Court Opinion

ID: 1034239
Source: CourtListenerOpinion
Date Created: 2013-07-19 00:00:56.394186+00
Date Added: 2024-06-11T12:41:10.569659
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 12-4518

UNITED STATES OF AMERICA,

                Plaintiff – Appellee,

          v.

HOWARD R. SHMUCKLER,

                Defendant - Appellant.

                             No. 13-4003

UNITED STATES OF AMERICA,

                Plaintiff – Appellee,

          v.

HOWARD R. SHMUCKLER,

                Defendant - Appellant.

Appeals from the United States District Court for the Eastern
District of Virginia, at Alexandria.     Leonie M. Brinkema,
District Judge. (1:11-cr-00344-LMB-1)

Submitted:   June 12, 2013                 Decided:   July 18, 2013

Before SHEDD, DAVIS, and FLOYD, Circuit Judges.
Affirmed by unpublished per curiam opinion.

Michael S. Nachmanoff, Federal Public Defender, Rachel S.
Martin, Assistant Federal Public Defender, Caroline S. Platt,
Appellate Attorney, OFFICE OF THE FEDERAL PUBLIC DEFENDER,
Alexandria, Virginia, for Appellant.  Neil H. MacBride, United
States Attorney, Timothy D. Belevetz, Assistant United States
Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria,
Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

                                              I.

      From    June     2008       to     September         2009,     Appellant         Howard

Shmuckler owned and operated a business called The Shmuckler

Group, LLC (TSG).            Clients paid TSG substantial fees for home

loan-related       services           such     as     forestalling            foreclosures,

modifying mortgages, and extending payment terms.                         Shmuckler and

his employees led prospective clients to believe that he was an

attorney licensed in Virginia and that his business had a 97%

success rate.        In reality, Shmuckler had never been a member of

the     Virginia      bar,       and     TSG’s        actual       success       rate       was

approximately 4.5%.          TSG’s employees instructed clients to cease

making their mortgage payments and stop communicating with their

lenders.      During       the    course      of     its     operation,       TSG    took    in

approximately $2.8 million from 865 clients.

      A grand jury returned an indictment charging Shmuckler with

seven counts of wire fraud.                  After the district court dismissed

Count    Three,    Shmuckler          pleaded       guilty    to   the    remaining         six

counts.       Next,    a     probation        officer        prepared     a    presentence

investigation report (PSR), which calculated Shmuckler’s offense

level as 35 and criminal history category as III, leading to a

recommended       sentence       of    210    to    262    months.        The       probation

officer based this determination in part on an eighteen-level

increase for a loss of more than $2.5 million but no more than

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$7 million and a two-level increase for an offense that involved

sophisticated means.

     At     the     sentencing         hearing,      Shmuckler           objected        to        the

proposed     two-level         increase       for    sophisticated             means.              The

parties also disagreed regarding the loss amount.                               The district

court     agreed     with      the     government         and     imposed       a    two-level

enhancement for sophisticated means, explaining, “This was not a

simple fraud scheme.            It was complex.             It involved among other

things    document       manipulation.”             However,          the    district         court

decided to assume for the sake of argument that Shmuckler’s loss

calculation was correct, leading it to impose a fourteen-level

enhancement       for    the    amount       of     loss    rather          than    the       PSR’s

proposed    eighteen-level           enhancement.               The    court       applied      the

other     enhancements        that     the    PSR     recommended,           leading          to    a

recommended       sentencing        range    of     135    to    168     months      under         the

Sentencing Guidelines.               The court ultimately imposed a sentence

of   ninety        months      to     run     consecutively             with        Shmuckler’s

undischarged term of imprisonment.

     On    August       16,    2012,    the    district          court      held     a   hearing

regarding     restitution.              The       government           submitted         a     list

reflecting all of the TSG clients whose mortgages TSG had failed

to modify and the amounts they paid TSG, which it developed by

interviewing TSG clients and bank representatives.                                   This list

suggested     a     restitution         amount       of     $1,848,279.              Shmuckler

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contended    that   the    restitution       amount    could     not    exceed     the

amount of loss the district court used for sentencing purposes,

meaning the restitution amount could not exceed $1 million.                        The

district court found the government’s argument more persuasive

and ordered restitution in the amount of $1,848,279 on December

17, 2012.

                                       II.

       First, Shmuckler argues that the district court erred in

applying      a       two-level         enhancement            under          U.S.S.G.

§ 2B1.1(b)(10)(C)      because     Shmuckler’s        fraud    did     not    utilize

“sophisticated      means.”      In    evaluating       the    district       court’s

application   of    sentencing     enhancements,       “this     Court       review[s]

the district court’s legal conclusions de novo and its factual

findings for clear error.”            United States v. Horton, 693 F.3d

463,   474   (4th   Cir.   2012)      (alteration      in     original)       (quoting

United States v. Layton, 564 F.3d 330, 334 (4th Cir. 2009))

(internal quotation marks omitted).               We therefore review the

district court’s finding regarding sophisticated means for clear

error, see United States v. Noel, 502 Fed. App’x 284, 290 (4th

Cir. 2012), and will reverse the district court’s finding only

if “left with the definite and firm conviction that a mistake

has been committed,” United States v. Harvey, 532 F.3d 326, 337

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(4th Cir. 2008) (quoting In re Mosko, 515 F.3d 319, 324 (4th

Cir. 2008)) (internal quotation marks omitted).

      TSG’s    behavior     resembles   the    scheme     at    play   in    United

States v. Noel, and we find that case persuasive.                  In Noel, this

Court determined that the district court did not err in imposing

a sophisticated means enhancement when the defendant attracted

clients by telling them that he would safely invest their money

but then used the funds to start his own business.                      502 Fed.

App’x at 290.         The Court emphasized the defendant’s lies to

financial institutions and explained that his “three-year period

of   extensive,      intentional    concealment     is   the    kind   of    scheme

anticipated by the” sophisticated means enhancement.                    Id.; see

also United States v. Kontny, 238 F.3d 815, 820 (7th Cir. 2001)

(“The more sophisticated the efforts that an offender employs to

conceal his offense, the less likely he is to be detected, and

so he should be given a heavier sentence to maintain the same

expected      punishment,    and    hence     the   same       deterrence,    that

confronts      the    average      offender.”).          Shmuckler     similarly

attracted clients with lies, including falsehoods regarding the

success rate of his business, his status as an attorney, and the

extent of TSG’s operations.           He also took significant steps to

conceal his fraud by telling clients not to communicate with

their lenders.       In light of these aspects of Shmuckler’s scheme,

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the   district   court     did     not     clearly      err    in    finding      that   he

utilized sophisticated means.

      Second, Shmuckler alleges that his sentence is procedurally

unreasonable     because     the    district       court      did    not    sufficiently

explain its decision to run Shmuckler’s sentence consecutively

to his undischarged term of imprisonment.                       “A district court’s

decision    to   impose      a    sentence      that    runs    concurrently         with,

partially    concurrently          with,     or    consecutively           to    a   prior

undischarged term of imprisonment is constrained only by its

consideration     of   the       factors    mentioned      in    the    commentary       to

[U.S.S.G.] § 5G1.3(c).”            United States v. Mosley, 200 F.3d 218,

223 (4th Cir. 1999) (per curiam).                      These factors include the

following:

      (i) The factors set forth in 18                         U.S.C.    [§]      3584
      (referencing 18 U.S.C. [§] 3553(a));

      (ii)       The      type                    (e.g.,             determinate,
      indeterminate/parolable)             and     length       of     the prior
      undischarged sentence;

      (iii) The time served on the undischarged sentence and
      the time likely to be served before release;

      (iv) The fact that the prior undischarged sentence may
      have been imposed in state court rather than federal
      court, or at a different time before the same or
      different federal court; and

      (v)   Any   other            circumstance  relevant                  to    the
      determination of            an appropriate sentence                  for   the
      instant offense.

U.S.S.G. § 5G1.3 cmt. n.3(A).

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       The   record     in   this    case     demonstrates        that      the   district

court considered the factors that the commentary to U.S.S.G.

§ 5G1.3(c)      identifies.           First,        the    court       considered      the

§ 3553(a)       factors.            Specifically,         the      court      considered

Shmuckler’s         “age,    [his]     definitely         well-documented            health

situation, and the fact that [he had] received a significant

sentence      from    the    District    of       Columbia.”          The    court    also

explained, “I want to make sure that this sentence reflects the

seriousness of this conduct and the need, as I said, to send the

word   out     to    other   people     in    the   financial         and    real    estate

industry that you can’t prey on those [vulnerable] communities

within our area and take advantage of them.”                           The court also

evaluated “the kinds of sentence and the sentencing range.”                              18

U.S.C. § 3553(a)(4).          The court’s comments further indicate that

it considered the length of Shmuckler’s undischarged term of

imprisonment as required by the commentary to U.S.S.G. § 5G1.3.

For    these    reasons,      the     district      court       did    not    abuse     its

discretion by imposing a consecutive sentence in this case.

       Third, Shmuckler argues that the district court erred in

ordering restitution in an amount greater than the amount of

actual loss it used for sentencing purposes.                      In support of this

argument, Shmuckler compares the restitution requirements of the

Mandatory Victims Restitution Act (MVRA)—which requires district

courts   to    order    restitution          in   wire    fraud    cases,      18   U.S.C.

                                             8
§ 3663A(c)(1)(A)(ii)—with the restitution calculation parameters

set forth in U.S.S.G. § 2B1.1.                  The MVRA “implicitly requires

that    the    restitution      award    be     based    on    the     amount    of    loss

actually caused by the defendant’s offense.”                          United States v.

Dokich, 614 F.3d 314, 319 (7th Cir. 2010) (quoting United States

v.     Rhodes,    330    F.3d    949,     953    (7th     Cir.       2003))     (internal

quotation marks omitted).               By contrast, the Guidelines direct

sentencing courts to determine the amount of loss by looking to

the “greater of actual loss or intended loss.”                        U.S.S.G. § 2B1.1

cmt. n.3(A).       Shmuckler contends that, in light of these rules,

“it is legally and logically ‘impossible’ for restitution to

exceed the loss found for purposes of the sentencing guidelines”

as the restitution amount did in this case.                      This Court reviews

restitution orders for abuse of discretion.                           See Harvey, 532

F.3d at 339.

       Each party contends that the Seventh Circuit’s decision in

United States v. Dokich supports its position, and we find the

case instructive.            In Dokich, the district court had used a

lower     figure       for   sentencing       purposes        than     it    ordered     in

restitution,       causing      the     circuit       court     to     speculate       that

“[p]erhaps       the    district      court,     by     deliberately         basing     its

guidelines calculation on a lower amount of loss, intended in

this way to give [the defendant] a break.”                           614 F.3d at 320.

The    court     held    that   the     district      court     did    not    abuse     its

                                           9
discretion because it had made a specific finding of actual loss

for   restitution   purposes.     Id.     In     the   case   at   hand,   the

district   court    explicitly   stated   that    it   was    “giv[ing]    the

defendant the benefit of the doubt” by using the lower loss

amount for sentencing purposes.           However, during the hearing

regarding restitution, the court made a more accurate finding of

actual loss.       The district court therefore did not abuse its

discretion in using a greater loss amount for restitution than

it did for sentencing purposes. *

                                  III.

      For the foregoing reasons, we affirm the decision of the

district court.

                                                                    AFFIRMED

      *
       Shmuckler further contends that the restitution order
violates the Sixth Amendment because the judge, not the jury,
found the facts supporting its entry. However, he acknowledges
that this Court rejected the same theory in United States v.
Day, 700 F.3d 713, 732 (4th Cir. 2012), and we agree that the
argument therefore lacks merit.

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