United States v. Cabrera

PUBLISH
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________________
FILED
No. 98-4432 U.S. COURT OF APPEALS
________________________________ ELEVENTH CIRCUIT
D.C. Docket No. 96-CR-562-DLG 04/19/99
THOMAS K. KAHN
CLERK
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
LUIS CABRERA, a.k.a. Luis Rafael Cabrera,
Defendant-Appellant.
---------------------------------------------------------------------------------------
________________________________
No. 98-4434
________________________________
D.C. Docket No. 98-CR-77-DLG
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
LUIS CABRERA,
Defendant-Appellant.
____________________________________________________________
Appeals from the United States District Court
for the Southern District of Florida
____________________________________________________________
(April 19, 1999)
Before HATCHETT, Chief Judge, BARKETT, Circuit Judge, and RONEY, Senior Circuit
Judge.
HATCHETT, Chief Judge:
Appellant Luis Cabrera appeals his conviction and sentence for knowingly possessing
cellular telephone cloning equipment, in violation of 18 U.S.C. § 1029(a)(4). Because the
government failed to provide reliable and specific evidence regarding the fraud loss attributable
to Cabrera, we vacate Cabrera’s sentence and remand the case to the district court for
resentencing.
I. BACKGROUND
In June 1996, a confidential informant told Secret Service agents than an individual
known to him as “Shorty” had a small black box known as a “copy-cat,” a device that allows
individuals to clone cellular telephones illegally. Witnesses later identified “Shorty” as the
appellant Cabrera. During a recorded telephone conversation between Cabrera and the
informant, Cabrera offered to clone a cellular telephone for the informant in exchange for ten
Electronic Serial Number/ Mobile Identification Number (ESN/MIN) combinations.1 In
1
A cellular service provider assigns a combination of an ESN and a MIN to each cellular
telephone subscriber to access service. A combination of the two numbers also furnishes the
cellular service provider with a means to bill customers for their service usage.
A cellular telephone cloning operation exists where an individual or group of individuals
acquire ESN/MIN combinations illegally from subscribers’ cellular telephones to permit the
unauthorized use of those accounts; the “cloner” utilizes an electronic serial number reader (ESN
reader) to obtain the combinations. Cloners reprogram the victim subscriber’s ESN/MIN
2
addition, Cabrera told the informant that he could sell him a copy-cat for $1899. Later that day
at a meeting, the informant, who was wearing a wire, gave Cabrera a cellular telephone and a
piece of paper containing ten fictitious ESN/MIN combinations. Using his copy-cat, Cabrera
cloned the cellular telephone, replacing its original ESN/MIN combination with one of those
provided from the informant. 2
After Secret Service agents, who were surveilling the meeting, arrested Cabrera, he
admitted that he owned the copy-cat and cloning cables and had used them to clone two or three
cellular telephones. Cabrera also stated that his “scanner”(ESN reader) was broken, making it
necessary for him to purchase ESN/MIN combinations. Cabrera stated he used the “scanner” for
one month before it became inoperable, and that he purchased nine ESN/MIN combinations
from an individual named “Tony.”3
When the agents later searched Cabrera’s home, they seized an entire cloning operation
consisting of a computer, cloning software, computer disks containing ESN/MIN combinations,
cloning interface cables, an ESN reader, various cellular telephones, a computer-generated list of
combination into the cloned cellular telephone. The cloned cellular telephone user can then gain
access to cellular service; the cellular service provider charges the unauthorized usage to the
victim subscriber’s telephone. The cloned cellular telephone user utilizes the telephone
simultaneously with the authorized user until the victim discovers and reports the unauthorized
calls. When the victim reports the fraud, the cellular provider normally removes the
unauthorized calls from the victim’s cellular telephone bill and changes the cellular telephone’s
ESN/MIN combination. Thus, ESN/MIN combinations are usually only “good” for
approximately thirty days; once the victim subscribers receive their monthly cellular telephone
bill and report the fraud, the cellular service provider invalidates the ESN/MIN combinations.
2
A copy-cat can reprogram the ESN/MIN combination assigned to a cellular telephone
originally and replace it with a different ESN/MIN combination.
3
The record does not indicate how many of the ESN/MIN combinations found at
Cabrera’s home “Tony” provided to Cabrera.
3
ESN/MIN combinations and an EPROM programmer, which cloners use to reprogram cellular
telephones. Cabrera shared his home with a roommate.
At the time of his arrest, Cabrera gave the agents a list of ESN/MIN numbers that he had
cloned.4 The agents gave all of the ESN/MIN combinations found on Cabrera’s handwritten list,
the computer-generated list, the computer and the computer disks to cellular service providers so
that they could determine whether any of the legitimate owners of the cellular telephones
assigned the combinations were defrauded. In addition, the agents interviewed Nelson Diaz, the
owner of the air conditioning business where the agents arrested Cabrera. Diaz signed a
statement acknowledging that he had known Cabrera for one and a half years and that Cabrera
had cloned telephones during that entire period.
II. PROCEDURAL HISTORY
A grand jury in the Southern District of Florida indicted Cabrera on one count of
possessing telephone cloning equipment in violation of 18 U.S.C. § 1029(a)(4).5 Before
Cabrera’s sentencing, a probation officer prepared a Presentence Investigation Report (PSI) that
calculated Cabrera’s base offense level at six, pursuant to U.S. Sentencing Guidelines Manual §
2F1.1. The PSI recommended that the district court adjust this offense level upward eleven
additional levels, pursuant to Sentencing Guidelines § 2F1.1(b)(1)(L), to reflect a fraud loss of
$850,897.32. The PSI based the fraud loss figure on the total amount of fraud the cellular
4
The sentencing transcript refers to a page and one half handwritten list of ESN/MIN
numbers that Cabrera provided to the agents. The list is not in the record.
5
Section 1029 (a) provides in relevant part: “Whoever-- (4) knowingly, and with intent to
defraud, produces, traffics in, has control or custody of, or possesses device- making equipment;
shall, if the offense affects interstate or foreign commerce, be punished as provided in subsection
(c) of this section.”
4
service providers reported for all of the ESN/MIN combinations contained on Cabrera’s
handwritten list, the computer-generated list, the computer and the computer disks found in
Cabrera’s home. The PSI also recommended that Cabrera receive a two-level enhancement to
reflect that his offense involved more than minimal planning and/or more than one victim; and it
also recommended a three-level decrease for his acceptance of responsibility and his timely
guilty plea. Based on a total offense level of 16 and a nonexistent criminal history, the PSI
calculated Cabrera’s presumptive guidelines sentencing range to be between 21 and 27 months.6
Cabrera filed a motion for the government to produce specific evidence regarding the
fraud loss calculation in the PSI. The government filed a responsive pleading with several
attachments, including one attachment that summarized the fraud loss each cellular service
provider suffered. Although the government stated that all of the loss occurred within a one-year
period, the summary failed to provide a time period for each loss. Moreover, the compilation
did not associate the loss with the ESN/MIN combinations found on the list Cabrera provided
containing combinations that he used to clone telephones, the computer generated list found in
Cabrera’s home, or the computer and accompanying disks, also found in Cabrera’s home.
Cabrera filed objections to the PSI challenging the fraud loss figure and moved to strike
the government’s fraud loss amount. Cabrera also argued that the government failed to prove
that he was the person responsible for the fraud loss amount it advanced and that he cloned
6
The probation officer later prepared a second PSI that increased the sentencing
recommendation from 27 to 33 months after Cabrera failed to appear at his first sentencing
hearing.
5
cellular telephones for only a short time.7 In addition, Cabrera requested that the government
identify what portion of the loss came from the ESN/MIN combinations that he provided to the
agents when they arrested him.
Cabrera pleaded guilty to possessing cellular telephone cloning equipment.8 At the
sentencing hearing, Cabrera argued that the government had failed to support its fraud loss figure
through specific and reliable evidence that linked him to the loss. Although Cabrera admitted
that he possessed the cellular telephone cloning equipment, he stated that the government’s
evidence did not show that he had used the computer and software seized from his home, which
he shared with another individual, to clone telephones. Cabrera also argued that it is “well
known” that different cloners use the same ESN/MIN combinations and that the government
failed to show that these other individuals were not responsible for the loss.
When the district court asked Cabrera whether he wanted to present any evidence to
establish that someone else used the cellular telephone cloning equipment found in his home,
Cabrera instead discussed a sworn affidavit that he obtained from Diaz recanting his prior
7
The record does not contain a more specific figure for the time period that Cabrera
admits he cloned cellular telephones.
8
Cabrera initially failed to appear for sentencing. The government issued a bench
warrant for his arrest. The police arrested Cabrera and the grand jury indicted him for failing to
appear at sentencing and disobeying a court order to appear for sentencing pursuant to 18 U.S.C.
§§ 3146 and 401(3). The court consolidated the failure to appear case with the cellular telephone
cloning case. The issues in this appeal only relate to facts underlying the cellular telephone
cloning case.
6
statement and asserting that he was aware Cabrera cloned cellular telephones for only three
months, rather than a year and a half.9
In response, the government argued that Cabrera admitted cloning cellular telephones for
two years.10 The government stated that it attributed only one year of the fraud loss associated
with the stolen ESN/MIN combinations to Cabrera. The district court overruled Cabrera’s
objection to the government’s fraud loss figure, finding that the one-year period was appropriate
and noting that Cabrera presented no evidence to contradict the government’s figure. The
district court granted Cabrera’s request for the three level downward departure for acceptance of
responsibility. The district court sentenced Cabrera to 33 months of imprisonment, including 6
months on the failure to appear charge.
III. ISSUES
The issues we discuss are whether the district court erred when: (1) it failed to require the
government to provide “reliable and specific evidence” regarding the amount of fraud loss; and
(2) it adopted the PSI without making “any” findings on the issue of the disputed fraud loss
figure.
IV. DISCUSSION
9
No such statement from the investigator or Diaz exists in the record. The sentencing
transcript, however, reflects Cabrera’s assertion that the investigator was present and that the
government received a copy of Diaz’s statement. The PSI and the government both refer to
Nelson Diaz as the person who made both statements and owned the air conditioning company.
Cabrera’s brief refers to Jorge Diaz as making the second statement and owning the company.
The record also contains a sworn statement from a Carlos Diaz, who states that he owns the
company where Nelson Diaz works.
10
Cabrera’s statement, however, does not contain this admission. Further, the
government presented no direct evidence of this admission.
7
A. The fraud loss estimate
We review the district court’s loss determination for clear error. See United States v.
Goldberg, 60 F.3d 1536, 1539 (11th Cir. 1995). The guidelines do not require the government to
make a fraud loss determination with precision; the figure need only be a reasonable estimate
given the information available to the government. See United States v. Dominguez, 109 F.3d
675, 676 (11th Cir. 1997). Upon challenge, however, the government bears the burden of
supporting its loss calculation with “reliable and specific evidence.” See United States v.
Sepulveda, 115 F.3d 882, 890 (11th Cir. 1997) ; United States v. Lawrence, 47 F.3d 1559, 1566
(11th Cir. 1995). Cabrera argues that the district court impermissibly imposed an obligation on
him to produce evidence disputing the government’s figure rather than requiring the government
to meet this standard.
Cabrera first argues that, pursuant to Sepulveda, the government must proffer a “cell site”
analysis. See Sepulveda, 115 F.3d at 889. A cell site analysis identifies the geographic area
producing the calls. See Sepulveda, 115 F.3d at 890. Sepulveda, however, is factually
distinguishable from this case. In Sepulveda, the defendants operated a “call sell center” where
customers rented cellular telephones, with all the calls emanating from one location, the call sell
center. The call sell center was located between two portions, or sectors, of a cell site. After the
government arrested the Sepulveda defendants, it made numerous test calls at the call sell center
to determine the cell sector that handled the calls. Cell sector A handled all the test calls. The
government, however, charged the Sepulveda defendants with all the unauthorized calls made
from cell sector A and cell sector B. This court remanded the case for resentencing because the
cell site analysis the government proffered in response to the Sepulveda defendants’ challenge
8
was inconclusive about whether the unauthorized cell sector B calls more likely than not
originated from the defendants’ store. See Sepulveda, 115 F.3d at 891-92.
A cell site analysis is necessary in a case like Sepulveda where the cellular air time theft
occurs in one location and the government charges the defendant with possession of cloned
telephones in violation of 18 U.S.C. § 1029(a)(3). In this type of case, courts limit liability
appropriately to the amount of loss that the defendant’s cloned telephone caused. A cell site
analysis, however, is not helpful in a case involving device making equipment and the
production and distribution of cloned telephones in violation of 18 U.S.C. 1029 (a)(4), because
the origin of the loss cannot be pinpointed to one geographic area.11 Thus, a cell site analysis in
this case would not be helpful.
When the government convicts an individual for possession of cloning “tools,” and
wishes to enhance the sentence based on the amount of use associated with the illegally obtained
ESN/MIN combinations, the government must provide evidence specifically linking the amount
of fraud loss to the defendant’s cloning activities. Multiple unauthorized users often use the
same ESN/MIN combinations simultaneously. See Sepulveda, 115 F.3d at 890. Further, sellers
provide the same ESN/MIN combinations to multiple buyers. Because the ESN/MIN numbers
are a commodity that many individuals can utilize, the government must provide proof to
attribute the unauthorized calls made with the ESN/MIN combinations to the defendant. See
Sepulveda, 115 F.3d at 889 (holding that the government failed to carry its burden of proving the
amount of loss used to enhance the defendants’ sentence).
11
Once a cloner programs a telephone with a valid ESN/MIN combination, the user can
normally make calls to any number, from any location.
9
The government attempted to attribute the loss corresponding with all the ESN/MIN
combinations found on Cabrera’s handwritten list, the computer-generated list and all the
numbers acquired from the computer and computer disks to Cabrera. The loss summary that the
government produced fails to attribute each cellular provider’s loss to specific ESN/MIN
combinations, and thus fails to identify the origin of the loss clearly. The losses could be
associated with the ESN/MIN combinations found on either of the two lists, the computer disks,
the computer itself or a combination. The government failed to sufficiently link all of these
ESN/MIN combinations to Cabrera’s cloning activities.
The computer-generated list of ESN/MIN combinations found at Cabrera’s home
contained handwritten notes, but the government did not offer any evidence that the handwriting
was Cabrera’s. Additionally, the government failed to offer any testimony or other evidence that
Cabrera actually used the computer to clone cellular telephones or sold the ESN/MIN
combinations to others.12 The only direct evidence regarding the fraud loss is Cabrera’s own
handwritten list of ESN/MIN combinations that he provided to the Secret Service agents upon
arrest. Cabrera admitted that he used these combinations to clone cellular telephones.
Therefore, the fraud loss associated with these ESN/MIN combinations are properly attributable
to Cabrera.
The government argues that Cabrera did not properly preserve the issue of whether it
provided sufficient evidence to support its calculations. The record shows, however, that
12
In fact, Cabrera testified that he purchased nine of the ESN/MIN combinations from
“Tony.”
10
Cabrera objected repeatedly before and during sentencing regarding the fraud loss attributable to
him.
The government also argues that we should accept the Ninth Circuit’s holding in United
States v. Clayton, 108 F.3d 1114 (9th Cir. 1997). In Clayton, the police seized several cellular
telephones, connecting cables, adapters, a computer containing cloning software, a computer log
file containing ESN/MIN combinations and a calendar book containing several additional
ESN/MIN combinations. At least 2 of the telephones were cloned, and at least 29 of the log file
numbers were used to clone telephones. Clayton argued that the government could attribute to
him only a fraction of the fraud loss associated with the ESN/MIN combinations he possessed
because others could have obtained the same combinations and cloned them. The Ninth Circuit
rejected Clayton’s argument and held him responsible for the loss associated with all of the
ESN/MIN combinations he possessed. Clayton, 108 F.3d at 1118-19. Although Clayton appears
factually similar to this case, two important distinctions are present. First, in Clayton the
government pinpointed the loss to one specific source: the computer log file. In this case, the
government failed to specifically attribute the losses to any of the sources for the ESN/MIN
combinations. Second, in Clayton no evidence exists that anyone other than Clayton used the
truck, which contained all of the cloning “tools.” In this case, Cabrera asserted that he did not
have sole use of his home, which contained all of the ESN/MIN combinations except those on
the handwritten list. To the extent that our holding conflicts with Clayton, however, we reject
the proposition that the government can attribute the entire fraud loss associated with ESN/MIN
combinations to the defendant solely because the defendant possessed those combinations.
11
We hold that telephone cloning fraud loss is attributable to a defendant, and therefore can
be utilized to enhance the defendant’s sentence, only if the government provides reliable proof
linking the defendant to the ESN/MIN combinations fraudulently used.
B. The district court’s findings
Cabrera next argues that the district court abused its discretion in adopting the fraud loss
amount attributed to him in the PSI because a sentencing court cannot adopt the government’s
figures if they amount to “conclusory factual recitals.” See United States v. Bernardine, 73 F.3d
1078, 1081 (11th Cir. 1996). A sentencing court must make factual findings sufficient to support
the government’s claim of the amount of fraud loss attributed to a defendant in a PSI. See
United States v. Butler, 41 F.3d 1435, 1442 (11th Cir.), cert. denied, 514 U.S. 1121 (1995). The
district court found explicitly that the amount of loss attributed to Cabrera was correct because
he admitted that he possessed the equipment that caused the losses. Because we hold that mere
possession, without more, is insufficient to attribute the entire loss to Cabrera, the district court
did not make the specific factual findings necessary to support the government’s fraud loss
amount.
IV. CONCLUSION
Because we find insufficient evidence to support the amount of loss attributed to Cabrera,
we vacate the sentence and remand to the district court for resentencing consistent with this
opinion.
VACATED and REMANDED.
12