United States v. Tatum , 518 F.3d 769 ( 2008 )

FILED
United States Court of Appeals
Tenth Circuit
March 3, 2008
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff–Appellee,
v. No. 07-7053
JASON ALAN TATUM,
Defendant–Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF OKLAHOMA
(D.C. No. 07–CR–12–01–RAW)
Submitted on the briefs: *
Terry L. Weber, Tulsa, Oklahoma, for Defendant–Appellant.
Sheldon J. Sperling, United States Attorney, and Ryan M. Roberts, Assistant
United States Attorney, Muskogee, Oklahoma, for Plaintiff–Appellee.
Before BRISCOE, McKAY, and McCONNELL, Circuit Judges.
McKAY, Circuit Judge.
Defendant pled guilty to one count of uttering a counterfeit check with the
*
After examining the briefs and the appellate record, this panel has
determined unanimously to honor the parties’ request for a decision on the briefs
without oral argument. See Fed. R. App. P. 34(f). The case is therefore ordered
submitted without oral argument.
intent to deceive an organization in violation of 18 U.S.C. § 513(a). The pre-
sentencing report calculated Defendant’s total offense level at ten, based on a
base offense level of six under United States Sentencing Guideline Manual
(U.S.S.G.) § 2B1.1(a)(2), a six-level enhancement pursuant to U.S.S.G. §
2B1.1(b)(10), 1 and a two-level reduction pursuant to U.S.S.G. § 3E1.1(a). Based
on a criminal history category of VI, Defendant’s advisory sentencing range was
calculated at twenty-four to thirty months. In response to the PSR and at his
sentencing hearing, Defendant objected to the § 2B1.1(b)(10) enhancement. The
district court overruled his objection, holding that subsections A and B of §
2B1.1(b)(10) were both satisfied by Defendant’s creation of counterfeit checks
and a false driver’s license by means of a computer and scanner. 2 The court then
sentenced Defendant to a term of twenty-four months’ imprisonment, at the
bottom of the advisory Guidelines range. On appeal, Defendant challenges the
application of the six-level enhancement under § 2B1.1(b)(10).
In reviewing the district court’s sentencing decision, we “must first ensure
that the district court committed no significant procedural error, such as failing to
1
Section 2B1.1(b)(10) generally calls for a two-level increase in the
offense level, but it provides that the offense level should be increased to twelve
if it would otherwise be less than twelve. Thus, Defendant’s calculated offense
level was increased six levels to level twelve pursuant to this Guideline.
2
The enhancement under § 2B1.1(b)(10) applies if any of the three
subsections are satisfied. The court held that subsection B provided an alternative
ground for imposition of the § 2B1.1(b)(10) enhancement.
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calculate (or improperly calculating) the Guidelines range.” Gall v. United
States, 128 S. Ct. 586, 597 (2007). “Assuming that the district court’s sentencing
decision is procedurally sound, [we] should then consider the substantive
reasonableness of the sentence imposed under an abuse-of-discretion standard.”
Id. Defendant contends that the district court committed a significant procedural
error when it imposed a six-level enhancement pursuant to § 2B1.1(b)(10),
increasing the advisory Guidelines range for Defendant’s sentence from a range
of six to twelve months to a range of twenty-four to thirty months.
Subsection A of § 2B1.1(b)(10) applies to an offense involving “the
possession or use of any (i) device-making equipment, or (ii) authentication
feature.” 3 Device-making equipment is defined as “any equipment, mechanism,
or impression designed or primarily used for making an access device or a
counterfeit access device.” 18 U.S.C. § 1029(e)(6); see also U.S.S.G. § 2B1.1
cmt n.9(A) (“‘Device-making equipment’ (i) has the meaning given that term in
3
An authentication feature is “any hologram, watermark, certification,
symbol, code, image, sequence of numbers or letters, or other feature that either
individually or in combination with another feature is used by the issuing
authority on an identification document, document-making implement, or means
of identification to determine if the document is counterfeit, altered, or otherwise
falsified.” 18 U.S.C. § 1028(d)(1); see also U.S.S.G. § 2B1.1 cmt n.9(A)
(“‘Authentication feature’ has the meaning given that term in 18 U.S.C. §
1028(d)(1).”). The government does not argue that Defendant’s offense involved
the use, possession, production, or trafficking of any authentication feature.
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18 U.S.C. § 1029(e)(6) . . . .”). 4 Subsection B applies to an offense involving
“the production or trafficking of any (i) unauthorized access device or counterfeit
access device, or (ii) authentication feature.” U.S.S.G. § 2B1.1(10)(B). For
purposes of both the statutory definition of device-making equipment and the text
of § 2B1.1(b)(10)(B), an access device is defined as “any card, plate, code,
account number, electronic serial number, mobile identification number, personal
identification number, or other telecommunications service, equipment, or
instrument identifier, or other means of account access that can be used, alone or
in conjunction with another access device, to obtain money, goods, services, or
any other thing of value, or that can be used to initiate a transfer of funds (other
than a transfer originated solely by paper instrument).” 18 U.S.C. § 1029(e)(1).
At his sentencing hearing, Defendant argued that his conduct did not
involve the production or trafficking of any access device. The district court
overruled this objection, concluding that the account numbers printed on the
counterfeit checks were access devices for purposes of subsections A and B of §
2B1.1(b)(10). The court also indicated that the counterfeit checks themselves
might be considered access devices. We disagree on both counts.
Although the statute defining access devices is quite broad, it contains a
4
Device-making equipment also “(ii) includes (I) any hardware or software
that has been configured as described in 18 U.S.C. § 1029(a)(9); and (II) a
scanning receiver referred to in 18 U.S.C. § 1029(a)(8).” Neither of these
definitions is applicable to Defendant’s conduct in the instant case.
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key limitation. An access device is defined as one of a number of means of
account access that can be used “to obtain money, goods, services, or any other
thing of value, or that can be used to initiate a transfer of funds (other than a
transfer originated solely by paper instrument).” 18 U.S.C. § 1029(e)(1)
(emphasis added). “That parenthetical exclusion unambiguously places the
passing of bad checks and similar conduct outside the scope of the federal
statute.” United States v. Hughey, 147 F.3d 423, 434 (5th Cir. 1998). Indeed, the
legislative history of § 1029 reveals that “Congress was focused on the fraudulent
use of [access] devices in connection with credit transactions,” United States v.
McNutt, 908 F.2d 561, 563 (10th Cir. 1990) (internal quotation marks omitted),
and specifically intended to exclude conduct such as passing bad checks. See S.
Rep. No. 98-368, at 10 (1984), as reprinted in 1984 U.S.C.C.A.N. 3647, 3656
(“By specifically excluding transfers of funds originated solely by paper
instrument, [the statutory definition] covers offenses such as those included in the
Electronic Fund Transfer Act, but does not cover activities such as passing bad
checks.”); H.R. Rep. No. 98-894, at 19 (1984), as reprinted in 1984 U.S.C.C.A.N.
3689, 3705 (“The definition of this term is broad enough to encompass future
technological changes and the only limitation i.e., ‘(other than a transfer
originated solely by paper instrument)’ excludes activities such as passing forged
checks.”).
In Hughey, the Fifth Circuit considered whether a defendant’s creation and
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presentation of a number of counterfeit checks constituted the production, use, or
trafficking of unauthorized or counterfeit access devices. 147 F.3d at 434-36.
After considering the plain language and legislative history of the access device
definition, the court concluded that the defendant’s conduct did not involve
access devices because his conduct involved only transfers “originated solely by
paper instrument” and “[s]uch conduct is not within the ambit of the conduct that
Congress sought to prohibit in § 1029.” Id. at 435. As in this case, the
government in Hughey argued that the account numbers printed on the counterfeit
checks themselves constituted access devices because they could potentially be
used with other codes, such as wire transfer codes, to obtain access to the
accounts. The court rejected this argument, stating:
The government’s argument ignores the fact that there is absolutely
no suggestion in the record that Hughey either possessed or had access to
the additional codes that would have been required to complete a wire
transfer with the account numbers. More importantly, the government’s
interpretation also ignores the plain text of the parenthetical exclusion,
which is directly application to Hughey’s conduct. The statute excludes
“transfer[s] originated solely by paper instrument,” without regard to
whether the transfer involved some component of an access device or some
device which, but for the parenthetical exclusion, might otherwise have the
potential [sic] be an access device.
Id.
We agree with the Fifth Circuit’s reasoning. The statutory definition of
access devices unambiguously excludes “transfer[s] originated solely by paper
instrument,” which is precisely the conduct involved in Defendant’s offense. The
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government introduced no evidence that Defendant used, possessed, produced, or
trafficked in bank account numbers in any way except as part of his scheme to
pass counterfeit checks. We therefore conclude that both the counterfeit checks
and the account numbers printed on those checks fall outside the statutory
definition of an access device. Thus, we hold that Defendant’s conduct did not
involve the use or possession of device-making equipment—equipment designed
or primarily used for making access devices or counterfeit access devices 5—under
subsection A of § 2B1.1(b)(10), nor did it involve trafficking in or producing
5
At sentencing, Defendant also argued that the computer and scanner he
used to create the counterfeit checks did not constitute device-making equipment
because computers and scanners are not primarily used to commit crimes. The
district court rejected this argument, stating that Defendant was defining device-
making equipment too narrowly and concluding that § 2B1.1(b)(10)(A) was
satisfied by Defendant’s use of a computer and scanner to counterfeit checks.
Defendant also appeals this portion of the court’s ruling.
We note that the two circuits to address this issue have both adopted a
middle ground in construing the definition of device-making equipment. See
United States v. Cabrera, 208 F.3d 309 (1st Cir. 2000); United States v. Morris,
81 F.3d 131 (11th Cir. 1996). While rejecting the general-purposes argument that
Defendant proposed to the district court in this case, the First and Eleventh
Circuits have indicated that a district court must enquire whether the defendant
designed or primarily used the equipment at issue to make access devices. See
Cabrera, 208 F.3d at 312-15 (considering whether evidence supported conclusion
that defendant primarily used or designed his computer system for document
production); Morris, 81 F.3d at 133 (“Here, [the defendant’s tumbling cellular]
phone was not primarily used to generate [electronic serial number/mobile
identification number] combinations: it was used to make phone calls.”). Given
our conclusion that Defendant’s conduct fell outside the statutory definition
because it did not involve access devices at all, we need not resolve this issue
here.
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access devices under subsection B. We accordingly hold that the district court
erred in imposing a six-level enhancement pursuant to § 2B1.1(b)(10).
The district court’s imposition of the § 2B1.1(b)(10) enhancement
constituted a significant procedural error. We therefore REVERSE the
imposition of this enhancement and REMAND for resentencing in accordance
with this opinion.
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