Court Opinion

ID: 3035887
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:53:22.503755+00
Date Added: 2024-06-11T10:48:09.749551
License: Public Domain

FILED
                               NOT FOR PUBLICATION                                     APR 01 2010

                                                                                   MOLLY C. DWYER, CLERK
                       UNITED STATES COURT OF APPEALS                               U.S . CO UR T OF AP PE A LS

                                FOR THE NINTH CIRCUIT

 UNITED STATES OF AMERICA,                              No. 09-50211

               Plaintiff - Appellee,                    D.C. No. 2:08-CR-00974-GAF-1

   v.
                                                                               *
                                                        MEMORANDUM
 WAHID SIDDIÏI,

               Defendant - Appellant.

                       Appeal from the United States District Court
                          for the Central District of California
                            Gary A. Feess, Judge, Presiding

                          Argued and Submitted March 1, 2010
                                  Pasadena, California

Before: RYMER and WARDLAW, Circuit Judges, and KENNELLY,** District
Judge.

        Wahid Siddiqi has appealed the sentence imposed by the district court

following his guilty plea to multiple charges of fraud in connection with means of

         *
              This disposition is not appropriate for publication and is not precedent except as
provided by 9th Cir. R. 36-3.

         **
               The Honorable Matthew F. Kennelly, United States District Judge for the
Northern District of Illinois, sitting by designation.
identification in violation of 18 U.S.C. y 1028(a)(7) & (c)(3)(A). Among other

things, Siddiqi challenges the district court's calculation of the loss attributable to

his offenses under U.S.S.G. y 2B1.1. The commentary to that Guideline defines

'actual loss' to include 'the reasonably foreseeable pecuniary harm that resulted

from the offense.' Id. app. note 3(A)(i). 'Reasonably foreseeable pecuniary

harm' means 'pecuniary harm that the defendant µnew or, under the

circumstances, reasonably should have µnown, was a potential result of the

offense.' Id. app. note 3(A)(iv).

      An employee of a banµ stole personal information about banµ customers.

Siddiqi obtained some of that information and sold it to a government informant.

The record reflects that no customer suffered any actual harm.

      Once the banµ discovered the theft, it notified all of the customers in writing,

established a call center where they could call to obtain more information, and

offered them two years of credit monitoring at the banµ's expense. The district

court included in Siddiqi's loss calculation a proportionate share of the banµ's cost

of providing each of these services. The lion's share consisted of the credit

monitoring service. Had that particular expense been excluded from the loss

calculation, it would have reduced Siddiqi's offense level.

      The district court found that all of these expenses constituted reasonably

                                            2
foreseeable pecuniary harm resulting from Siddiqi's offenses. We review that

finding for clear error. United States v. Garro, 517 F.3d 1163, 1167 (9th Cir.

2008).

         Expenses that a victim incurs to mitigate the effects of a data loss may, in

appropriate circumstances, constitute reasonably foreseeable pecuniary harm under

the Guideline commentary. See United States v. Pham, 545 F.3d 712, 721 (9th Cir.

2008). In Pham, the victims incurred actual losses as a result of identity theft. We

held that their expenses to resolve account shortfalls and related problems, if

proven, could amount to reasonably foreseeable losses from the fraud.

         The record in this case contained no basis to support the district court's

finding that expense the banµ incurred to offer its customers credit monitoring

services was a reasonably foreseeable result of Siddiqi's fraud. In its comments,

the court focused not on foreseeability but rather on whether the banµ had acted

reasonably and had done 'what businesses ought to do.' The fact that the banµ

acted reasonably, however, does not suffice to establish that the expenses it

incurred were reasonably foreseeable. Indeed, the court noted in its comments that

the steps the banµ tooµ were unusual and went beyond the norm. See Sentencing

Tr. 17 ('Countrywide is doing what businesses ought to do. They rarely do . . .

what they did in this - in this situation.'), 20 ('[W]e're in a situation where what

                                             3
this corporation did for a change was to protect its customers'). In addition, the

credit monitoring service arguably went beyond what banµing regulatory

guidelines suggest. We also note that there was no victim impact statement or

other evidence in the record addressing, for example, whether providing this

particular service is typical in similar circumstances or even why the banµ elected

to offer its customers credit monitoring.

      Under the circumstances, the district court's finding of reasonable

foreseeability was unsupported in the record and was therefore clearly erroneous.

Because we have found an error in the Guidelines calculation that provided the

starting point for the sentence the district court imposed, we remand the case to the

district court for resentencing. See Gall v. United States, 552 U.S. 38, 51 (2007).

For this reason, we need not consider the other arguments Siddiqi has made on

appeal.

      We do not limit the evidence that the district court may consider to the

evidence that was presented at the original sentencing hearing. Rather, we remand

the case on an open record so that both parties can present evidence relevant to the

issue of reasonable foreseeability. See Pham, 545 F.3d at 723.

      VACATED AND REMANDED.

                                            4
                                                                             FILED
United States v. Siddiqi                                                        APR 01 2010
No. 09-50211                                                             MOLLY C. DWYER, CLERK
                                                                           U.S . CO UR T OF AP PE A LS

RYMER, Circuit Judge, dissenting.

      I don't thinµ the district court clearly erred in finding it was reasonably

foreseeable that the banµ would act to protect its customers as it did in the

circumstances of this case: the scale of identity theft was huge, and it included,

among other things, the social security number of millions of individuals. Nor do I

agree with the suggestion that foreseeability is somehow capped by prior responses

to unrelated thefts of a different order of magnitude, or by regulations that establish

a floor for what a banµing institution must do. Instead, I would apply United

States v. Pham, 545 F.3d 712, 721 (9th Cir. 2008), to the loss calculation here, and

affirm.