Court Opinion

ID: 2679776
Source: CourtListenerOpinion
Date Created: 2014-06-20 20:00:09.866268+00
Date Added: 2024-06-11T09:40:27.615391
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                _______________

                                      No. 13-4779
                                    _______________

                           UNITED STATES OF AMERICA

                                            v.

                                    RAMIL KISMAT,
                                             Appellant
                                    _______________

                     Appeal from the United States District Court
                         for the Middle District of Pennsylvania
                              (D.C. No. 1:11-cr-00301-001)
                    District Judge: Honorable Christopher C. Conner
                                    _______________

                       Submitted Under Third Circuit LAR 34.1(a)

                                      June 13, 2014

         Before: AMBRO and BARRY, Circuit Judges, and RESTANI,1 Judge.

                             (Opinion Filed: June 20, 2014)
                                  _______________

                                       OPINION
                                    _______________
RESTANI, Judge

       Appellant Ramil Kismat appeals his conviction for bank fraud and wire fraud as

well as various aspects of his sentence. For the reasons stated below, we will affirm.

1
  The Honorable Jane A. Restani, Judge of the United States Court of International Trade,
sitting by designation.
                                           1
                                              I.

         Appellant Kismat and his co-defendant at trial Sergey Sorokin (together, “the

defendants”) were charged with bank fraud in violation of 18 U.S.C. § 1344 (2012), wire

fraud in violation of 18 U.S.C. § 1343, identity theft in violation of 18 U.S.C.

§ 1028(a)(7), and aggravated identity theft in violation of 18 U.S.C. § 1028A(a)(1). The

defendants allegedly used numerous compromised credit and debit card numbers over a

period of several months to make purchases at various retail establishments, mostly in

Pennsylvania. Despite counsel’s arguments at trial that the defendants were unaware that

the cards used to make those purchases were encoded with compromised account

numbers, a jury convicted Kismat and Sorokin on the bank fraud and wire fraud charges.2

Kismat ultimately was sentenced to 64 months of incarceration.

         Kismat raises seven issues on appeal. Specifically, he claims that: (1) the district

court committed reversible error by providing a “willful blindness” instruction; (2) the

court committed plain error by failing to give a jury instruction regarding the good faith

defense; (3) the court committed plain error in its bank fraud jury instruction; (4) the

cumulative error of the failure to instruct the jury on the good faith defense and the

deficiency in the bank fraud instruction warrants reversal; (5) there was insufficient

evidence presented at trial to prove that Kismat had the requisite mens rea to commit

bank fraud and wire fraud; (6) the court erred in its calculation of the intended loss for

2
    Sorokin’s appeal of his sentence is docketed as case number 13-3955.
                                               2
purposes of sentencing; and (7) the court erred in its calculation of the number of victims

for purposes of sentencing. We will address each claim in turn.3

                                            II.

       Kismat first claims that the district court erred by providing a “willful blindness”

instruction to the jury.   He argues that the evidence at trial did not warrant that

instruction. We review a challenge to the district court’s determination that the evidence

supported the giving of a willful blindness instruction for abuse of discretion. United

States v. Stadtmauer, 620 F.3d 238, 252 (3d Cir. 2010). In determining whether the

evidence was sufficient to warrant the instruction, we view the evidence and reasonable

inferences derived therefrom in the light most favorable to the government. Id. The

evidence here was sufficient to warrant the instruction.

       Kismat claimed at trial, and continues to argue, that he did not know that the cards

he was using contained compromised account information. Evidence presented at trial,

however, indicated that Kismat was not using the cards in good faith, or at best,

consciously avoided learning about the propriety of the cards. On several occasions, he

drove from the New York/New Jersey area to central Pennsylvania to use the cards at

common retailers such as Target. He would make a handful of transactions at the store,

using multiple cards and often switching registers, and then would move on to another

store where he would repeat the same activity. The purchases were often prepaid Visa or

3
  The district court had jurisdiction under 18 U.S.C. § 3231. We have appellate
jurisdiction over Sorokin’s conviction under 28 U.S.C. § 1291 and sentencing under 18
U.S.C. § 3742(a).
                                           3
MasterCard gift cards that required an additional activation fee. Kismat told police that

he liked to use these prepaid cards to purchase other merchandise; but by engaging in the

additional step of purchasing the prepaid gift cards instead of using his own supposedly

legitimate card to purchase the merchandise directly, Kismat was wasting money because

he had to incur the additional activation fees. Taken together, Kismat’s defense that he

was unaware that the cards he was using were fraudulent and his actions indicating that

he was trying to obscure his use of the cards to obtain items of value warranted giving the

jury a willful blindness instruction. See United States v. Wert-Ruiz, 228 F.3d 250, 256–

58 (3d Cir. 2000) (holding that denial of knowledge regarding true nature of money

laundering scheme combined with actions taken to conceal involvement in the scheme

was sufficient to warrant willful blindness instruction).4

                                             III.

       Kismat next argues that the district court committed plain error by failing to

instruct the jury on the good faith defense. He correctly notes that the existence of good

faith negates the intent-to-defraud element required for bank fraud and wire fraud. See

United States v. Jimenez, 513 F.3d 62, 75 (3d Cir. 2008); United States v. Al Hedaithy,

392 F.3d 580, 590 (3d Cir. 2004). Reversal under the plain error standard is warranted

4
  Kismat also argues in his reply brief that the instruction was erroneous because it did
not include any language that advised the jury that it was permitted, but not required, to
draw any inferences from the evidence on this issue. Because this argument was not
raised in his opening brief, we will not consider it. See Ethypharm S.A. Fr. v. Abbott
Labs., 707 F.3d 223, 231 n.13 (3d Cir. 2013). In any event, we note that the district court
instructed that the jury “may” find the knowledge requirement met by evidence proving
willful blindness beyond a reasonable doubt.
                                             4
only if there is (1) an error, (2) that is plain, (3) the error affects substantial rights, and

(4) the error “seriously affects the fairness, integrity, or public reputation of judicial

proceedings.”    United States v. Bobb, 471 F.3d 491, 500 (3d Cir. 2006) (internal

quotation marks and brackets omitted).

       We have upheld refusals to give a separate good faith instruction when the

instructions, “taken as a whole, adequately define[] the elements of the crime, including

the intent requirement, thereby making a good faith instruction unnecessary and

redundant.” United States v. Leahy, 445 F.3d 634, 651 (3d Cir. 2006). The district court

defined the elements of each crime, including the requirement that Kismat act with an

intent to defraud, which the district court defined as “knowingly and with the intention or

the purpose to deceive or to cheat.” Acting “with the intention or the purpose to deceive

or to cheat” is incompatible with acting in good faith, and thus it was unnecessary for the

district court to give an additional good faith instruction. See id. at 644, 651–52 (holding

that the district court did not abuse its discretion by refusing to give a good faith

instruction when the court instructed the jury on the intent element and described “intent

to defraud” as acting “knowingly and with the purpose to deceive or to cheat”). Thus, we

find no error in the failure to give a separate good faith instruction.

                                              IV.

       Kismat also argues that the district court committed plain error in instructing the

jury on the elements of bank fraud. 18 U.S.C. § 1344 provides:

       Whoever knowingly executes, or attempts to execute, a scheme or
       artifice—
                                      5
              (1) to defraud a financial institution; or
              (2) to obtain any of the moneys, funds, credits, assets, securities, or
              other property owned by, or under the custody or control of, a
              financial institution, by means of false or fraudulent pretenses,
              representations, or promises;
       shall be fined not more than $1,000,000 or imprisoned not more than 30
       years, or both.

The district court instructed the jury that to find the defendants guilty, the government

had to prove each of the following beyond a reasonable doubt:

       First that . . . Ramil Kismat and/or Sergey Sorokin knowingly executed a
       scheme to obtain the money, funds, or other property owned by or under
       the control of [the allegedly victimized financial institutions] by means of
       material false or fraudulent pretenses, representations, or promises as
       detailed in Count 1 of the indictment, second, that Ramil Kismat and
       Sergey Sorokin did so with the intent to defraud these institutions, and
       third, that any of these financial institutions were then insured by the
       Federal Deposit Insurance Corporation.

Kismat asserts that the district court impermissibly combined the two allegedly distinct

subsections of § 1344 into a single count and failed to instruct the jury that it had to reach

a unanimous verdict as to which of the separate sections he allegedly violated. There was

no improper conflation of distinct subsections. Our caselaw makes clear that intent to

defraud a financial institution is an element of both subsections (1) and (2). See Leahy,

445 F.3d at 642–43; United States v. Thomas, 315 F.3d 190, 196–99 (3d Cir. 2002). The

instructions here required that the jury find all of the elements of subsection (2), and thus

it is apparent that Kismat was convicted under § 1344(2). There was no error in the

instruction.

                                              6
                                             V.

       For the reasons stated above, we reject Kismat’s claim that the combination of the

failure to instruct on the good faith defense and the alleged deficiencies in the bank fraud

instruction amounted to plain error warranting reversal.

                                            VI.

       Kismat next claims that there was insufficient evidence of his fraudulent intent to

support the bank fraud and wire fraud convictions. In reviewing whether the evidence

was sufficient to support a guilty verdict, “[w]e must view the evidence in the light most

favorable to the government, and will sustain the verdict if any rational trier of fact could

have found the essential elements of the crime beyond a reasonable doubt.” Leahy, 445

F.3d at 657 (internal quotation marks omitted).

       The guilty verdict was supported by sufficient evidence. Kismat argues that the

evidence showed that he acted in good faith and describes his shopping patterns as

merely an “oddity.” From the evidence described above, the jury was entitled to disagree

and conclude that Kismat in fact was attempting to conceal his use of the cards

containing the compromised account information, which is hardly consistent with his

claim that he was using the cards in good faith.

                                            VII.

       Kismat also argues that the district court’s intended loss finding of $432,118.29,

which equaled the aggregate credit limit of the compromised accounts used, is

unsupported by the evidence. He claims that he had no knowledge as to the actual credit

                                             7
limits of the cards, neither defendant admitted to intending to use the cards to their limits,

not all of the cards were used until they were declined, and there was no evidence

showing how he obtained the compromised accounts that would shed any light on his

intent.

          The loss to be used for sentencing purposes shall be “the greater of actual loss or

intended loss.”      U.S.S.G. § 2B1.1 n.3(A) (2013).        “Intended loss” means (I) “the

pecuniary harm that was intended to result from the offense; and (II) includes intended

pecuniary harm that would have been impossible or unlikely to occur.” Id. § 2B1.1

n.3(A)(ii). A district court errs by simply equating the intended loss of a credit card fraud

scheme with the cards’ aggregate credit limit without “‘deeper analysis.’” United States

v. Diallo, 710 F.3d 147, 151 (3d Cir. 2013) (quoting United States v. Geevers, 226 F.3d

186, 192 (3d Cir. 2000)). The facts of the case must support a finding that the aggregate

credit limit was the intended loss. Id. Even though a defendant might not expect to cause

the entirety of the potential loss (here, the aggregate credit limit), “expectation is not

synonymous with intent when a criminal does not know what he may expect to obtain,

but intends to take what he can.” Geevers, 226 F.3d at 193. A district court may find

that a defendant intended to cause the entirety of the potential loss, even if the actual loss

is much lower, if the failure to cause the entirety of the potential loss is due to third-party

intervention or the defendant’s desire to avoid detection. See id. (approving the use of

the face value of worthless checks used in a “check kiting” scheme as the intended loss,

                                               8
despite acknowledging that a check kiter “will either abscond or be discovered before

exhausting the kite”).

       The district court engaged in the “deeper analysis” our cases require. The court

cited Diallo and Geevers in explaining its intended loss finding and gave specific reasons

for its conclusion.      Based on the evidence presented, the court found that had the

defendants, as a practical matter, been able to charge each of the accounts to its limit

before being detected, they would have done so. A majority of the cards were used

multiple times unless or until they were declined. For those cards that were not used until

they were declined, the district court found that the defendants discontinued their use in

order to avoid detection of their scheme. This finding is consistent with the evidence

showing the defendants’ rather extensive steps to conceal their use of the compromised

accounts, such as traveling long distances to make purchases, engaging in only a handful

of transactions at each store, and switching registers. The district court thus did not

clearly err when it found that the defendants, had it been feasible, would have charged up

to the credit limit on each account. See id.

                                           VIII.

       Kismat’s final claim is that the district court erred by applying a four-level

enhancement under the Sentencing Guidelines based upon a finding that the offense

involved fifty or more victims. See U.S.S.G. § 2B1.1(b)(2)(B). Kismat argues that only

the financial institutions should be considered victims because they were the only ones

who suffered pecuniary loss; the individual account holders likely did not suffer any

                                               9
actual loss, because they presumably were reimbursed by their banks. To support his

position, Kismat relies on United States v. Kennedy, 554 F.3d 415 (3d Cir. 2009).

Kennedy, however, was decided before the definition of “victim” for purposes of

U.S.S.G. § 2B1.1(b)(2)(B) was amended. Under U.S.S.G. § 2B1.1(b)(2)(B), “victim”

now includes “any individual whose means of identification was used unlawfully or

without authority.” U.S.S.G. § 2B1.1(b)(2)(B) n.4(E). “Means of identification” for

purposes of U.S.S.G. § 2B1.1 is defined in 18 U.S.C. § 1028(d)(7), and includes any

“access device.” See U.S.S.G. § 2B1.1 n.1. An “access device” is:

       any card, plate, code, account number, electronic serial number, mobile
       identification number, personal identification number, . . . or other means of
       account access that can be used, alone or in conjunction with another access
       device, to obtain money, goods, services, or any other thing of value, or that
       can be used to initiate a transfer of funds.

18 U.S.C. § 1029(e). Credit card and debit card account numbers clearly fall within the

definition of “access device” as “account numbers” that can be used “to obtain money,

goods, services, or any other thing of value, or that can be used to initiate a transfer of

funds.” Each individual account holder whose account number was used unlawfully or

without authority therefore was a “victim,” and the district court correctly found that

there were more than fifty such victims in this case. The four-level enhancement thus

was proper.

                                            IX.

       For the reasons set forth above, we will affirm.

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