United States v. Eneshia Carlyle ( 2019 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 18-11486
Non-Argument Calendar
________________________
D.C. Docket No. 8:14-cr-00123-CEH-MAP-2
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ENESHIA CARLYLE,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(May 30, 2019)
Before BRANCH, HULL and JULIE CARNES, Circuit Judges.
PER CURIAM:
After pleading guilty to wire fraud, in violation of 18 U.S.C. §§ 1343 and 2,
and aggravated identity theft, in violation of 18 U.S.C. §§ 1028A and 2, defendant
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Eneshia Carlyle appeals the district court’s amended forfeiture money judgment
imposed pursuant to 18 U.S.C. § 981(a)(1)(C). This Court vacated Carlyle’s
original forfeiture money judgment and remanded in light of the Supreme Court’s
recent decision in Honeycutt v. United States, 581 U.S. ___, 137 S. Ct. 1626
(2017). On remand, the district court entered an amended forfeiture money
judgment in the amount of $1,457,293.95.
On appeal, Carlyle contends that on remand, the district court misapplied the
Honeycutt standard and that the resulting amended forfeiture money judgment
violated the Eighth Amendment’s Excessive Fines Clause because it is grossly
disproportionate to her offense. After review, we affirm the district court’s entry
of the amended forfeiture money judgment.
I. BACKGROUND FACTS
A. Fraud Scheme and Guilty Plea
Defendant Carlyle and her husband and codefendant, James Lee Cobb,
engaged in a scheme to obtain fraudulent tax refunds from the Internal Revenue
Service (“IRS”) using stolen personal identifying information (“PII”), commonly
referred to as stolen identity refund fraud. Much of the PII Carlyle and Cobb used
was gleaned from patients’ medical records. The codefendants loaded the
fraudulently obtained tax refunds onto fraudulent debit cards, which they then used
to make purchases or to withdraw funds from ATMs. The scheme was uncovered
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when police pulled Cobb over in a routine traffic stop and found some of the debit
cards and cash transfer receipts in his car.
During a subsequent search of Cobb and Carlyle’s marital home, officers
found, inter alia, more evidence of the stolen identity refund fraud, including debit
cards and stolen PII, as well as the keys to two storage units leased to, and
accessed by, Carlyle. Officers searched the storage units and found trash bags full
of patient information from various healthcare facilities and information about
individuals’ deaths and social security numbers. One storage unit also held a red
Mercedes registered to Carlyle. Inside the car’s trunk, officers found a cheetah-
print purse belonging to Carlyle that contained debit cards with various names,
patient medical records, utility bills, and social security cards.
Cobb and Carlyle were charged in a ten-count superseding indictment.
Carlyle entered a negotiated guilty plea to one count of wire fraud and one count of
aggravated identity theft. At her plea hearing, Carlyle admitted, among other
things, that: (1) she conspired with her husband Cobb and others to commit the
stolen identity refund fraud scheme; (2) she and her husband “together” filed the
false tax returns with the IRS to get the refunds; (3) she and her husband used
laptop computers and a “hot spot” device to file the false tax returns electronically;
(4) she and her husband accessed the refunds by, among other methods, loading
them onto pre-paid debit cards; and (5) she and Cobb caused those debit cards to
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be mailed into the Middle District of Florida, “where they were ultimately received
by CARLYLE and Cobb.”
Carlyle also admitted that: (1) during the search of her marital residence, law
enforcement found the keys to her storage unit in her purse; (2) workers at the
storage unit office identified Carlyle from a photograph and told law enforcement
that she “directly accessed both storage units”; (3) law enforcement found evidence
of the stolen identity refund fraud scheme in her storage units, including PII and
pre-paid debit cards in trash bags and additional pre-paid debit cards in the trunk of
her Mercedes; and (4) many of the fraudulent debit cards “had direct connections
to Carlyle,” such as surveillance video of Carlyle using debit cards at ATMs to
make withdrawals, recorded phone calls in which Carlyle attempted to unblock
funds from debit cards, or documented calls from a phone number linked to
Carlyle accessing debit cards via telephone.
As part of her plea agreement, Carlyle agreed to: (1) a forfeiture money
judgment “in an amount to be determined at sentencing but not less than $610,000,
representing the amount of proceeds obtained as a result of the scheme”; and (2)
forfeiture of Carlyle’s Mercedes found in the storage unit, “which was derived
from” the proceeds. 1 The IRS later calculated a total loss of $1,820,759 and
1
Carlyle’s plea agreement also contained a limited sentence appeal waiver and a
forfeiture appeal waiver, but the government has not sought to enforce these waivers on appeal
and instead has fully briefed the merits of the forfeiture issues. Therefore, we do not address
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requested restitution in that amount. Unable to locate any other property derived
from the wire fraud scheme, the government sought a preliminary forfeiture order
for Carlyle’s Mercedes and for a money judgment against Carlyle in the amount of
$1,820,759, pursuant to Federal Rule of Criminal Procedure 32.2(b), 18 U.S.C.
§ 981(a)(1)(C), and 28 U.S.C. § 2461(c).
B. Sentencing and Original Forfeiture Money Judgment
At sentencing, the district court determined that the intended loss for
Carlyle’s offenses was $5,613,549 and the actual loss was $1,820,759. The district
court imposed a 114-month sentence for Carlyle’s wire fraud offense and a
consecutive 24-month sentence for Carlyle’s aggravated identity theft offense, for
a total 138-month sentence. The district court also ordered restitution of
$1,820,759 to the IRS, to be paid jointly and severally with Cobb. The
government asked the district court also to impose the forfeiture money judgment
of $1.8 million jointly and severally with Cobb. The government explained that
the $610,000 amount in Carlyle’s plea agreement was based on an earlier IRS
calculation, but that the IRS had since received more records and had recalculated
the loss amount.
whether the issues Carlyle raises on appeal are barred by either waiver. See United States v.
Valnor, 451 F.3d 744, 745 n.1 (11th Cir. 2006).
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After sentencing, the district court entered a written order granting the
government’s motion for a forfeiture money judgment in the amount of $1,820,759
and for a preliminary order of forfeiture for the Mercedes. The order held Carlyle
“jointly and severally liable” with her husband Cobb for the forfeiture money
judgment.
C. Carlyle’s First Appeal of Forfeiture Money Judgment
While Carlyle’s appeal of the forfeiture money judgment was pending, the
Supreme Court decided Honeycutt, which involved 21 U.S.C. § 853(a)(1), a
criminal forfeiture statute applicable in certain serious drug cases. 581 U.S. at ___,
137 S. Ct. at 1630, 1632. In Honeycutt, the Supreme Court rejected joint and
several liability among co-conspirators under 21 U.S.C. § 853, holding that when a
defendant is part of a conspiracy, § 853 limits forfeiture to tainted property “the
defendant himself actually acquired as the result of the crime.” Id. at ___, 137 S.
Ct. at 1635.
In Carlyle’s initial appeal, the government conceded Honeycutt necessitated
a remand. Accordingly, this Court vacated Carlyle’s original forfeiture money
judgment and remanded to the district court to determine in the first instance
whether Honeycutt applied to Carlyle’s case and to conduct any factfinding
necessary to determine the appropriate amount of monetary forfeiture to be
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imposed upon Carlyle. United States v. Carlyle, 712 F. App’x 862, 865 (11th Cir.
2017).
D. Post-Remand Evidentiary Hearing
On remand, the district court held an evidentiary hearing, at which the
parties agreed, and the district court concluded, that Honeycutt applied to Carlyle’s
forfeiture under 18 U.S.C. § 981(a)(1)(C). The district court then heard testimony
from Special Agent Glen Hayag from the IRS Criminal Investigation Division.
Special Agent Hayag detailed the search of Carlyle’s home and storage units
and explained how he computed the loss amount that was directly traceable to
Carlyle’s storage units. In particular, Special Agent Hayag explained that during
the original investigation, he worked with the IRS Scheme Development Center to
identify which of the 7,000 pieces of PII found in the marital home and Carlyle’s
storage units were used to obtain fraudulent tax refunds. Special Agent Hayag
then determined which of those refunds were sent to debit cards and had other
characteristics of being part of the fraud scheme. As a result of his analysis,
Special Agent Hayag narrowed the result to 805 pieces of PII from the marital
home and storage units that were used to claim $5,613,549 in tax refunds and
receive approximately $1.8 million in tax refunds.
Special Agent Hayag testified that between 140 and 150 debit cards using
stolen PII were found in Carlyle’s storage unit, including 68 debit cards found
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inside her cheetah-print purse. In addition, officers found handwritten lists of PII,
along with bank account and routing numbers or other notations indicating that tax
returns had been successfully filed and tax refunds had been directed to debit
cards. To prepare for the post-remand evidentiary hearing, Special Agent Hayag
further narrowed the fraudulent refunds to only those traceable to the PII found in
Carlyle’s storage unit and determined that $3,058,917.85 had been claimed and
$1,457,293.95 had been paid using that PII. That $1.4 million number excluded
fraudulent refunds connected to debit cards and PII found in the marital home.
E. Amended Forfeiture Money Judgment
Afterward, the district court entered an amended forfeiture money judgment.
The district court reiterated its conclusion, agreed to by the parties, that Honeycutt
applied to Carlyle’s forfeiture under 18 U.S.C. § 981(a)(1)(C). The district court
found that the government had proved by a preponderance of the evidence “that
Carlyle, within the meaning of Honeycutt, personally obtained $1,457,293.95 as a
result of the wire fraud scheme to which she pleaded guilty.”
The district court’s supporting findings of fact included that: (1) Carlyle
admitted (as part of her guilty plea) to aiding her husband Cobb in the execution of
the wire fraud scheme, including by filing false tax returns using stolen identities
and “access[ing] the refunds from pre-paid cards loaded with fraudulent refunds
mailed to her and Cobb”; (2) Carlyle also admitted to personally recovering
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$610,000; (3) Carlyle owned and leased the storage unit, and the Mercedes inside
was registered to Carlyle; (4) the purses found inside the storage unit contained
debit cards and debit card mailers in various individuals’ names and sheets of
paper containing stolen PII; (5) there was no evidence that Cobb used or carried a
purse or that any of the items in the storage unit belonged to Cobb; (5) Agent
Hayag, based on his review, “concluded that the total amount of money obtained
through the PII and fraudulent tax returns amounted to $1,457,293.95”; and (6)
“[t]his total derives only from the PII found in the storage unit, and not the
residence Carlyle shared with Cobb.”
II. DISCUSSION
A. Honeycutt Claim
When a defendant is convicted of a criminal offense for which civil
forfeiture is authorized, the district court shall “order the forfeiture of . . . property
as part of the sentence in the criminal case.” 28 U.S.C. § 2461(c). The civil
forfeiture statute authorizes forfeiture of “[a]ny property, real or personal, which
constitutes or is derived from proceeds traceable to a violation of . . . any offense
constituting ‘specified unlawful activity’ (as defined in section 1956(c)(7) of this
title), or a conspiracy to commit such offense.” 18 U.S.C. § 981(a)(1)(C). Section
1956’s definition of “specified unlawful activity” includes offenses listed in 18
U.S.C. § 1961(1), which includes wire fraud under 18 U.S.C. § 1343. See 18
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U.S.C. §§ 1956(c)(7)(A), 1961(1). At sentencing, the government must prove the
elements of forfeiture by a preponderance of the evidence. See United States v.
Hasson, 333 F.3d 1264, 1277-78 (11th Cir. 2003) (addressing forfeiture under 18
U.S.C. § 982(a)(1)).2
On appeal, Carlyle contends the district court erred in concluding that
$1,457,293.95 represented the proceeds she personally obtained from the fraud
scheme. Carlyle does not dispute that the $1,457,293.95 forfeiture money
judgment reflects the amount of fraudulent tax refunds connected to PII found in
her storage unit. Additionally, the parties continue to agree, as they did in the
district court, that Honeycutt applies to forfeitures under § 981(a)(1)(C). Thus, for
purposes of this appeal, we assume arguendo, and do not decide, that the standard
announced in Honeycutt applies to forfeiture judgments under § 981(a)(1)(C). 3
2
Although Hasson addressed a criminal forfeiture statute, its reasoning—that at
sentencing the preponderance standard generally applies—dictates that the government bears the
same burden of proof for civil forfeitures sought in criminal sentencings.
3
This Court has not yet considered whether Honeycutt applies to civil forfeitures under
§ 981(a)(1)(C). We have, however, concluded that the reasoning of Honeycutt applies to
criminal forfeitures under 18 U.S.C. § 982(a)(7), pertaining to healthcare offenses. See United
States v. Elbeblawy, 899 F.3d 925, 933, 940-42 (11th Cir. 2018), cert. denied, ___ U.S. ___, 139
S. Ct. 1322 (2019) (remanding for a new forfeiture determination).
Three Circuits have addressed whether Honeycutt applies to § 981(a)(1)(C) civil
forfeitures, but they do not agree. See United States v. Peithman, 917 F.3d 635, 652 (8th Cir.
2019) (concluding Honeycutt does not apply to § 981(a)(1)(C) based on that statute’s textual
differences with 21 U.S.C. § 853); United States v. Sexton, 894 F.3d 787, 799 (6th Cir.), cert
denied, ___ U.S. ___, 139 S. Ct. 415 (2018) (same); but see United States v. Gjeli, 867 F.3d 418,
427-28 (3d Cir. 2017), cert. denied, ___ U.S. ___, 138 S. Ct. 700 (2018) (concluding Honeycutt
does apply to § 981(a)(1)(C) based on that statute’s textual similarities with 21 U.S.C. § 853).
We need not resolve this issue here, however, because even assuming Honeycutt’s “personally
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Under Honeycutt’s standard, a defendant involved in a conspiracy can be
held liable, for forfeiture purposes, only for tainted property the defendant herself
“obtained” as a result of the crime. See 581 U.S. at ___, 137 S. Ct. at 1635. To
define the term “obtain” in § 853(a)(1), the Supreme Court in Honeycutt looked to
common dictionary definitions, such as “[t]o come into the possession or
enjoyment of,” “to get or acquire,” or “to procure or gain, as the result of purpose
and effort.” Id. at 1632 (internal quotation marks omitted). The Supreme Court
further stated that a defendant could “obtain” the property directly or indirectly
through an intermediary. Id. at 1633. By way of example, the Supreme Court
suggested a college student delivering drugs for a “mastermind” should not be held
liable for the entire $3 million drug scheme if the college student received only
$3,600 for his participation. Id. at 1631-32. The mastermind, on the other hand,
“ultimately ‘obtains’” the $3 million, whether he receives it directly from drug
purchasers or arranges to have purchasers pay the college student as an
intermediary. Id. at 1633.
Here, the district court properly found that Carlyle personally obtained
$1,457,293.95 as a result of the stolen identity refund fraud scheme. 4 Based on
obtained” standard applies, the district court correctly concluded that the government had met its
burden by a preponderance of the evidence with respect to Carlyle.
4
We review a district court’s legal conclusions regarding forfeiture de novo and its
findings of fact for clear error. Elbeblawy, 899 F.3d at 933.
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Carlyle’s own admissions as part of her guilty plea and on Special Agent Hayag’s
testimony, the district court could properly conclude that it was more likely than
not that Carlyle “obtained,” within the meaning of Honeycutt—that is, she came
into possession and enjoyment of, acquired, or procured—the $1.4 million in
fraudulent tax refunds traced to the debit cards and stolen PII found in her storage
units, in her Mercedes, and in her purses. See Honeycutt, 581 U.S. at ___, 137 S.
Ct. at 1632.
Specifically, Carlyle admitted that both she and her husband together
electronically filed false tax returns using a laptop and a hot spot device, that she
accessed the resulting fraudulently obtained refunds by loading them onto pre-paid
debit cards, which she and her husband then had mailed to Florida, where the debit
cards were “ultimately received by” both her and her husband. Based on Special
Agent Hayag’s testimony and Carlyle’s own admissions, Carlyle kept PII and pre-
paid debit cards used in the fraud scheme in her storage unit, which she directly
accessed with keys found in her purse. Debit cards and documents containing PII
were found in her cheetah-print purse and the trunk of her Mercedes, among other
places in the storage units. Surveillance videos, ATM photographs, and recorded
or documented phone calls directly connected Carlyle to many of the debit cards
found in her storage units. This evidence showed that Carlyle accessed the stolen
refunds on those debit cards either at ATMs, over the telephone, or by using them
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to make purchases at retail stores. And, according to Special Agent Hayag, the
$1,457,293.95 amount in the forfeiture money judgment represented only the
fraudulent refunds traced to debit cards and PII found in Carlyle’s storage unit.
These facts are amply sufficient to support the district court’s finding, by a
preponderance of the evidence, that Carlyle personally obtained those fraudulent
refunds. Although Carlyle argues that nearly all of the proceeds from the scheme
“could have ended up, and almost certainly did end up, in Cobb’s pocket” as the
fraud scheme’s leader, Carlyle did not present any evidence to support this claim. 5
Nor was the district court required to ignore the fact that Carlyle and Cobb, in
addition to engaging in the fraud scheme together, were also married and living
together. Cobb may have been the leader of the scheme, but he and Carlyle often
were together when they used fraudulent debit cards to make withdrawals at ATMs
or to make purchases at retail locations, and Carlyle posed as the debit cardholder
on at least one occasion to try to unfreeze funds on a card loaded with fraudulently
obtained refunds. Absent some other evidence to the contrary, it is reasonable to
infer from the evidence in the record that Carlyle possessed and enjoyed the fruits
of her own efforts.
5
In fact, apart from stipulating that she personally obtained $100,000 from the scheme,
Carlyle did not present any evidence at the hearing.
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In this way, Carlyle’s case is distinguishable from Honeycutt. In Honeycutt,
the defendant managed sales and inventory at his brother’s hardware store. Id. at
___, 137 S. Ct. at 1630. The hardware store sold large quantities of Polar Pure, a
water purification product containing iodine, which the brothers knew or had
reason to believe would be used to manufacture methamphetamine. Id. The
Supreme Court concluded the defendant, as only a manager, could not be held
jointly and severally liable with his brother for the store’s profits from the illegal
sales given that the government had conceded the defendant “had no ownership
interest in his brother’s store and did not personally benefit from the Polar Pure
sales.” Id. at ___, 137 S. Ct. at 1635.
Here, the government made no such concession. Instead, the evidence the
government presented at the evidentiary hearing, along with Carlyle’s admissions,
indicate that Carlyle, unlike the store manager in Honeycutt, actually benefited
from the wire fraud scheme because she withdrew money from ATMs using
fraudulent debit cards, purchased a Mercedes with fraud proceeds, and even
stipulated that she received $100,000 from the scheme.
Carlyle couches her argument in terms of the district court
“misinterpret[ing]” Honeycutt, and she suggests the district court impermissibly
found that she and Cobb “jointly obtain[ed]” the $1,457,293.95. The record makes
clear, however, that on remand, the district court understood that, once it
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determined Honeycutt applied, it was required to make fact findings as to the
amount of the proceeds Carlyle personally obtained during the fraud scheme, and
that is exactly what the district court did. Carlyle’s argument on appeal is really a
challenge to the sufficiency of the evidence supporting the district court’s finding
that she personally obtained $1,457,293.95. 6
There also is no merit to Carlyle’s argument that the district court erred in
ordering that Cobb’s forfeiture payments be offset against Carlyle’s. Specifically,
the district court’s forfeiture order stated that “[t]he value of any assets or proceeds
forfeited from Co-Defendant James Cobb shall be offset against [Carlyle’s]
forfeiture liability. In no event shall the United States collect more than
$1,820,759.00 from the Defendants, collectively, towards forfeiture ordered in this
case.”
During the evidentiary hearing, Carlyle argued that a forfeiture money
judgment against her in the amount of $1,457,293.95 could result in the
government collecting more than the total proceeds of the scheme. The district
court added the offset provision to ensure that the government collected no more
than the $1.8 million Special Agent Hayag had testified was the total amount of the
6
Because the district court’s forfeiture money judgment held Carlyle liable only for the
fraud proceeds the court found she personally obtained and did not find that Carlyle and Cobb
“jointly obtained” those proceeds, we need not resolve today whether Honeycutt prohibits
codefendants, such as spouses or business partners, from jointly obtaining property subject to
forfeiture.
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fraud proceeds derived from the evidence found in both the marital residence and
the storage units. The offset provision was particularly important to ensure the
government did not over-collect for this scheme because this Court had already
affirmed Cobb’s forfeiture money judgment, holding him jointly and severally
liable with Carlyle for $1.8 million, in 2016, before Honeycutt was decided. See
United States v. Cobb, 842 F.3d 1213, 1220-21 (11th Cir. 2016). Without this
offset provision, the government could have recovered $3.2 million, when the loss
was only $1.8 million.
B. Eighth Amendment Excessive Fines Claim
The Eighth Amendment states that no excessive fines shall be imposed.
U.S. Const. amend. VIII. A forfeiture order imposed at the end of a criminal
proceeding due to a conviction constitutes a fine that is subject to the Excessive
Fines Clause. United States v. Seher, 562 F.3d 1344, 1371 (11th Cir. 2009). A
forfeiture order constitutes an excessive fine “if it is grossly disproportional to the
gravity of a defendant’s offense.” Id. (quotation marks omitted). To determine
whether a fine is grossly disproportional to the defendant’s offense, we consider:
(1) whether the defendant is in the class of persons at whom the criminal statute was
primarily directed; (2) what other penalties were authorized for the offense by the
legislature or the Sentencing Commission; and (3) the harm caused by the
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defendant. Id. We strongly presume that a forfeiture order within the range of
fines allowed by Congress for the offense is constitutional. Id.7
A forfeiture money judgment that is greater than the statutory maximum
fine is not presumptively invalid but should receive close scrutiny rather than a
presumption of constitutionality. See United States v. Sperrazza, 804 F.3d
1113, 1127 (11th Cir. 2015). When we have closely scrutinized forfeiture
money judgments that exceeded the statutory maximum fine, we have “upheld
all forfeitures imposed by district courts in amounts up to twice the maximum
authorized fine.” Id.
Here, under Seher’s three-factor test, Carlyle’s forfeiture money judgment
was not grossly disproportionate to her offense. First, Carlyle is within the class of
persons whom the wire-fraud and aggravated-identity-theft statutes were meant to
cover. See Seher, 562 F.3d at 1371. Carlyle had used the wires and a victim’s
means of identification to access funds that she had obtained fraudulently from the
United States. See 18 U.S.C. §§ 1028A, 1343.
Second, the amount of Carlyle’s forfeiture money judgment was below the
statutory maximum fine, and thus is entitled to a presumption of constitutionality.
See Seher, 562 F.3d at 1371. The statutory maximum fine for Carlyle’s wire-
7
We review de novo whether a forfeiture order is excessive, in violation of the Eighth
Amendment’s Excessive Fines Clause. Seher, 562 F.3d at 1370.
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fraud and aggravated-identity-theft convictions was the greater of $250,000 or
twice the pecuniary gain or loss resulting from the offenses. See 18 U.S.C.
§§ 1343, 3571(b)(1), (d). Given that the district court found that the actual loss
resulting from Carlyle’s offenses was $1,820,759, the statutory maximum fine
was $3,642,518. Although Carlyle’s forfeiture money judgment was greater
than the top end of her guidelines fine range of $17,500 to $175,000, the
Sentencing Commission has stated that the guidelines fine range is intended to
support a fine of up to twice the gross gain or loss caused by the offense and
that, where that is not the case, an upward departure may be warranted. See
U.S.S.G. § 5E1.2(c)(3) & cmt. n.4 (2014). Thus, while Carlyle’s forfeiture
money judgment was greater than her guidelines fine range, an upward
departure to impose a forfeiture money judgment equal to the amount of loss
caused by the offense would not be grossly disproportionate. In sum, Carlyle’s
forfeiture money judgment of $1,457,293.95 represented less than half of the
statutory maximum fine and is presumptively constitutional.
Under Seher’s third factor, Carlyle’s offense caused significant harm to
her victims. See Seher, 562 F.3d at 1371. According to the presentence
investigation report and Special Agent Hayag’s testimony, Carlyle and Cobb
obtained PII for over 7,000 victims, and officers recovered debit cards in the
names of over 350 victims. Between 140 and 150 debit cards using stolen PII
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were found in Carlyle’s storage units alone. Carlyle’s offenses caused $1.8
million in harm to the public because she received tax refunds for fraudulent
returns. Considering all three Seher factors, we conclude the district court’s
amended forfeiture money judgment in the amount of $1,457,293.95 was not
grossly disproportionate to Carlyle’s offense conduct and does not violate the
Eighth Amendment.
AFFIRMED.
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