United States v. Berry

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
DEC 15 2003
TENTH CIRCUIT
PATRICK FISHER
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
No. 02-6372
v. (Western District of Oklahoma)
(D.C. No. 02-CR-27-R)
MICHELE RENEE BERRY,
Defendant-Appellant.
ORDER AND JUDGMENT *
Before SEYMOUR, MURPHY, and O’BRIEN, Circuit Judges.
After examining the briefs and appellate record, this court has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
I. Introduction
After a jury trial, appellant Michelle Renee Berry was found guilty of six
counts of wire fraud, in violation of 18 U.S.C. §§ 2(b) and 1343. A Presentence
Investigation Report (“PSR”) was prepared and Berry filed written objections.
The district court considered Berry’s objections, sustaining one but overruling
the others. The court sentenced Berry to twenty-four months’ incarceration on
each count to be served concurrently. The court also ordered Berry to pay
restitution in the total amount of $188,225.15. In this appeal, Berry does not
challenge her convictions but appeals the sentence imposed by the district court.
Exercising jurisdiction pursuant to 18 U.S.C. § 3742(a), this court affirms .
II. Background
In August 1997, Berry became a sales person for an Oklahoma corporation
known as Radios Unlimited, Inc. (“Radios Unlimited”). Radios Unlimited was
under contract to sell cellular telephones for Nextel, Inc. (“Nextel”). During the
course of her employment with Radios Unlimited, Berry created subscriber
agreements using fictitious corporate names and addresses in order to obtain a
supply of pre-approved cellular telephones. These records were transmitted to
Nextel via interstate communication devices. Nextel thereafter activated the
cellular telephones and mailed them to Berry.
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At trial, the government presented evidence that Berry established fifteen
fraudulent accounts and received approximately 300 cellular telephones. Berry
sold the telephones to individuals and directed the purchasers to mail their
payments for monthly service directly to her post office box address. Berry
deposited the air time payments into her personal bank account; she forwarded
only $1500 to Nextel.
Berry was convicted of six counts of wire fraud, in violation of 18 U.S.C.
§§ 2(b) and 1343. Applying U.S.S.G. § 2F1.1 (1997), the PSR calculated Berry’s
base offense level at six and recommended a seven-level increase in the base
offense level because the loss resulting from the fraud exceeded $120,000.00.
U.S.S.G. § 2F1.1(b)(1)(H) (1997). At sentencing, the district court overruled
Berry’s objection to the seven-level increase. Berry’s total offense level was set
at seventeen and her criminal history category at I. She was sentenced to twenty-
four months’ incarceration on each count, to be served concurrently.
Berry then brought this appeal. She does not challenge her convictions but
asserts that the district court erred in overruling her objection to the calculation
of the amount of the loss.
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III. Discussion
A. Standard of Review
This court reviews “the district court’s determination of a U.S.S.G. § 2F1.1
loss [] for clear error, but the factors which the district court may consider in
determining the loss are reviewed de novo.” United States v. Keifer , 198 F.3d
798, 800 (10th Cir. 1999). Because Berry objected to the calculation of the loss
amount in the PSR, the government was required to prove the facts underlying
the calculation by a preponderance of the evidence at the sentencing hearing. Id.B. Amount of Loss
The 1997 edition of the Guidelines Manual was used to calculate Berry’s
sentence. Pursuant to § 2F1.1, her offense level was affected by the value of the
loss caused by her criminal conduct. Loss was defined as “the value of the
money, property, or services unlawfully taken.” U.S.S.G. § 2F1.1, cmt. n.7
(1997) (cross-referencing U.S.S.G. § 2B1.1 for a more detailed definition of
loss). “Ordinarily, when property is taken or destroyed the loss is the fair market
value of the particular property at issue.” U.S.S.G. § 2B1.1, cmt. n.2 (1997).
At the sentencing hearing, FBI Special Agent Tim Akins testified for the
government. Agent Akins stated that he provided Nextel with the fifteen
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fraudulent account numbers. 1
In response, Nextel sent Akins “adjustment
sheets” for all fifteen accounts and invoices for some of the accounts. From this
information, Akins was able to determine the amount of bad-debt loss Nextel
wrote off for each account and the amount of any payments Nextel received on
the accounts after the loss was written off.
Akins summarized the information he received from Nextel on two charts
which were introduced at the sentencing hearing. The first chart listed each
account number, account name, number of telephones, amount of the bad debt
written off by Nextel, date the debt was written off, and adjustments to the
amount written off. The second chart compared the invoice balances and write-
off dates with the adjustment sheet balances and write-off dates. Akins testified
that based on his review of the records provided by Nextel, the actual loss
sustained by Nextel as a result of Berry’s fraudulent acts was $174,181.42.
Akins was the only witness at the sentencing hearing who testified about amount
of loss.
Berry raises three challenges to the government’s evidence of loss. She
first argues that the information Akins received from Nextel and upon which he
1
Berry’s argument on appeal is confined to the amount of Nextel’s loss.
She does not argue that the government failed to prove by a preponderance of the
evidence the amount of loss suffered by Radios Unlimited or the five individuals
identified in the judgment.
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based his loss calculation was unreliable for several reasons: (1) it did not
include any explanation of how Nextel arrived at its loss; (2) it did not indicate
whether billed minutes were included in any promotional price; (3) it did not
indicate how many minutes were included in the promotional price; (4) it did not
indicate when the promotion offer ended; (5) it was not derived from a full set of
invoices; (6) it did not indicate whether Nextel’s write-off minimized its losses;
(7) it did not indicate whether Nextel was intentionally keeping the fraudulent
accounts active in order to increase its losses and the amount it could recover in
restitution; (8) it did not indicate how many accounts Nextel received payments
on or how much money Nextel received; and (9) it did not indicate who made
payments on the accounts. We are not convinced by any of Berry’s arguments.
Akins testified that Nextel arrived at its loss by determining the amount it
wrote off as an uncollected bad debt for each of the fraudulent accounts. The
issues raised by Berry relating to the promotional period for each telephone are
irrelevant. Nextel determined the amount of its loss by reference to the amounts
billed for service but uncollected. Akins testified that Nextel had purged the
complete set of invoices for the fraudulent accounts. Nextel, however, combined
the uncollected amounts from those individual invoices into a single amount from
which it determined the total bad debt. As to Berry’s arguments that Nextel’s
write-off may have decreased its loss and that Nextel may have intentionally kept
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the fraudulent accounts active, Berry has not substantiated these bald allegations.
Finally, the government did present evidence at the sentencing hearing that
payments were received on some of the fraudulent accounts. These payments
were deducted from Nextel’s loss. The identity of the person making the
payment is irrelevant.
This court has previously held that a sentencing court may consider hearsay
evidence to determine loss if that evidence bears indicia of reliability. United
States v. Moore , 55 F.3d 1500, 1501 (10th Cir. 1995). Akins testified that he
received information directly from Nextel in response to his inquiry. The district
court was entitled to rely on the accounting information supplied to Akins by
Nextel particularly when, as in this case, there is simply nothing in the record
indicating that this information was fabricated or falsified. The alleged
deficiencies asserted by Berry are either wholly unfounded or have no bearing on
the reliability of the information provided to Akins by Nextel.
Berry next contends, for some of the same reasons she advances above,
that the government did not have adequate information from which it could
ascertain a correct loss amount. Its calculation and the district court’s finding,
she therefore contends, are erroneous. Specifically, she reasserts her arguments
that Akins did not know whether payments were being made on specific
accounts, the specific terms of any promotional period, how many minutes were
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used by each telephone, or why certain accounts were not closed until several
months after the fraud was discovered. As we stated, supra , Akins testified
regarding payments made on several of the fraudulent accounts. Nextel provided
Akins with the total amount billed to each account for monthly service but not
collected. Berry does not argue that Nextel did not make air time available for
each telephone on a monthly basis. She therefore, fails to explain how the terms
of any promotion period or the number of minutes used by each telephone are
relevant to the amount of Nextel’s loss. See U.S.S.G. § 2B1.1, cmt. n.2 (1997)
(“[W]hen property is taken or destroyed the loss is the fair market value of the
particular property at issue.”). Berry has also failed to substantiate her assertion
that Nextel benefitted from keeping the fraudulent accounts open until Berry’s
sentencing because the failure to terminate service to the telephones resulted in
an increased restitution award. Akins testified that the nature of Berry’s
fraudulent scheme made it difficult for Nextel to determine which accounts were
fraudulent and how many telephones were associated with the fraudulent
accounts.
Finally, Berry summarily argues that the government did not prove the
amount of the loss by a preponderance of the evidence. Because we find Berry’s
more specific arguments to be meritless, this argument also fails.
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IV. Conclusion
“For the purposes of [§ 2F1.1(b)(1)], the loss need not be determined with
precision. The court need only make a reasonable estimate of the loss, given the
available information.” U.S.S.G. § 2F1.1, cmt. n.8 (1997). This court concludes
that the factual findings relating to amount of loss made by the district court at
Berry’s sentencing hearing are supported by reliable information in the record
and are not clearly erroneous. Accordingly, the sentence imposed by the district
court is hereby affirmed .
ENTERED FOR THE COURT
Michael R. Murphy
Circuit Judge
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