United States v. Adjei ( 2009 )

Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
2-19-2009
USA v. Adjei
Precedential or Non-Precedential: Non-Precedential
Docket No. 07-2295
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 07-2295
____________
UNITED STATES OF AMERICA
v.
RICHARD ADJEI,
Appellant
____________
On Appeal from the United States District Court
for the District of Delaware
(D.C. No. 06-cr-00055)
District Judge: Honorable Gregory M. Sleet
____________
Submitted Under Third Circuit LAR 34.1(a)
January 6, 2009
Before: FUENTES and FISHER, Circuit Judges, and PADOVA,* District Judge.
(Filed: February 19, 2009 )
____________
OPINION OF THE COURT
____________
*
Honorable John R. Padova, Senior United States District Judge for the Eastern
District of Pennsylvania, sitting by designation.
FISHER, Circuit Judge.
Richard Adjei pleaded guilty to four counts of violating federal law in relation to
his conduct of using stolen identities to file false tax returns. Adjei was sentenced to a
total of 75 months of imprisonment. On appeal, he raises two challenges to his sentence.
For the reasons set forth below, we will affirm.
I.
We write exclusively for the parties, who are familiar with the factual context and
legal history of this case. Therefore, we will set forth only those facts necessary to our
analysis.
On May 11, 2006, a federal grand jury in Delaware returned a four-count
indictment charging Adjei with various violations of federal law. On November 16,
2006, Adjei waived the indictment and pleaded guilty to an information charging him
with one count of bank fraud in violation of 18 U.S.C. § 1344, one count of aggravated
identity theft in violation of 18 U.S.C. § 1028A, one count of engaging in monetary
transactions using property derived from unlawful activity in violation of 18 U.S.C.
§ 1957, and one count of filing false claims in violation of 18 U.S.C. § 287. The
Memorandum of Plea Agreement provided that “[i]f the Government in its sole discretion
determines that the defendant has fulfilled his obligations of cooperation,” then at
sentencing the Government would (1) make Adjei’s cooperation known to the District
Court; (2) enter a motion for departure if Adjei provided substantial and truthful
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assistance in the investigation or prosecution of another person; and (3) make sentencing
recommendations that the Government deemed appropriate.
Additionally, in the plea agreement, Adjei admitted that between November 2005
and April 2006 he filed 175 false tax returns with the Internal Revenue Service. Adjei
filed these tax returns by using stolen identification information from hospital patients –
which was taken from a billing collection company used by multiple hospitals – and did
so without the knowledge or consent of the individuals whose identities he
misappropriated. Adjei also used 149 of the fraudulent refund claims to secure refund
anticipation loans from HSBC Bank, JP Morgan (Bank One), and Santa Barbara Bank &
Trust (SBB&T).
The District Court held a sentencing hearing on April 17, 2007. At this time, Adjei
objected to the amount of loss calculation set forth in the Presentence Investigation
Report (PSR). The PSR determined that the amount of loss that Adjei intended to cause
was more than $1 million but less than $2.5 million. The District Court sustained Adjei’s
objection and determined that the proper range for the amount of loss was between
$400,000 and $1 million. Adjei did not object to any of the other calculations contained
in the PSR. Adjei’s base offense level of six under U.S.S.G. § 2B1.1(a)(2) was increased
fourteen levels pursuant to U.S.S.G. § 2B1.1(b)(1)(H) for the intended loss, four levels
pursuant to U.S.S.G. § 2B1.1(b)(2)(B) because the offense involved more than fifty
victims, and one level pursuant to U.S.S.G. § 2S1.1(b)(2)(A) because he was convicted
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under 18 U.S.C. § 1957. Additionally, a three-level reduction for acceptance of
responsibility was applied. Thus, Adjei’s total offense level was 22 and his criminal
history category was I. Based on these calculations, the District Court determined that the
corresponding Guidelines range was between 41 and 51 months of imprisonment on
Counts One, Three, and Four. A mandatory two-year minimum sentence of imprisonment
was statutorily required on Count Two and would run consecutive to any sentence
imposed under the other counts.
Although defense counsel did not make any objections to the calculation of the
Guidelines sentence, he did argue for a downward variance to a sentence “not much
above” the two-year mandatory minimum set by 18 U.S.C. § 1028A. He stated:
Mr. Adjei has, from the very beginning, acknowledged his guilt. He has
been debriefed by the government. He has told the government about other
people who were involved, the identity of the individual who supplied him
with the Social Security numbers. He has – I mean, unfortunately, the
government has not seen fit to file a motion for downward departure or a
motion under 3553(e) for a sentence below the mandatory minimum of two
years in this case.
(App. 40-41.) After listening to testimony from a director of the hospital billing company
and arguments from both parties, the District Court specifically found that as a result of
Adjei’s conduct, the individual hospital patients
had to engage in a long, drawn-out process to regain their identities and
obtain proper tax returns. Not only was this process burdensome, but in the
words of some of the victims whose identities you stole, they quote, it
‘mess[ed] up their finances,’ . . . during a difficult period of time in their
lives with respect to their individual health conditions.
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(App. 56-57.) The District Court proceeded to sentence Adjei to 51 months of
imprisonment on Counts One, Three, and Four, and an additional 24 months of
imprisonment on Count Two. Adjei timely appealed the judgment of sentence.
II.
The District Court had jurisdiction over this case pursuant to 18 U.S.C. § 3231,
and we have jurisdiction to review the District Court’s judgment of sentence pursuant to
28 U.S.C. § 1291 and 18 U.S.C. § 3742. Because Adjei did not object to the number of
victims enhancement at sentencing, we review his challenge to the application of this
provision for plain error. Under the plain error standard, “we may vacate a sentence and
remand for resentencing only if we find that (1) an error was committed; (2) the error was
plain, that is, it is ‘clear’ and ‘obvious;’ and (3) the error ‘affected [the defendant’s]
substantial rights.’” United States v. Nappi, 243 F.3d 758, 762 (3d Cir. 2001) (quoting
United States v. Olano, 507 U.S. 725, 734 (1993)). We exercise plenary review over
Adjei’s breach of plea agreement argument. United States v. Hodge, 412 F.3d 479, 485
(3d Cir. 2005).
III.
Adjei challenges his sentence on two separate grounds. First, he argues that the
District Court committed plain error by applying the number of victims sentence
enhancement pursuant to U.S.S.G. § 2B1.1(b)(2). Second, he argues that the Government
acted in bad faith by failing to inform the District Court of the nature and extent of his
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cooperation and by failing to move for a downward departure under U.S.S.G. § 5K1.1, 28
U.S.C. § 994(n), and 18 U.S.C. § 3553(e). We will address each argument in turn.
A.
Adjei acknowledges that he did not make an objection to the application of the
number of victims enhancement at the time of sentencing and therefore our review of this
claim is for plain error. Nonetheless, Adjei contends that the District Court committed
plain error because only those persons who sustain “actual loss” meet the definition of
“victim” under U.S.S.G. § 2B1.1(b)(2), and as applied to the facts of his case, the only
victims were the Internal Revenue Service, the three banks, and the hospital billing
company. Accordingly, Adjei argues that it was plain error for the District Court to count
the individual hospital patients as victims for the purpose of applying the four-level
enhancement pursuant to U.S.S.G. § 2B1.1(b)(2)(B).
Under the plain error standard, Adjei’s argument fails because he cannot establish
that the District Court committed an error that was clear and obvious. To begin, the
Guidelines define “victim” as “any person who sustained any part of the actual loss.”
U.S.S.G. § 2B1.1 cmt. n.1. Relatedly, “actual loss” is defined as “the reasonably
foreseeable pecuniary harm that resulted from the offense.” U.S.S.G. § 2B1.1 cmt.
n.3(A)(i). “Pecuniary harm” is defined as “harm that is monetary or that otherwise is
readily measurable in money,” but “does not include emotional distress, harm to
reputation, or other non-economic harm.” U.S.S.G. § 2B1.1 cmt. n.3(A)(iii). At the time
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Adjei was sentenced, we had not yet issued a precedential opinion interpreting the
definition of “victim” under U.S.S.G. § 2B1.1 and its Application Notes. Since that time,
we decided United States v. Kennedy, – F.3d – , 2009 WL 250105 (3d Cir. Feb. 4, 2009),
in which we held that “only those who are actually harmed by the crime can be counted as
victims for purposes of USSG § 2B1.1(b)(2).” Id. at *1. In Kennedy, we determined that
it was error for the district court to include individual account holders as victims under
U.S.S.G. § 2B1.1(b)(2) because it was undisputed that the individuals “did not ‘sustain[]
any part of the actual loss,’” and the Government did not “prove that the account holders
even knew that their funds had been stolen before they were completely reimbursed.” Id.
at *3. But our decision in Kennedy did not answer the question that is at issue in this
case, namely, whether defrauded individuals who “spent time or money seeking
reimbursement” qualify as victims under U.S.S.G. § 2B1.1(b)(2). Id. at *6. Thus,
applying the number of victims enhancement to the factual scenario presented in the
instant case – where there was testimony about the time and effort expended by individual
hospital patients in order to obtain their rightful tax refunds – was not error under current
law when Adjei was sentenced and, following our decision in Kennedy, still cannot
conclusively be characterized as such.
Furthermore, although in recent years several Courts of Appeals have addressed
questions related to the application of U.S.S.G. § 2B1.1(b)(2), the differing results
reached in those cases undermine Adjei’s assertion that the District Court committed clear
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and obvious error. Compare United States v. Pham, 545 F.3d 712, 720-21 (9th Cir. 2008)
(explaining that if, prior to being reimbursed, individual account holders experienced
losses that were not short-lived, U.S.S.G. § 2B1.1(b)(2) could be applied), United States
v. Abiodun, 536 F.3d 162, 169 (2d Cir. 2008) (concluding that because each individual
“had to spend an appreciable amount of time securing reimbursement from their banks or
credit card companies” they could be considered victims under U.S.S.G. § 2B1.1(b)(2)),
and United States v. Lee, 427 F.3d 881, 895 (11th Cir. 2005) (finding that U.S.S.G.
§ 2B1.1(b)(2) applied because individuals suffered “more than a small out-of-pocket loss
and were not immediately reimbursed”), with United States v. Conner, 537 F.3d 480, 489
(5th Cir. 2008) (concluding that because individual accounts were quickly reimbursed by
credit card companies the individuals could not be counted as victims under U.S.S.G.
§ 2B1.1(b)(2)), United States v. Icaza, 492 F.3d 967, 970 (8th Cir. 2007) (finding that
U.S.S.G. § 2B1.1(b)(2) did not apply where defendants stole from hundreds of retail
stores in a franchise because only the parent corporation ultimately bore the loss), and
United States v. Yagar, 404 F.3d 967, 971 (6th Cir. 2005) (holding that individual account
holders could not be counted as victims under U.S.S.G. § 2B1.1(b)(2) because “they were
fully reimbursed for their temporary financial losses”). Even courts which determined
that reimbursed individuals did not meet the definition of “victims” under U.S.S.G.
§ 2B1.1(b)(2) recognized that under different circumstances such individuals might
qualify as victims. See Conner, 537 F.3d at 491 (noting that if individual account holders
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“encountered difficulty in obtaining reimbursement, a different question would be
presented”); Yagar, 404 F.3d at 971 (noting that “there may be situations in which a
person could be considered a ‘victim’ under the Guidelines even though he or she is
ultimately reimbursed”).
Consequently, even if we were today to accept Adjei’s interpretation of U.S.S.G.
§ 2B1.1(b)(2), we would still be unable to conclude that the District Court committed an
error that was clear and obvious under existing law when it included the individual
hospital patients as victims for the purpose of sentencing. See United States v. Clark, 237
F.3d 293, 299 (3d Cir. 2001) (finding no plain error where the defendant could not show
that at the time of sentencing the district court committed an “error [which was] clear
under current law”) (internal quotation marks and citation omitted). Therefore, under the
plain error standard, Adjei’s challenge to the application of the number of victims
enhancement must fail.
B.
Adjei also argues that the Government acted in bad faith by failing to carry
through with the terms of the plea agreement after he fulfilled his obligations to
cooperate, but he notes that these allegations of bad faith were not brought to the District
Court’s attention. Furthermore, Adjei recognizes that the plea agreement does not contain
a promise that the Government will file a downward departure motion, but instead it
reserves “sole discretion” for the Government to decide whether to make such a motion.
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Despite this recognition, Adjei argues that the Government’s refusal to file a downward
departure motion is attributable to bad faith and constitutes a violation of the plea
agreement.
Although Adjei did not raise this argument at any point prior to this appeal, we
will nonetheless exercise plenary review over this contention. See Hodge, 412 F.3d at
485 (“We rejected the notion that breach-of-plea arguments should be reviewed for plain
error, and instead held that we must exercise plenary review.” (citing United States v.
Moscahlaidis, 868 F.2d 1357, 1360 (3d Cir. 1989))). Adjei bears the burden of
establishing by a preponderance of the evidence that the Government breached the plea
agreement. See United States v. Huang, 178 F.3d 184, 187 (3d Cir. 1999); see also
United States v. Isaac, 141 F.3d 477, 484 (3d Cir. 1998) (“[D]efendant must make a
showing of bad faith to trigger some form of hearing” on the question of whether the
prosecutor’s decision not to file a downward departure motion violated the plea
agreement (internal quotation marks omitted)).
The only relevant reference to the breach of plea argument contained in the record
is defense counsel’s statement at sentencing that Adjei “has been debriefed by the
government. He has told the government about other people who were involved, the
identity of the individual who supplied him with the Social Security numbers. . . .
[U]nfortunately, the government has not seen fit to file a motion for downward departure
or a motion under 3553(e).” But this statement contains no allegation that the
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Government acted in bad faith by failing to file a motion at sentencing and provides no
accusations of improper motive for us to review. The fact that the Government did “not
see[] fit to file a motion” hardly demonstrates that it acted in bad faith and breached the
plea agreement, especially when we consider that the plea agreement reserved “sole
discretion” to the Government to determine if Adjei provided substantial and truthful
assistance. Moreover, although the statement highlights that Adjei was debriefed by the
Government, this alone does not support his contention that the Government acted in bad
faith in light of the express language of the plea agreement, which stated that “a
debriefing does not amount to substantial assistance.” There is simply no evidence of the
Government’s bad faith, let alone the preponderance of evidence which Adjei would need
in order to carry his burden of demonstrating that the Government breached the plea
agreement. Consequently, we are unable to conclude that the Government’s failure to
move for a downward departure constituted a breach of the plea agreement, and Adjei’s
argument to this effect must be rejected.
IV.
For the foregoing reasons, we will affirm the judgment of the District Court.
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