United States v. Johnny Stewart ( 2015 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
SEP 18 2015
UNITED STATES OF AMERICA, No. 13-50161 MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
Plaintiff - Appellee, D.C. No. 2:12-cr-00179-GAF-1
v.
MEMORANDUM*
JOHNNY STEWART,
Defendant - Appellant.
UNITED STATES OF AMERICA, No. 13-50377
Plaintiff - Appellee, D.C. No. 2:12-cr-00179-GAF-3
v.
CLAYTON STEWART, aka Douglas
Blackburn, etc.,
Defendant - Appellant.
Appeal from the United States District Court
for the Central District of California
Gary A. Feess, District Judge, Presiding
Argued and Submitted September 1, 2015
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
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Before: GRABER, RAWLINSON, and WATFORD, Circuit Judges.
Johnny Stewart raises a number of arguments on appeal challenging his
convictions and his sentence, while Clayton Stewart raises several arguments
challenging his sentence. We will address Johnny Stewart’s arguments first,
before turning to the one argument that Clayton Stewart raises that relates to his
sentence alone. We will then address the remaining arguments that are raised
jointly with respect to both defendants’ sentences.
1. Johnny Stewart’s Arguments
a. The district court did not abuse its discretion in denying Johnny Stewart’s
request for substitute counsel. The district court’s inquiry into the attorney-client
conflict was more than adequate. The court allowed Stewart “to express freely his
concerns,” United States v. Castro, 972 F.2d 1107, 1110 (9th Cir. 1992), overruled
on other grounds by United States v. Jimenez Recio, 537 U.S. 270 (2003), and the
court’s questions were “targeted toward understanding the crux of the
disagreement,” United States v. Mendez-Sanchez, 563 F.3d 935, 943 (9th Cir.
2009). Those inquiries revealed that counsel had not abandoned Stewart or
otherwise left him without trained legal representation. Cf. United States v. Reyes-
Bosque, 596 F.3d 1017, 1034 (9th Cir. 2010); United States v. Adelzo-Gonzalez,
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268 F.3d 772, 777–80 (9th Cir. 2001). The decision not to appoint substitute
counsel thus did not render involuntary Stewart’s subsequent waiver of his right to
counsel.
b. The government introduced sufficient evidence to support Stewart’s
convictions for aggravated identity theft. See United States v. Nevils, 598 F.3d
1158, 1163–65 (9th Cir. 2010) (en banc). Most significantly, Stewart possessed a
thumb drive that contained detailed credit reports for individuals with good credit,
each of whom was proved to be a real person. The jury heard no evidence
suggesting that good credit histories can be developed through the use of purely
synthetic identities. In addition, the thumb drive contained completed tax
documents for one of the victims of the scheme. Given the record in this case, a
reasonable jury could find that Stewart knew that “the means of identification at
issue belonged to another person.” Flores-Figueroa v. United States, 556 U.S.
646, 657 (2009).
c. We reject Stewart’s challenge to the validity of his convictions for money
laundering. The activity charged in counts 19 and 21 of the indictment plainly
meets the elements required to prove money laundering under 18 U.S.C. § 1956(a).
Stewart transferred fraudulently obtained funds—the “proceeds” of bank
fraud—from a checking account belonging to one of his sham businesses into a
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different sham business’s account after the first one was frozen. That activity was
separate and distinct from the underlying fraud by which Stewart acquired the
credit in the first place. See United States v. Lomow, 266 F.3d 1013, 1018 (9th Cir.
2001), superseded by statute on other grounds as recognized in United States v.
McEnry, 659 F.3d 893, 899 n.8 (9th Cir. 2011).
We need not decide whether the activity charged in counts 18 and 20 of the
indictment also satisfied the elements of the money laundering statute. Even if the
district court should have dismissed counts 18 and 20 and entered convictions on
only two counts of money laundering instead of four, that would not have made
any difference in calculating Stewart’s Sentencing Guidelines range. See U.S.S.G.
§§ 2S1.1, 3D1.2(c), 3D1.3(a). Thus, no remand for resentencing would have been
necessary. See United States v. Baker, 10 F.3d 1374, 1421 (9th Cir. 1993),
overruled on other grounds by United States v. Nordby, 225 F.3d 1053, 1059 (9th
Cir. 2000).
d. The district court did not abuse its discretion in imposing a two-level
enhancement for obstruction of justice under U.S.S.G. § 3C1.1. On direct
examination—in response to questions from his brother—Clayton Stewart testified
that he did not know that the identifying information belonged to real people and
that it was preferable to use the identity of an “artificial person” because it was
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“less hassle.” Johnny Stewart also elicited testimony that Clayton Stewart had
never spoken to Postal Inspector Shen, who had investigated the Stewarts’ scheme.
The evidence at trial supports the conclusion that these statements were false. See
United States v. Garcia, 135 F.3d 667, 671 (9th Cir. 1998). Inspector Shen
testified that he had spoken to Clayton Stewart “face to face . . . on numerous
occasions,” including as part of the investigation into this case. With respect to the
identifying information, as noted above, Stewart possessed a thumb drive that
contained credit and address histories of the victims, including full credit reports of
real people. The trial record also showed that a bank representative told Clayton
Stewart (who was posing as victim A.S. at the time) that bank records showed A.S.
had been an American Express cardholder since 1993.
These false statements were material. Knowledge that the identifying
information belonged to real people was a necessary element for the aggravated
identity theft charges, Flores-Figueroa, 556 U.S. at 657, and Clayton Stewart’s
denials that he spoke to Inspector Shen contradicted the testimony of the agent who
identified his voice and testified more generally about the investigation into the
scheme. The enhancement was therefore well supported.
That the district court did not make specific, on-the-record findings of
materiality or willfulness does not compel a contrary conclusion. Although “it is
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preferable for a district court to address each element of the alleged perjury in a
separate and clear finding,” United States v. Cordova Barajas, 360 F.3d 1037,
1043 (9th Cir. 2004) (quoting United States v. Dunnigan, 507 U.S. 87, 95 (1993)),
“[s]uch express findings . . . are not required,” id. And here, the district court did
“make[] a finding of an obstruction of, or impediment to, justice that encompasses
all of the factual predicates for a finding of perjury.” Id. (quoting Dunnigan, 507
U.S. at 95).
e. Given that the record supports the district court’s finding that Johnny
Stewart suborned at least some perjurious testimony by his brother, the district
court did not err in refusing to decrease Stewart’s offense level for acceptance of
responsibility. See U.S.S.G. § 3E1.1 cmt. n.4.
f. The district court did not abuse its discretion in imposing a two-level
enhancement for possession of device-making equipment. The record supports the
finding that Johnny Stewart—who had fraudulent credit cards issued in his
name—had at least constructive possession over premises at which agents seized
not only passport-sized photographs of Stewart and materials for making driver’s
licenses, but also a card-cutting machine, which is clearly “designed or primarily
used for making an access device.” 18 U.S.C. § 1029(e)(6); see also id.
§ 1029(e)(1).
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g. The restitution order requires Stewart to pay more than he gained by the
fraud. The government concedes that the correct restitution amount is
$404,284.80. We vacate the restitution order and remand for the limited purpose
of allowing the district court to correct this error.
2. Clayton Stewart’s Arguments
The district court did not plainly err in allowing Clayton Stewart to testify at
his brother’s trial outside the presence of counsel. See Fed. R. Crim. P. 52(b). No
precedent of this court or the Supreme Court makes it “clear” or “obvious,” United
States v. Olano, 507 U.S. 725, 734 (1993), that testifying at his brother’s trial
constituted a critical stage of Clayton Stewart’s prosecution. Thus, Stewart cannot
satisfy the first prong of the plain error test, which must be met even if the district
court’s failure to obtain a knowing and intelligent waiver of Stewart’s right to
counsel would otherwise amount to structural error. See United States v.
Yamashiro, 788 F.3d 1231, 1234–36 (9th Cir. 2015).
3. Joint Arguments
a. The district court did not plainly err in imposing the sophisticated means
enhancement under U.S.S.G. § 2B1.1(b)(10)(C) in tandem with the
§ 2S1.1(b)(2)(B) enhancement for money laundering. The Sentencing Guidelines
“expressly forbid[]” double-counting “where it is not intended.” United States v.
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Rosas, 615 F.3d 1058, 1065 (9th Cir. 2010) (quoting United States v. Reese, 2 F.3d
870, 894 (9th Cir. 1993)). The Guidelines do not expressly forbid applying these
two enhancements together.
b. The district court did not abuse its discretion in imposing a two-level
enhancement for aggravating role under U.S.S.G. § 3B1.1(c). The Stewarts
applied for the credit cards they used to make fraudulent charges; they made
telephone calls to banks posing as their victims; and they opened sham businesses
to launder their ill-gotten gains. The record also supports the conclusion that the
Stewarts directed the activities of Dexter Hardy, whose ID was found at the office
of one of the brothers’ sham businesses and who was paid in cash for carrying out
less central tasks. A “factual basis” thus exists for characterizing both Johnny
Stewart and Clayton Stewart as organizers or leaders under § 3B1.1. United States
v. Avila, 95 F.3d 887, 890 (9th Cir. 1996); see United States v. Ingham, 486 F.3d
1068, 1074–75 (9th Cir. 2007).
c. The district court did not abuse its discretion in imposing a two-level
enhancement for the number of victims. The Sentencing Guidelines call for a two-
level increase “[i]f the offense” of conviction “involved 10 or more victims.”
U.S.S.G. § 2B1.1(b)(2)(A). Nothing in the Guidelines precludes a district court
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from aggregating institutional victims and victims who are natural persons. See id.
cmt. nn.1, 4.
AFFIRMED IN PART, VACATED IN PART, and REMANDED IN
PART.