Court Opinion

ID: 2709469
Source: CourtListenerOpinion
Date Created: 2014-08-05 15:16:11.682303+00
Date Added: 2024-06-11T10:01:26.040163
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
No. 12-3884

UNITED STATES OF AMERICA,
                                                   Plaintiff-Appellee,

                                  v.

TAJUDEEN RABIU,
                                                Defendant-Appellant.

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
           No. 09 CR 365-2 — Ronald A. Guzmán, Judge.

      ARGUED JUNE 13, 2013 — DECIDED AUGUST 1, 2013

   Before MANION, SYKES, and TINDER, Circuit Judges.

    MANION, Circuit Judge. Tajudeen Rabiu pleaded guilty to
bank fraud, 18 U.S.C. § 1344, and aggravated identity theft, id.
§ 1028A(a)(1). The district court calculated a total offense level
of 26, which includes a four-level upward adjustment based on
2                                                  No. 12-3884

a finding that the offense involved fifty or more “victims.”
See U.S.S.G. § 2B1.1(b)(2)(B) (2010). The crimes were committed
between 2003 and 2007, but the court applied the 2010 version
of the sentencing guidelines, which for fraud offenses expands
the definition of “victim” to include not only persons who
incurred actual pecuniary loss but also “any individual whose
means of identification was used unlawfully or without
authority.” See id. § 2B1.1 cmt. n.4(E) (emphasis added). The
number of victims, if based entirely on actual pecuniary loss,
would have been at least ten but not fifty, so under the version
of the guidelines in effect when Rabiu committed his crimes,
the upward adjustment for the number of victims would have
been two levels, not four. See U.S.S.G. § 2B1.1(b)(2)(A) (2006).
Rabiu thus argues that applying the 2010 guidelines violated
the Ex Post Facto Clause and, alternatively, that the district
court misinterpreted the expanded definition of “victim” in
linking him to at least fifty victims. Although we agree with
Rabiu that the court overstated the number of victims, it is
clear that the district judge would have imposed the same
sentence even had he accepted Rabiu’s calculation of the
imprisonment range. Accordingly, the error was harmless.
                            I. Facts
     Rabiu was indicted for bank fraud, unauthorized use of
access devices, and aggravated identity theft. See 18 U.S.C.
§§ 1344, 1029(a)(2), 1028A(a)(1). According to the indictment,
Rabiu had worked as a teller at three different banks between
September 2003 and February 2007. Without authorization, he
searched account records looking for account holders with
balances exceeding $100,000. He then stole their identifying
No. 12-3884                                                  3

information and, along with his codefendants, compromised
some of that information to divert checks and money into
fraudulently opened bank accounts. Postal inspectors who
were investigating Rabiu lawfully searched his home and
seized handwritten notes containing the name, Social Security
number, and account information of eighty-six customers from
the banks where he had worked, as well as an unspecified
number of fake driver’s licenses and Social Security cards
bearing the names of some of those customers. Apparently
only seventeen of those account holders suffered pecuniary
loss, and those losses eventually were reimbursed by the
banks.
     Rabiu was arrested in April 2009. After a codefendant
pleaded guilty and agreed to cooperate against him, Rabiu
pleaded guilty to one count each of bank fraud and aggravated
identity theft. He submitted a plea declaration admitting
participation in the scheme, but insisting that some of the
names and identifying information used on the phony driver’s
licenses and Social Security cards were fictitious and not from
bank customers. Rabiu’s plea declaration does not include any
admission concerning the number of customers whose infor-
mation he stole or used.
     Before sentencing, the government asserted that Rabiu
should receive a four-level upward adjustment under
§ 2B1.1(b)(2)(B) because, according to the government, the
bank fraud had “involved 50 or more victims.” The govern-
ment cited the current definition of “victim,” which, for
offenses involving identity theft, was broadened in November
2009 (after Rabiu’s arrest). See U.S.S.G. supplement to app. C
(2009) (amendment 726). The expanded definition, found in
4                                                  No. 12-3884

Application Note 4(E) to § 2B1.1, includes not only persons
who suffered actual injury but also those “whose means of
identification was used unlawfully or without authority.”
U.S.S.G. § 2B1.1 cmt. n.4(E)(ii) (2010). Rabiu countered that,
because he was charged with crimes that had ended in 2007,
applying this broader definition of “victim” was an
ex post facto violation (though he acknowledged this court’s
decision to the contrary, see United States v. Demaree, 459 F.3d
791 (7th Cir. 2006)). He urged the district court to use the
narrower definition of “victim” in effect when the crimes were
committed. Rabiu alternatively argued that, even under the
broader definition, the number of victims is less than 50
because the evidence proved not that he had “used” their
identifying information, but only that he had stolen or pos-
sessed the information.
      At sentencing the parties debated the meaning of “used”
in Application Note 4(E). For a person to count as his victim,
Rabiu maintained, the government had to prove that he
actively employed that person’s identifying information in
connection with the bank fraud; simply writing down and
concealing their identifying information, he insisted, showed
only that he stole or possessed the information. Under the
broadened definition of “victim,” he argued, he was responsi-
ble for only thirty-three victims, not for all eighty-six whose
identifying information was found in his home. The govern-
ment insisted, however, that Rabiu had “used” the account
holders’ identifying information simply by writing it down and
taking it to his apartment (and thus making each account
holder a “victim”).
No. 12-3884                                                   5

      The district court agreed with the government, reasoning
that the bank customers became “victims” when Rabiu “took
their information—their private, personal identity informa-
tion—from the bank to his home and proceeded to attempt to
utilize it in the execution of his ongoing scheme.” (The court’s
assertion that Rabiu had made an “attempt to utilize” the
stolen information is an overstatement; as far as the record
shows, only a few of the eighty-six names and associated
identifying information appear on phony documents.) The
court accordingly added four levels (not two, as the probation
officer had recommended, for 10 or more victims, see U.S.S.G.
§ 2B1.1(b)(2)(A)), and calculated a total offense level of 26.
Rabiu’s criminal-history category is I, so he faced an imprison-
ment range of 63 – 78 months. The court did not address
Rabiu’s ex post facto argument but did discuss the factors
underlying its sentencing decision, including the seriousness of
the crimes and the need to protect the public from Rabiu and
deter him and others from future crimes, see 18 U.S.C.
§ 3553(a). Just before pronouncing the sentence, the court
stated: “Frankly, regardless of what any other court in the
future may rule that the appropriate offense level and guide-
line calculation was, I feel the sentence I’m about to impose is
appropriate in this case for the reasons that I’ve stated here
today.” The court then imposed total imprisonment of 102
months: 78 months for bank fraud and 24 months consecutive
for aggravated identity theft.
                        II. Discussion
     On appeal Rabiu maintains that the district court’s use of
the 2010 guidelines, rather than a version without the ex-
panded definition of “victim,” violated the Ex Post Facto
6                                                     No. 12-3884

Clause. We held in Demaree, 459 F.3d at 795, that using the
current version of the guidelines does not raise an ex post facto
concern even if the result is a greater imprisonment range for
the charged offense. Shortly before oral argument, however,
the Supreme Court rejected our stance and held that the
Ex Post Facto Clause is violated when a defendant is sentenced
under a version of the guidelines promulgated after he
committed his crime if the newer version yields a higher
sentencing range. Peugh v. United States, 133 S. Ct. 2072, 2084
(2013). That decision supports Rabiu’s argument that his
guidelines range is overstated; he should have received a two-
level increase (rather than four levels) for the number of
victims, and his guidelines range should have been 51 – 63
months.
      The Peugh decision also instructs, however, that a misap-
plication of a new guideline will be deemed harmless if the
sentencing court also stated on the record that the identical
sentence would have been imposed if the court followed the
older, more lenient version. See Peugh, 133 S. Ct. at 2088 n.8.
Many times we have found that message to insulate a sentenc-
ing judge’s misapplication of a sentencing statute or guideline.
See, e.g., United States v. Foster, 701 F.3d 1142, 1157–58 (7th Cir.
2012) (concluding that error in failing to apply Fair Sentencing
Act was harmless where district judge stated he would impose
identical sentence “applying the FSA or not”); United States v.
Hill, 645 F.3d 900, 912–13 (7th Cir. 2011) (explaining that
purported sentencing error would have been harmless based
on district judge’s statement that the sentence would be the
same “if there were no guidelines”); United States v. Abbas, 560
F.3d 660, 667 (7th Cir. 2009) (concluding that application of
No. 12-3884                                                       7

upward adjustment was harmless error because district judge
said she would have given same sentence without adjustment);
United States v. Anderson, 517 F.3d 953, 965–66 (7th Cir. 2008)
(same where district judge stated he would impose identical
sentence “if another judge determines that my sentencing
guidelines calculations were in any way made in error”).
      Before imposing the sentence, the district court discussed
the pertinent factors in 18 U.S.C. § 3553(a) and explained that
those factors warrant the punishment imposed even if the
court’s application of the guidelines is determined to be
erroneous. That statement dismantles Rabiu’s contention that
the misapplication of the new version of § 2B1.1(b)(2)(B) could
have been harmful. We recognize that an unforeseen change in
the guidelines may weaken the force of an opinion like the
judge gave in this case, see, e.g., United States v. Gokey, 437 F.3d
622, 626 (7th Cir. 2006); United States v. Graves, 418 F.3d 739, 746
(7th Cir. 2005), but here the judge’s unambiguous statement
contemplated the position of each party and the associated
guidelines range. The district court fully understood the
disputed issue yet signaled that Rabiu will not receive a lower
sentence on remand even if we accept his argument that he
victimized fewer than fifty people. As was the case in Foster
and in the other cases cited, the district court’s statement “was
not just a conclusory comment tossed in for good measure.”
Foster, 701 F.3d at 1158 (internal quotation marks omitted).
Rather, the district court here emphasized in detail the serious-
ness of the crime, the dismissive attitude of the defendant, and
the need for deterrence. Thus, despite Peugh’s support for
Rabiu’s ex post facto claim, the overstatement of his guidelines
range was harmless and his sentence stands.
8                                                     No. 12-3884

      Although Peugh and our harmless-error jurisprudence
dispose of this case, we think it prudent to decide the underly-
ing issue addressed by the parties. We have not yet parsed the
phrase “used unlawfully or without authorization,” U.S.S.G.
§ 2B1.1 cmt. n.4(E), and we think it best to settle the meaning
now because the question is sure to arise again soon. Our
starting point is the text of Application Note 4(E) and the plain
meaning of the words used. See United States v. Mount, 675 F.3d
1052, 1054 (7th Cir. 2012); United States v. Arnaout, 431 F.3d 994,
1001 (7th Cir. 2005). Application notes are considered part of
the guidelines rather than commentary on the guidelines.
Stinson v. United States, 508 U.S. 36, 38 (1993); Arnaout, 431 F.3d
at 1001.
      Section 2B1.1(b)(2) provides for a two-level increase if the
offense “involved 10 or more victims” and a four-level increase
if there are “50 or more victims.” Application Note 4(E), as it
appears after the 2009 amendment, defines a “victim” as “(i)
any victim as defined in Application Note 1; or (ii) any individ-
ual whose means of identification was used unlawfully or
without authority.” The definition found in Application Note
1 (which has remained unchanged since 2003) reads: “(A) any
person who sustained any part of the actual loss determined
under subsection (b)(1); or (B) any individual who sustained
bodily injury as a result of the offense.” Together these two
application notes describe distinct categories of “victim” for
fraud offenses involving identity theft: those who sustain
pecuniary loss or bodily injury (whether or not their identify-
ing information was used) and those whose identifying
information was “used” though they suffered no loss or injury.
At oral argument both parties asserted that no account holder
No. 12-3884                                                      9

suffered actual pecuniary loss because all of them were made
whole by the financial institutions. But that shared contention
rests on an incorrect legal premise. Account holders whose
funds are depleted incur actual pecuniary loss even if later
reimbursed, and so they count as “victims” for purposes of
§ 2B1.1(b)(2), even under the definition of victim that governed
when Rabiu committed his crimes. See United States v. Loffredi,
No. 12-1124, slip op. at 4–5 (7th Cir. June 18, 2013) (Both the
party who suffered the initial loss and the party who reim-
bursed the loss have been harmed. The party reimbursed does
not reduce the number harmed.). Rabiu has never disputed
that the accounts of at least seventeen of his customers were
compromised temporarily, so the number of “victims” cannot
be fewer than that number. The question we confront here is,
what constitutes “use” of someone’s identifying information?
      Only three times have we reviewed in a published
opinion an application of § 2B1.1(b)(2) using the broadened
definition of “victim,” and in none of those decisions did we
address the definition of “used” in Application Note 4(E)(ii).
See United States v. Harris, No. 12-1470, slip op. at 7–9 (7th Cir.
May 29, 2013); United States v. Vasquez, 673 F.3d 680, 687 (7th
Cir. 2012); United States v. Sandoval, 668 F.3d 865, 867–69 (7th
Cir. 2011). The Eleventh Circuit recently held, however, that a
victim of identity theft is a “victim” under the broader defini-
tion of Application Note 4(E)(ii) only if the person’s identifying
information was actively employed to further the purpose of
the conspiracy or scheme. United States v. Hall, 704 F.3d 1317,
1322–23 (11th Cir. 2013). The defendant in that case, a medical
office assistant, stole identifying information from at least 65
patients and sent that information to her cohorts, who obtained
10                                                   No. 12-3884

fraudulent credit cards in the names of twelve of those persons.
Id. at 1319–20. Hall pleaded guilty to conspiracy to commit
bank fraud, 18 U.S.C. §§ 1349, 1344, and at sentencing received
a four-level upward adjustment under § 2B1.1(b)(2)(B) because,
according to the district court, the scheme had involved fifty or
more victims. Hall, 704 F.3d at 1320. In rejecting that conclu-
sion, the court of appeals held that the number of victims was
just twelve. Id. at 1323. The court began with the literal reading
of Application Note 4(E) and plain meaning of “use,” which,
the court described, is the “‘application or employment of
something … for the purpose for which it is adapted.’” Id. at
1322 (quoting Black’s Law Dictionary 1681 (9th ed. 2009)). Hall
had employed (or “used”) the identifying information of her
patients for the purpose of obtaining cash by way of the
fraudulent credit cards. Id. The court also pointed to the
language in § 2B1.1(b)(10) (now (b)(11)), which adds two levels
based on different behaviors involved in the offense. Id. That
section reads:
     If the offense involved (A) the possession or use of any
     (i) device-making equipment, or (ii) authentication
     feature; (B) the production or trafficking of any (i)
     unauthorized access device or counterfeit access
     device, or (ii) authentication feature; or (C)(i) the
     unauthorized transfer or use of any means of iden-
     tification unlawfully to produce or obtain any other
     means of identification, or (ii) the possession of 5 or
     more means of identification that unlawfully were
     produced from, or obtained by the use of, another
     means of identification, increase by 2 levels.
No. 12-3884                                                    11

    U.S.S.G. § 2B1.1(b)(10) (2010) (emphasis added). The court
noted that the terms “use” and “transfer” (and also “posses-
sion”) in that section are joined by the conjunction “or”; this
means, the court reasoned, that the Sentencing Commission
intended different definitions for each word. Hall, 704 F.3d at
1322. The court concluded that “use” must mean more than a
transfer of identifying information “without more action,” and
that additional action did not occur until Hall’s coconspirators
applied for (“used” the identifying information to obtain) the
twelve fraudulent credit cards. Id. Thus, Hall’s theft, sale, and
transfer of the information did not equate to “using” the
information. Id. at 1323.
      The analysis in Hall, which was decided after Rabiu was
sentenced, mirrors the Supreme Court’s rationale in Bailey v.
United States, 516 U.S. 137, 149 (1995), which concluded that
constructively possessing a gun in a “nonactive nature” is
distinct from “using” or “carrying” it. A former version of 18
U.S.C. § 924(c) mandated a five-year prison term for a defen-
dant who “during and in relation to any crime of violence or
drug trafficking crime … uses or carries a firearm.” 18 U.S.C.
§ 924(c)(1) (1984). The Court reversed the judgment of the D.C.
Circuit, which had equated “use” with “possession,” rendering
meaningless “carry” as written in the statute. Bailey, 516 U.S. at
150. (Congress later amended § 924(c)(1) so that it now
proscribes possession as well as using or carrying.) As the
Court explained, “use” does not mean to possess, but rather
means “‘[t]o convert to one’s service,’ ‘to employ,’ ‘to avail
oneself of,’ and ‘to carry out a purpose or action by means of,’”
definitions which “imply action and implementation.” Id. at
145.
12                                                 No. 12-3884

      The sentencing guidelines also distinguish between terms
in many other provisions, signaling the intent of the Sentencing
Commission to target separate behaviors. See, e.g., U.S.S.G.
§§ 2A2.2(b)(2) (adding upward adjustment of five levels if
firearm is discharged but only three levels if weapon is
“brandished or its use was threatened”), 2K1.3(b)(3) (providing
upward adjustment if defendant “used or possessed” explosive
material or believed “it would be used or possessed”), 2K2.6 &
cmt. n.1(C) (providing base offense level of 10 for possessing,
purchasing, or owning body armor, but requiring four-level
upward adjustment if body armor is “used in connection with
another felony”), 2L2.2(b)(3) (adjusting upward if defendant
fraudulently “obtained or used” a passport). And the guide-
lines’ definition of “use” in other contexts confirms that some
action more than acquiring or possessing is required. See id.
§§ 1B1.1 cmt. n.1(I) (defining “otherwise used” in reference to
dangerous weapons as conduct that “did not amount to the
discharge of a firearm but was more than brandishing, display-
ing, or possessing”), 2K2.6 cmt. n.1(C) (defining “use” of body
armor to include wearing for protection or as barter but
excluding from definition armor that was “merely possessed”),
3B1.5 cmt. n.1 (same and explaining that “‘use’ does not mean
that the body armor was found in the trunk of the car but not
used actively as protection”).
     Turning back to Rabiu, the government’s evidence shows
that he possessed identifying information for at least fifty
persons but “used” the information of fewer than fifty. (Rabiu
puts the number of persons whose identifying information was
“used” at thirty-three; the government makes no effort to
challenge that number.) The government argued that persons
No. 12-3884                                                   13

whose identifying information Rabiu stole became “victims”
the minute he wrote down the information and took it to his
apartment. But the plain language of the application note and
the reasoning of Hall compel the conclusion that Rabiu only
had possessed the information at that point; he had not actively
used it for any purpose. See Hall, 704 F.3d at 1322–23 & n.3.
Because his possession of the information was not “use,” the
offense did not involve at least fifty victims. If the number was
thirty-three, as Rabiu concedes, then under the current version
of § 2B1.1(b)(2) he should have received a two-level (rather
than four-level) upward adjustment. See U.S.S.G. § 2B1.1(b)(2).
If everything else remained constant, Rabiu’s total offense level
would be 24, and his imprisonment range would be 51 – 63
months, rather than 63 – 78 months. But because the district
court noted it would have given the same sentence despite its
error, Rabiu cannot prevail on this argument either.
                        III. Conclusion
      Although Rabiu has support for both of his arguments on
appeal, the district court’s statement during sentencing renders
its errors harmless. Accordingly, we AFFIRM the judgment of
the district court.