United States v. Howard Shmuckler

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-4518
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
HOWARD R. SHMUCKLER,
Defendant - Appellant.
No. 13-4003
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
HOWARD R. SHMUCKLER,
Defendant - Appellant.
Appeals from the United States District Court for the Eastern
District of Virginia, at Alexandria. Leonie M. Brinkema,
District Judge. (1:11-cr-00344-LMB-1)
Submitted: June 12, 2013 Decided: July 18, 2013
Before SHEDD, DAVIS, and FLOYD, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Michael S. Nachmanoff, Federal Public Defender, Rachel S.
Martin, Assistant Federal Public Defender, Caroline S. Platt,
Appellate Attorney, OFFICE OF THE FEDERAL PUBLIC DEFENDER,
Alexandria, Virginia, for Appellant. Neil H. MacBride, United
States Attorney, Timothy D. Belevetz, Assistant United States
Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria,
Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
I.
From June 2008 to September 2009, Appellant Howard
Shmuckler owned and operated a business called The Shmuckler
Group, LLC (TSG). Clients paid TSG substantial fees for home
loan-related services such as forestalling foreclosures,
modifying mortgages, and extending payment terms. Shmuckler and
his employees led prospective clients to believe that he was an
attorney licensed in Virginia and that his business had a 97%
success rate. In reality, Shmuckler had never been a member of
the Virginia bar, and TSG’s actual success rate was
approximately 4.5%. TSG’s employees instructed clients to cease
making their mortgage payments and stop communicating with their
lenders. During the course of its operation, TSG took in
approximately $2.8 million from 865 clients.
A grand jury returned an indictment charging Shmuckler with
seven counts of wire fraud. After the district court dismissed
Count Three, Shmuckler pleaded guilty to the remaining six
counts. Next, a probation officer prepared a presentence
investigation report (PSR), which calculated Shmuckler’s offense
level as 35 and criminal history category as III, leading to a
recommended sentence of 210 to 262 months. The probation
officer based this determination in part on an eighteen-level
increase for a loss of more than $2.5 million but no more than
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$7 million and a two-level increase for an offense that involved
sophisticated means.
At the sentencing hearing, Shmuckler objected to the
proposed two-level increase for sophisticated means. The
parties also disagreed regarding the loss amount. The district
court agreed with the government and imposed a two-level
enhancement for sophisticated means, explaining, “This was not a
simple fraud scheme. It was complex. It involved among other
things document manipulation.” However, the district court
decided to assume for the sake of argument that Shmuckler’s loss
calculation was correct, leading it to impose a fourteen-level
enhancement for the amount of loss rather than the PSR’s
proposed eighteen-level enhancement. The court applied the
other enhancements that the PSR recommended, leading to a
recommended sentencing range of 135 to 168 months under the
Sentencing Guidelines. The court ultimately imposed a sentence
of ninety months to run consecutively with Shmuckler’s
undischarged term of imprisonment.
On August 16, 2012, the district court held a hearing
regarding restitution. The government submitted a list
reflecting all of the TSG clients whose mortgages TSG had failed
to modify and the amounts they paid TSG, which it developed by
interviewing TSG clients and bank representatives. This list
suggested a restitution amount of $1,848,279. Shmuckler
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contended that the restitution amount could not exceed the
amount of loss the district court used for sentencing purposes,
meaning the restitution amount could not exceed $1 million. The
district court found the government’s argument more persuasive
and ordered restitution in the amount of $1,848,279 on December
17, 2012.
II.
First, Shmuckler argues that the district court erred in
applying a two-level enhancement under U.S.S.G.
§ 2B1.1(b)(10)(C) because Shmuckler’s fraud did not utilize
“sophisticated means.” In evaluating the district court’s
application of sentencing enhancements, “this Court review[s]
the district court’s legal conclusions de novo and its factual
findings for clear error.” United States v. Horton, 693 F.3d
463, 474 (4th Cir. 2012) (alteration in original) (quoting
United States v. Layton, 564 F.3d 330, 334 (4th Cir. 2009))
(internal quotation marks omitted). We therefore review the
district court’s finding regarding sophisticated means for clear
error, see United States v. Noel, 502 Fed. App’x 284, 290 (4th
Cir. 2012), and will reverse the district court’s finding only
if “left with the definite and firm conviction that a mistake
has been committed,” United States v. Harvey, 532 F.3d 326, 337
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(4th Cir. 2008) (quoting In re Mosko, 515 F.3d 319, 324 (4th
Cir. 2008)) (internal quotation marks omitted).
TSG’s behavior resembles the scheme at play in United
States v. Noel, and we find that case persuasive. In Noel, this
Court determined that the district court did not err in imposing
a sophisticated means enhancement when the defendant attracted
clients by telling them that he would safely invest their money
but then used the funds to start his own business. 502 Fed.
App’x at 290. The Court emphasized the defendant’s lies to
financial institutions and explained that his “three-year period
of extensive, intentional concealment is the kind of scheme
anticipated by the” sophisticated means enhancement. Id.; see
also United States v. Kontny, 238 F.3d 815, 820 (7th Cir. 2001)
(“The more sophisticated the efforts that an offender employs to
conceal his offense, the less likely he is to be detected, and
so he should be given a heavier sentence to maintain the same
expected punishment, and hence the same deterrence, that
confronts the average offender.”). Shmuckler similarly
attracted clients with lies, including falsehoods regarding the
success rate of his business, his status as an attorney, and the
extent of TSG’s operations. He also took significant steps to
conceal his fraud by telling clients not to communicate with
their lenders. In light of these aspects of Shmuckler’s scheme,
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the district court did not clearly err in finding that he
utilized sophisticated means.
Second, Shmuckler alleges that his sentence is procedurally
unreasonable because the district court did not sufficiently
explain its decision to run Shmuckler’s sentence consecutively
to his undischarged term of imprisonment. “A district court’s
decision to impose a sentence that runs concurrently with,
partially concurrently with, or consecutively to a prior
undischarged term of imprisonment is constrained only by its
consideration of the factors mentioned in the commentary to
[U.S.S.G.] § 5G1.3(c).” United States v. Mosley, 200 F.3d 218,
223 (4th Cir. 1999) (per curiam). These factors include the
following:
(i) The factors set forth in 18 U.S.C. [§] 3584
(referencing 18 U.S.C. [§] 3553(a));
(ii) The type (e.g., determinate,
indeterminate/parolable) and length of the prior
undischarged sentence;
(iii) The time served on the undischarged sentence and
the time likely to be served before release;
(iv) The fact that the prior undischarged sentence may
have been imposed in state court rather than federal
court, or at a different time before the same or
different federal court; and
(v) Any other circumstance relevant to the
determination of an appropriate sentence for the
instant offense.
U.S.S.G. § 5G1.3 cmt. n.3(A).
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The record in this case demonstrates that the district
court considered the factors that the commentary to U.S.S.G.
§ 5G1.3(c) identifies. First, the court considered the
§ 3553(a) factors. Specifically, the court considered
Shmuckler’s “age, [his] definitely well-documented health
situation, and the fact that [he had] received a significant
sentence from the District of Columbia.” The court also
explained, “I want to make sure that this sentence reflects the
seriousness of this conduct and the need, as I said, to send the
word out to other people in the financial and real estate
industry that you can’t prey on those [vulnerable] communities
within our area and take advantage of them.” The court also
evaluated “the kinds of sentence and the sentencing range.” 18
U.S.C. § 3553(a)(4). The court’s comments further indicate that
it considered the length of Shmuckler’s undischarged term of
imprisonment as required by the commentary to U.S.S.G. § 5G1.3.
For these reasons, the district court did not abuse its
discretion by imposing a consecutive sentence in this case.
Third, Shmuckler argues that the district court erred in
ordering restitution in an amount greater than the amount of
actual loss it used for sentencing purposes. In support of this
argument, Shmuckler compares the restitution requirements of the
Mandatory Victims Restitution Act (MVRA)—which requires district
courts to order restitution in wire fraud cases, 18 U.S.C.
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§ 3663A(c)(1)(A)(ii)—with the restitution calculation parameters
set forth in U.S.S.G. § 2B1.1. The MVRA “implicitly requires
that the restitution award be based on the amount of loss
actually caused by the defendant’s offense.” United States v.
Dokich, 614 F.3d 314, 319 (7th Cir. 2010) (quoting United States
v. Rhodes, 330 F.3d 949, 953 (7th Cir. 2003)) (internal
quotation marks omitted). By contrast, the Guidelines direct
sentencing courts to determine the amount of loss by looking to
the “greater of actual loss or intended loss.” U.S.S.G. § 2B1.1
cmt. n.3(A). Shmuckler contends that, in light of these rules,
“it is legally and logically ‘impossible’ for restitution to
exceed the loss found for purposes of the sentencing guidelines”
as the restitution amount did in this case. This Court reviews
restitution orders for abuse of discretion. See Harvey, 532
F.3d at 339.
Each party contends that the Seventh Circuit’s decision in
United States v. Dokich supports its position, and we find the
case instructive. In Dokich, the district court had used a
lower figure for sentencing purposes than it ordered in
restitution, causing the circuit court to speculate that
“[p]erhaps the district court, by deliberately basing its
guidelines calculation on a lower amount of loss, intended in
this way to give [the defendant] a break.” 614 F.3d at 320.
The court held that the district court did not abuse its
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discretion because it had made a specific finding of actual loss
for restitution purposes. Id. In the case at hand, the
district court explicitly stated that it was “giv[ing] the
defendant the benefit of the doubt” by using the lower loss
amount for sentencing purposes. However, during the hearing
regarding restitution, the court made a more accurate finding of
actual loss. The district court therefore did not abuse its
discretion in using a greater loss amount for restitution than
it did for sentencing purposes. *
III.
For the foregoing reasons, we affirm the decision of the
district court.
AFFIRMED
*
Shmuckler further contends that the restitution order
violates the Sixth Amendment because the judge, not the jury,
found the facts supporting its entry. However, he acknowledges
that this Court rejected the same theory in United States v.
Day, 700 F.3d 713, 732 (4th Cir. 2012), and we agree that the
argument therefore lacks merit.
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