of the mark because the enhancement

applies even when the defendant leads just one participant so long as the scheme includes five.

See U.S.S.G. § 3B1.1 cmt. 2; United States v. Robinson, 503 F.3d 522, 529 (6th Cir. 2007). Here

there were at least seven other participants.

       The victim enhancement. For the first time on appeal, Finley objects to a four-level

enhancement for the 167 victims caught up in the scheme, see U.S.S.G. § 2B1.1(b)(2)(B), which

we review for plain error, see United States v. Vonner, 516 F.3d 382, 385–86 (6th Cir. 2008) (en

banc). He claims the victim count should include only the banks that suffered a financial loss,

not the account holders reimbursed by their card issuers for fraudulent charges. The general

rule indeed requires monetary or bodily harm to count as a victim. See U.S.S.G. § 2B1.1 cmts.

1 & 3(A)(i); United States v. Stubblefield, 682 F.3d 502, 510–13 (6th Cir. 2012). In identity-

theft cases, however, the “victims” include “any individual whose means of identification was

used unlawfully or without lawful authority.” U.S.S.G. § 2B1.1 cmt. 4(E). No one disputes that

credit card account numbers are a means of identification for purposes of this guideline, making

the victim count accurate. In response, Finley points to United States v. Yagar, 404 F.3d 967,

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United States v. Finley
970–71 (6th Cir. 2005), which held that account holders promptly reimbursed by their banks

were not victims because they suffered no actual loss. But Yagar predates the new definition of

“victim” adopted in 2009 for identity-theft cases, making that holding irrelevant. See United

States v. Tragas, 727 F.3d 610, 620 (6th Cir. 2013).

          Substantive reasonableness. Finley claims that the district court’s near-the-bottom-of-

the-guidelines sentence is “greater than necessary” to serve the goals of sentencing, see

18 U.S.C.A. § 3553(a), due to the difference between his sentence and the sentences of the

others.    On appeal, we presume a within-guidelines sentence is reasonable.        See Vonner,
516 F.3d at 389. Finley has not rebutted that presumption. District judges are “not required to

consider the disparity between the sentences of co-defendants.”       United States v. Wallace,

597 F.3d 794, 803 (6th Cir. 2010). Finley, as a leader, was at any rate more culpable than his

fellow conspirators. The differences in the sentences were justified and earned.

          For these reasons, we affirm.

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