Court Opinion

ID: 2996926
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:32:28.249251+00
Date Added: 2024-06-11T12:04:59.997467
License: Public Domain

In the
 United States Court of Appeals
               For the Seventh Circuit
                         ____________

Nos. 02-2721 & 02-2783
UNITED STATES OF AMERICA,
                                               Plaintiff-Appellee,
                                v.

JAMAL A. SHEIKH and RAED ALSHEIKH,
                                         Defendants-Appellants.

                         ____________
           Appeals from the United States District Court
     for the Northern District of Indiana, South Bend Division.
         No. 01 CR 69—Robert L. Miller, Jr., Chief Judge.
                         ____________
    ARGUED OCTOBER 20, 2003—DECIDED MAY 6, 2004
                   ____________

 Before POSNER, KANNE, and WILLIAMS, Circuit Judges.
  WILLIAMS, Circuit Judge. A jury convicted defendants
Jamal Sheikh and Raed Alsheikh of aiding and abetting
food stamp redemption fraud and conspiracy to defraud the
United States. At sentencing, the district court enhanced
both defendants’ sentences by two levels for obstruction of
justice, and Sheikh’s sentence by three levels for his
leadership role in the offense. Defendants appeal these
sentence enhancements, but for the reasons stated below,
we affirm.
2                                      Nos. 02-2721 & 02-2783

                       I. BACKGROUND
  Yousef Alsheikh and Jamal Sheikh co-owned the Van
Buren Food Store, a small grocery store in South Bend,
Indiana from October 1995 to May 1997, when Jamal sold
his interest in the store to Yousef.1 In October 1995, after
Jamal submitted an application, the United States
Department of Agriculture (“U.S.D.A.”) certified the store to
accept food stamp coupons as payment for certain eligible
grocery items. Grocers participating in the program can
redeem food stamps by presenting them, along with a re-
demption certificate, to a participating bank for deposit.
The bank then credits the grocer’s account in the amount of
the food stamp deposit and, in turn, the United States
Federal Reserve credits the bank with the requisite amount
of funds.
  Over the years, Yousef, Jamal and Yousef’s son, Raed
Alsheikh, committed food stamp redemption fraud, re-
deeming food stamps they purchased from customers for
less than their value and food stamps they accepted in ex-
change for ineligible items. In October 2001, a federal
indictment charged the three, Yousef, Jamal and Raed, with
aiding and abetting food stamp redemption fraud and
conspiracy to defraud the United States.2
  At trial, several witnesses testified regarding the defen-
dants’ participation in the fraud. Former employee, Brett
Kelly, testified that the store was well-known in the com-
munity as a place at which one could readily sell food
stamps. Further, on several occasions, he witnessed both
Yousef and Jamal purchase food stamps for cash and he
also saw Yousef accept food stamps for ineligible items.

1
  To avoid confusion, the defendants are hereafter referred to by
their first names.
2
    Yousef died before the grand jury returned the indictment.
Nos. 02-2721 & 02-2783                                    3

Kelly also admitted to purchasing food stamps from cus-
tomers for cash, after Yousef instructed him to do so.
Finally, Kelly described a conversation with Raed in which
Raed came into the store after an argument with his father
and complained, “I can’t believe how much money he
[Yousef] paid for these food stamps.”
  Linda Dent, who assists the U.S.D.A. in conducting
undercover operations, testified that she visited the Van
Buren Market on three occasions and each time she was
able to purchase ineligible items with food stamps and/or
sell food stamps for cash. On her third visit, a man in his
twenties matching Raed’s description allowed her to use
food stamps to purchase ineligible items and to sell a book
of food stamps for cash.
  Lisa Nelson, Special Agent with the U.S.D.A., testified
that Van Buren’s food stamp redemption amount consis-
tently exceeded the amount of food sales, which in her
opinion suggested fraud. She further testified that between
October 1995 and April 1997, Jamal signed virtually all of
the food stamp redemption certificates and thereafter, the
redemption certificates were primarily signed by Raed. She
also testified that Jamal wrote himself checks totaling
$140,000 from the market’s bank account.
  Anastasia Nerger, an inspector in the Criminal
Investigations Division of the U.S.D.A., testified that when
she interviewed Jamal after his arrest he admitted that he
knew Yousef had purchased food stamps for cash and, de-
spite this knowledge, Jamal continued to redeem the food
stamps for at least five or six months.
  Daniel Eidem, whose company provided accounting
services for Van Buren Market, testified that in multiple
months the cash distributed to the store’s owners exceeded
the store’s sales, causing Eidem to question the source of
the cash. Soon after Eidem brought these accounting irreg-
4                                   Nos. 02-2721 & 02-2783

ularities to the store owners’ attention, Jamal sent Eidem
a letter terminating the accounting relationship.
  Raed testified that he began working in the store in
March or April 1997 due to his father’s failing health and,
in turn, his father paid him $200 a week. His duties in-
cluded sorting and stamping food stamps, completing de-
posit tickets, and depositing food stamps in the bank. Raed
denied ever working with Brett Kelly, and he further denied
that he ever complained to Kelly about his father paying too
much for food stamps. Raed also denied ever purchasing
food stamps for cash or accepting food stamps as payment
for ineligible items. Likewise, he denied depositing food
stamps in the bank knowing that they were illegally
obtained.
   Jamal testified that he deposited food stamps in the bank,
but he never did so knowing the food stamps were obtained
illegally. He further denied ever purchasing food stamps for
cash. He did admit, however, that one day he witnessed
Yousef selling food stamps, which prompted him to take
control over the store and the register. Three months later,
Jamal sold his interest in the store to Yousef. The govern-
ment presented evidence that during this period of Jamal’s
exclusive control over the market, the market redeemed
approximately $27,000 more in food stamps than it had in
total food sales.
  On March 6, 2002, a jury convicted both defendants on all
counts. The district court sentenced Jamal to 41 months’
imprisonment, attributing to him a loss amount of
$284,972.80, and imposing a two-level enhancement for
more than minimal planning, a three-level enhancement for
his role in the offense, and a two-level enhancement for
obstruction of justice. The district court sentenced Raed to
27 months’ imprisonment, attributing to him a $300,000
loss amount, and imposing a two-level enhancement for
more than minimal planning and a two-level enhancement
Nos. 02-2721 & 02-2783                                       5

for obstruction of justice. Both defendants appeal the ob-
struction of justice enhancements, and Jamal appeals the
enhancement for his leadership role in the offense.

                       II. ANALYSIS
A. Obstruction of Justice Enhancement
  Both Jamal and Raed challenge the district court’s de-
cision to enhance their respective sentences by two levels
for obstruction of justice. We review de novo the adequacy
of the district court’s obstruction of justice findings and any
underlying factual findings for clear error. United States v.
Carrera, 259 F.3d 818, 831 (7th Cir. 2001).
  A court may impose a two-level enhancement under
U.S.S.G. § 3C1.1 if “the defendant willfully obstructed or
impeded, or attempted to obstruct or impede, the admin-
istration of justice during the course of the investigation,
prosecution, or sentencing of the instant offense of convic-
tion.” Perjury is the sort of conduct that may warrant an
obstruction of justice enhancement. See United States v.
Dunnigan, 507 U.S. 87, 94 (1993); see also U.S.S.G § 3C1.1,
cmt. n.4. For enhancement purposes, perjury is defined as
giving false testimony under oath “concerning a material
matter with the willful intent to provide false testimony,
rather than as a result of confusion, mistake, or faulty
memory.” Dunnigan, 507 U.S. at 94.
  In enhancing both defendants’ sentences, the district
court found that both had committed perjury when they
denied that they knowingly redeemed food stamps that
were illegally obtained. The district court further stated
that both defendants’ testimony was false, willfully given,
and material. Defendants contend that the evidence does
not support the district court’s perjury findings and that the
findings were insufficient because the court failed to
delineate specific reasons for discrediting their testimony.
We disagree.
6                                     Nos. 02-2721 & 02-2783

  Although it is “preferable for a district court to address
each element of the alleged perjury in a separate and clear
finding,” it is sufficient if the district court “makes a finding
of an obstruction of . . . justice that encompasses all of
the factual predicates for a finding of perjury.” Dunnigan,
507 U.S. at 95. It is enough for the district court to deter-
mine that “the defendant lied to the judge and jury about
matters crucial to the question of the defendant’s guilt.”
United States v. Holman, 314 F.3d 837, 846 (7th Cir. 2002).
Here, the district court has satisfied this standard. It
specifically found that each defendant lied about knowingly
redeeming illegally obtained food stamps, a matter that is
certainly crucial to each defendant’s guilt. This finding is
amply supported by the record, as multiple witnesses
testified to both defendants’ involvement in the fraud.
Accordingly, we cannot say that the district court erred by
imposing the obstruction of justice enhancements.

B. Leadership Role Enhancement
  Jamal further contends that the district court erred
by enhancing his sentence due to his supervisory role in the
offense. Sentencing Guideline § 3B1.1(b) provides for
a three-level increase in the base offense level “[i]f the
defendant was a manager or supervisor . . . and the crimi-
nal activity involved five or more participants or was oth-
erwise extensive . . . .” While the district court rejected
the government’s argument that the food stamp scheme
involved five or more participants, it applied the enhance-
ment, reasoning that Jamal was a supervisor of an other-
wise extensive scheme. Jamal’s argument regarding the
enhancement is twofold: first, he argues that the district
court erred by deeming him a supervisor and second, he
argues that the scheme was not otherwise extensive be-
cause it involved fewer than five participants. We consider
each argument in turn below, and review for clear error the
Nos. 02-2721 & 02-2783                                        7

district court’s findings regarding the defendant’s role in
the offense. See United States v. Frazier, 213 F.3d 409, 417
(7th Cir. 2000). We “will reverse ‘only if, after reviewing the
entire evidence, we are left with the definite and firm
conviction that a mistake has been made.’ ” United States v.
Schuh, 289 F.3d 968, 972 (7th Cir. 2002) (quoting United
States v. Carrera, 259 F.3d 818, 826 (7th Cir. 2001)).

  1. Supervisor Status
  Although the guidelines do not define the term “supervi-
sor,” Application Note 4 to U.S.S.G § 3B1.1 indicates that
the following factors should be considered in assessing one’s
supervisory role:
    the exercise of decision making authority, the na-
    ture of participation in the commission of the of-
    fense, the recruitment of accomplices, the claimed
    right to a larger share of the fruits of the crime, the
    degree of participation in planning or organizing
    the offense, the nature and scope of the illegal
    activity, and the degree of control and authority
    exercised over others.
However, no single factor is essential to the application of
the enhancement. United States v. Granado, 72 F.3d 1287,
1290 (7th Cir. 1995).
  The sole reason offered by the district court for deeming
Jamal a supervisor was that he instructed Brett Kelly to
engage in food stamp fraud by directing him to “drum up
people who were willing to sell their food stamps illegally.”
Sent. Mem. at 7. This rationale is not apparently supported
by the record, as Kelly testified that Jamal never instructed
him to purchase food stamps for cash. Kelly Test. at 81.
Nonetheless, we “may affirm a sentence adjustment on any
ground supported by the record.” Schuh, 289 F.3d at 973.
  Here, there is sufficient evidence in the record supporting
the district court’s conclusion that Jamal was a supervisor.
8                                   Nos. 02-2721 & 02-2783

Specifically, the record reveals that Jamal made countless
deposits of illegally obtained food stamps, obtained a large
portion of the proceeds from the fraud as compared to other
participants such as Kelly (who admittedly sold food stamps
for cash), exclusively ran the store and directed Yousef’s
activities for a period of time during which the fraud
continued, and terminated the services of the bookkeeping
firm when it pointed out accounting irregularities. Jamal
contends that these tasks are solely consistent with manag-
ing the market, as opposed to maintaining the fraud;
however, given the nature of the fraud, i.e., that it was
intimately tied to the business, many functions inevitably
overlap. On these facts, we cannot say that it was clearly
erroneous for the district court to deem Jamal a supervisor.

    2. Otherwise Extensive
  We next consider Jamal’s argument that the district court
erred by applying the enhancement on the basis that the
scheme was “otherwise extensive.” Jamal contends that the
scheme could not qualify as “otherwise extensive,” as it
involved a small mom-and-pop store and the district court
could not specifically identify at least five participants in
the scheme. We find the defendant’s argument unpersua-
sive.
  The commentary to U.S.S.G § 3B1.1 provides: “In assess-
ing whether an organization is ‘otherwise extensive,’ all
persons involved during the course of the entire offense are
to be considered. Thus, a fraud that involved only three
participants but used the unknowing services of many
outsiders could be considered extensive.” The commentary
further notes that a participant is one “who is criminally
responsible for the commission of the offense, but need not
have been convicted.” U.S.S.G § 3B1.1, cmt. n.1.
  In United States v. Frost, 281 F.3d 654, 658 (7th Cir.
2002), this court noted the commentary and found a scheme
Nos. 02-2721 & 02-2783                                         9

“otherwise extensive” despite the fact that only two partici-
pants could be named, since many outsiders were also used.
This court further noted that the organization involved was
extensive and derived significant income from the fraud. Id.
The district court’s logic in this case mirrors the logic of this
court in Frost. The district court noted that, in addition to
the known participants, “the Van Buren Market enterprise
used many people (including the food stamp vendors) to
make the profit from the scheme; it made a substantial
portion of its income through illegal food stamp redemption,
and it continued in operation for about two years. It was
“otherwise extensive” within the meaning of U.S.S.G
§ 3B1.1.” Sent. Mem. at 9. Because these are precisely the
sort of findings affirmed by this court in Frost, the district
court did not err by deeming the scheme “otherwise exten-
sive.”
   This conclusion is not, as Jamal suggests, inconsistent
with this court’s decision in United States v. Boula, 932
F.2d 651 (7th Cir. 1991). In Boula, this court indicated that
the number of people involved in the scheme is central to
the “otherwise extensive” inquiry. Id. at 654. Jamal argues
that because the government did not establish that at least
five participants were involved, the scheme cannot qualify
as “otherwise extensive.” But Boula did not say that to
qualify as “otherwise extensive” everyone involved in the
scheme must be specifically identified or be a participant,
i.e., criminally responsible; rather, it focused on all of the
people involved in the scheme. Thus, this decision, like
Frost, which largely focuses on the number of people
involved in the operation, counting both participants and
outsiders, is in line with Boula.

                     III. CONCLUSION
  For the foregoing reasons, we AFFIRM the district court’s
imposition of the obstruction of justice and leadership role
sentence enhancements.
10                             Nos. 02-2721 & 02-2783

A true Copy:
      Teste:

                   ________________________________
                   Clerk of the United States Court of
                     Appeals for the Seventh Circuit

               USCA-02-C-0072—5-6-04