United States v. Xiao Yong Zheng

In the
United States Court of Appeals
For the Seventh Circuit
No. 12-2739
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
XIAO YONG ZHENG,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 09 CR 1046-7 — Robert M. Dow, Jr., Judge.
ARGUED FEBRUARY 27, 2013 — DECIDED AUGUST 12, 2014
Before FLAUM, SYKES, and TINDER, Circuit Judges.
SYKES, Circuit Judge. Xiao Yong Zheng was involved in a
Chicago-based document-fraud operation that made fake
Chinese passports and other identification documents for
customers seeking false documents to use to obtain Illinois
driver’s licenses and identification cards. Zheng pleaded guilty
to aggravated identity theft and conspiracy to misuse Social
2 No. 12-2739
Security numbers and commit passport fraud. The district
court imposed a sentence of 61 months. In calculating Zheng’s
sentencing guidelines range, the judge applied a two-level
enhancement for fraudulent use of a foreign passport. See
U.S.S.G. 2L2.1(b)(5)(B). Zheng challenges the application of the
enhancement based on a special guideline rule against “double
counting” for aggravated identity theft.
We vacate and remand for resentencing. A person commits
aggravated identity theft when he knowingly transfers,
possesses, or uses a means of identification without lawful
authority “during and in relation to” a set of enumerated
offenses. See 18 U.S.C. § 1028A(a)(1), (c). A conviction for
violating § 1028A adds a mandatory consecutive two-year term
to whatever sentence the defendant receives for the predicate
crime. See id. § 1028A(a)(1), (b), implemented by U.S.S.G.
§ 2B1.6(a). To avoid enhancing the defendant’s sentence twice
for the same offense conduct—once under the guideline for the
predicate offense and again under § 1028A—the Sentencing
Commission has directed judges not to apply any specific
offense characteristic for the transfer, possession, or use of a
“means of identification.” U.S.S.G. § 2B1.6 cmt. n.2. The
rationale is that the sentence for aggravated identity theft
already accounts for this offense conduct. Id.
A foreign passport is a “means of identification” under the
definition of that term found in 18 U.S.C. § 1028(d)(7), which is
incorporated by reference in the application notes to § 2B1.6.
Accordingly, the district court should not have applied the
two-level enhancement for fraudulent use of a foreign pass-
port.
No. 12-2739 3
I. Background
From 2007 to 2009, Zheng worked in a fraudulent-docu-
ment ring operating in Chicago’s Chinatown neighborhood.
The group sold fake Chinese passports and Social Security
cards from the United States territory of Saipan to customers
who wanted to obtain an Illinois driver’s license or identifica-
tion card but lacked legitimate documents verifying their
identity.1 Zheng had been introduced to the ring the year
before, when he needed false identifying documents to apply
for an Illinois driver’s license for himself. In September 2006 he
obtained a driver’s license using another person’s Social
Security card and a fake Chinese passport reflecting that
person’s identifying information.
Zheng was thereafter recruited to join the conspiracy and
over a two-year period helped more than 100 customers secure
false identifying documents. His role in the conspiracy was to
meet with customers, collect cash payment, and gather the
information necessary to prepare the false documents. Zheng
also transported customers to the office of the Illinois Secretary
of State, where they used the falsified documents to fraudu-
lently obtain a driver’s license or identification card. Near the
end of the conspiracy, Zheng began helping his coconspirators
in the manufacturing process, making six to ten fraudulent
passports himself before federal authorities shut the ring
down.
1
Additional facts are described in United States v. Wang, 707 F.3d 911 (7th
Cir. 2013), which resolved an earlier appeal in another case stemming from
the same conspiracy.
4 No. 12-2739
The investigation produced three separate indictments,
each with multiple defendants. In a 2011 superseding indict-
ment, Zheng was charged with conspiracy to make or use a
false passport and misuse a Social Security number, see
18 U.S.C. § 371; falsely using a Social Security number, see
42 U.S.C. § 408(a)(7)(B); and aggravated identity theft, see
18 U.S.C. § 1028A. He pleaded guilty to the conspiracy and
aggravated-identity-theft counts.
Aggravated identity theft is an independent offense but is
tied to the commission of an underlying crime of fraud or
deceit enumerated in the statute. Specifically, § 1028A(a)(1)
provides that anyone who, in connection with certain enumer-
ated felonies, “knowingly transfers, possesses, or uses, without
lawful authority, a means of identification of another person
shall, in addition to the punishment for such felony, be
sentenced to a term of imprisonment of 2 years.” Zheng’s
conviction for conspiracy to commit passport fraud is one of
the listed crimes. The mandatory two-year sentence for
aggravated identity theft must run consecutively to the
sentence imposed for the predicate offense. § 1028A(a)(1), (b),
implemented by U.S.S.G. § 2B1.6(a).
Aggravated identity theft thus operates as a kind of
statutory sentence enhancement for the predicate crime. This
sentence structure raises the possibility that the same offense
conduct will have the effect of bumping the defendant’s
sentence up twice—once in the guidelines calculation for the
underlying offense and again through the mandatory consecu-
tive sentence for aggravated identity theft. The Sentencing
Commission has promulgated a special rule to avoid the
No. 12-2739 5
“double counting” inherent in cases of aggravated identity
theft. Application Note 2 to the guideline for aggravated
identity theft instructs judges not to apply any specific offense
characteristic for the transfer, possession, or use of a “means of
identification” when calculating the offense level for the
underlying crime. U.S.S.G. § 2B1.6 cmt. n.2.
In Zheng’s presentence report, however, the probation
officer recommended the application of a two-level enhance-
ment for fraudulent use of a foreign passport under U.S.S.G.
§ 2L2.1(b)(5)(B). Zheng objected, citing Application Note 2 and
arguing that a foreign passport qualifies as a “means of
identification” as that term is defined in § 1028(d)(7), which is
the relevant definition for purposes of the aggravated-identity-
theft guideline. See U.S.S.G. § 2B1.6 cmt. n.2 (incorporating the
statutory definition by reference). The government countered
that a passport is better classified as an “identification
document,” a separately defined term in the same statute.
18 U.S.C. § 1028(d)(3).
The district court agreed with the government, overruled
Zheng’s objection, and applied the two-level enhancement for
fraudulent use of a foreign passport. Zheng’s total offense level
was 23, which yielded an advisory guidelines range of 46 to
57 months on the conspiracy count. The judge imposed a
below-guidelines sentence of 37 months on that count and
tacked on the two-year consecutive term as required under
§ 1028A, for a total sentence of 61 months.
6 No. 12-2739
II. Discussion
The sole issue on appeal is the district court’s application of
the two-level enhancement under § 2L2.1(b)(5)(B) for Zheng’s
fraudulent use of a foreign passport. This issue turns on an
interpretation of Application Note 2 to § 2B1.6, the guideline
for aggravated identity theft.2 We review the district court’s
interpretation of the sentencing guidelines de novo. United
States v. Sutton, 582 F.3d 781, 783 (7th Cir. 2009).
As we have noted, Application Note 2 is a special guide-
lines rule against double counting. See United States v. Vizcarra,
668 F.3d 516, 519–27 (7th Cir. 2012) (explaining that the
guidelines do not contain a general background rule against
double counting but instead prohibit double counting only as
specifically spelled out in the text). The guideline for aggra-
vated identity theft is straightforward. It implements the
statutory command of a two-year consecutive sentence: “If the
defendant was convicted of violating 18 U.S.C. § 1028A, the
guideline sentence is the term of imprisonment required by
statute. Chapters Three (Adjustments) and Four (Criminal
History and Criminal Livelihood) shall not apply to that count
2
The parties do not dispute that Application Note 2 is an authoritative part
of the guidelines. See United States v. Vizcarra, 668 F.3d 516, 520 (7th Cir.
2012) (“[C]ommentary in the Guidelines Manual that interprets or explains
a guideline is authoritative unless it violates the Constitution or a federal
statute, or is inconsistent with, or a plainly erroneous reading of, that
guideline.” (internal quotation marks omitted)); United States v. Edwards,
945 F.2d 1387, 1392 (7th Cir. 1991) (“The Sentencing Commission’s
application notes are contemporaneous explanations of the Guidelines by
their authors, entitled to substantial weight.” (internal quotation marks
omitted) (alteration omitted)).
No. 12-2739 7
of conviction.” U.S.S.G. § 2B1.6(a); see also 18 U.S.C.
§ 1028A(a)(1) (providing for a mandatory two-year sentence);
id. § 1028A(b)(2) (providing that the two-year sentence under
§ 1028A shall not run concurrently with other sentences, with
exceptions not relevant here).
Application Note 2 to § 2B1.6 explains that when the
defendant is convicted of aggravated identity theft, Chapter
Two enhancements do not apply to the predicate offense:
Inapplicability of Chapter Two Enhance-
ment.—If a sentence under this guideline is
imposed in conjunction with a sentence for an
underlying offense, do not apply any specific
offense characteristic for the transfer, possession,
or use of a means of identification when deter-
mining the sentence for the underlying offense.
A sentence [for aggravated identity theft] under
this guideline accounts for this factor for the
underlying offense of conviction, including any
such enhancement that would apply based on
conduct for which the defendant is accountable
under §1B1.3 (Relevant Conduct). “Means of
identification” has the meaning given that term
in 18 U.S.C. § 1028(d)(7).
U.S.S.G. § 2B1.6 cmt. n.2. So when calculating the guidelines
range for the underlying crime—here, conspiracy to commit
passport fraud3—the court may not apply any specific offense
3
Both conspiracy and passport fraud are predicate offenses to aggravated
(continued...)
8 No. 12-2739
characteristic for the transfer, possession, or use of a “means of
identification.” The Sentencing Commission has concluded that
the conviction for aggravated identity theft adequately
accounts for this offense conduct.
Here, the district court enhanced the offense level for the
conspiracy count under § 2L2.1(b)(5)(B), which directs the
court to apply a two-level increase if “the defendant fraudu-
lently obtained or used … (B) a foreign passport.” Id.
§ 2L2.1(b)(5)(B). The object of the conspiracy was the making
and selling of fake Chinese passports (among other false
documents) for customers to use to fraudulently obtain Illinois
drivers’ licenses or identification cards. So the two-level
enhancement for fraudulent use of a foreign passport was
easily supported by the facts.
But Zheng’s conspiracy conviction was the predicate crime
for aggravated identity theft, so Application Note 2 knocks the
enhancement out. Or at least it does if a foreign passport
counts as a “means of identification.” Application Note 2
defines “means of identification” by reference to § 1028(d)(7),
which states as follows:
(7) [T]he term “means of identification”
means any name or number that may be used,
alone or in conjunction with any other
3
(...continued)
identity theft. See 18 U.S.C. § 371 (defining conspiracy offense); id. § 1543
(defining offense of forgery or false use of passport); id. § 1028A(c)(4)
(listing § 1028A predicate offenses, including “any provision contained in
this chapter”).
No. 12-2739 9
information, to identify a specific individual,
including any—
(A) name, social security number, date of
birth, official State or government issued
driver’s license or identification number,
alien registration number, government passport
number, employer or taxpayer identification
number;
(B) unique biometric data, such as finger-
print, voice print, retina or iris image, or
other unique physical representation;
(C) unique electronic identification num-
ber, address, or routing code; or
(D) telecommunication identifying infor-
mation or access device … .
18 U.S.C. § 1028(d)(7) (emphasis added).
This definition is very broad. It primarily refers to intangi-
ble identifying information (e.g., name, date of birth, Social
Security number, etc.). But it also encompasses physical objects
that are embedded with identifying information (e.g., access
devices, fingerprints, iris images, other biometrics). See United
States v. Spears, 729 F.3d 753, 755 (7th Cir. 2013). Passports are
physical objects embedded with intangible identifying informa-
tion. Indeed, in Spears we included passports in a list of
examples of physical objects that fall under the definition of
“means of identification” in § 1028(d)(7). See id. (“Although it
is possible to ‘possess’ [identifying] information without
committing it to paper, many forms of possession entail
10 No. 12-2739
embodiment in an object such as a passport, Social Security
card, or alien registration document.”). Spears held that a
counterfeit handgun permit is a “means of identification” as
the term is defined in § 1028(d)(7).
Our decision in Spears focused on a different interpretive
puzzle in § 1028A—namely, whether a defendant who makes
a fake document containing a person’s identifying information
and transfers the counterfeit document to that person commits
aggravated identity theft. Id. at 754–58. We answered that
question “no,” holding that manufacturing a false means of
identification for a customer using the customer’s own identify-
ing information does not violate § 1028A. Id. Still, our discus-
sion of the term “means of identification” in § 1028(d)(7)
supports Zheng’s position that a passport counts as a “means
of identification.”
Also relevant here is United States v. Doss, which addressed
Application Note 2 directly and held that the identifying
information embedded in a counterfeit access device qualifies
as a “means of identification” for purposes of the double-
counting bar in § 2B1.6. 741 F.3d 763, 767 (7th Cir. 2013). But
Doss was an easy case; the enhancement at issue there applied
to trafficking in counterfeit access devices, see U.S.S.G.
§ 2B1.1(b)(11)(B), and access devices are specifically mentioned
in the statutory definition of “means of identification,” see
§ 1028(d)(7)(D) (listing “telecommunication identifying infor-
mation or access device”). Doss, 741 F.3d at 767 n.7. So without
much ado we held that Application Note 2 precluded applica-
tion of the enhancement and remanded for resentencing. Id. at
768.
No. 12-2739 11
Neither Spears nor Doss addressed the specific argument the
government raises here. The government argues that a
passport falls under the narrower definition of “identification
document” in § 1028(d)(3) and thus cannot also be a “means of
identification” under § 1028(d)(7). Subsection 1028(d)(3)
defines “identification document” as “a document made or
issued by or under the authority of the United States Govern-
ment, a State, … [or] a foreign government … which, when
completed with information concerning a particular individual,
is of a type intended or commonly accepted for the purpose of
identification of individuals.” Although a passport may satisfy
the broader definition of “means of identification” in subsec-
tion (d)(7), the definition of “identification document” seems a
closer fit. The government reasons that the two definitions
were meant to demarcate mutually exclusive categories:
Because passports count as identification documents, they
should not also be considered a means of identification.
We see no reason why a passport cannot be both an
“identification document” and a “means of identification.” The
terms overlap, and nothing in the statutory scheme suggests
that an identification document cannot also qualify as a means
of identification. The broader term is defined by reference to
items of identifying information, which may or may not be
embedded in an official document such as a passport. That is,
the definition of “means of identification” covers intangible
identifying information, regardless of form. The term “identifi-
cation document,” in contrast, refers only to tangible docu-
ments that serve identification purposes. The two terms appear
in a series of statutes falling under the general heading of
identity theft and fraud. Just two of these statutes—§ 1028A
12 No. 12-2739
(aggravated identity theft, defined as the transfer, possession,
or use of a means of identification in connection with an
enumerated felony) and § 1028(a)(7) (the transfer, possession,
or use of a means of identification in connection with other
unlawful activity)—use the broader term, capturing a wide
swath of conduct that involves misuse of another person’s
identifying information.
In contrast, the statutes using the term “identification
document” are more targeted and specifically require falsifica-
tion or misuse of an identification document. If the defendant’s
conduct meets the narrower definition, the corresponding
charging options open to the prosecutor are more numerous;
many counterfeit-document crimes use the term “identification
document.” See, e.g., 18 U.S.C. § 1028(a)(1)–(6), (8) (all relating
to misuse of identification documents). It’s true, as the govern-
ment observes, that counterfeiting an official government
document may give rise to additional or different harms than
misusing an individual item of identifying information. But
that’s not a reason to read the terms “identification document”
and “means of identification” as mutually exclusive. We
conclude that a passport is a “means of identification” under
the broad definition in § 1028(d)(7).
As almost an afterthought, the government points to an
unpublished Ninth Circuit decision to support its position that
a passport is not a means of identification. See United States v.
Dehaney, 455 F. App’x 781 (9th Cir. 2011). The discussion in
Dehaney was quite brief. Relying on a Ninth Circuit precedent
that had distinguished the terms “identification document”
and “means of identification,” the court summarily concluded
No. 12-2739 13
that “a United States passport is not a ‘means of identification’”
and rejected the defendant’s argument that Application Note 2
to § 2B1.6 applied. Id. at 783. But the precedent cited by the
court—United States v. Melendrez, 389 F.3d 829 (9th Cir.
2004)—did not involve a conviction for aggravated identity
theft, and so § 2B1.6 was not at issue. We do not find Dehaney
persuasive.
In short, the point of Application Note 2 is to avoid count-
ing the same offense conduct twice for purposes of sentence
enhancement when a conviction for aggravated identity theft
is in the mix. The mandatory two-year consecutive sentence
under § 1028A already accounts for conduct involving misuse
of a means of identification, so the Sentencing Commission
instructs judges not to apply Chapter Two enhancements to the
predicate offense for the same offense conduct. Because a
passport is a means of identification, Application Note 2 to
§ 2B1.6 precludes application of the two-level enhancement for
Zheng’s fraudulent use of a foreign passport.
Accordingly, it was error to apply the enhancement. We
note in closing that although the district court imposed a
below-guidelines sentence on the conspiracy count, the
government has not argued that the error in calculating the
guidelines range was harmless. See United States v. Zahursky,
580 F.3d 515, 527 (7th Cir. 2009) (explaining that the govern-
ment must establish that a sentencing error was harmless). We
therefore VACATE Zheng’s sentence and REMAND for resentenc-
ing.