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© West 2001 No Claim to Orig. U.S. Govt. Works
65 USLW 2356, 45 Fed. R. Evid. Serv. 581
(Cite as: 100 F.3d 380)
<KeyCite Yellow Flag>
United States Court of Appeals,
Fifth Circuit.
UNITED STATES of America, Plaintiff-Appellee,
v.
Moyosore ISMOILA;
Segun Debowale; Nuratu Lawanson, Defendants-Appellants.
UNITED STATES of
America, Plaintiff-Appellee,
v.
Moyosore ISMOILA,
Defendant-Appellant.
Nos. 93-2486, 95-20171.
Nov. 13, 1996.
Rehearing Denied
Jan. 2, 1997.
Defendants were convicted of
conspiring to commit wire fraud, money laundering and use of authorized access
devices, of aiding and abetting wire fraud, of aiding and abetting money
laundering, and of aiding and abetting use of unauthorized access devices by
the United States District Court for the Southern District of Texas, John D.
Rainey, J., and they appealed. The Court of Appeals, Duhe, Circuit Judge, held
that: (1) finding that defendant had knowingly participated in conspiracy to
defraud participating banks through credit card scheme was sufficiently supported by evidence; (2)
affidavits and other statements prepared by credit card holders, indicating
that their credit cards had been stolen, were admissible under residual
exception to hearsay rule; (3) amount of loss associated with defendants'
scheme was properly fixed, for purposes of calculating defendant's base offense
level, based on intended rather than actual loss to banks; and (4) defendant
could properly be required to make restitution for losses resulting from entire
fraudulent credit card scheme, and not merely for losses directly attributable
to defendant's actions.
Affirmed in part, reversed and vacated in part, and rendered.
West Headnotes
[1] Criminal Law k1144.13(3)
[1] Criminal Law k1144.13(5)
[1]
Criminal Law k1159.4(1)
On challenge to sufficiency of evidence to support defendant's conviction,
Court of Appeals reviews evidence in light most favorable to verdict, and
accepts all credibility choices and reasonable inferences made by jury.
[2]
Criminal Law k1159.2(7)
Conviction must be upheld as supported by sufficient evidence if rational jury
could have found that prosecution proved essential elements of crime charged
beyond reasonable doubt.
[3] Criminal Law k1159.2(2)
[3]
Criminal Law k1159.2(8)
Evidence may be sufficient to support defendant's conviction, even though it does not exclude every reasonable
hypothesis of innocence and is not wholly inconsistent with every conclusion
except that of guilt.
[4]
Criminal Law k1159.6
On challenge to sufficiency of evidence to support defendant's conviction,
standard of review is the same regardless of whether evidence is direct or
circumstantial.
[5]
Conspiracy k24.5
To show that alleged conspirator had requisite criminal intent, government must
prove that alleged conspirator knew of conspiracy and voluntarily joined it,
and that conspirator had requisite intent to commit underlying substantive
offenses. 18
U.S.C.A. § 371.
[6]
Conspiracy k40.1
To hold defendant
criminally liable as conspirator, on theory that she aided and abetted
underlying substantive violations, government did not have to prove that
defendant herself completed each specific act charged in indictment, only that
she associated with conspiracy and had same criminal intent as principal. 18
U.S.C.A. §§ 2, 371.
[7]
Criminal Law k59(5)
To "aid and abet" simply means to assist perpetrator of crime
while sharing requisite criminal intent. 18
U.S.C.A. § 2.
[8]
Telecommunications k362
Intent necessary for wire fraud is specific intent to defraud or deceive. 18
U.S.C.A. § 1343.
[9]
Telecommunications k363
While wire fraud conviction
requires proof of specific intent to defraud or deceive, requisite intent can
be proven by inference from all of the facts and circumstances surrounding
transactions in question. 18
U.S.C.A. § 1343.
[10] United States k34
To convict defendant of money laundering, government must prove either that
defendant intended to promote the performance of unlawful money laundering
activity or knew that transaction was designed to conceal proceeds of unlawful
activity. 18
U.S.C.A. § 1956.
[11] False Pretenses k5
[11] False Pretenses k49(2)
To convict for use of unauthorized access devices, government must prove that
defendant acted knowingly and with intent to defraud, but proof of such intent
may be established with circumstantial evidence. 18
U.S.C.A. § 1029(a)(2).
[12] Conspiracy k47(4)
Finding that defendant had knowingly participated in conspiracy to defraud
participating banks, by applying for merchant credit card accounts on behalf of
sham businesses and obtaining payment from banks for fictitious purchases made
with stolen credit cards, was sufficiently supported by evidence presented on
conspiracy charge, including evidence of what appeared to be defendant's
signature on document submitted in connection with scam, though government
never presented testimony of handwriting expert; jury was entitled to draw its
own conclusions as to genuineness of defendant's purported signatures by
comparing signatures with known sample of defendant's handwriting, and by
considering inferences arising from defendant's possession of two driver's
licenses bearing different names and containing different personal information,
and from defendant's presence on premises of fictitious businesses directly
tied to processing of stolen credit cards. 18
U.S.C.A. §§ 2, 371, 1029(a)(2), 1343, 1956.
[13] Criminal Law k491(1)
Jury
is entitled to draw its own conclusions as to genuineness of signatures by
making comparison with authentic signature.
[14] Conspiracy k40.1
Showing of mere presence and association with those participating in conspiracy
is insufficient to prove knowledge of and participation in conspiracy. 18
U.S.C.A. § 371.
[15] Conspiracy k40
Criminal conspiracy cannot be proven solely by family relationship. 18
U.S.C.A. § 371.
[16] Conspiracy k47(1)
While inferences drawn from existence of family relationship or from defendant's mere presence and
association with known conspirators will not support conspiracy conviction,
such inferences, when combined with other circumstantial evidence, may be
sufficient to support conspiracy conviction. 18
U.S.C.A. § 371.
[17] Telecommunications k363
Paper trail connecting defendant to phony businesses involved in processing of
stolen credit cards was sufficient to prove her membership in scheme to defraud
and to support her conviction, on aiding and abetting theory, of substantive
wire fraud offenses. 18
U.S.C.A. § 1343.
[18] Telecommunications k362
Once membership in scheme to defraud is established, knowing participant is
liable for any fraudulent wire communications that take place in connection
with that scheme. 18
U.S.C.A. § 1343.
[19] United States k34
Finding that participant in scheme to defraud participating banks had aided and
abetted other participants in laundering funds generated by their fraudulent
activity was sufficiently supported by evidence presented on money laundering
charge, including evidence that other conspirators had induced banks to issue
checks and paying for fictitious credit card purchases allegedly made at sham
businesses operated by defendant, that checks were deposited into businesses'
accounts, and that defendant signed many of the checks payable to herself and
fellow conspirators; evidence showed that bank transactions in question were
part of larger scheme designed to conceal illegal activity, and that defendant
promoted this unlawful endeavor by presenting herself as legitimate business
owner. 18
U.S.C.A. § 1956(a)(1)(A)(i), (a)(1)(B)(i).
[20] United States k34
To establish that defendant designed to conceal proceeds of illegal activity,
as required to support defendant's money laundering conviction, government had
to prove more than just innocent money spending. 18
U.S.C.A. § 1956(a)(1)(A)(i), (a)(1)(B)(i).
[21] United States k34
To support money laundering conviction, it was enough for government to show
that bank transactions were part of larger scheme designed to conceal illegal
proceeds. 18
U.S.C.A. § 1956(a)(1)(A)(i), (a)(1)(B)(i).
[22] False Pretenses k49(1)
Extensive paper trail tying defendant to phony businesses at which fictitious
credit card purchases were made using stolen credit cards was sufficient to
support defendant's conviction, on aiding and abetting theory, as participant
in scheme to defraud banks through use of unauthorized access devices. 18
U.S.C.A. §§ 2, 1029(a)(2).
[23] Criminal Law k1153(1)
Court of Appeals reviews district court's evidentiary rulings for abuse of discretion.
[24] Criminal Law k1168(2)
Confrontation clause errors are subject to harmless error analysis. U.S.C.A.
Const.Amend. 6.
[25] Criminal Law k436(3)
Affidavits and other statements prepared by credit card holders, indicating
that their credit cards had been stolen and that they had not authorized
certain charges made by defendants in furtherance of scheme to defraud
participating banks, were not admissible under business records exception to
hearsay rule, on theory that these affidavits and other statements were
business records of credit card holders themselves; government failed to
establish that it was in regular course of business for credit card holders to
fill out affidavits or otherwise give information to their banks regarding
stolen credit cards. Fed.Rules
Evid.Rule 803(6), 28 U.S.C.A.
[26] Criminal Law k436(2)
"Business records" exception to hearsay rule applies only if
person who makes statement is himself acting in regular course of business. Fed.Rules
Evid.Rule 803(6), 28 U.S.C.A.
[27] Criminal Law k436(3)
Affidavits and other statements prepared by credit card holders, indicating
that their credit cards had been stolen and that they had not authorized
certain charges made by defendants in furtherance of alleged scheme to defraud,
were not admissible under business records exception to hearsay rule, as
business records of issuing banks; while it may have been in regular course of
business for issuing bank to keep such statements on file, source of
information contained in these records was card holders and not any person
inside issuing banks. Fed.Rules
Evid.Rule 803(6), 28 U.S.C.A.
[28] Criminal Law k419(2.5)
[28] Criminal Law k662.8
Affidavits and other statements prepared by credit card holders, indicating
that their credit cards had been stolen and that they had not authorized
certain charges allegedly made by defendants in furtherance of scheme to
defraud, were admissible under residual exception to hearsay rule; statements,
which card holder submitted to issuing banks to challenge certain specific charges,
possessed sufficiently high degree of reliability that admission of statements
under residual exception did not violate defendants' confrontation rights. U.S.C.A.
Const.Amend. 6; Fed.Rules
Evid.Rules 803(24), 804(b)(5),
28 U.S.C.A.
[29] Sentencing and Punishment k1988
(Formerly 110k982.5(2))
Wire fraud defendant who had been ordered to pay restitution could properly be
required, as condition of his supervised release, to provide his probation
officer with access to "any requested financial information" such
a condition was appropriate
given defendants' restitutionary obligation. 18
U.S.C.A. § 3583(d); U.S.S.G.
§ 5B1.4(b)(18), 18 U.S.C.A.
[30] Criminal Law k1139
[30] Criminal Law k1158(1)
Court of Appeals reviews district court's application and legal interpretation
of Sentencing Guidelines de novo; its findings of fact in support of guidelines
application, for clear error. U.S.S.G.
§ 1B1.1 et seq., 18 U.S.C.A.
[31] Sentencing and Punishment k976
(Formerly 110k1313(2))
Finding that defendant played leadership role in conspiracy to defraud banks by
seeking payment for fictitious sales made by sham businesses on stolen credit
cards was sufficiently supported by evidence presented at sentencing hearing, and supported four-level increase in
defendant's base offense level, given evidence that defendant had leased
premises at which seven of the sham businesses allegedly operated and himself
owned many of these businesses, that defendant split proceeds received from
stolen credit cards on 50/50 basis with possessor of stolen credit cards, and
that defendant instructed his subordinates to deposit proceeds of scheme into
different bank accounts in attempt to conceal criminal activity. U.S.S.G.
§ 3B1.1(a), 18 U.S.C.A.
[32] Criminal Law k1158(1)
Finding of fact is not "clearly erroneous" if it is plausible in
light of entire record.
[33] Sentencing and Punishment k962
(Formerly 110k1310)
Defendant's role in criminal activity may be deduced, for purposes of deciding
whether enhancement is warranted in defendant's base offense level,
inferentially from available facts. U.S.S.G.
§ 3B1.1, 18 U.S.C.A.
[34] Sentencing and Punishment k752
(Formerly 110k1251)
Participants in scheme to defraud banks, by applying for merchant credit card
accounts on behalf of sham businesses and obtaining payment from banks for
fictitious purchases allegedly made from these businesses with stolen credit
cards, had to be counted in deciding whether defendant was leader or organizer
of criminal activity in which five or more participants were involved, for
purposes of supporting four-level increase in defendant's base offense level;
it was immaterial that these participants may not have been tied to any of
criminal counts on which defendant was convicted. U.S.S.G.
§§ 3B1.1 et seq., 3B1.1(a), 18 U.S.C.A.
[35] Sentencing and Punishment k736
(Formerly 170k54)
Amount of loss from defendants' scheme to defraud participating banks, by applying
for merchant credit card accounts on behalf of sham businesses and obtaining payment from banks for
fictitious purchases made with stolen credit cards, was properly fixed for
sentencing purposes under "loss" guideline based on loss which
defendants intended to inflict (i.e., the amount for which they sought
payment), though amount for which payment was sought exceeded maximum available
credit limit on stolen credit cards, such that banks were not at risk for
excess charges. U.S.S.G.
§ 2F1.1, 18 U.S.C.A.
[36] Criminal Law k1158(1)
Sentencing court's loss determinations, for purposes of calculating defendant's
base offense level under United States Sentencing Guidelines, are reviewed for
clear error. U.S.S.G.
§ 2F1.1, 18 U.S.C.A.
[37] Sentencing and Punishment k736
(Formerly 110k1246)
In determining amount of loss from defendant's criminal misconduct, for
purposes of calculating defendant's base offense level under United States
Sentencing Guidelines, loss need not be determined with precision; it is enough that sentencing court can
make reasonable estimate of loss, given available information. U.S.S.G.
§ 2F1.1, 18 U.S.C.A.
[38] Criminal Law k1158(1)
Court of Appeals reviews for clear error sentencing court's determination that
enhancement in defendant's sentence is warranted for defendant's
"obstruction of justice." U.S.S.G.
§ 3C1.1, 18 U.S.C.A.
[39] Sentencing and Punishment k761
(Formerly 110k1253)
Finding that defendant had obstructed justice while in jail was sufficiently
supported by evidence that defendant had allowed his codefendant, a fugitive,
to hide out in attic of defendant's home. U.S.S.G.
§ 3C1.1, 18 U.S.C.A.
[40] Criminal Law k1147
Court of Appeals employs
abuse of discretion standard in reviewing process used by district court in
sentencing.
[41] Criminal Law k1147
Court of Appeals reviews district court's decision to depart from Sentencing
Guidelines for abuse of discretion. U.S.S.G.
§ 1B1.1 et seq., 18 U.S.C.A.
[42] Sentencing and Punishment k800
(Formerly 110k1260)
Departure from federal Sentencing Guidelines will be upheld on appeal if
district court provides acceptable reasons for departure, and if extent of
departure is reasonable. U.S.S.G.
§ 1B1.1 et seq., 18 U.S.C.A.
[43] Criminal Law k1158(1)
Reasons given by district
court for departing from recommended guideline sentence are findings of fact,
which Court of Appeals reviews for clear error. U.S.S.G.
§ 1B1.1 et seq., 18 U.S.C.A.
[44] Sentencing and Punishment k828
(Formerly 110k1253)
Decision to depart upward from recommended guideline sentence, on theory that
defendant's obstruction of justice in allowing codefendant to hide out in his
home during defendant's trial on wire fraud conspiracy charges was of degree
not adequately taken into account by "obstruction of justice"
enhancement, was not abuse of district court's sentencing discretion, where
defendant's conduct allowed defendant to present a defense at trial that
blamedcodefendant, all the while that defendant was concealing codefendant in
his home. U.S.S.G.
§§ 3C1.1, 5K2.0, p.s., 5K2.2, p.s., 18 U.S.C.A.
[45] Conspiracy k41
As participant in conspiracy, defendant was legally liable for all actions of coconspirators in furtherance of
that crime.
[46] Sentencing and Punishment k2146
(Formerly 110k1208.4(2))
Defendant, as participant in conspiracy to commit wire fraud, could be required
to make restitution not only for losses directly attributable to his own
actions, but for losses resulting from entire fraudulent scheme.
[47] Telecommunications k362
[47] Telecommunications k363
Requisite intent to defraud under wire fraud statute existed if defendant acted
"knowingly and with specific intent to commit fraud" district court's
instruction to that effect was not improper, on theory that district court
should have substituted the word "willfully" for
"knowingly." 18
U.S.C.A. § 1343.
*385 Albert
A. Balboni, Paula
Camille Offenhauser, Katherine
L. Haden, US Attorney's Office, Houston, TX, for
plaintiff-appellee.
Moyosore Ismoila, Texarkana, TX, pro se.
Jerome
McConnell Godinich, Jr., Houston, TX, for Segun
Debowale, defendant- appellant.
Chidi Amaefule, Dallas, TX, pro se.
Roland
E. Dahlin, II, Federal Public Defender, H.
Michael Sokolow, David B. Gerber, Federal Public
Defender, Houston, TX, for Nuratu Lawanson, defendant-appellant.
Appeals from the United States District Court for the Southern District of
Texas.
Before DUHE and DENNIS, Circuit Judges, and DUVAL, District Judge. [FN1]
FN1. District Judge of the Eastern District of Louisiana, sitting by
designation.
DUHE, Circuit Judge:
Segun Debowale and Nuratu Lawanson were convicted by a jury of conspiracy to commit wire fraud,
money laundering, and use of unauthorized access devices, in violation of 18
U.S.C. § 371 (count 1); aiding and abetting wire fraud,
in violation of 18
U.S.C. § 2 and 18
U.S.C. § 1343 (counts 2-9); aiding and abetting money
laundering, in violation of 18
U.S.C. § 2 and §
1956(a)(1)(A)(i), (a)(1)(B)(i) (counts 10-15); and
aiding and abetting the use of unauthorized access devices, in violation of 18
U.S.C. § 2 and 18
U.S.C. § 1029(a)(2) (count 16). Moyosore Ismoila was
convicted by a jury of conspiracy to commit wire fraud, money laundering, and
use of unauthorized access devices, in violation of 18
U.S.C. § 371 (count 1); aiding and abetting wire fraud,
in violation of 18
U.S.C. § 2 and 18
U.S.C. § 1343 (counts 2-9); and aiding and abetting the
use of unauthorized access devices, in violation of 18
U.S.C. § 2 and 18
U.S.C. § 1029(a)(2) (count 16). Lawanson was sentenced to
a total of thirty-two months imprisonment followed by three years of supervised
release. Debowale was sentenced to a total of eighty-seven months imprisonment
followed by five years of supervised release, and was ordered to pay $360,689
in restitution. Ismoila was sentenced to a total of sixty months imprisonment
followed by three years of supervised release, and was ordered to pay $111,008
in restitution. On appeal, the Appellants raise multiple points of error. We
affirm the convictions and sentences of Debowale and Ismoila. We reverse the
conviction of Lawanson on Count 11, affirm on all other counts, vacate her
sentence on Count 11,
affirm her sentence on all other counts and render.
BACKGROUND
The Appellants defrauded various banks and credit card companies by processing
hundreds of fraudulent charges on stolen credit cards to obtain cash. They
posed as legitimate business owners, which allowed them to obtain the
electronic machinery by which they processed false charges to the stolen credit
cards.
Before describing the details of the Appellants' scheme, a review of the
mechanics of a typical credit card transaction is helpful. The primary victims
of the conspiracy are known as issuing banks. Issuing banks are members of VISA
and MasterCard, not-for-profit associations of member banks that operate a
worldwide communication system for financial transfers using credit cards.
Issuing *386 banks
issue credit cards to consumers, enabling those consumers to make credit-card
purchases at participating businesses. To accept credit cards, businesses must
open an account with a merchant bank. Merchant banks, like issuing banks, are
members of VISA and MasterCard, but merchant banks have accounts with
businesses, not consumers. Once a business is electronically connected with a
merchant bank, it can accept a consumer's credit card by processing the credit
card through a point-of-sale terminal provided to it by the merchant bank. If
the merchant bank approves the sale, it immediately credits the business for
the amount of the consumer's purchase. The merchant bank then transmits the information
regarding the sale to VISA or MasterCard, who in turn forward the information
to the bank that issued the card to the consumer who made the purchase. If the
issuing bank approves the sale, it notifies VISA or MasterCard and then pays
the merchant bank at the end of the business day. The issuing bank carries the
debt until the cardholder pays the bill.
The Appellants opened approximately ten sham businesses and applied for merchant
accounts for those businesses with Comdata Corporation, Western Union, Discover
Card, and First Interstate Bank of South Dakota. The Appellants used these
businesses to defraud the banks and credit card companies in two different ways.
In one method, the Appellants applied for merchant credit card accounts for
their sham businesses. At these businesses, the Appellants processed stolen
credit cards in sham transactions in exchange for nonexistent merchandise.
After these charges were relayed to the merchant banks, those banks then
deposited the amount of each charge directly into the Appellants' bank
accounts, and the Appellants withdrew the funds. [FN2]
FN2. The Appellants conducted most of their business through First
Interstate Bank of South Dakota, a merchant credit card issuer. First
Interstate employed a company named Cherry Payment Systems that signed up merchants for them. Chidi Amaefule,
non-appealing co-defendant, was a salesman for Cherry Payments, and as part of
his job, he certified that Appellants owned legitimate businesses, thus
enabling them to get MasterCard and VISA merchant accounts. The Appellants also
defrauded Discover Card, a company that is both a merchant and issuing bank.
The Appellants also set up
sham check-cashing businesses for which they obtained accounts with Comdata and
Western Union. At these businesses, the Appellants used the stolen credit cards
to purchase "Comcheks" issued by Comdata Corporation or
"Flash Cash" checks issued by Western Union. The Appellants then
deposited the Comcheks into their business bank accounts or had Western Union
deposit the amount of the Flash Cash checks into these accounts, and later
withdrew the funds.
The issuing companies became aware of the fraudulent transactions when the
holders of the stolen cards complained that they had not made the charges
listed on their respective bills. The scheme involved approximately 270
cardholders and 44 different issuing banks. Charges of $539,135 were made on
these credit cards at the Appellants' businesses, all but $16,350 of which were
confirmed to be fraudulent.
The Government presented the testimony of five credit cardholders, and
representatives from Comdata, Western Union, First Interstate, Discover, MasterCard, and four issuing banks.
In addition, the prosecution introduced records of 44 issuing banks that
reflected account information of 270 cardholders. There was also testimony from
the employees of the banks into which the Appellants deposited the proceeds
from their conspiracy and the owners of property on which the fraudulent
businesses were located. In addition, Special Agent Judy Sly testified as to
the details of her investigation, and the Government introduced evidence seized
during the execution of a search warrant at one of the businesses. Finally, the
Government produced the testimony of Taiwo Oyewuwo, a.k.a. Adetoye Falusi, a
member of the conspiracy who pled guilty and agreed to testify for the
Government.
ANALYSIS
I. SUFFICIENCY OF THE EVIDENCE
Lawanson first asserts that the evidence was insufficient to sustain her
convictions. *387 She was convicted on all counts encompassing four different
offenses: conspiracy (count 1); aiding and abetting wire fraud (counts 2-9);
aiding and abetting money laundering (counts 10-15); and aiding and abetting
the use of unauthorized access devices (count 16). The Government concedes that
the evidence was insufficient to support Lawanson's conviction on count 11, and
thus we reverse her conviction and vacate her sentence on that count. On all
other counts the evidence was sufficient.
[1][2][3][4] We review the
sufficiency of the evidence in "the light most favorable to the
verdict, accepting all credibility choices and reasonable inferences made by
the jury." United
States v. McCord, 33 F.3d 1434, 1439 (5th Cir.1994)
(internal quotations omitted), cert. denied, 515
U.S. 1132, 115 S.Ct. 2558, 132 L.Ed.2d 812 (1995). A
conviction must therefore be upheld if a rational jury could have found that
the prosecution proved the essential elements of the crime charged beyond a
reasonable doubt. Id. It " 'is not necessary that the evidence exclude every
reasonable hypothesis of innocence or be wholly inconsistent with every
conclusion except that of guilt.' " Id. (quoting United
States v. Bell, 678 F.2d 547, 549 (5th Cir.1982), aff'd,
462
U.S. 356, 103 S.Ct. 2398, 76 L.Ed.2d 638 (1983)). This
standard of review is the same regardless whether the evidence is direct or
circumstantial. United
States v. Cardenas, 9 F.3d 1139, 1156 (5th Cir.1993),
cert. denied, 511
U.S. 1134, 114 S.Ct. 2150, 128 L.Ed.2d 876 (1994).
B. Discussion
Lawanson concedes that there was sufficient evidence for a reasonable jury to
find a conspiracy and that wire fraud, money laundering, and use of
unauthorized access devices occurred. She asserts, however, that the Government
failed to prove that she knowingly participated in the fraudulent scheme.
1. The Elements of Each Offense
[5][6][7] To satisfy the intent requirement of conspiracy, the Government
must show that Lawanson knew of the conspiracy and voluntarily joined it, United
States v. Chaney, 964 F.2d 437, 449 (5th Cir.1992), and
that Lawanson had the requisite intent to commit the underlying substantive
offenses. United
States v. Buford, 889 F.2d 1406, 1409 n. 5 (5th Cir.1989). Because the Government proceeded under the theory that Lawanson
aided and abetted the substantive violations, it is not necessary to prove that
Lawanson herself completed each specific act charged in the indictment. The
Government must prove, however, that she associated with the criminal venture
such that she had the same criminal intent as the principal. See United
States v. Murray, 988 F.2d 518, 522 (5th Cir.1993).
"To aid and abet simply means to assist the perpetrator of a crime
while sharing the requisite criminal intent." United
States v. Jaramillo, 42 F.3d 920, 923 (5th Cir.), cert.
denied, 514
U.S. 1134, 115 S.Ct. 2014, 131 L.Ed.2d 1013 (1995).
[8][9][10][11] The intent necessary for wire fraud is the specific intent to
defraud or deceive, although proof of such intent can arise "by
inference from all of the facts and circumstances surrounding the
transactions." United
States v. Keller, 14 F.3d 1051, 1056 (5th Cir.1994)
(internal quotations omitted). To convict Lawanson of money laundering, the Government must
prove either that she intended to promote the carrying on of an unlawful
activity or knew that the transaction was designed to conceal the proceeds of
an unlawful activity. United
States v. Garza, 42 F.3d 251, 253 (5th Cir.1994), cert.
denied, 515
U.S. 1110, 115 S.Ct. 2263, 132 L.Ed.2d 268 (1995).
Finally, to convict for use of unauthorized access devices, the Government must
prove that Lawanson acted knowingly and with the intent to defraud, although
proof of such intent may be established with circumstantial evidence. United
States v. Goodchild, 25 F.3d 55, 59-60 (1st Cir.1995).
2. The Evidence
[12] Lawanson essentially makes two arguments. First, she contends
that, although her name and apparent signature appear on many of the documents
that the Government introduced into evidence, the Government offered no proof
that she had actually signed *388 her name on the documents. Second, Lawanson asserts that even if
she did participate in some of the transactions described in the indictment as
"overt acts," [FN3] the Government still failed to prove that this participation was
sufficient to show that she had the requisite knowledge and intent required for
conviction.
FN3. Lawanson concedes that a reasonable jury could have found that
"some" of the signatures were genuine.
Lawanson points out that the
Government did not undertake a handwriting analysis of any of the signatures;
that the limited fingerprint analysis did not inculpate her; that no witnesses
saw her sign any of the documents; and that there was testimony that her
husband, Segun Debowale, had used Lawanson's name as part of the illegal
scheme. Lawanson contends that such evidence calls into question whether she
signed the documents on which her name appears.
[13] The evidence suggests otherwise. The Government introduced two
Texas driver's licenses into evidence, one bearing the name Nuratu Ronke
Lawanson and the other bearing the name Abiodun K. Lawanson. Each of these
licenses contained a photograph and a signature. A reasonable jury could
conclude that both photos were that of Lawanson [FN4] and that the signatures were
her's as well. A jury is entitled to draw its own conclusion as to the
genuineness of signatures by making a comparison with an authentic signature. United
States v. Jenkins, 785 F.2d 1387, 1395 (9th Cir.), cert.
denied, 479
U.S. 855, 107 S.Ct. 192, 93 L.Ed.2d 125, 479
U.S. 889, 107 S.Ct. 288, 93 L.Ed.2d 262 (1986); United
States v. Cashio, 420 F.2d 1132, 1135 (5th Cir.1969),
cert. denied, 397
U.S. 1007, 90 S.Ct. 1234, 25 L.Ed.2d 420 (1970); Fed.R.Evid.
901(b)(3). In this case, the signature on the driver's
licenses bearing Lawanson's picture served as an authentic signature, and by
comparison, a reasonable trier of fact could determine that Lawanson's signature on the other documents was
genuine.
FN4. Agent Judy Sly testified that both pictures depicted Lawanson.
The determination that
Lawanson signed the various financial documents is crucial to the jury's
finding of guilt because it is her signature on many of the business records
that connects her to the fraudulent scheme. First, she filed assumed name
certificates as the owner of Cheques Cashed, Designer's Outlet, and ADE Postal
Services, three of the phony businesses used to further the scheme. Second,
Lawanson applied for merchant credit card accounts with First Interstate Bank
of South Dakota for the businesses called Checks Cashed and Designer's Outlet.
Again, Checks Cashed and Designer's Outlet were fake businesses, and First
Interstate is one of the merchant credit card issuers whose wire transfers to
the fake businesses formed the basis of four counts of wire fraud. Third,
Lawanson opened bank accounts at First National Bank for ADE Cheques Cashed and
at Texas Capitol Bank for Designer's Outlet, two of the banks about which the
money laundering counts revolved. An employee of Texas Capital Bank met
Lawanson the day after she attempted to wire $7,000 to Nigeria and identified
her in court as the signatory on the Designer's Outlet account. Lawanson's
signature also appears as maker on many Designer's Outlet checks made payable
to Segun Debowale, Nuratu Lawanson, and Chidi Amaefule (all co- conspirators in this scheme).
Further, Lawanson's signature appears on the back of some of these checks,
indicating that she tendered or cashed these checks. A reasonable jury could
find that these signatures on all of these documents match those on the Texas
driver's licenses.
Lawanson questions the authenticity of the signatures because a Western Union
agent identified Segun Debowale as Lawanson. Lawanson argues that this evidence
suggests that Debowale signed Lawanson's name on Western Union's agreement with
ADE Cheques Cashed (dba National Cash Express), and, by implication, on other
documents. But this evidence cuts both ways. The signature on the two Western
Union documents does not appear to match the signatures on Lawanson's driver's
licenses and the other documents discussed above. A reasonable jury could
therefore conclude, based upon *389 the eyewitness identification of Debowale as Lawanson, that these
signatures belonged to Debowale. The jurors could also infer that while the
signature on the two Western Union documents belonged to Debowale, the other
signatures belonged to Lawanson. [FN5] Furthermore, there were
signatures on other Western Union/National Cash Express documents that did not
match Debowale's signature but did match the signatures from Lawanson's
driver's licenses. [FN6]
FN5. In addition, Lawanson's signature on a Bank One/National Cash Express document does not appear to
match those on her driver's licenses. National Cash Express, however, is the
business for which Debowale was identified as signing Lawanson's name, giving
rise to the inference that he signed these documents and that thus Lawanson
signed the others.
FN6. The two signatures are quite distinctive. The signatures that
belong to Lawanson contain a curved "L" at the beginning of the
name Lawanson, while the signatures that belong to Debowale contain a sharp
"L" at the beginning of the name Lawanson. Further, the
"L" in Debowale's signature of Lawanson's name also matches the
"L" that is found in Debowale's signature of his own name.
The Government also introduced
other evidence establishing Lawanson's guilt. The fact that Lawanson had two
Texas driver's licenses, bearing different names and containing different
personal information, and operated the phony businesses using different names,
is circumstantial evidence of her unlawful intent. Furthermore, an agent who
conducted a surveillance of one of the fake businesses observed Lawanson there
on three occasions. Each of the businesses that Lawanson was directly tied to
was involved in processing the stolen credit cards.
[14][15][16] Despite the foregoing evidence,
Lawanson argues that the Government failed to prove that she had the necessary intent to be
convicted of conspiracy and the other substantive charges. We disagree.
Lawanson asserts that her conspiracy conviction must be reversed because the
above evidence establishes that she was "merely present" during
the commission of the illegal scheme and that the only evidence tying her to
the conspiracy was based on her marital relationship with Debowale. It is true
that a showing of mere presence and association with those participating in a
conspiracy is insufficient to prove knowledge of and participation in criminal
activity, United
States v. Jackson, 700 F.2d 181, 185 (5th Cir.), cert.
denied, 464
U.S. 842, 104 S.Ct. 139, 78 L.Ed.2d 132 (1983), and that
a conspiracy cannot be proven solely by a family relationship. United
States v. Williams- Hendricks, 805 F.2d 496, 503 (5th Cir.1986). The evidence, however, establishes that Lawanson was more than
merely present during the conspiracy and that her role in the illegal scheme
was not limited to her marital relationship with Debowale. "[W]hen
inferences drawn from the existence of a family relationship or 'mere knowing
presence' are combined with other circumstantial evidence, there may be
sufficient evidence to support a conspiracy conviction." Williams-Hendricks,
805 F.2d at 503.
[17][18] Lawanson's
assertion that the evidence was insufficient to prove that she had the requisite
intent to be convicted of the substantive crimes also lacks merit. Regarding
the wire fraud counts, Lawanson herself applied for merchant accounts with First Interstate for two of the
fake businesses and she filed assumed name certificates for three of the sham
businesses. The Government also introduced evidence of wire communications:
stolen or fraudulent credit cards were used to make purchases of nonexistent
merchandise, Comcheks, and Flash Cash checks at the businesses to which
Lawanson was connected. This evidence is sufficient to allow a reasonable jury
to conclude that Lawanson participated in a scheme to defraud and that she used
wire communication in furtherance of this scheme. See United
States v. Dula, 989 F.2d 772, 778 (5th Cir.), cert.
denied, 510
U.S. 859, 114 S.Ct. 172, 126 L.Ed.2d 131 (1993).
Further, a reasonable trier of fact could find that Lawanson acted with the
specific intent to defraud because unlawful intent to defraud may be proven by
circumstantial evidence. See United
States v. Aggarwal, 17 F.3d 737, 740 (5th Cir.1994). The
paper trail connecting Lawanson to the phony businesses is sufficient to prove
her membership in the scheme to defraud, and once membership is established, a
knowing participant is liable for any wire communication *390 that takes place in connection
with the scheme. Dula,
989 F.2d at 778.
[19][20][21] The Government proved beyond a
reasonable doubt that Lawanson aided and abetted money laundering.
Specifically, the Government alleged that by depositing the illegally-obtained
Comcheks into the bank accounts of the fraudulent businesses and withdrawing funds
from these accounts,
Lawanson intended to promote an illegal activity and designed to conceal the
nature of these proceeds. See Garza,
42 F.3d at 253. The Government may show either that
Lawanson knowingly designed to conceal the proceeds of an illegal activity or
that she intended to promote the carrying on of unlawful activity. Id.; 18
U.S.C. § 1956(a)(1)(A)(i), (a)(1)(B)(i). To establish that
Lawanson designed to conceal the proceeds of an illegal activity, the
Government must prove more than just innocent money spending, although it is
sufficient to show that the transaction is part of a larger scheme designed to
conceal illegal proceeds. United
States v. Willey, 57 F.3d 1374, 1385-86 (5th Cir.),
cert. denied, 516
U.S. 1029, 116 S.Ct. 675, 133 L.Ed.2d 524 (1995). Intent
to promote the illegal activity can be established by showing the defendant
used the illegal proceeds to promote the unlawful scheme by presenting herself
as a legitimate business owner. See United
States v. Alford, 999 F.2d 818, 824 (5th Cir.1993).
Lawanson opened up two separate bank accounts for three of the phony
businesses; attempted to wire $7,000 to Nigeria; signed many checks payable to
herself and co- conspirators; and owned businesses into whose bank accounts the
Comcheks were deposited. This evidence is sufficient to prove both that the
bank transactions were part of a larger scheme designed to conceal the illegal
activity and that Lawanson promoted the unlawful endeavor by presenting herself
as a legitimate business owner. The multiple transactions were part of an overall scheme designed to conceal
the illegal proceeds in that the proceeds generated by one phony business run
by one co-conspirator were often deposited in the bank account of another sham
business owned by a different co- conspirator. In addition, by depositing the
Comcheks into the bank accounts, Lawanson gave the appearance that she was
operating a legitimate business by accepting Comcheks in exchange for
merchandise, when in reality there was no purchase of goods and only a deposit
of illegal funds. In fact, the entire scheme was premised on the fraud that
Lawanson and her co-conspirators were operating legitimate businesses, because
this influenced the banks and merchant credit card companies to do business
with the conspirators.
[22] Finally, the evidence is sufficient to convict Lawanson of aiding
and abetting the use of unauthorized access devices. Stolen credit cards are
one type of unauthorized access device, 18
U.S.C. § 1029(e)(1), (e)(3); United
States v. Jacobowitz, 877 F.2d 162, 165 (2d Cir.), cert.
denied, 493
U.S. 866, 110 S.Ct. 186, 107 L.Ed.2d 141 (1989), and the
Government produced ample evidence that stolen credit cards were used at the
sham businesses. Proof that Lawanson herself used the specific credit cards
described in the indictment is not necessary because the Government proceeded
under the theory that Lawanson aided and abetted in the use of stolen credit
cards. The Government was simply required to prove that Lawanson became
associated with, participated in, and in some way acted to further the use of the stolen credit cards. See United
States v. Chavez, 947 F.2d 742, 746 (5th Cir.1991).
Although the Government must prove that Lawanson acted with the intent to
defraud, such intent may be proven by circumstantial evidence. Goodchild,
25 F.3d at 60. The extensive paper trail tying Lawanson
to the phony businesses satisfies all of the necessary elements. See Chavez,
947 F.2d at 746 (noting that the same evidence will
typically support both a conspiracy and an aiding and abetting conviction).
II. ADMISSION OF BANK RECORDS
The Government offered and the court admitted records from 44 banks regarding
270 credit card customers containing, among other things, customers' statements
that their credit cards were stolen. The records were introduced through fraud
investigators from Chase Manhattan Bank, Discover, AT & T Universal,
Citibank, and MBNA American *391 National Association (five of the issuing banks).
[23][24] All three
Appellants argue that the district court erred by admitting these documents,
because they contained hearsay, and in some instances, double hearsay, and
therefore violated their Sixth Amendment right to confront witnesses. We review
a district court's evidentiary rulings for abuse of discretion. United
States v. Moody, 903 F.2d 321, 326 (5th Cir.1990).
Confrontation Clause errors are subject to harmless-error analysis. Delaware
v. Van Arsdall, 475 U.S. 673, 680-82, 106 S.Ct. 1431, 1435-37,
89 L.Ed.2d 674 (1986); United
States v. Stewart, 93 F.3d 189, 194 (5th Cir.1996). We
see no abuse of discretion.
There were essentially two types of records in which the hearsay statements
appeared. [FN7] First, the Government introduced letters and affidavits from the
cardholders stating that their cards had been lost, stolen, or not received,
and that their account bills contained unauthorized charges. Typically, these
affidavits were standard forms sent by the credit card issuers to the
cardholders, who in turn filled out the affidavits and returned them to the
issuing banks. In some cases, the cardholders themselves wrote letters to the
issuing banks stating that their bills contained unauthorized charges. Along
with the affidavit or letter, some cardholders also returned a copy of their
bill on which they marked the fraudulent charges.
FN7. The parties agree that the statements at issue are hearsay; they
disagree as to whether they are admissible under exceptions to the hearsay rule.
Second, the Government
introduced computerized printouts generated by the issuing banks. These
printouts were essentially reports of phone calls made by cardholders to bank
personnel in which the cardholders informed the bank that their credit cards
were lost, stolen, or had never been received. The cardholders relayed this information orally to the bank personnel,
who in turn entered the statements directly into the bank's computer.
The Appellants objected to the admissibility of these records as hearsay. The
cardholders' affidavits and letters are hearsay because they contain the
out-of-court statements of the credit cardholders. The computer records
containing the oral statements are double hearsay. The first level of hearsay
is the oral statements made by the cardholders to the bank personnel. The
second level of hearsay consists of the bank records themselves that were
created when the bank employees recorded the oral statements of the cardholders.
The district court admitted the records under the business records exception, Fed.R.Evid.
803(6), and, to the extent that such records contained
double hearsay, the "catch-all" or "residual"
exceptions, Fed.R.Evid.
803(24) and Fed.R.Evid.
804(b)(5). The district court admitted the documents
only after hearing testimony concerning them from five cardholders and five
bank custodians.
Read literally, the Confrontation Clause could bar the use of all out- of-court
statements in a criminal case when the declarant is unavailable, but the
Supreme Court has rejected such an extreme interpretation of the Clause. Idaho
v. Wright, 497 U.S. 805, 814, 110 S.Ct. 3139, 3145-46, 111 L.Ed.2d 638 (1990); Sherman
v. Scott, 62 F.3d 136, 140 (5th Cir.1995), cert. denied,
516
U.S. 1093, 116 S.Ct. 816, 133 L.Ed.2d 760, 516
U.S. 1180, 116 S.Ct.
1279, 134 L.Ed.2d 225 (1996). In Ohio
v. Roberts, the Court noted that "when a hearsay
declarant is not present for cross-examination at trial, the Confrontation
Clause normally requires a showing that he is unavailable. Even then, his
statement is admissible only if it bears adequate 'indicia of reliability.'
" Ohio
v. Roberts, 448 U.S. 56, 66, 100 S.Ct. 2531, 2539, 65 L.Ed.2d 597 (1980). The Court later "clarified the scope of Roberts," noting that the case "stands for the proposition that
unavailability analysis is a necessary part of the Confrontation Clause inquiry
only when the challenged out-of-court statements were made in the course of a
judicial proceeding." White
v. Illinois, 502 U.S. 346, 354, 112 S.Ct. 736, 741, 116 L.Ed.2d 848 (1992); accord Sherman,
62 F.3d at 140.
Hence the relevant inquiry in this case is whether the evidence bears adequate
indicia of reliability. Evidence is considered reliable *392 if it falls within a firmly
rooted hearsay exception or is otherwise supported by a showing of
particularized guarantees of trustworthiness. Roberts,
448 U.S. at 66, 100 S.Ct. at 2539; United
States v. Flores, 985 F.2d 770, 775 (5th Cir.1993). The
business records exception is a firmly rooted hearsay exception. United
States v. Norton, 867 F.2d 1354, 1363 (11th Cir.), cert.
denied, 491
U.S. 907, 109 S.Ct. 3192, 105 L.Ed.2d 701, 493
U.S. 871, 110 S.Ct. 200, 107 L.Ed.2d 154 (1989).
Residual or catch-all exceptions generally are not. Wright,
497 U.S. at 817, 110 S.Ct. at 3147-48. Therefore, if the
records are admissible
under the business records exception, no violation of the Confrontation Clause
occurred. If, however, the records are admissible under the residual
exceptions, they must be supported by particularized guarantees of
trustworthiness to avoid offending the Confrontation Clause.
A. The Business Record Exception
The Appellants challenge the admissibility of the records under the business
records exception on the ground that the cardholders were not acting in the
regular course of business when they made the oral statements to the bank
employees and supplied the affidavits or letters to the issuing banks. We agree
with the Appellants that neither the cardholders' oral statements nor their
written affidavits and letters fall within the business records exception, Fed.R.Evid.
803(6). The business records exception does, however, encompass
one level of hearsay: the bank records themselves and the computer recordation
by bank personnel of the oral statements of the cardholders.
[25][26] The
cardholders statements do not qualify as business records of the cardholders
because the business records exception "applies only if the person who
makes the statement 'is himself acting in the regular course of business.'
" Rock
v. Huffco Gas & Oil Co., Inc., 922 F.2d 272, 279 (5th Cir.1991) (quoting Florida
Canal Industries, Inc. v. Rambo, 537 F.2d 200, 202 (5th Cir.1976)). As the Appellants correctly point out, it is not the regular course of business for
credit cardholders to fill out affidavits or otherwise give information to
their banks regarding stolen credit cards. See United
States v. Davis, 571 F.2d 1354, 1359 (5th Cir.1978).
[27] Second, the statements are not admissible as business records of
the issuing banks because of the double hearsay involved.
Double hearsay exists when a
business record is prepared by one employee from information supplied by
another employee. If both the source and the recorder of the information, as
well as every other participant in the chain producing the record, are acting
in the regular course of business, the multiple hearsay is excused by Rule
803(6). However, if the source of the information is an
outsider, Rule
803(6) does not, by itself, permit the admission of the
business record. The outsider's statement must fall within another hearsay
exception to be admissible because it does not have the presumption of accuracy
that statements made during the regular course of business have.
United
States v. Baker, 693 F.2d 183, 188 (D.C.Cir.1982)
(citing United
States v. Davis, 571 F.2d 1354 (5th Cir.1978)). In the
present case, the cardholders--outsiders to the companies that generated the
documents--were the sources of the information contained in the records. So
although Fed.R.Evid.
803(6) provides an exception for one level of
hearsay--that of the documents themselves created by the employee who recorded
the cardholder statements--the sources of the information contained in the
records were the cardholders,
and their statements must fall within another hearsay exception to be
admissible. [FN8] See Baker,
693 F.2d at 188.
FN8. The record shows that the documents themselves satisfy the
requirements of Fed.R.Evid.
803(6). For example, Maureen Lentz, a fraud investigator
with AT & T Universal Card, testified that an AT & T employee would
take a report over the telephone from a cardholder and enter that information
into the computer, that the computer records are records that "AT &
T Universal would keep in the normal course of business," that they are
"records that AT & T Universal would rely on in the regular course
of business," and that the "records contain information that were made
at or near the time of the events depicted therein by a person with knowledge."
*393 The Government cites many cases that affirm the admission, under
the business records exception, of a company's business records containing
statements provided by outsiders. These cases, however, all involve situations
in which the double hearsay problem was satisfied either by the use of multiple
hearsay exceptions or because the outsider who provided the statements was also
acting in the regular course of business. See, e.g., United
States v. Goodchild, 25 F.3d 55, 60 (1st Cir.1994).
[28] Although the statements of the cardholders do not qualify as
business records, both the written affidavits and the oral statements made to
the bank personnel are admissible under the residual exceptions to the hearsay
rule, Fed.R.Evid.
803(24) and 803(b)(5). The residual exceptions authorize the admission of hearsay
statements having "circumstantial guarantees of trustworthiness"
equivalent to those of the other enumerated hearsay exceptions, as long as the
trial court determines that the statements are sufficiently material, probative,
and in the interests of justice. Fed.R.Evid.
803(24), 804(b)(5).
To satisfy the dictates of the Confrontation Clause, the evidence must be
sufficiently reliable, that is, it must be supported by a showing of
particularized guarantees of trustworthiness. Roberts,
448 U.S. at 66, 100 S.Ct. at 2539. These particularized
guarantees of trustworthiness must be drawn from the totality of the circumstances
surrounding the making of the statement, but they cannot stem from other
corroborating evidence. Wright,
497 U.S. at 820-22, 110 S.Ct. at 3149-50; Scott,
62 F.3d at 140 & n. 2. Although the Supreme Court's
language in its decisions interpreting the Confrontation Clause regarding
trustworthiness and reliability appears similar to the requirements set forth
in the residual hearsay exceptions, we note that the two inquiries are not
identical and that evidence admissible under the residual exceptions may still violate the Confrontation Clause. Wright,
497 U.S. at 814, 110 S.Ct. at 3145-46; United
States v. Shaw, 69 F.3d 1249, 1253 (4th Cir.1995).
The written affidavits of the cardholders and the oral statements made by the
cardholders to the banks exhibit a high degree of reliability such that
admission does not offend the Confrontation Clause. The Appellants impugn the
reliability of the cardholders' statements on the grounds that the statements
are self-serving because the cardholders, by informing the banks that they had
not made specific charges, were able to avoid paying for those charges. The
record, however, suggests otherwise. A fraud investigator at Citibank with 22
years of experience testified that he had participated in over 1000 fraud
investigations and that he could remember only three or four instances in which
the cardholder was lying about not making the charges. In addition, the record
shows that issuing banks have an incentive to ensure the veracity of the
cardholders' claims of fraud because loss due to fraud is borne by the issuing
banks. We thus believe that the affidavits of the cardholders and the oral
statements made to the bank personnel exhibit a degree of reliability similar
to that of the statements judged admissible in United
States v. Simmons, 773 F.2d 1455, 1460 (4th Cir.1985) (holding that the admission, under Rule
803(24), of an ATF gun certification form that had been
filled out and signed by a weapon manufacturer did not violate the
Confrontation Clause because the form was highly reliable).
In addition, the trustworthiness of the statements at issue is so clear from
the surrounding circumstances that cross-examination of the 265 non-testifying
cardholders would be of marginal utility. See Wright,
497 U.S. at 820, 110 S.Ct. at 3149, Shaw,
69 F.3d at 1253. In this case, the trial court delayed
ruling on the admissibility of the hearsay statements until after the
Government had presented the testimony of five of the cardholders whose
statements are at issue. The Appellants' cross-examination of these witnesses
was minimal, and they did not make an issue of whether these witnesses were being
untruthful. Finally, none of the Defendants in closing argument attacked the *394 credibility of the cardholders;
the crux of the defense was not whether the cards had been stolen. We thus
conclude that there was sufficient indicia of reliability supporting the
out-of-court statements by the credit cardholders such that admission of these
statements under the residual exceptions to the hearsay rule does not violate
the Appellants' Sixth Amendment right to confront witnesses.
III. CONDITION OF SUPERVISED RELEASE
[29] Debowale asserts that his Fourth and Fifth Amendment rights were
violated by a condition of his supervised release that requires him "to
provide the probation officer access to any requested financial
information." We disagree.
Title
18 U.S.C. § 3583(d) allows the district court to order
any condition of supervised release that "it considers to be
appropriate," so long as that condition:
(1) is reasonably related to
the factors set forth in section 3553(a)(1), (a)(2)(B), (a)(2)(C), and
(a)(2)(D);
(2) involves no greater
deprivation of liberty than is reasonably necessary for the purposes set forth
in section 3553(a)(2)(B), (a)(2)(C), and (a)(2)(D); and
(3) is consistent with any
pertinent policy statements issued by the Sentencing Commission pursuant to 28
U.S.C. 994(a).
The Sentencing Commission policy statements specifically contemplate a
condition of supervised release such as the one imposed in this case. Section
5B1.4(b)(18) provides:
If the court imposes an order
of restitution, forfeiture, or notice to victims, or orders the defendant to
pay a fine, it is recommended that the court impose a condition requiring the
defendant to provide the probation officer access to any requested financial
information.
U.S.S.G.
§ 5B1.4(b)(18) (emphasis added). The district court
ordered Debowale to pay restitution of $380,689.23. The court's requirement
that he provide access to any requested financial information is thus not only "consistent with," but
is identical to, the policy statement promulgated by the Sentencing Commission.
IV. THE SENTENCING CHALLENGES
[30] We review the district court's application and legal
interpretation of the sentencing guidelines de novo, United
States v. Domino, 62 F.3d 716, 719 (5th Cir.1995), and
its findings of fact for clear error. United
States v. Hooker, 997 F.2d 67, 75 (5th Cir.1993).
A. Leadership Role
[31][32] Debowale and
Ismoila contend that the district court erred by increasing their base offense
levels by four levels for being leaders or organizers pursuant to U.S.S.G.
§ 3B1.1(a). Debowale maintains that the evidence is
insufficient to show that he was a leader or organizer, and Ismoila asserts
that the evidence does not show that the scheme involved five or more
participants. We review for clear error. United
States v. Gonzalez, 76 F.3d 1339, 1345 (5th Cir.1996); United
States v. Valencia, 44 F.3d 269, 272 (5th Cir.1995). A
finding is not clearly erroneous if it is plausible in light of the entire
record. Valencia,
44 F.3d at 272. The district court's finding that
Debowale and Ismoila were leaders or organizers under §
3B1.1 was not clearly erroneous, and thus we affirm.
[33] To apply §
3B1.1(a), a court must find that the defendant was the
leader or organizer of a criminal activity, and that the criminal activity involved five or more participants.
A defendant's role in a criminal activity for the purposes of §
3B1.1 can be deduced inferentially from the available
facts. Gonzalez,
76 F.3d at 1345.
The Presentence Investigation Report ("PSR") establishes that
Debowale was a leader or organizer of the criminal activity. See Gonzalez,
76 F.3d at 1346 ("Because the PSR has sufficient
indicia of reliability to support its probable accuracy, it may be considered
as evidence by the trial court at sentencing."). The PSR indicated that
Debowale was the leader and organizer of over five individuals who used the
phony businesses to process false charges to stolen *395 credit cards. The evidence
showed that Debowale leased the premises located at 9914 South Gessner and 5905
South Gessner in Houston, the places of business of seven of the fraudulent
businesses. Debowale himself owned many of the businesses, and split the
proceeds received from the stolen cards on a 50/50 basis with the possessor of
the stolen cards. The PSR also indicates that Debowale had Nuratu Lawanson and
Evelyn Olubiyi working directly under him, as he instructed them to deposit
money into different bank accounts to conceal the scheme. Further, evidence
showed that Debowale often used Lawanson's name when dealing with a company
that he defrauded. As part of the criminal activity, Debowale also worked with
Emmanuel Obajuluwa, a co-possessor of Nationwide Check Cashing, and Busari
Danian, who operated Vantage Computers, two of the front businesses involved in
the conspiracy. Debowale used the services of Chidi Amaefule, who, as an employee of Cherry Payment
Systems, represented to First Interstate Bank that Debowale's fraudulent
businesses were legitimate.
[34] Ismoila's claim that the scheme did not involve at least five
individuals is similarly without merit. He relies on United
States v. Barbontin, which held that a minimum of five
participants must be involved in the precise transaction underlying the
conviction. 907
F.2d 1494, 1497-98 (5th Cir.1990) (referring to such
individuals as "transactional participants"). Specifically,
Ismoila contends that individuals identified by Taiwo Oyewuwo, a co-conspirator
who testified for the Government, did not rise to the level of transactional
participants. Oyewuwo testified that he observed three Nigerians known only as
"Charlie," "Wale," and "Stone," present
fraudulent credit cards to Ismoila. Ismoila contends that because these three
people were not linked to any precise credit card transaction, they are not
transactional participants under Barbontin.
Since Barbontin, however, decisions by this Court based upon revisions to the
Sentencing Guidelines have more broadly defined what constitutes a transaction.
The introductory commentary to Chapter Three, Part B of the Sentencing
Guidelines, effective November 1, 1990, provides:
The determination of a
defendant's role in the offense is to be made on the basis of all conduct
within the scope of § 1B1.3 (Relevant Conduct), i.e., all conduct included under §
1B1.3(a)(1)-(4), and not solely on the basis of elements and acts cited in the
count of conviction.
U.S.S.G.
§ 3B1.1 introductory comment (emphasis added). This
Court has held that a transaction is thus defined not by the contours of the
offense charged, but by the parameters of the underlying scheme itself. United
States v. Mir, 919 F.2d 940, 945 (5th Cir.1990).
Based on this definition of transaction, "Charlie," "Wale,"
and "Stone" qualify as transactional participants under §
3B1.1. While the three individuals may not have been
tied to any of the counts on which Ismoila was convicted, they were
participants in the underlying scheme itself. See Mir,
919 F.2d at 945. And although there is no direct
evidence that "Charlie," "Wale," and
"Stone" took orders from Ismoila, this can be inferred from the
available evidence. See Gonzalez,
76 F.3d at 1345.
Oyewuwo also identified other individuals who participated in the conspiracy
under Ismoila's leadership. Oyewuwo testified that Ismoila instructed him to set
up a business known as Atom Auto & Repair, for the purpose of accepting
fraudulent credit cards. He also stated that Ismoila arranged for Grace
Eyikogbe, a fugitive at time of trial, to open bank accounts for Main Check
Cashing, one of the businesses that processed fraudulent credit cards. Such
testimony establishes that Ismoila was in fact a leader or organizer of a
criminal activity that involved five or more participants. [FN9]
FN9. Ismoila also claims that reliance on Oyewuwo's testimony is an
abuse of discretion because such testimony is false, uncorroborated, and
unreliable for the purposes of §
3B1.1. This assertion is without basis in fact, and it
was not clear error for the district judge to rely on Oyewuwo's testimony. See Gonzalez,
76 F.3d at 1345.
*396 B. Intended Loss Versus Actual Loss
[35] Ismoila argues that in assessing his offense level under U.S.S.G.
§ 2F1.1, the district court erred by holding him
accountable for intended loss instead of actual loss. We affirm.
In the PSR, the probation officer recommended a seven-level increase for
Ismoila's specific offense characteristics under U.S.S.G.
§ 2F1.1(b)(1)(H), based on a loss of $146,245. The
Government objected to this calculation, asserting that the probation officer
failed to include the intended loss in its loss calculation. The intended loss
consisted of credit card charges of $85,203 and $6,200 that were attempted at
Atom Auto and Main Check Cashing--charges that the credit card companies
declined to process. With the inclusion of the attempted charges, the total
loss amount is $237,648, resulting in an eight-level increase, under §
2F1.1(b)(1)(I). [FN10] At the sentencing hearing,
Ismoila objected to the Government's objection to the PSR.
FN10. In arriving at its figures, the Government did not include all of
the attempted charges on each specific card, only the highest one. Often,
participants in this scheme would process a credit card through the
point-of-sale terminal, only to have that fraudulent sale be rejected. The
participant would then use that same card, but with a lesser dollar amount. The
Government asserts that in its calculations, it used only the highest attempt
per credit card, and not every failed attempt.
[36][37] Loss
determinations are reviewed for clear error; as long as the determination is
plausible in light of the record as a whole, clear error does not exist. United
States v. Sowels, 998 F.2d 249, 251 (5th Cir.1993),
cert. denied, 510
U.S. 1121, 114 S.Ct. 1076, 127 L.Ed.2d 393 (1994). In
addition, the loss " 'need not be determined with precision. The court
need only make a reasonable estimate of the loss, given the available
information.' " United
States v. Chappell, 6 F.3d 1095, 1101 (5th Cir.1993)
(quoting U.S.S.G.
§ 2F1.1 cmt. 8), cert. denied, 510
U.S. 1183, 114 S.Ct. 1232, 127 L.Ed.2d 576, 510
U.S. 1184, 114 S.Ct. 1235, 127 L.Ed.2d 579 (1994).
Further, comment 7 to §
2F1.1 states that "if an intended loss that the
defendant was attempting to inflict can be determined, this figure will be used if it is greater than
the actual loss." U.S.S.G.
§ 2F1.1 cmt. 7; see also Chappell,
6 F.3d at 1101. The Government was able to determine the
intended loss, which was greater than the actual loss, and therefore the
district court's sentencing determination based on the attempted loss was
correct.
Ismoila relies on Sowels for the proposition that intended loss calculation for stolen
credit cards is determined by the maximum available credit limit on each card
because that is the amount of loss for which the cardholder is at risk. Sowels,
998 F.2d at 251-52. Ismoila contends that the charges
were declined because they were in excess of the credit card limit, and thus
the cardholder was not exposed to such a large loss. See also United
States v. Wimbish, 980 F.2d 312, 315 (5th Cir.1992)
(calculating the loss value of stolen and forged checks as the entire face
value of those checks, and not the actual amount obtained, because the defendant
put his victims at risk for the whole amount of the check), cert. denied, 508
U.S. 919, 113 S.Ct. 2365, 124 L.Ed.2d 272 (1993).
Sowels, however, actually holds that available credit limit can be used
as a measure of loss when the credit cards were stolen but not used. See Sowels,
998 F.2d at 252 ("[T]his case is unique because it
involves an uncompleted offense."). By basing its loss calculation on the
available credit limit, the Sowels Court satisfied the dictates of comment 7 to § 2F1.1, which states that intended loss will be used if it can be
determined. Available credit is simply one way of determining intended loss. In
this case, however, Ismoila actually attempted to make charges with the credit cards, and using the dollar
amounts of the attempted charges is more accurate than using maximum available
credit in determining the loss that Ismoila intended to inflict. Cf. Chappell,
6 F.3d at 1101 (determining the intended loss of
fifty-one blank checks to be the average of the value of the checks actually
recovered). The fact that
the victims were not at risk for the charges above their credit limit is not
dispositive. The intent of Ismoila is critical, however, as the plain language
of comment 7 makes clear. He intended his victims to *397 suffer losses equal to a total
of $237,648. He should not be rewarded because some of the charges were over
the available credit limit. See United
States v. Robinson, 94 F.3d 1325, 1328 (9th Cir.1996) (stating that "§
2F1.1 does not require the loss the defendant intended
to inflict be realistically possible"); cf. United
States v. Brown, 7 F.3d 1155, 1159 (5th Cir.1993)
(finding that intended loss included two $2,000 checks that the defendant did
not cash due to police vigilance because defendant "should not be
rewarded simply because law enforcement officials thwarted his plans").
The district court's inclusion of intended loss was not error.
C. Obstruction of Justice and Upward Departure
The district court
increased Ismoila's total offense level by four levels--two for obstruction of
justice under §
3C1.1 and two by upward departure under §
5K2.0--because Ismoila and his wife hid a co-defendant,
Grace Eyikogbe, during trial and because Ismoila advised Eyikogbe to flee.
Ismoila asserts that the evidence is insufficient to support the two-level
obstruction of justice enhancement, and departing upward by two additional
levels was error, because his conduct was not substantially in excess of that
which is ordinarily involved in the offense and because the Guidelines already
take such conduct into account. We disagree.
1. Obstruction of Justice
[38][39] We review for
clear error. United
States v. Storm, 36 F.3d 1289, 1295 (5th Cir.1994),
cert. denied, 514
U.S. 1084, 115 S.Ct. 1798, 131 L.Ed.2d 725 (1995).
The Government presented evidence that Ismoila and his wife, Tayo Ismail, hid
Grace Eyikogbe at their home while Ismoila was in jail during the trial. After
the trial, FBI agents found Eyikogbe and Ismail hiding in the attic of
Ismoila's house, and Ismail was subsequently charged with harboring a fugitive.
As part of Tayo Ismail's plea agreement, the Government questioned her under
oath and presented this testimony at Ismoila's sentencing hearing. Ismail
testified that when Ismoila called her at home from jail, she told him that
Eyikogbe was present at Ismoila's home. Ismail further stated that Ismoila told her to place Eyikogbe
into a motel because he could be criminally charged for having Eyikogbe at his
house. Ismail's testimony was bolstered by telephone records produced by the
Government confirming that Ismoila had indeed called home while he was in jail.
Ismoila contends that it is hardly unusual for a person who is jailed to call
home and that his wife's testimony does not establish that he obstructed
justice, only that he knew that Eyikogbe was present at his home.
The district court properly enhanced Ismoila's sentence. The PSR concluded, and
the evidence at the sentencing hearing shows, that Ismoila knew that his
co-defendant, a fugitive, was present in his home during the trial. This
evidence is certainly enough to support a two-level enhancement for obstruction
of justice.
2. Upward Departure
[40][41][42][43][44] In addition to
the two-level enhancement pursuant to §
3C1.1, the sentencing court departed upward an
additional two levels pursuant to U.S.S.G.
§§ 5K2.0 and 5K2.2. "We employ an abuse of discretion standard when
reviewing the process used by the trial court in sentencing." United
States v. Wylie, 919 F.2d 969, 980 (5th Cir.1990). We
review a district court's decision to depart from the guidelines for abuse of
discretion, and such a departure will be upheld if the district court provided
acceptable reasons for the departure and if the extent of the departure was reasonable. United
States v. Rosogie, 21 F.3d 632, 634 (5th Cir.1994). The
reasons given by the trial court are findings of fact, which we review for
clear error. Id.
A court may depart even if the factor is taken into consideration by the
guidelines, "only if the factor is present to a degree substantially in
excess of that which ordinarily is involved in the offense." U.S.S.G.
§ 5K2.0. This Court has developed a two-pronged test to
determine whether a departure is justified: (1) whether the circumstances were
considered by the guidelines, and (2) whether the circumstances are of a *398 sufficient magnitude and have a
basis in fact. Wylie,
919 F.2d at 980.
The Government argues that the obstruction of justice enhancements in the
guidelines do not take into account the seriousness of Ismoila's offense
because Ismoila actually obstructed justice in two ways: (1) harboring a
fugitive co-conspirator, and (2) urging her to flee the Houston area. The
Government also contends that hiding Eyikogbe was such a serious infraction as
to warrant departure because it allowed Ismoila to present a defense at trial
that blamed Eyikogbe, all the while he was concealing her in his house.
Ismoila, on the contrary, asserts that the §
3C1.1 of the guidelines adequately punish him for
obstruction of justice.
The facts discussed above are adequate to support a two-level upward
enhancement. See Rosogie,
21 F.3d at 634 (departing upward because the guidelines did not adequately
account for defendant's criminal history and use of aliases); United
States v. Barakett, 994 F.2d 1107, 1112-13 (5th Cir.1993) (departing upward on bank fraud convictions because of the
extended time period over which the fraud occurred, the large number of
victims, and the substantial amount of planning), cert. denied, 510
U.S. 1049, 114 S.Ct. 701, 126 L.Ed.2d 668 (1994).
Reliance on these facts was not clearly erroneous, and the district court did
not abuse its discretion.
[FN11]
FN11. Ismoila also asserts that the district court failed to give him
adequate opportunity to present information regarding the four-level increase
for obstruction of justice and upward departure, as required by U.S.S.G.
§ 6A1.3(a). Ismoila claims that he was not given notice
of the Government's intention to tender exhibits at the sentencing hearing.
Because Ismoila failed to make this objection at trial, we will affirm absent
plain error. United
States v. Calverley, 37 F.3d 160, 162 (5th Cir.1994) (en
banc), cert. denied, 513
U.S. 1196, 115 S.Ct. 1266, 131 L.Ed.2d 145 (1995).
Ismoila's position is without
merit. The PSR and the Government's evidence at sentencing supported the
four-level increase. Ismoila received the initial PSR, which recommended a
two-level obstruction of justice enhancement based upon Ismoila's concealment
of Eyikogbe, on May 7, 1993, almost six weeks before the date of sentencing. He had two
opportunities to present objections to the PSR, in writing prior to the
sentencing hearing and orally at the hearing itself. United
States v. Mueller, 902 F.2d 336, 346 (5th Cir.1990). On
May 20, 1993--approximately four weeks before the sentencing hearing--the
Government filed its objections to the PSR, in which it stated that it was
prepared to prove at sentencing that Ismoila both harbored Eyikogbe and encouraged
Eyikogbe and Oyewuwo to flee the Houston area and that it would seek a
two-level upward departure. Furthermore, the Government stated that it had
telephone records showing that Ismoila called home after his arrest. On May 24,
1993--over three weeks before sentencing--Ismoila's wife testified under oath
that she told Ismoila that Eyikogbe was present at their house. The record thus
shows that Ismoila had ample opportunity to present information to the court.
Ismoila's claim that the court failed to issue findings of fact before the
sentencing hearing as required by §
6A1.3(b) and Fed.R.Crim.P.
32 is similarly without merit. Rule
32 does require the court to resolved disputed issues of
fact, but the sentencing court made sufficient findings to support its
decision. Fed.R.Crim.P.
32(c)(3); Mueller,
902 F.2d at 346. Although the court did not issue these
factual findings before sentencing, the PSR forms the factual basis for the
sentencing decision. Mueller,
902 F.2d at 346.
D. Restitution
Ismoila also asserts that the district court erred by ordering him to pay
$111,008 in restitution arguing that it failed to resolve all factual disputes
regarding the amount of restitution pursuant to Fed.R.Crim.P.
32; failed to consider his indigence pursuant to §
3664(a); and incorrectly held him jointly and severally liable for the entire
amount of loss. None of these claims has merit.
First, the factual findings by the district court were sufficient because the
court adopted the findings of the PSR, which expressly evaluated Ismoila's
financial condition. United
States v. Thomas, 13 F.3d 151, 153 (5th Cir.1994). The
court ordered restitution in the amount of $111,008, the same figure
recommended by the PSR.
[45][46] Second, as a
participant in a conspiracy, Ismoila "is legally liable for all the
actions of her co-conspirators in furtherance of this crime." United
States v. Chaney, 964 F.2d 437, 453 (5th Cir.1992). The
district court was therefore well within its discretion to order restitution
for the losses resulting from the entire fraudulent scheme and not merely the
losses directly attributable to Ismoila's *399 actions. Id.; United
States v. All Star Industries, 962 F.2d 465, 478 (5th Cir.), cert. denied, 506
U.S. 940, 113 S.Ct. 377, 121 L.Ed.2d 288 (1992).
V. THE JURY CHARGE
[47] The district court charged the jury that they must find that
Ismoila "knowingly created a scheme to defraud." Ismoila asserts
that this instruction omitted an essential element of wire fraud by using the
word "knowingly" instead of "willfully." We disagree.
Ismoila relies on United
States v. Mekjian, 505 F.2d 1320, 1324 (5th Cir.1975), a case in which this Court reversed a conviction on the ground
that the word "willfully" was omitted from the indictment and that
the word "knowingly" was not an adequate substitute. Id. However, the statute at issue in Mekjian was 18
U.S.C. § 1001, which by its terms requires a mens rea of
both "knowingly" and "willfully." Id.
at 1322 n. 1. The wire fraud statute, 18
U.S.C. § 1343, does not specifically mention an intent
element, but this Court has held that the "requisite intent to defraud
under §
1343 exists if the defendant acts 'knowingly and with
the specific intent to deceive.' " United
States v. Keller, 14 F.3d 1051, 1056 (5th Cir.1994)
(quoting United
States v. St. Gelais, 952 F.2d 90, 96 (5th Cir.), cert.
denied, 506
U.S. 965, 113 S.Ct. 439, 121 L.Ed.2d 358 (1992)). In
this case, the district court instructed the jury that it must find that the
defendant acted "knowingly ... with a specific intent to commit
fraud," a charge that is nearly identical to that set forth in Keller. The jury instruction was therefore entirely proper.
VI. THE REMAINING ISSUES
Ismoila also raises the following issues: (1) that the district court erred by
admitting into evidence the testimony of Roxanne Sebring, the FBI financial
analyst who summarized the bank account evidence; (2) that the statements made
by the prosecutor in the Government's closing argument undermined his right to
a fair trial; (3) that the district court erred by failing to give a specific
unanimity instruction regarding theconspiracy count; (4) that the $2,800 seized
from him upon his arrest be returned to him; (5) that his alien registration
card be returned to him; and (6) that his restitution obligation be stayed.
We do not discuss these issues because they are wholly without merit.
AFFIRMED IN PART, REVERSED AND VACATED IN PART, and RENDERED.
END OF DOCUMENT