United States v. Smith, Shawna L. ( 2000 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 99-3169
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
SHAWNA LEANNE SMITH,
Defendant-Appellant.
Appeal from the United States District Court
for the Western District of Wisconsin.
No. 99-CR-16-S-01--John C. Shabaz, Chief Judge.
Argued January 21, 2000--Decided July 14, 2000
Before Bauer, Ripple and Kanne, Circuit Judges.
Bauer, Circuit Judge. On January 28, 1999,
Defendant Shawna L. Smith ("Smith") was arrested
for bank fraud. She confessed within an hour
after her arrest. Later, she moved to suppress
her confession, but the motion was denied and her
confession was used against her at trial. A jury
found her guilty of six counts of bank fraud in
violation of 18 U.S.C. sec. 1344 and one count of
using a false social security number in violation
of 42 U.S.C. sec. 408(7)(B). The United States
District Court for the Western District of
Wisconsin sentenced Smith to 30 months
imprisonment and ordered restitution in the
amount of $202,474.05. She appeals, claiming that
the District Court erred in denying her motion to
suppress because she did not knowingly and
voluntarily waive her Miranda rights and because
her statements to the authorities were not
voluntary. She also challenges the District
Court’s inclusion of the dollar amounts she
charged on stolen credit cards and the dollar
amounts she attempted to obtain from advances on
the cards in computing the loss amount for
sentencing and restitution purposes./1 We
affirm.
I. BACKGROUND
In the summer of 1998, Shawna L. Smith left
California and came to Wisconsin to participate
in a bank fraud scheme. The mastermind behind the
scheme, "Nepa," paired Smith with a Nigerian
named Rasheed Ukaonu ("Ukaonu"). The plan was
simple. Using stolen credit cards and
corresponding counterfeit drivers’ licenses
provided by Nepa, Smith obtained mailing
addresses at two different "Mailboxes, Etc."
locations in Madison. Then, using five business
checks that had been stolen from the mail, Smith
went to five different area banks and opened one
business checking account at each bank. Each
account was opened in the business name of a
payee of one of the stolen checks and listed as
its address one of the two "Mailbox, Etc."
addresses. For identification, Smith provided the
banks with a false driver’s license, and on one
occasion, the corresponding stolen credit card.
She then made a small initial cash deposit into
each account.
A few days later, Smith deposited one of the
stolen business checks into each corresponding
account. She waited a few days for the checks to
clear and then withdrew most of the available
funds in the form of cash and cashier’s checks,
each check made payable to one of her aliases.
She then quickly (usually the same day) cashed
the cashier’s checks at a branch location of the
victim bank. To cash each of the cashier’s
checks, Smith posed as the payee. She showed a
counterfeit driver’s license, and, sometimes, the
underlying credit card, for identification.
The credit cards were used for more than
identification at the banks. Smith also used them
to obtain almost $30,000 in unauthorized cash
advances at the same banks. She charged a rental
car to one of the cards, and charged $5,000 worth
of gas, food, and liquor to others. The
indictment against Smith originally charged her
with intent to defraud using unauthorized credit
cards and obtaining over $1,000 in cash advances
and goods, in violation of 18 U.S.C.
sec.1029(a)(2), but that count was dismissed by
the Government without prejudice prior to trial.
A criminal complaint charging bank fraud was
issued by the United States District Court for
the Western District of Wisconsin on January 28,
1999 and Smith was arrested later that night at
her last known address, a YMCA in Hollywood,
California. The arrest was made by four plain
clothes FBI agents and one postal inspector at
9:45 pm. Smith did not resist.
Smith was taken to the U.S. Postal Service
Office in Los Angeles for questioning. The agents
began by reading Smith her rights off of a
standardized form. She was then given the form to
read, which she appeared to do. The agents asked
Smith if she understood her rights and Smith
indicated that she did, either verbally or with
an affirmative nod of her head. One of the agents
then asked Smith to sign the waiver of rights
form. Smith refused. But, when the agents asked
whether she wanted to talk to them and whether
they could ask her questions, Smith said "yes."
Thereafter, the agents questioned Smith for about
one hour, during which time she admitted her
involvement in the fraud scheme. Smith never
asked that the questioning be halted or that she
be provided with an attorney. Smith was
subsequently indicted on six counts of bank
fraud, one count of credit card fraud and one
count of using a false social security number.
Prior to trial, Smith moved to suppress her
confession, claiming that she did not waive her
Miranda rights and that because of the coercive
and intimidating atmosphere during her
interrogation, her statements to the agents were
not voluntary. An evidentiary hearing was held
before the Magistrate Judge and he recommended
that the motion be denied. The District Judge
adopted the Magistrate’s recommendation and
denied Smith’s motion to suppress.
After a two day trial, a federal jury found
Smith guilty on the remaining counts of bank
fraud and using a false social security number.
The Presentence Report recommended that the
purchases on the stolen credit cards be included
for purposes of offense level computation and for
purposes of computing restitution. It calculated
the amount at $40,320.76. Smith objected to the
inclusion of that amount since the charge of
credit card fraud against her had been dropped.
At the sentencing hearing, under U.S.S.G.
sec.2F1.1(b)(1), the court calculated the
undisputed losses from the bank fraud at
$167,418.25. It also added attempted credit card
transactions producing no loss in the amount of
$9,800 and actual credit card losses of
$35,055.80, for a total loss of $212,274.05. By
including the credit card losses in the
computation, Smith’s base offense level was 14,
instead of 13. The court also added a two level
enhancement under U.S.S.G. sec.3C1.1 for
obstruction of justice for Smith’s false
testimony at the suppression hearing and denied
any downward departure under U.S.S.G. sec.3B1.2
for Smith’s claim that she was only a minor
participant in the scheme. Sentence was imposed
at 30 months, and restitution was ordered at
$202,474.05. Judgment was entered accordingly.
II. DISCUSSION
A. Motion to Suppress
The two issues before us regarding Smith’s
motion to suppress are whether Smith knowingly
and voluntarily waived her right against self-
incrimination and whether Smith’s post-arrest
statements to the agents were voluntary. This
Court reviews the question of whether Smith’s
waiver of her Fifth Amendment Miranda rights was
voluntary de novo. United States v. Mills, 122
F.3d 346, 350 (7th Cir. 1997), cert. denied, 522
U.S. 1033 (1997). We also review de novo Smith’s
claim that her inculpatory statements to the
authorities were involuntary. United States v.
Dillon, 150 F.3d 754, 757 (7th Cir. 1998). Both
questions are considered under the totality of
the circumstances. United States v. Brooks, 125
F.3d 484, 490-92 (7th Cir. 1997).
As the Government properly states in its brief,
Smith’s motion to suppress presents "a factual
dispute," a veritable "she said" versus "they
said." The District Court ruled against Smith
after hearing evidence, saying Smith’s testimony
was "totally unbelievable." We must give
deference to the District Court’s findings of
fact, Mills, 122 F.3d at 350-51, and credibility
determinations, United States v. Jensen, 169 F.3d
1044, 1046 (7th Cir. 1999).
Smith’s arguments here are the same as those
raised below. She claims that her waiver was not
valid and her statements not voluntary because
she was handcuffed to her chair, under the
influence of cocaine and sleeping pills, tired,
menstruating, ill, intimidated and not allowed to
use the bathroom until after she confessed.
Weighed against contrasting evidence presented by
the government agents, Smith’s attempts to shed
her confession fail.
The government agents testified, and the
District Court found, that Smith’s rights were
read to her in a slow, deliberate and
understandable manner and that Smith was given
the printed form to read, which she appeared to
do. When asked whether she understood her rights,
Smith indicated that she did. She then refused to
sign a waiver form, but went on to confess
anyway.
Smith argues that she did not waive her Fifth
Amendment right against self-incrimination and
that her avowal should be suppressed because she
refused to sign the waiver of rights form when it
was presented to her. However, a Miranda waiver
need not be express. It may be inferred from a
defendant’s understanding of her rights coupled
with a course of conduct reflecting her desire to
give up her right to remain silent. North
Carolina v. Butler, 441 U.S. 369, 373-76 (1979).
Indeed, waiver may be inferred from the
defendant’s conduct, even when she has refused to
sign a waiver form. United States v. Banks, 78
F.3d 1190, 1196-98 (7th Cir. 1996), vacated on
other grounds, 519 U.S. 990 (1996), on remand,
United States v. Mills, 122 F.3d 346 (1997),
cert. denied 522 U.S. 1033 (1997).
Here, there can be no doubt that Smith’s
conduct demonstrated a waiver of her right to
remain silent. She immediately began talking to
the agents after refusing to sign the waiver form
and continued to do so for an hour. During that
entire time, she never requested an attorney and
never asked that the questioning be stopped.
There can be no credible argument under these
facts that Smith’s conduct was not a waiver of
her Miranda rights.
Smith claims alternatively that her confession
was the product of the agents’ overbearing
tactics. The agents dispute that the atmosphere
during Smith’s interrogation was intimidating or
coercive. They said that at the outset they
offered Smith a soda. She refused it, but asked
for a glass of water, which was immediately
brought to her. They maintain that they sat a
respectful distance from her, they did not gang
up on her, and that most of the questioning was
done by one agent, although occasionally the
other agents would ask clarifying or follow-up
questions. As to her claim that she was not
allowed to use the bathroom until after she
confessed, the agents said that Smith did not ask
to use the restroom until the end of the
interview and that her request was immediately
granted. The District Court believed the agents’
testimony and found that, contrary to Smith’s
description, the atmosphere was "low key and
informal." Thus, it seems to us, that despite
"striv[ing] mightly", in the words of the
Magistrate Judge, to convince the court that the
agents’ tactics overbore her will and forced her
into talking, Smith’s statements were voluntary
and properly used against her at trial.
Nor are we persuaded that Smith was
incapacitated by having ingested cocaine and
over-the-counter sleeping pills 45 minutes prior
to her arrest. Smith did not tell the agents that
she had taken drugs, did not appear to the agents
to be under the influence of any drugs, and
responded appropriately to the agents’ questions,
hardly the conduct expected of a woman who was
mentally disabled and unable to make knowing
choices. Most damaging to her claim, though, is
the fact that she refused to sign the waiver
form. Smith’s refusal to do so shows her
independent thinking and exercise of her free
will. Her claim thus fails.
The question before us is whether Smith was too
high on crack, too sleepy, feeling too unwell
because she was menstruating and too intimidated
to be mentally capable of executing a knowing and
intelligent waiver of her Miranda rights. The
District Court had no hesitation in finding that
Smith’s excuses were "totally unbelievable" and
that the Government’s description of events was
more credible. We defer to the District Court’s
thorough and specific findings, especially since
they are amply supported by the evidence. We thus
affirm the denial of Smith’s motion to suppress
her confession.
B. Sentencing Issues
At sentencing, the District Court found Smith’s
total offense level to be 18. A base offense
level of six was applied because Smith’s crime
involved fraud or deceit. U.S.S.G. sec.2F1.1(2).
Eight levels were added because the amount was
more than $200,000. U.S.S.G.sec.2F1.1(b)(1)(I).
Additional levels were then added because Smith
was found by the court to have obstructed justice
by testifying falsely during the suppression
hearing and because the crime involved more than
minimal planning. Had the court not included the
credit card losses, the amount would have been
less than $200,000 and Smith’s offense level
would have been one point lower. U.S.S.G.
sec.2F1.1(b)(1)(H). Smith argues that the
District Court erred in including the credit card
charges in the loss amount. She contends that
those losses cannot be included because they
relate to crimes for which she was neither
charged nor convicted and because the court did
not make the requisite findings that the credit
card fraud was conduct relevant to the bank fraud
scheme.
We review the District Court’s factual
determinations for clear error, but its
interpretations of the sentencing guidelines de
novo. United States v. Petty, 132 F.3d 373, 380
(7th Cir. 1997); United States v. Edwards, 115
F.3d 1322, 1325 (7th Cir. 1997). A finding that
uncharged activity is "relevant conduct" that can
be considered under the sentencing guidelines is
a finding of fact that we will not disturb unless
it is clearly erroneous. United States v. Sykes,
7 F.3d 1331, 1335 (7th Cir. 1993). Applying these
standards to the questions before us we find that
the District Court correctly applied the
sentencing guidelines to findings of fact that
were not clearly erroneous and we thus affirm
Smith’s sentence.
Smith’s first argument, that the losses and the
attempted losses from the credit cards cannot be
attributed to her for sentencing purposes because
they relate to uncharged conduct and conduct for
which she was not convicted, is easily disposed
of. "[S]entencing judges may look to the conduct
surrounding the offense of conviction in
fashioning an appropriate sentence, regardless of
whether the defendant was ever charged with or
convicted of that conduct, and regardless of
whether he could be." United States v. Dawn, 129
F.3d 878, 884 (7th Cir. 1997). See also United
States v. Meyer, 157 F.3d 1067, 1081-82 (7th Cir.
1998), cert. denied 119 S. Ct. 1465 (1999). To
avoid the obvious rejection of her argument on
this basis, Smith rephrases it as an argument
that the credit card losses do not "square with"
the indictment, which charges bank fraud. We do
not, however, believe this change in verbiage
changes the result. Her attempt to limit the
"relevant conduct" to conduct outlined in the
indictment is exactly the same argument
considered and rejected by this Court in Meyer
and Dawn. We see no reason to depart from those
holdings here.
Smith’s other argument, that the credit card
fraud cannot be included in the loss calculation
because it was not part of a "common scheme or
plan" or part of the "same course of conduct," is
more substantial. "The [s]entencing [g]uidelines
specifically contemplate, indeed require, that
the district courts take into account the full
range of related conduct, whether it be charged
or not." United States v. Petty, 132 F.3d 373,
381 (7th Cir. 1997) (citation and internal
quotation marks omitted). "Related conduct" is
described by the guidelines as all acts or
omissions by the defendant (1) which occur during
the offense of conviction, in preparation for
that offense, or in the course of attempting to
avoid detection or responsibility for that
offense, or (2) are part of the "same course of
conduct or common scheme or plan" as the offense
of conviction. U.S.S.G. sec.1B1.3(a)(1).
[B]ecause the relevant conduct rule is "not
without limits" and "because its application so
favors the government," we insist that courts be
"scrupulous to ensure that the government has
adhered to those limits." One of the ways in
which we ensure that these limits are maintained
is by requiring sentencing courts to "explicitly
state and support, either at the sentencing
hearing or (preferably) in a written statement of
reasons, the finding that the unconvicted
activities bore the necessary relation to the
convicted offense." United States v. Beler, 20
F.3d 1428, 1431-32 (7th Cir. 1994), citing United
States v. Duarte, 950 F.2d 1255, 1263 (7th Cir.
1991).
United States v. Crockett, 82 F.3d 722, 729 (7th
Cir. 1996).
Not only does Smith claim that the credit card
fraud was not conduct relevant to the bank fraud
scheme for sentencing and restitution purposes,
she claims that the District Court did not follow
our mandate that it make explicit findings that
the credit card scheme was part of a "common
scheme or plan" or "part of the same course of
conduct" (as those terms are defined by
Application Note 9 to U.S.S.G. sec.1B1.3) as the
bank fraud scheme, and thus the credit card
losses cannot be counted. We agree that the
sentencing judge did not spend a great deal of
time developing this connection, and we would
wish all judges to be very explicit and detailed,
but we do not agree with Smith that no findings
were made by the court here. The judge noted that
the credit cards which were wrongfully used were
in the same names as the aliases used by Smith
and that there were some photos by bank
surveillance cameras showing that it was Smith
attempting to obtain cash with those cards. The
judge found that the charges and advances were
made during the same thirteen day period in which
the defendant was defrauding the banks and that
the transactions were the same "MO" as that used
by Smith during the bank scheme. As we have said,
these findings may be bare bones and perhaps more
could have been done by the court to set forth
its reasoning as clearly as possible, but the
fact that more could have been said does not
compel us to vacate Smith’s sentence.
Deficiencies in the District Court’s statements
that are harmless do not require a vacation of
the sentence. Crockett, 82 F.3d at 730.
In Crockett, the defendant was convicted on
drug conspiracy charges. At sentencing, the judge
calculated the quantity of drugs by including one
transaction that occurred after the scope of the
charged conspiracy. He justified the inclusion by
saying it was "related conduct," and supported
that by saying only that all of the conduct
involved "dealing in the field of controlled
substances," all of which were close in time and
involved the same accomplices. We found that
minimal effort to be harmless error because it
was backed up by the objective evidence and did
not change the defendant’s base offense level.
We have, in other cases, also found that a
pacuity of explicit findings by the sentencing
judge does not mandate the vacation of the
defendant’s sentence. See e.g., Petty, 132 F.3d
373. There, we held that because the District
Court found a common purpose of financial gain,
similar modus operandi and common accomplices,
that was enough to satisfy our requirement of
explicit findings. Id. at 381. The District Court
made similar findings here. Because they are
backed up by the objective evidence, we affirm
the inclusion of the credit card losses and
affirm Smith’s sentence.
The fact that it was ultimately the credit card
companies and not the banks that suffered the
losses occasioned by the wrongful use of the
credit cards does not mean, as Smith suggests,
that the District Court could not order
restitution for those losses. Restitution can
include all victims of the scheme. United States
v. Bennett, 943 F.2d 738, 740 (7th Cir. 1991),
cert. denied, 504 U.S. 987 (1992). Smith contends
that she can only be compelled to compensate the
banks because that is the only fraud scheme with
which she was charged and convicted. Again, we
reject that notion. As long as the court can
adequately demarcate the scheme, it can order
restitution for any victim harmed by the
defendant’s conduct during the course of that
scheme. United States v. Hensley, 91 F.3d 274,
277 (1st Cir. 1996). Not only did the District
Court conclude that the credit card fraud was
part of the same scheme or course of conduct as
the bank fraud scheme, our review of the evidence
convinces us that this is true. Smith used the
credit cards to rent the car used to drive
herself and her accomplice to and from the
various banks, she used the credit cards as
identification to open some of the accounts, and
she used them as identification to cash some of
the cashier’s checks. Also, all of the purchases
and cash advances on the cards were made in the
Madison area, the same location as the bank
fraud. Given all of this, we are convinced that
the schemes were so intertwined, that the credit
card scheme was used to support the bank fraud
scheme, that restitution is appropriate. The
order of restitution including the credit card
losses is thus affirmed.
III. CONCLUSION
For the foregoing reasons, the judgment of the
District Court is affirmed.
AFFIRMED.
/1 Smith also raises as claims of error the District
Court’s failure to give a requested jury
instruction, addition of a two level enhancement
at sentencing for obstruction of justice and
refusal to grant a downward departure for being
only a minimal participant in the fraud scheme.
We believe these contentions to be wholly without
merit and do not address them in our opinion.