United States v. Gregory Jones , 332 F. App'x 801 ( 2009 )

Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
6-24-2009
USA v. Gregory Jones
Precedential or Non-Precedential: Non-Precedential
Docket No. 08-2638
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 08-2638
UNITED STATES OF AMERICA,
v.
GREGORY JONES,
also known as “G”
Gregory Jones,
Appellant
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Crim. No. 06-cr-00367-1)
District Judge: Eduardo C. Robreno
Submitted Pursuant to Third Circuit LAR 34.1(a)
May 20, 2009
Before: RENDELL and GARTH, Circuit Judges,
and VANASKIE, District Judge*
(Filed: June 24, 2009)
OPINION OF THE COURT
__________________
*The Honorable Thomas I. Vanaskie, United States District Judge for the Middle
District of Pennsylvania, sitting by designation.
VANASKIE, District Judge.
Gregory Jones, who pled guilty to conspiracy, credit card fraud, identity fraud and
aggravated identity fraud in violation of 18 U.S.C. §§ 2, 371, 1029(a)(1), (a)(3), and
(a)(4), 1028(a)(5), and 1028A, appeals his sentence of 144 months in prison. Jones
assails the District Court’s calculation of his offense level for purposes of ascertaining the
advisory guideline imprisonment range. Jones also contends that the District Judge who
sentenced Jones’ co-conspirator after Jones was sentenced erred in denying him access to
the transcript of the co-conspirator’s sentencing proceeding, thereby impairing his ability
to claim unreasonable disparity in the sentence he received. Because we discern no error
in the District Court’s calculation of Jones’ offense level and find that a different judge’s
denial of access to the co-conspirator’s sentencing transcript is not properly before us, we
will affirm the District Court’s judgment and sentence.
I.
As we write only for the parties, who are familiar with the factual context and the
procedural history of the case, we will set forth only those facts necessary to our analysis.
Commencing in 2002, Jones and Brian Morgan undertook the manufacture and
sale of counterfeit credit cards and identification documents. Morgan contributed most of
the capital for the operation and focused on fabricating credit cards. Jones knew how to
set up the software and operate the equipment, and concentrated on manufacturing
counterfeit IDs and checks. They equally divided most of the day-to-day expenses and
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shared raw materials, facilities, and overhead costs. They also jointly set $100 as the
minimum price for counterfeit credit cards and jointly ordered “skimmers,” i.e., devices
that can extract account numbers and other data from the magnetic strip on a credit card.
On occasion, they shared credit card numbers.
Jones and Morgan manufactured the illicit credit cards from several locations in
Philadelphia. At some point between 2003 and 2005, Jones and Morgan moved their
enterprise to 1913 Alden Street, Philadelphia. On February 7, 2006, a search warrant was
executed on the Alden Street address and Morgan was arrested. Authorities confiscated
thousands of credit card numbers, multiple computers, scanners, an embosser, credit card
receipts from numerous businesses, images of credit card holograms, tipping foil, and
hundreds of completed counterfeit credit cards and drivers licenses. In total 6,631 distinct
(non-duplicative) credit card numbers were found.
Undeterred, Jones continued the manufacturing of bogus credit cards in an
apartment at 4158 Girard Avenue, Philadelphia. On May 25, 2006, law enforcement
officers executed a search warrant at the Girard Avenue apartment. Upon entering the
apartment, the officers saw Jones in the process of printing counterfeit credit cards, using
the same type of equipment and materials seized from the Alden Street location. One
hundred forty-two credit card numbers were found at the Girard Avenue address.
On March 15, 2007, Jones entered a plea of guilty to all counts of the indictment.
On March 27, 2007, Jones submitted to a probation officer who was conducting the
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presentence investigation a “Net Worth Statement.” The “instructions for completing Net
Worth Short Form Statement” informed Jones that he was required to provide “a
complete listing of all assets you own or control as of this date.” He was specifically
directed to list all real estate holdings. Jones wrote that he owned three properties with a
total value of approximately $240,000, none of which included real estate located at
5359 Grays Avenue, Philadelphia.
Although Jones did inform the probation officer that he owned a bar at the Grays
Avenue address, it was only some time later that the government ascertained that Jones
also owned the real property at this location. The investigation disclosed that Jones
bought the property in November of 2005, but did not record the deed evidencing his
ownership until March 27, 2007, the same date he submitted the financial worksheet that
omitted any reference to this particular property. The probation officer recommended that
Jones receive a two-level enhancement for obstruction of justice and that he be denied a
three-level reduction in his offense level for acceptance of responsibility due to the failure
to list his ownership interest in the Grays Avenue property.
The probation officer further recommended that the base offense level of 6 be
increased by 18 premised upon a loss of $500 for each of the 6,700 “access devices”
seized from the Alden Street and Girard Avenue locations.1 Finally, the probation officer
1
The sentencing guidelines provide that the amount of loss “shall be not less than $500
per access device.” U.S.S.G. § 2B1.1, cmt n.3(F)(i). The probation officer multiplied
(continued...)
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proposed a two-level enhancement for use of sophisticated means in the commission of
the offense in accordance with U.S.S.G. § 2B1.1(b)(9)(C), plus a four-level enhancement
under U.S.S.G. § 2B1.1(b)(2), based upon a finding that the offense involved 50 or more
victims. This yielded a total offense level of 32, which when combined with Jones’
criminal history category of VI, produced an advisory imprisonment range of 210 to
262 months.
Jones objected to the enhancements to his offense level. Following two days of
evidentiary hearings and after holding oral argument, the District Court sustained in part
the objection to the calculation of loss. Specifically, the District Court calculated the loss
at $1,374,000 by attributing to Jones only 2,748 access devices. The District Court based
this modification on the government’s evidence of unique account numbers taken from
skimmers and found on business receipts and records obtained during the search of the
Alden Street location.2 United States v. Jones, 557 F. Supp. 2d 630, 640 (E.D. Pa. 2008).
1
(...continued)
the total unique credit card numbers found at the Alden Street and Girard Avenue
locations (6,700) by $500 to determine an aggregate loss of $3,350,000. The sentencing
guidelines provide an 18-level enhancement for loss between $2,500,000 and $7,000,000.
U.S.S.G. § 2B1.1(b)(1)(J).
2
The District Court held that “every number found on any receipt or business record,
every number downloaded from a skimmer, and every number, whether authentic or
fictitious, gleaned from tipping foil, constitutes an access device.” United States v. Jones,
557 F. Supp. 2d 630, 640 (E.D. Pa. 2008). Because the government only itemized
numbers downloaded from the skimmers or found on receipts and account records seized
from the Alden Street residence, the District Court excluded from its loss calculation
account numbers that were written on pieces of paper, inscribed on credit cards, or found
(continued...)
5
The District Court further found that Jones should be held responsible for all the access
devices found at the Alden Street address, concluding that under the “Relevant Conduct”
provision of the sentencing guidelines, U.S.S.G. § 1B1.3(a)(1), Jones both aided and
abetted Morgan’s criminal conduct at this location and was a joint participant with
Morgan in the criminal activities that occurred there. Jones, 557 F. Supp. 2d at 641-42.
The loss calculation called for an offense level enhancement of 16.3 U.S.S.G.
§ 2B1.1(b)(1)(I). Finally, the District Court overruled the objections to the sophisticated
means and obstruction of justice enhancements as well as the objection to the denial of a
three-level reduction for acceptance of responsibility. Because the government elected
not to pursue an enhancement for number of victims under U.S.S.G. § 2B1.1(b)(2), the
District Court did not adopt the probation officer’s recommendation on this point. As a
result, the District Court calculated a total offense level of 26, producing an advisory
guideline range of 120 to 150 months.
On May 30, 2008, Jones was sentenced to 144 months in prison and three years of
supervised release. He was also ordered to pay restitution in the amount of $311,575.35.
Jones timely filed a notice of appeal on June 5, 2008.
2
(...continued)
on tipping foil, reasoning that it had “no way of knowing how many numbers were found
written on paper, and how many were taken from tipping foil or credit cards.” Id. at 640
n.15.
3
Jones contended that he should be held accountable for approximately 1,000 access
devices, producing a loss of about $500,000 and a 14-level enhancement in his offense
score. United States v. Jones, 557 F. Supp. 2d 630, 638 (E.D.Pa. 2008).
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On June 17, 2008, Morgan was sentenced by a different judge, the Honorable
William H. Yohn, Jr., to a prison term of 75 months and three years of supervised release.
Morgan’s sentencing was held in open court, but the transcript was later sealed. On
July 9, 2008, Jones, through his lawyer, wrote a letter requesting that Judge Yohn unseal
the sentencing transcript. This request was rejected on July 18, 2008, and a motion for
reconsideration was denied on August 4, 2008. Jones did not separately appeal Judge
Yohn’s decisions refusing to grant him access to the transcript of Morgan’s sentencing.
II.
Jones challenges his sentence on several grounds. He claims the District Court
erred in its determination of his offense level by: (1) finding he willfully and materially
obstructed justice; (2) denying him acceptance of responsibility; (3) computing the total
amount of loss; (4) attributing the full amount of loss to him; and (5) assessing an
enhancement for use of sophisticated means in this criminal enterprise. He also
challenges Judge Yohn’s refusal to grant him access to Morgan’s sentencing transcript,
thus purportedly impairing his ability to present a disparity in sentencing argument under
18 U.S.C. § 3553(a)(6). Each contention will be addressed seriatim.
III
1.
Section 3C1.1 of the sentencing guidelines provides for a two-level upward
adjustment where “the defendant willfully obstructed or impeded, or attempted to obstruct
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or impede, the administration of justice with respect to the investigation, prosecution, or
sentencing of the instant offense of conviction.” Application Note 4(h) to U.S.S.G.
§ 3C1.1 states that “providing materially false information to a probation officer in
respect to a presentence or other investigation” constitutes obstruction of justice.
It is undisputed that Jones failed to disclose his ownership of the 5359 Grays
Avenue property when he submitted his Net Worth Statement. The District Court
carefully considered Jones’ arguments that the non-disclosure was not willful. As to
Jones’ explanation that he did not regard himself as the legal owner of the property at the
time he completed the Net Worth Statement because the deed had not been recorded at
that time, the District Court reasonably concluded that Jones was not credible both
because recording of the deed is not essential to establish legal ownership as well as
because Jones was required to identify not only property that he owned, but also property
that he controlled, and Jones plainly controlled the Grays Avenue property.
Jones’ arguments that he disclosed his ownership of the property through
statements he made to a Pre-Trial Services Officer and to a Secret Service agent were
likewise reasonably rejected. As the District Court observed, the fact that Jones had told
the Pre-Trial Services Officer and the Secret Service agent that he operated the bar
located at this address is not tantamount to an admission of ownership of the real estate.
Nor does the fact that it was Jones who consented to a search of the Grays Avenue
premises preclude a finding that the failure to mention the property on the Net Worth
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Statement was deliberate. Indeed, Jones’ contention that he did not list the property
because he had not recorded the deed shows that the omission was willful. Moreover,
contrary to Jones’ assertions, his failure to disclose all liabilities, including real estate tax
liabilities on the property in question, reinforces the conclusion that the omission of this
parcel was willful.
We disturb a District Court’s factual findings only for clear error. United States v.
Napier, 273 F.3d 276, 278 (3d Cir. 2001); United States v. Powell, 113 F.3d 464, 467
(3d Cir.1997) (citing United States v. Belletiere, 971 F.2d 961, 964 (3d Cir.1992)). The
District Court’s determination that Jones willfully failed to disclose the ownership of the
Grays Avenue property is not clearly erroneous.
Furthermore, the District Court did not err in finding that the fact of ownership of
the Grays Avenue property was material. Application Note 6 to U.S.S.G. § 3C1.1 defines
“material” information as “information that, if believed, would tend to influence or affect
the issue under determination.” Ability to pay a fine or satisfy a restitution obligation is
an issue under determination in a sentencing proceeding involving a financial crime. As
we explained in United States v. Cusumano, 943 F.2d 305, 316 (3d Cir. 1991), “[a]
statement to a probation officer concerning one's financial resources will obviously affect
the officer's determination of ability to pay.” In this case, the restitution obligation was
$311,575.35. Ownership of the Grays Avenue property, even at the value ascribed to the
property by Jones of $16,500, is plainly material to a determination of the ability to pay
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restitution. The fact that the District Court determined that Jones did not have the ability
to pay a fine does not alter this conclusion. Having concluded that the omission of the
Grays Avenue property was willful, the District Court had ample reason for finding the
omission material. See Cusumano, 943 F.2d at 315 (finding no error in the district court’s
determination that defendant’s false statement to probation officer regarding the value of
stock he owned was a materially false statement).
2.
Application Note 4 to the acceptance of responsibility provision of the sentencing
guidelines, § 3E1.1, cmt. n.4, provides that “[c]onduct resulting in an enhancement under
§ 3C1.1 (Obstructing or Impeding the Administration of Justice) ordinarily indicates that
the defendant has not accepted responsibility for his criminal conduct.” The Application
Note also recognizes that “[t]here may . . . be extraordinary cases in which adjustments
under both §§ 3C1.1 and 3E1.1 may apply.” U.S.S.G. § 3E1.1, cmt. n.4. The defendant
bears the burden of establishing by a preponderance of the evidence that an offense level
reduction is warranted, and we review the denial of acceptance of responsibility credit
under a clearly erroneous standard. United States v. Muhammad, 146 F.3d 161, 167
(3d Cir. 1998).
Jones has not pointed to any extraordinary circumstances meriting a reduction in
his offense level for acceptance of responsibility. Even though Jones pleaded guilty, the
District Court acted well within its ample discretion in determining that providing
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materially false information to the Probation Office was inconsistent with acceptance of
responsibility.
3.
The District Court was required to determine the number of “unauthorized access
devices” and “counterfeit access devices” attributable to Jones in order to determine the
amount of loss for sentencing purposes. See U.S.S.G. § 2B1.1, cmt. n.3(F)(i). Jones
argues that the District Court erred in determining that the definition of “access device” in
18 U.S.C. § 1029(e)(1) should be construed broadly to include credit cards with expired
or randomly generated numbers, credit cards with no information encoded in the magnetic
strip that could serve as backup forms of identification, credit cards missing the security
code (which may be used on the computer or over the phone), and randomly generated
account numbers listed on pieces of paper. He claims that such credit cards and fictitious
account numbers are not “access devices” as defined by Section 1029(e)(1) because they
cannot be used to obtain goods, services, or other things of value.
As set forth in 18 U.S.C. § 1029(e)(1):
[T]he term "access device" means any card, plate, code, account number,
electronic serial number, mobile identification number, [or] personal
identification number . . . 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).
Agent McDowell testified that although nearly 7,000 account numbers were
identified from credit cards, records, pieces of paper, and other items seized during the
11
search of both the Alden Street and Girard Avenue properties, he was able to create a
subset of 2,748 unique account numbers from store receipts, Comcast records, and
skimmers seized during the search of the Alden Street location. These account numbers
had the requisite indicia of being capable of use to obtain things of value because they
had either been used for that purpose (as evidenced by the receipts and Comcast records)
or had been extracted from the magnetic strip on credit cards by skimmers. Although the
District Court found that the term “access device” could include all credit cards found
during the searches, including those that had been inscribed with fictitious or expired
account numbers, its loss calculation was limited to the smaller subset of account
numbers that were capable of being used to obtain goods, services, or other things of
value. Contrary to Jones’ assertion, the government was not required to present evidence
from banks and other financial institutions that the account numbers had been wrongly
appropriated or could actually be used to acquire things of value. The government simply
had to show that the account numbers were capable of obtaining things of value, and the
evidence it presented with respect to the 2,748 account numbers that the District Court
determined to be “access devices” for loss calculation purposes was sufficient. Thus, the
District Court did not err in calculating loss for purposes of determining the offense level
in this case.
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4.
We review the District Court’s allocation of loss to Jones based on relevant
conduct for clear error. See United States v. Wise, 515 F.3d 207, 217 (3d Cir. 2008);
United States v. Perez, 280 F.3d 318, 352 (3d Cir. 2002). Jones argues that the District
Court erred in finding him responsible for the entire loss under U.S.S.G. § 1B1.3(a)(1)(A)
(relevant conduct for sentencing purposes includes all acts and omissions aided and
abetted by the defendant) and U.S.S.G. § 1B1.3(a)(1)(B) (relevant conduct in the case of
jointly undertaken criminal activity “includes all reasonably foreseeable acts and
omissions of others in furtherance of the jointly undertaken criminal activity”). Jones
contends that his operation was sufficiently distinct from Morgan’s enterprise that he can
neither be regarded as an “aider and abetter” of Morgan nor a joint participant with
Morgan for purposes of attributing to Jones access devices that Morgan created.
The evidence before the District Court indicated that Jones and Morgan equally
divided most of the expenses and shared raw materials, facilities, and overhead costs.
They also jointly set $100 as the minimum price for counterfeit credit cards, jointly
ordered skimmers from the internet, and occasionally shared credit card numbers.
Moreover, Jones knew he and Morgan were engaged in a fraudulent scheme. This
evidence is sufficient to demonstrate a joint undertaking under U.S.S.G. § 1B1.3(a)(1)(B)
so as to hold Jones responsible for the entire amount of loss attributable to the operations
at the Alden Street location. See United States v. Duliga, 204 F.3d 97, 101 (3d Cir. 2000)
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(in scheme involving multiple telemarketers, the total loss was attributed to defendant,
even though his own telemarketing efforts created only part of the loss, because he jointly
undertook to produce false application fees, used the same script as and worked along
side other telemarketers, and was aware of the company’s fraudulent nature and the scope
of its operations). Moreover, as the District Court correctly stated, “Jones’ decision to
help pay for the rent, machinery and upkeep, regardless to what extent, and his decision to
install the software necessary for Mr. Morgan to manufacture counterfeit access devices
with the knowledge that Morgan was engaged in criminal activity, renders Jones liable for
those crimes [as an aider and abetter] under § 1B1.3(a)(1)(A).” Jones, 557 F. Supp. 2d at
641. Thus, no error occurred in attributing the entire loss to Jones for purposes of
calculating his offense level.
5.
In assessing a two-point enhancement for sophisticated means under U.S.S.G.
§ 2B1.1(b)(9)(C), the District Court considered the following: “(1) the use of multiple
computers, scanners, card printing machines, skimmers, and an embossing machine;
(2) the use of specialized and/or highly technical software; (3) multiple locations (at least
five) operated by two parties; and (4) a vast number of devices found (6700).” Jones, 557
F. Supp. 2d at 643-44. The sophisticated means enhancement applies to “especially
complex or especially intricate offense conduct pertaining to the execution or
concealment of an offense.” U.S.S.G. § 2B1.1, cmt. n.8(B). Considering the evidence
14
cited by the District Court, coupled with Agent McDowell’s testimony that it takes
substantial expertise to operate the equipment and software necessary to create fraudulent
credit cards, it is clear that the District Court had an ample evidentiary foundation for
determining that Jones deserved a sophisticated means enhancement. See United States v.
Vaughn, 159 F. App'x 287 (2d Cir. 2005) (finding sophisticated means in the
manufacturing of counterfeit driver's licenses).
IV.
In addition to challenging the determination of his offense level, Jones claims that
the decisions of Judge Yohn denying him access to Morgan’s sentencing transcript
wrongfully impaired his ability to pursue an unreasonable disparity in sentencing
argument under 18 U.S.C. § 3553(a)(6) (sentencing court should consider “the need to
avoid unwarranted sentence disparities among defendants with similar records who have
been found guilty of similar conduct”). Morgan, however, was sentenced after Jones, so
it is not clear how the District Court in this matter could have considered the issue of
sentencing disparity vis a vis Morgan.
In any event, Judge Yohn’s refusal to unseal Morgan’s sentencing transcript in
United States v. Morgan, Cr. No. 06-164, and subsequent denial of Jones’ motion for
reconsideration, are not properly before us in this matter. Jones may only appeal Judge
Yohn's decision in the present action if he has no other avenue of appeal. See In re
Madden, 151 F.3d 125, 127 (3d Cir. 1998). Judge Yohn’s decision was appealable in the
15
matter over which he presided because “an order granting or denying access to portions of
[a] trial record is appealable as a final order pursuant to 28 U.S.C. § 1291.” United States
v. Raffoul, 826 F.2d 218, 222 (3d Cir. 1987). Jones did not appeal Judge Yohn’s rulings,
and thus the correctness of denying access to the Morgan sentencing transcript is not
properly before us.
V.
For the foregoing reasons, we will affirm the District Court’s judgment and
sentence.
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