United States v. Khalid Z. Sarsour

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
MARCH 31, 2008
THOMAS K. KAHN
No. 07-12650
CLERK
Non-Argument Calendar
________________________
D. C. Docket No. 05-00031-CR-01-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
KHALID Z. SARSOUR,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Georgia
_________________________
(March 31, 2008)
Before BIRCH, CARNES and BARKETT, Circuit Judges.
PER CURIAM:
A federal grand jury indicted Khalid Sarsour on 5 counts of the unauthorized
use of food stamp benefits with a value of $100 or more and 5 counts of the
unauthorized use of food stamp benefits with a value of $100 or less, all in
violation of 7 U.S.C. § 2024(b). Sarsour pled guilty on all counts. On appeal, he
disputes two sentencing enhancements, for total loss and for abuse of trust, and one
reduction denial, for acceptance of responsibility. We AFFIRM.
I. BACKGROUND
According to the presentence investigation report (“PSI”) adopted by the
district court, the federal food stamp program is administered by the United States
Department of Agriculture (“USDA”) to help eligible families in need of food
assistance. Food stamps are issued in Georgia through the use of the Electronic
Benefit Transfer (“EBT”) system. Recipients are credited with a specific monetary
amount per month in their EBT account, and the account balance is electronically
reduced when a food purchase is made at a participating store. Stores must apply
and receive authorization from the USDA before accepting EBT funds. Food
stamps are non-transferrable, cannot be used to buy certain items such as alcohol or
tobacco, and cannot be exchanged for cash.
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Sarsour owned Ace Market, Inc., which operated under the name Lee’s
Supermarket, from 2001 through 2004 in Augusta, Georgia. Unusual EBT activity
at Lee’s Supermarket, including a high number of sales ending in even dollar
amounts, such as $80, and multiple EBT withdrawals in short periods of time,
prompted an investigation. Agents interviewed a number of food stamp recipients
during the investigation, and many admitted to selling their EBT benefits, allowing
others to do so, or misusing benefits at Lee’s Supermarket between 2001 and 2004.
The probation officer calculated the total loss for the years 2001 to 2004 by
using an equation where the amount of loss equaled the total amount of benefits
redeemed minus the estimated total retail value of qualifying goods sold. Benefits
redeemed at Lee’s Supermarket from 2001 to 2004 equaled $1,501,196.62. The
estimated total retail value of qualifying goods sold by food stamps during the
same period was $1,033,380.25. The difference between the two amounts is
$467,816.37. The probation officer estimated the total of retail value of qualifying
goods by multiplying the total amount of qualifying goods bought for the market
by Sarsour’s own estimate that 64% of his sales were from food stamps.
The probation officer assigned Sarsour a base offense level of six, pursuant
to U.S.S.G. § 2B1.1(a)(2) (2006). He received a 14-level enhancement because the
amount of loss exceeded $400,000, U.S.S.G. § 2B1.1(b)(1)(H), and a two-level
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enhancement for abuse of a position of public trust, in accordance with U.S.S.G. §
3B1.3. Based on a total offense level of 22 and a criminal history category of I,
Sarsour’s sentencing range was 41-51 months of imprisonment.
Sarsour filed three objections to the PSI which mirror his issues on appeal.
He objected to the estimated loss amount, the two-point adjustment for abuse of
trust, and the refusal to award a three-point reduction for acceptance of
responsibility. At the sentencing hearing, the district court began by noting that
“there [were] a number of objections” to be addressed. R3 at 3. Sarsour’s lawyer
responded that “[a]ll of our objections, in a nutshell, basically go to how much is
the loss.” Id. at 4. The parties then spent almost the entire sentencing hearing
discussing only the loss determination. Two of Sarsour’s former employees
testified. Timothy Wright testified that a large majority of the market’s customers
utilized food stamps. Valerie Key testified that there were three cash registers, and
each one was equipped with EBT technology. Key estimated that 85% of the
market’s sales were EBT transactions, and she had never redeemed food stamps for
cash or allowed persons to purchase alcohol or cigarettes with EBT funds.
With respect to the amount of loss, Sarsour’s primary challenge to the PSI’s
calculation was that the percentage used for the number of food sales that were
paid by food stamps was too low. The probation officer explained his calculation,
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which used the percentage that Sarsour had originally cited as the number of food
sales conducted via food stamps. The government conceded that Sarsour was not
licensed to receive food stamp payments until early 2003. Id. at 48.
As the sentencing hearing neared its end, the district court noted that “what
[it had] heard this morning more likely resembles a case presented in the defense of
the issue of the guilt or the innocence itself.” Id. at 124. Sarsour was “the only
one who [knew] what happened here and the rest of us are just trying to put it
together looking through a glass that is almost obscured.” Id. at 126. The district
court acknowledged that the loss determination was an estimate, but based upon
the evidence it had heard, it was convinced that the probation officer’s calculations
were accurate, and Sarsour had defrauded the government of at least $400,000.
The district court adopted the PSI’s factual findings and guideline calculations and
sentenced him to 48 months of imprisonment.
II. DISCUSSION
A. Enhancement for Total Loss
We review the district court’s amount of loss calculation for clear error.
United States v. Medina, 485 F.3d 1291, 1297 (11th Cir. 2007). However,
objections raised for the first time on appeal are reviewed for plain error. United
States v. Mangaroo, 504 F.3d 1350, 1353 (11th Cir. 2007). Under this standard,
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we can reverse if “there is (1) an error, (2) that is plain, (3) that affects substantial
rights . . ., and (4) that seriously affects the fairness, integrity, or public reputation
of judicial proceedings. Id. The district court’s loss calculation need only be a
reasonable estimate of the loss. U.S.S.G. § 2B1.1, comment. (n.3(C)).
Sarsour asserts that the district court erred in calculating the loss amount
because it included improper transactions. He argues (1) that he only became the
licensed food stamp merchant in January 2003, and therefore could not have made
any requests for food stamp payments prior to that date, and (2) that despite his
incapacitation from a car accident for a number of months in 2003, the district
court erroneously included the entire year in its calculation of total loss. He
concedes that this basis for challenging the loss amount was not presented to the
district court and must be reviewed for plain error. Appellant’s Br. at 16-17.
1. Food Stamp License
Violations of the food stamp program can be committed by “whoever
knowingly uses, transfers, acquires, alters, or possesses coupons, authorization
cards, or access devices in any manner contrary to this chapter.” 7 U.S.C.
§ 2024(b)(1) (emphasis added). “In interpreting a statute we look first to the plain
meaning of its words.” United States v. Griffith, 455 F.3d 1339, 1342 (11th Cir.
2006) (citation omitted). The use of the term “whoever” instructs us that
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participation in the food stamp program is not required to violate the statute. See,
e.g., U.S. v. Khatib, 706 F.2d 213, 218-19 (7th Cir. 1983) (“The language of the
statute is not restrictive.”). The district court properly estimated the total loss by
including losses from 2001 and 2002 because Sarsour bought the store in 2001 and
then worked there daily. Sarsour’s majority shareholder position and active
involvement with the market on a day-to-day basis unequivocally implicate his
involvement in the food stamp fraud. The PSI confirms Sarsour’s role in 2001 and
2002:
food stamp redemptions at [Lee’s Market] increased dramatically in
2001. In the year 2000, redemptions ranged from a low of $5,378 in
May of 2000, to a high of $12,086.87 in December of 200[0]. By way
of contrast, the redemptions averaged $14,818.33 per month in 2001,
and $43,496.44 per month in 2002.
PSI at ¶ 16.
2. Absence from the Business
While Sarsour now argues that he was incapacitated from a car accident and
was absent from the store for several months of 2003, he did not make this
argument to the sentencing court. Appellant’s Br. at 16-17. Indeed, the details of
Sarsour’s accident and broken arm are only briefly discussed in one pleading.
Appellant’s Br. at 3 (citing R1-27). The district court did not commit plain error
when it included all of the months of 2003 in the loss total because the effect of
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Sarsour’s injury on his involvement at the market was not apparent from the
record.
B. Denial of Acceptance of Responsibility
We ordinarily review a district court’s denial of acceptance of responsibility
for clear error. United States v. Moriarty, 429 F.3d 1012, 1022 (11th Cir. 2005)
(per curiam). However, we review for plain error when a defendant does not state
clearly the grounds for an objection in the district court. United States v. Massey,
443 F.3d 814, 818 (11th Cir. 2006). In order to preserve an objection, a defendant
“must raise the point in such clear and simple language that the trial court may not
misunderstand it.” Id. at 819 (quotation omitted). Sarsour merely “object[ed] to
the denial of acceptance of responsibility,” PSI addendum at 3, and so we review
the denial for plain error.
Sarsour believes that he was denied an acceptance of responsibility
reduction solely because he changed the markup percentage used for goods sold at
Lee’s Supermarket. By changing his markup he actually increased his potential
loss amount. Sarsour contends that his acknowledgment of engaging in food stamp
fraud justifies the granting of an acceptance of responsibility reduction.
The Guidelines state that if the defendant “clearly demonstrates acceptance
of responsibility,” the offense level should be reduced. U.S.S.G. § 3E1.1(a).
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Appropriate considerations in determining whether a defendant qualifies for the
reduction include truthfully admitting the conduct comprising the offense of
conviction, the timeliness of the defendant’s conduct in accepting responsibility,
and assistance to authorities in recovering the fruits of the offense. Id., comment.
(n.1). A defendant may not “falsely den[y] or frivolously contest[], relevant
conduct that the court determines to be true.” Id. The district court deserves “great
deference” on review. Id., comment. (n.5).
During sentencing, the court stated that, “what [it had] heard this morning
more likely resemble[d] a case presented in the defense of the issue of the guilt or
the innocence itself.” R3 at 124. “A defendant who enters a guilty plea is not
entitled to an adjustment under this section as a matter of right.” U.S.S.G. § 3E1.1,
comment. (n.3). Based on the testimony before the court and the assertions of the
PSI, it was not plain error to deny the acceptance of responsibility reduction.
C. Abuse of Trust Enhancement
The abuse of trust enhancement applies “[i]f the defendant abused a position
of public or private trust, or used a special skill, in a manner that significantly
facilitated the commission or concealment of the offense.” U.S.S.G. § 3B1.3. The
government must establish that (1) the defendant held a place of private or public
trust, and (2) abused that position in a way that significantly facilitated the
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commission of the offense. United States v. Ward, 222 F.3d 909, 911 (11th Cir.
2000). We have held that the enhancement only applies when the victim conferred
the trust. United States v. Walker, 490 F.3d 1282, 1300 (11th Cir. 2007).
We review a district court’s factual findings for clear error and its
application of the Guidelines de novo. Walker, 490 F.3d at 1299. However,
objections raised for the first time on appeal are reviewed for plain error.
Mangaroo, 504 F.3d at 1353. Since this is the first time Sarsour has advanced this
argument, we review it for plain error.
Sarsour asserts that the abuse of trust enhancement was erroneous because
there was a fiscal intermediary between him and the USDA. Relying upon United
States v. Garrison, 133 F.3d 831 (11th Cir. 1998), he contends that his relationship
with the victim, the USDA, was too attenuated to apply the enhancement. In
Garrison, we held that the chief executive of a home healthcare provider was “not
directly in a position of trust in relation to Medicare. While Medicare may have
been the victim in [that] case, the [abuse of trust] enhancement [was] unavailable
because Garrison did not occupy a sufficiently proximate position of trust relative
to Medicare.” 133 F.3d at 841. Most important to our analysis was that Garrison’s
Medicare requests had to be reviewed and approved by a third party, Aetna, before
being submitted to Medicare for reimbursement. Id.
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The food stamp program does use a third party, which is involved in the
EBT system. Citibank Production System (“Citibank”) monitors EBT accounts,
and it approves debit requests if there are sufficient funds in a recipient’s account.
Citibank then deposits funds into the retail store’s account and later receives credit
from the Federal Reserve Bank. Citibank did approve the debits from EBT
accounts and facilitate the monetary transactions between Lee’s Supermarket and
the USDA. Citibank’s responsibility, however, was only to ensure that money was
available in a recipient’s account. From the record, it does not appear that Citibank
had a responsibility to determine whether the use of the food stamp was for an
acceptable item, if the requested sum was a suspiciously round number, or if there
were many large sum requests in a short period of time. Because Citibank did not
examine and review the underlying validity of each food stamp request, the
comparison to Garrison is inapposite. See Garrison, 133 F.3d at 841 (emphasizing
that medicare requests were reviewed and approved by Aetna before submission to
the government). Sarsour had to receive approval from the USDA to participate in
the food stamp program, and that approval allowed him to engage in food stamp
fraud. The district court did not plainly err in determining that the abuse of trust
enhancement was applicable in this case.
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III. CONCLUSION
Sarsour pled guilty to the unauthorized use of food stamps, in violation of 7
U.S.C. § 2024(b). On appeal, he disputes the sentence imposed by the district
court. As we have explained, the court did not err in applying the Guidelines to
Sarsour. Accordingly, Sarsour’s sentence is AFFIRMED.
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