Court Opinion

ID: 7374797
Source: CourtListenerOpinion
Date Created: 2022-07-28 16:00:26.192103+00
Date Added: 2024-06-11T16:21:02.494766
License: Public Domain

United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 21-3712
                         ___________________________

                              United States of America

                                        Plaintiff - Appellee

                                          v.

                                Bradley Jon Matheny

                                     Defendant - Appellant
                                   ____________

                      Appeal from United States District Court
                  for the Northern District of Iowa - Cedar Rapids
                                   ____________

                              Submitted: June 17, 2022
                                Filed: July 28, 2022
                                   ____________

Before GRUENDER, BENTON, and GRASZ, Circuit Judges.
                          ____________

GRUENDER, Circuit Judge.

       Bradley Matheny was convicted on seven counts of forging or counterfeiting
postage meter stamps in violation of 18 U.S.C. § 501 and three counts of smuggling
in violation of 18 U.S.C. § 554. The district court sentenced Matheny to 36 months’
imprisonment and ordered him to pay $256,441.78 in restitution to the United States
Postal Service (“USPS”). Matheny appeals, challenging the sufficiency of the
evidence supporting his convictions, the district court’s estimate of the face value of
the counterfeit stamps for purposes of calculating his advisory sentencing guidelines
range, the amount of restitution ordered, and the substantive reasonableness of his
prison sentence. We vacate and remand on the restitution issue but otherwise affirm
Matheny’s convictions and sentence.

                                           I.

       Matheny operated an online business buying and reselling items on eBay. He
used the USPS to ship items to customers. Through eBay’s web site, Matheny would
input his package specifications, prepay postage, and receive a digital shipping label
that he would print on adhesive paper. The top of the label indicated whether he had
paid for first-class or priority shipping; the bottom of the label included a barcode
and tracking number.

        During the summer of 2015, a Cedar Rapids post-office manager noticed that
Matheny was regularly dropping off packages at the back dock after 8:00 p.m.,
which was the “critical entry time” when the office staff “need[ed] to get the
packages in so that [they could] process them properly for their next location.” The
manager asked Matheny “if he could possibly bring his mail in earlier,” noting that
the office was “doing him a courtesy by letting him come to the back dock” in the
first place. Matheny replied, “Well, I can’t do that. Do I have to take my business
somewhere else?” The manager relented and assured Matheny that the office
“appreciate[d his] business.”

       After that conversation, Matheny began dropping off his packages
progressively later, “until routinely he was coming in about a quarter to 9:00.” As a
result, the staff “didn’t have . . . time to scrutinize the packages.” They would simply
sort the packages for priority or first-class delivery according to the designation of
shipping class at the top of the label.

       In the fall of 2015, a mail handler approached the manager with “some parcels
that she said didn’t look right”—“the postage didn’t seem to match up with the
service they were getting.” After investigating the packages himself, the manager
referred the matter to Inspector Ron Jewell of the Postal Inspection Service.
                                          -2-
       Inspector Jewell intercepted and examined every piece of mail that Matheny
sent over a one-month period and discovered several irregularities. Some packages
had been “underweighted”; that is, the recorded weight on the label, which
determined the postage fee, was less than the actual weight of the package. Other
packages exhibited recorded weights that been altered. In some cases, a package
had both been underweighted and had its recorded weight altered. For example, one
13.1-ounce package featured a recorded weight of 3 ounces that had been modified
to 8 ounces, with a red “DO NOT BEND” stamp partially obscuring the alteration.
Still other packages featured labels with a priority shipping designation on the top
half but a first-class barcode and tracking number on the bottom half. Subpoenaed
eBay records indicated that Matheny routinely purchased two shipping labels for a
single order, one priority and the other first class, and then voided the more
expensive priority purchase for which he received a full refund.

       In May 2017, postal inspectors executing a search warrant at Matheny’s
residence discovered a box full of clippings of first-class labels without barcodes
and tracking numbers. At that point, Inspector Jewell realized that Matheny had
been covering the bottom halves of priority labels with the bottom halves of first-
class labels, thereby producing a hybrid label with a priority shipping designation at
the top and a first-class barcode and tracking number at the bottom. The priority
shipping designation would ensure priority delivery times, and the first-class
barcode and tracking number would ensure that the package was scanned and
tracked to its destination. Meanwhile, the covered priority barcode would not be
scanned, enabling Matheny to collect a refund on the priority stamp that he had
purchased but apparently never used. The result would be faster priority delivery
times at less expensive first-class rates.

       To confirm his theory, Inspector Jewell zoomed in on the photographs that he
had taken of the hybrid labels. Sure enough, he “could see a little crease line across
the top of the barcode” indicating that “First-Class barcodes had been laid over the
actual Priority barcode.” Inspector Jewell was able to match each of the first-class
label clippings discovered at Matheny’s residence with a first-class barcode and
tracking number that Matheny had used with a priority shipping designation.
                                         -3-
       Meanwhile, law enforcement also noticed irregularities in Matheny’s
international sales. Matheny had opted not to use eBay’s Global Shipping Program
so that he could purchase international shipping labels and complete customs forms
on his own. For several of his international sales, Matheny reduced customs taxes
by underrepresenting the value of the item sold and designating it as a “gift,” rather
than “merchandise,” on the customs form.

        Postal inspectors eventually confronted Matheny, and he confessed to altering
the recorded weights on some labels. Later, a grand jury charged Matheny with eight
counts of forging or counterfeiting postage meter stamps in violation of 18 U.S.C
§ 501, three counts of smuggling in violation of 18 U.S.C. § 554, and four additional
counts not at issue in this appeal. Matheny pleaded not guilty and waived his right
to trial by jury. At the close of the bench trial, Matheny moved for a judgment of
acquittal. The district court denied the motion and found Matheny guilty on seven
counts of forging or counterfeiting postage meter stamps and three counts of
smuggling. The district court acquitted Matheny on the remaining counts.

      At sentencing, the district court found that the face value of the counterfeit
stamps exceeded $250,000, triggering a twelve-level enhancement to Matheny’s
base offense level. See U.S.S.G. §§ 2B1.1(b)(1)(G), 2B5.1(b)(1). The advisory
sentencing guidelines range after application of the enhancement was 51 to 63
months’ imprisonment. The district court varied downward to a sentence of 36
months’ imprisonment. It also ordered Matheny to pay $256,441.78 in restitution to
the USPS. This sum included the loss due to Matheny’s splicing and alteration of
shipping labels as well as the loss due to Matheny’s underweighting of packages.

      Matheny appeals, challenging the sufficiency of the evidence supporting his
convictions, the district court’s face-value calculation, the amount of restitution
ordered, and the substantive reasonableness of his prison sentence.

                                         -4-
                                          II.

       We begin with Matheny’s challenge to the sufficiency of the evidence
supporting his convictions. A defendant may request either a new trial or a judgment
of acquittal due to insufficient evidence, and the two requests are governed by
different standards. See, e.g., United States v. Ruzicka, 988 F.3d 997, 1007 (8th Cir.
2021). Matheny does not specify which remedy he seeks on appeal. But given that
he did not request a new trial before the district court and his appellate brief recites
the standards governing our review of the denial of a motion for a judgment of
acquittal, we construe his sufficiency-of-the-evidence challenge as a request for a
judgment of acquittal. As we explain below, construing the challenge as a request
for a new trial would not alter our conclusion.

       We review the denial of a motion for a judgment of acquittal due to
insufficient evidence de novo. Id. A defendant is entitled to a judgment of acquittal
due to insufficient evidence only if no reasonable factfinder could find him guilty
beyond a reasonable doubt. See id.

       Seven of Matheny’s convictions were based on 18 U.S.C. § 501, which
criminalizes “mak[ing] . . . or knowingly us[ing]” any “forged or counterfeited . . .
postage meter stamp.” On two of the seven counts, the Government claimed that
Matheny violated § 501 by making or knowingly using a shipping label with an
altered recorded weight. Cf. 18 U.S.C. § 513(c)(2) (defining “forged” documents in
a related context to include any document “that purports to be genuine but is not
because it has been falsely altered”). On the other five, the Government claimed
that Matheny violated § 501 by making or knowingly using a hybrid shipping label
featuring a priority shipping designation but a first-class barcode and tracking
number. Cf. id. (defining “forged” documents to include to any document “that
purports to be genuine but is not because it . . . is a combination of parts of two or
more genuine documents”). Matheny presents two arguments as to why the
evidence was insufficient to support some or all of his § 501 convictions.

                                          -5-
       First, as to all seven counts, Matheny argues that there was insufficient
evidence that he committed the conduct alleged. We disagree. The evidence
indicated that the labels’ recorded weights had been altered on the packages at issue
in two of the counts and that hybrid labels had been used on the packages at issue in
the remaining five counts. Matheny speculates that someone else might have made
the forgeries. But Matheny confessed to altering recorded weights on shipping
labels. And even assuming that someone else made the hybrid labels, the fact that
Matheny routinely bought two labels and then voided the priority purchase in order
to receive a refund indicates that he knew that the hybrid labels he was using were
forgeries that looked like priority labels but would scan as first-class labels. See
§ 501 (criminalizing “mak[ing] . . . or knowingly us[ing]” forged postage meter
stamps (emphasis added)); cf. United States v. Olbres, 61 F.3d 967, 973 (1st Cir.
1995) (holding that a reasonable jury could infer that the defendants knowingly
understated their income from the fact that they took advantage of related
deductions). So does the fact that Matheny insisted on dropping off his packages at
the back dock late at night when the post-office staff would be unable to scrutinize
the labels. Cf. United States v. Pizano, 421 F.3d 707, 723 (8th Cir. 2005) (holding
that “the jury could infer that [the defendant] knew” that certain funds “were
criminally derived” in part because the defendant attempted to conceal the funds’
source).

        Second, as to the five counts involving the hybrid labels, Matheny argues that
the conduct alleged does not violate § 501. Matheny reasons that covering the
bottom half of a priority label with the bottom half of a first-class label while leaving
the top half of the priority label intact does not result in a “forged or counterfeited
. . . postage meter stamp,” § 501, because the “stamp” consists of only the top half
of the label with the designations of postage and shipping class. Therefore, Matheny
concludes, proof that he made or knowingly used the hybrid labels does not
constitute proof that he violated § 501.

      We are not persuaded. The dictionary defines a “postage stamp” as “a
government adhesive stamp or imprinted stamp for use on mail as evidence of
prepayment of postage.” Merriam-Webster’s Collegiate Dictionary 969 (11th ed.
                                          -6-
2005). The scannable barcodes on the bottom halves of the shipping labels Matheny
purchased were part of what made the labels “evidence of prepayment of postage.”
See id. Therefore, the barcodes were part of the stamps. Furthermore, an adhesive
“stamp” is “a . . . printed paper,” id. at 1215, not a subsection of a printed paper.
Thus, if (as Matheny concedes) the designations of postage and shipping class at the
top of the labels were part of the stamps, then everything else on the labels—
including the barcodes and tracking numbers—were part of the stamps, too. Just as
a dollar bill consists of not only the designation of the bill’s denomination but the
entire sheet of paper on which that designation appears, so an adhesive postage
stamp consists of not only the designations of postage and shipping class but the
entire label on which those designations appear.

        This does not mean that any alteration, no matter how minute or immaterial,
of any part of a shipping label violates § 501. Someone who tapes on a replacement
for the corner that was torn off his diploma might be open to the charge of
fastidiousness, but he could hardly be accused of forgery. The reason is that the
corner of a diploma is immaterial to the diploma’s function of providing evidence
that its owner has earned a certain degree from a certain school. Cf. United States v.
Morse, 983 F.2d 851, 853 (8th Cir. 1993) (describing forgery as “fraudulent
activity”); “Fraud,” Black’s Law Dictionary (11th ed. 2019) (defining fraud to
require “misrepresentation or knowing concealment of a material fact” (emphasis
added)). By the same logic, someone who splices a new corner onto a stamp might
not be guilty of forgery given that, typically, the corner of a stamp is immaterial to
the stamp’s function of providing “evidence of prepayment of postage.” See
“Postage stamp,” Merriam-Webster’s Collegiate Dictionary 969 (11th ed. 2005).

      But Matheny did much more than simply give his shipping labels new corners.
Instead, his conduct is analogous to covering the school name and logo on a diploma
with the name and logo of a more prestigious school. Unlike splicing on a new
corner, splicing on the name and logo of a more prestigious school constitutes
forgery because it creates the false appearance that the diploma’s owner received a
degree from the more prestigious school. So too here, Matheny committed forgery
when he spliced together priority shipping designations with first-class barcodes and
                                         -7-
tracking numbers because he thereby created the false appearance that he was paying
priority postage. Cf. § 513(c)(2) (providing that a document “that purports to be
genuine but is not because it . . . is a combination of parts of two or more genuine
documents” is forged).

       Matheny also challenges the sufficiency of the evidence supporting his
smuggling convictions. As relevant here, 18 U.S.C. § 554 criminalizes “fraudulently
or knowingly export[ing] or send[ing] from the United States . . . any merchandise,
article, or object contrary to any law or regulation of the United States.” Federal
regulations require designating the “[c]ategory of items” being shipped “(e.g.,
document, gift, merchandise, etc.)” on all customs forms. See U.S. Postal Serv.,
International Mail Manual § 123.711 (2022); 39 C.F.R. § 20.1 (incorporating by
reference the International Mail Manual). According to Matheny, the evidence was
insufficient to prove that he knew he had mislabeled merchandise as gifts. But trial
testimony indicated that the default setting on the online customs form was
“merchandise,” which means that Matheny must have deliberately changed it to
“gift.” From this, a reasonable factfinder could infer beyond a reasonable doubt that
Matheny knew that he had mislabeled merchandise he was selling on eBay as gifts.
Cf. United States v. Bowman, 235 F.3d 1113, 1115-16 (8th Cir. 2000) (holding that
a reasonable jury could infer that the defendant knew he was concealing the proceeds
of a crime based on evidence that he “was deliberately moving the proceeds around”
in a way that “ma[de] tracking the money difficult”).

        Thus, Matheny’s sufficiency-of-the-evidence challenge fails as to all counts
if it is construed as a request for a judgment of acquittal. And it fares no better if
construed as a request for a new trial. To prevail on this claim, even assuming he
did not forfeit it, Matheny would need to show that “the evidence weigh[ed] heavily”
against the verdict. See United States v. Huerta-Orozco, 272 F.3d 561, 565 (8th Cir.
2001). For the reasons explained above, the evidence did not weigh heavily against
the verdict but rather provided ample support for it. Therefore, Matheny’s
sufficiency-of-the-evidence challenge fails regardless of whether it is construed as a
request for a judgment of acquittal or a request for a new trial.

                                         -8-
                                          III.

       Next, Matheny objects to the face-value calculation underlying the district
court’s application of the twelve-level sentencing enhancement to his base offense
level.1 See U.S.S.G. §§ 2B1.1(b)(1)(G), 2B5.1(b)(1). We review the district court’s
legal conclusions de novo and its factual findings for clear error, see United States
v. Lamere, 980 F.2d 506, 510 (8th Cir. 1992), keeping in mind that the district court
need only make a “reasonable estimate” of the counterfeits’ face value, see Ruzicka,
988 F.3d at 1011 (stating this principle when reviewing a loss calculation); United
States v. Taftsiou, 144 F.3d 287, 293 (3d Cir. 1998) (invoking the same principle
when reviewing a face-value calculation); United States v. Melton, 131 F.3d 1400,
1403, 1406 (10th Cir. 1997) (same).

       When a defendant is convicted under § 501, § 2B5.1(b)(1) directs the
sentencing court to enhance the defendant’s base offense level according to the table
in § 2B1.1 but to use “the face value of the counterfeit items” rather than the loss to
the victim. See § 2B5.1 cmt. 2 (“This guideline applies to counterfeiting of United
States . . . postage stamps . . . .”); United States v. King, 257 F.3d 1013, 1018, 1028-
29 (9th Cir. 2001) (holding that § 2B5.1 applies when the defendant was convicted
of violating § 501). The sentencing court is to treat any “instrument that has been
falsely made, manufactured, or altered” as “counterfeit,” § 2B5.1 cmt. 1, and it
should account for all counterfeits that the defendant made as “part of the same
course of conduct or common scheme or plan” as the counterfeits he was convicted
of making, see U.S.S.G. § 1B1.3(a)(2) (stating the applicable definition of “relevant
conduct”); United States v. Okai, 454 F.3d 848, 851-52 (8th Cir. 2006) (indicating
that a § 2B5.1 face-value calculation should account for relevant conduct). The table
in § 2B1.1 provides for a twelve-level enhancement if the victim suffered a loss of
greater than $250,000. See U.S.S.G. § 2B1.1(b)(1)(G).

      1
       Although Matheny frames his objection as a challenge to the “calculation of
[the] amount of loss” underlying the enhancement, the district court properly based
the enhancement on the face value of the counterfeit stamps rather than the loss
incurred by the USPS. See § 2B5.1(b)(1); id. cmt. 2. Accordingly, we construe
Matheny’s objection as a challenge to the district court’s face-value calculation.
                                        -9-
       Here, the district court found that Matheny’s fraudulent scheme spanned at
least four years and that the face value of the counterfeits he made over the course
of those four years exceeded $250,000. Accordingly, substituting the face value of
counterfeits for the loss to the victim in § 2B1.1’s table, the district court enhanced
Matheny’s base offense level by twelve levels.

       Matheny objects to none of the district court’s legal conclusions. Nor does he
object to the district court’s finding that his scheme spanned at least four years.
Instead, he contests only the district court’s finding that the face value of the
counterfeits he made over the course of his four-year scheme exceeded $250,000.
Matheny points out that the district court based its finding on an extrapolation from
the results of the one-month review during which Inspector Jewell intercepted and
examined every piece of mail that Matheny sent. According to Matheny, one month
is “an exceptionally short period of time relative to” four years—too short to serve
as the basis of a “reasonable estimate.” See Ruzicka, 988 F.3d at 1011.

       We disagree. Especially where the defendant’s scheme encompassed many
fraudulent acts over a long period of time, extrapolating from a representative
sample may yield “a reasonable estimate” of the scale of the fraud even if the sample
captures only a small percentage of the fraud. See, e.g., United States v. Johnson,
841 F.3d 299, 303-05 (5th Cir. 2016) (affirming a loss calculation based on
extrapolation from a sample of less than one percent); United States v. Scrivener,
189 F.3d 944, 950 (9th Cir. 1999) (affirming a loss calculation based on
extrapolation from a sample of thirteen percent). Here, the Government introduced
evidence that the one-month sample was representative of Matheny’s fraudulent
practice over the course of the four years. If anything, the sample was skewed in
Matheny’s favor because it was drawn from a month when his sales were relatively
low. Cf. United States v. Boesen, 541 F.3d 838, 851 (8th Cir. 2008) (affirming a loss
calculation based on extrapolation from “the lowest fraud rate in the record”). Yet
extrapolating from the sample still yielded a total face value of $387,347.71, which
is significantly more than $250,000. Cf. Taftsiou, 144 F.3d at 293 (affirming a face-
value calculation after noting that, to show “reversible error,” the defendants “would
have to show that [the] calculations were off by” a significant margin). The district
                                         -10-
court did not clearly err in finding that the face value of counterfeits was more than
$250,000.

                                         IV.

       Matheny also challenges the amount of restitution that the district court
ordered. We review the district court’s restitution calculation de novo as to legal
conclusions and for clear error as to factual findings. See Ruzicka, 988 F.3d at 1013-
14. Restitution may be ordered “only for the loss caused by the specific conduct that
is the basis of the offense of conviction,” Hughey v. United States, 495 U.S. 411,
413 (1990), unless the offense of conviction “involves as an element a scheme,
conspiracy, or pattern of criminal activity,” in which case restitution may be ordered
for any loss caused “by the defendant’s criminal conduct in the course of the scheme,
conspiracy, or pattern,” 18 U.S.C. §§ 3663(a)(2), 3663A(a)(2). Compare United
States v. Reynolds, 432 F.3d 821, 822-23 (8th Cir. 2005) (reversing a restitution
award for conduct distinct from, albeit part of the same scheme as, the defendant’s
violation of 18 U.S.C. § 844(e) because a “scheme or pattern of criminal activity is
not an element of a § 844(e) offense”), with United States v. Cornelsen, 893 F.3d
1086, 1088, 1090-91 (8th Cir. 2018) (permitting restitution for all conduct that was
part of the defendant’s “broad scheme to defraud” where the statute of conviction
was 18 U.S.C. § 1343, which lists as an element a “scheme or artifice to defraud”).

      Here, neither statute of conviction lists as an element a scheme, conspiracy,
or pattern of criminal activity. See §§ 501, 554(a). Therefore, restitution to the
USPS should have been limited to “the loss caused by the specific conduct that is
the basis of” Matheny’s forgery convictions. See Hughey, 495 U.S. at 413. Instead,
the $256,441.78 restitution award included not only the loss due to Matheny’s
forging of stamps but also the loss due to Matheny’s underweighting of packages.

      When the record makes clear the amount of restitution that the district court
should have awarded, we may remand for entry of a corrected restitution order
without requiring the district court to engage in additional fact-finding. See, e.g.,
United States v. Searing, 250 F.3d 665, 667-68 (8th Cir. 2001). Here, though, the
                                        -11-
record indicates only that 65.6 percent of the packages that Matheny mailed
displayed forged stamps while 21.15 percent were underweighted; the record does
not indicate the dollar amount of the loss due to each category of fraud. And the
district court made no findings on the matter. Therefore, we will remand for the
district court to calculate the loss due to forgery and reduce the restitution award to
that amount. See United States v. Woodring, 35 F.4th 633, 635 (8th Cir. 2022)
(remanding “for fact-finding” where the appropriate restitution amount was unclear
from the record). 2
                                            V.

      Finally, Matheny challenges the substantive reasonableness of his prison
sentence. “We review the substantive reasonableness of a sentence under a
deferential abuse-of-discretion standard.” United States v. Espinoza, 9 F.4th 633,
637 (8th Cir. 2021). Where the district court varied downward from the guidelines
range, “it is nearly inconceivable that the court abused its discretion in not varying
downward still further.” Id.

      2
        Arguably, the district court should have excluded not only the loss due to
underweighting but also the loss due to forgery beyond the seven counts of
conviction. See Hughey, 495 U.S. at 422 (reversing a restitution award for loss due
to credit-card fraud beyond the credit-card fraud for which the defendant was
convicted). But Matheny has never objected—before the district court or on
appeal—to the inclusion of the loss due to forgery beyond the seven counts of
conviction. All he has asked is that the restitution amount exclude any loss not due
to forgery. Accordingly, he has waived any objection to the inclusion of the loss due
to forgery beyond the seven counts of conviction, see United States v. Rice, 699 F.3d
1043, 1050 (8th Cir. 2012) (“Issues not raised in a party’s opening brief are
waived.”); United States v. Murphy, 248 F.3d 777, 779-80 (8th Cir. 2001) (“[A
litigant] cannot . . . complain when he receive[s] what he asked for.”), and the district
court need not address the issue on remand, see United States v. Castellanos, 608
F.3d 1010, 1017 (8th Cir. 2010) (explaining that issues that have been waived are
“not within the scope of remand”); United States v. Morris, 259 F.3d 894, 898 (7th
Cir. 2001) (“[P]arties cannot use the accident of remand as an opportunity to reopen
waived issues.”).
                                          -12-
       Here, the district court varied downward to a term of 36 months’
imprisonment from a sentencing guidelines range of 51 to 63 months. In explaining
its decision not to vary downward further, the district court acknowledged
Matheny’s lack of criminal history but noted the need “to deter others . . . from
exploiting weaknesses in government programs” and to impose a sentence that
“reflect[s] the seriousness” of Matheny’s offenses. See 18 U.S.C. § 3553(a)(2)(A)-
(B) (directing the sentencing court to consider “the need for the sentence imposed”
to “reflect the seriousness of the offense” and “afford adequate deterrence to criminal
conduct”). This is not the “nearly inconceivable” case where a district court that
varied downward nonetheless “abused its discretion in not varying downward still
further.” See Espinoza, 9 F.4th at 637. Matheny’s 36-month prison sentence is not
substantively unreasonable. See id. (holding that a sentence below the guidelines
range was not substantively unreasonable notwithstanding the defendant’s “lack of
criminal history” in part because of “the gravity” of the defendant’s conduct).

                                         VI.

       For the foregoing reasons, we affirm Matheny’s convictions, vacate the
district court’s restitution order and remand for the district court to limit the
restitution award to the loss due to forgery, and otherwise affirm Matheny’s
sentence.
                        ______________________________

                                         -13-