United States v. Sami Natour

In the
United States Court of Appeals
For the Seventh Circuit
No. 11-2577
U NITED STATES OF A MERICA,
Plaintiff-Appellee,
v.
S AMI N ATOUR,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 1:07-cr-00083-1—Elaine E. Bucklo, Judge.
A RGUED F EBRUARY 16, 2012—D ECIDED N OVEMBER 9, 2012
Before P OSNER, R IPPLE and W ILLIAMS, Circuit Judges.
R IPPLE, Circuit Judge. Sami Natour was convicted,
following a jury trial, of four counts of interstate trans-
portation of stolen property in violation of 18 U.S.C.
§ 2314. At sentencing, the district court attributed to him
a loss amount of approximately $292,000 and deter-
mined that he was “in the business of receiving and
selling stolen property,” U.S.S.G. § 2B1.1(b)(4); these con-
clusions resulted in a 14-level increase to Mr. Natour’s
2 No. 11-2577
base offense level under the Guidelines. See U.S.S.G.
§§ 2B1.1(b)(1)(G), (b)(4). The district court sentenced
Mr. Natour to 28 months’ imprisonment on all counts,
to run concurrently, followed by three years of super-
vised release, and ordered restitution in the amount
of $104,742.16. Mr. Natour appeals, challenging both
his conviction and sentence.
We perceive no violation of the Grand Jury Clause in
Mr. Natour’s conviction. The terms used in 18 U.S.C. § 2314are not of a wholly independent character, and the
offense conduct proved at trial and stated in the jury
instructions are within the charges approved by the
grand jury. Further, we find no reversible error in the
district court’s sentencing decisions. The court properly
applied § 2B1.1(b)(4) of the United States Sentencing
Guidelines to Mr. Natour as a person in the business
of receiving and selling stolen property, and the court
used both an acceptable method and evidence-based
mathematical figures in arriving at a loss calculation
for purposes of § 2B1.1(b)(1). Accordingly, we affirm
the judgment of the district court.
I
BACKGROUND
A. Facts
On February 7, 2007, Secret Service Agent Joel Heffernan
received a tip from FedEx about suspicious activity
on Mr. Natour’s account, namely, four packages sent from
No. 11-2577 3
“Sam-Tek” 1 to “Sam, SNS” in New York, for cash on
delivery in the amount of $63,970. Upon visiting the
FedEx facility the following day, agents discovered that
the boxes contained 290 new Nextel cellular phones in
individual boxes, but not shrink-wrapped. There were
no invoices or packing slips. Law enforcement catalogued
the contents, and the packages were forwarded on to
the delivery address.
The same day, FedEx called the Secret Service again,
this time to alert them to two additional packages from
Mr. Natour to the same recipient, for cash on delivery
in the amount of $20,000. In these two boxes, agents
found 100 new Nextel phones packed in the same
manner with no packing slips or invoices. Again, the
contents were catalogued and forwarded to the recipient.
On February 8 and 9, a person identifying himself
as Mr. Natour called FedEx to complain about de-
layed delivery of his February 7 packages, which he
1
For several years before and during the operative events in
the present case, Mr. Natour operated a series of businesses.
From 2000 to 2004, Mr. Natour operated Sam-Tek out of his
home in Oak Forest, Illinois. He dissolved the company in
December 2006, but reincorporated the following month,
approximately one month prior to the relevant events in this
case, under the name “Sam-Tek US.” He also operated, for
some unspecified period of time, a cell phone store called
“Orbitec,” later named “Quickcom,” in Chicago Ridge, Illinois,
which remained in operation during the relevant events in
this case.
4 No. 11-2577
claimed contained “electronic equipment such as mother-
boards.” 2
On February 12, 2007, agents conducted surveillance
of Mr. Natour’s home. They observed a man later identi-
fied as Andre Williams delivering two cardboard
boxes. Later the same day, the agents examined another
shipment from the defendant at the FedEx facility.
These boxes contained 119 Nextel phones in the same
condition as prior shipments, this time addressed to
“Frances, SND” in Los Angeles, for cash on delivery
of $23,000.
Two days later, on February 14, agents conducted
surveillance of Mr. Natour’s cell phone business,
Quickcom, located in Chicago Ridge. They observed a
FedEx driver pick up two packages for shipment. Upon
arriving at the FedEx facility, the agents opened the
packages and found 55 Nextel phones packed in the
same way as prior shipments. The agents searched the
trash at Quickcom and recovered five invoices for cell
phones ordered by individuals and businesses other
than the defendant or any of his business names. The
serial numbers on these invoices matched the numbers
for phones contained in the February 7 and 8 shipments
by Mr. Natour.
On February 27, 2007, agents obtained an arrest warrant
for Mr. Natour and search warrants for his home and
business. In the search of his home, agents discovered
2
R.191 at 186.
No. 11-2577 5
$34,000 in a FedEx box in his crawlspace, as well as
various relevant documents including FedEx airbills for
the shipments in question. At his business, the agents
verified that his inventory was legitimate. The agents
also executed a search warrant at SNS in New York,
a recipient of several of the suspicious shipments. They
discovered an additional 151 new Nextel phones
shipped by Mr. Natour to SNS for $30,030 cash on
delivery, in the same condition as prior shipments and
without packing slips.
Upon his arrest, Mr. Natour cooperated with the
agents and provided a statement. In it, he described
becoming acquainted with Williams, who Mr. Natour
claims obtained cell phones by incorporating a business
and purchasing phones in the business’s name, only
to default on the payment. Williams would sell
Mr. Natour the phones for $200 apiece, and Mr. Natour
would resell for a profit of $25-$35 per phone. Mr. Natour
stated that he had sold approximately 1500 phones to
SNS and had dealt with it “for the past five months.” 3
He identified other individuals with whom he was in-
volved, and others that were involved with Williams,
including one whom he described as “[t]he main business
owner dealing with illegal phones.” 4 Immediately after
these admissions, Mr. Natour’s statement concluded:
“I think that I made about $60,000 in 2004, $75,000 in
2005 and $90,000 in 2006. I know I didn’t claim this
3
R.192 at 91.
4
R.192 at 91.
6 No. 11-2577
money on my taxes. I know what I did, I know what
I was doing was illegal, but I wasn’t sending any
money overseas.” 5
B. District Court Proceedings
The Government indicted Mr. Natour on five counts
of transporting telephones “knowing the same to have
been stolen and converted,” in violation of 18 U.S.C. § 2314.
Each count corresponded to a shipment date: February 7,
8, 12, 14 and 27 of 2007.
At trial, the Government relied heavily on the testi-
mony of Michael Stock, the manager of Sprint’s 6
corporate security group. Stock had reviewed all of the
inventory data acquired by the Secret Service agents in
the course of their investigation. Stock stated that, of
the 708 total phones involved in the five shipments,
roughly 550 were identified by their serial numbers
as Sprint/Nextel phones. Of the Sprint/Nextel phones,
379 were associated with an account “adjustment,”
which Stock described as follows: When a phone was
ordered from Sprint, a line-item charge would be placed
on a customer’s phone bill. If a customer called Sprint
to indicate that a phone purchase never had been autho-
5
R.192 at 91.
6
Sprint and Nextel merged in 2005. Although not entirely
clear from the record, it appears that the business continues
to refer to itself as “Sprint,” but at least some of its phones
are sold under the brand name “Nextel.”
No. 11-2577 7
rized, nor had any phone actually been ordered or re-
ceived, Sprint would “adjust” the bill to correct the
error. When the charge was unauthorized, the bill
would be adjusted to zero, meaning the entire cost of
the phone would be written-off as a loss by Sprint.
When this process was handled by one of Sprint’s fraud
investigators, the loss would be coded in Sprint’s
internal accounting system with the notation “F,” for
fraud. If the report was handled by a customer service
agent rather than a fraud investigator, it could not be
given the “F” code, although it is possible that the cus-
tomer’s complaint could have been identical.
Stock also explained to the jury numerous tables iden-
tifying individual phones and the account adjustments
with which they were associated. He acknowledged
that, although the majority were associated with a
fraud code, other adjustments and other codes also were
present. He noted that, if a customer did not contact
Sprint to complain that a phone was charged improperly
to his account, no fraud investigation would be initiated
and no adjustment made. Stock’s testimony suggested
that similar account fraud could go undetected if a cus-
tomer did not notice and report an irregularity on his bill.
Stock tallied all of the adjustments to Sprint accounts
associated with the 379 phones and concluded that,
based on those phones alone, the “minimum loss to
Sprint” was $104,742.16.7 Stock identified this number as
a “minimum loss” because, although it represented the
7
R.192 at 24; R.186 at 41.
8 No. 11-2577
total value of adjustments to customer accounts on the
379 phones for which adjustments were sought, whether
coded “F” or otherwise, it did not reflect the full value
of the phones, which are offered at a below-cost dis-
count to customers, primarily as inducements to enter
or lengthen telephone service contracts.
Stock also testified that neither Mr. Natour nor any of
his business names had accounts with Sprint, although
one need not be an authorized dealer or account
holder to sell Sprint phones. Finally, Stock reviewed the
packing slips recovered from the Quickcom trash search
and stated that all five were orders by legitimate
Sprint customers. All of the packing slips had shipping
addresses that did not match the customer’s billing ad-
dresses, which, he indicated, was evidence of fraud.
He also stated that four of the five slips contained
orders that were associated with account adjustments.
The fifth slip contained an order on the business account
of Frito-Lay. Frito-Lay never contacted Sprint to report
unauthorized charges or request an adjustment.
More than 150 cell phones catalogued by the agents
could not be associated with Sprint. Among them were
all 55 cell phones related to Count 4, concerning the
February 14 shipment. According to the agents’ records,
those phones had a differently formatted serial num-
ber and could not be identified at all. Accordingly,
the Government dismissed Count 4.
At the close of the Government’s evidence, Mr. Natour
presented no evidence and instead made an oral motion
requesting a judgment of acquittal. The court denied
No. 11-2577 9
the motion. After the jury returned a verdict of guilty on
all counts, Mr. Natour moved for a new trial, which
was also denied.
The presentence investigation report (“PSR”) recom-
mended a total offense level of 16. Specifically, after
accounting for a base offense level of 6, the PSR recom-
mended an 8-point increase under U.S.S.G. § 2B1.1(b)(1)(E)
for the amount of loss claimed by Sprint ($104,742) and
a 2-point increase under § 2B1.1(b)(4) for being “in
the business of receiving and selling stolen property.”
Mr. Natour objected that the total loss amount should
be lower, arguing that there had been insufficient evi-
dence that all 708 phones were stolen. He also claimed
that, because he operated a legitimate cell phone busi-
ness, he was not “in the business of” receiving stolen prop-
erty. The Government, in turn, argued that Sprint’s mini-
mum loss estimates understated the actual loss because
it related to only the 379 actually adjusted accounts,
rather than the total amount of “stolen” property;
in the Government’s view, the total value of all
708 phones should be counted.
The district court accepted the Government’s view with
modifications. The court agreed that an amount that
accounted only for the 379 Sprint phones associated
with account adjustments was an insufficient reflection
of the magnitude of the loss. However, the court
adjusted the total amount of phones upon which it
would base its estimate from 708 to 653, excluding the
55 phones that had been included in dismissed Count 4.
With 653 phones, the court calculated the loss amount
at approximately $292,000. Accordingly, the court added
10 No. 11-2577
4 levels, for a total of 12, to correspond to its calculated
loss amount. See U.S.S.G. § 2B1.1(b)(1)(G). Due to the
higher loss amount, the court calculated the total
offense level at 20, with a guidelines range of 37-46
months’ imprisonment. Ultimately, the court entered a
below-Guidelines sentence of 28 months’ imprisonment.
The court also ordered restitution in the amount of
loss actually claimed by Sprint, $104,742.16.
II
DISCUSSION
Mr. Natour appeals both his conviction and sentence.
With respect to his conviction, Mr. Natour submits that
the evidence and the jury instructions impermissibly
broadened the indictment in violation of his rights
under the Grand Jury Clause. See U.S. Const. amend. V.
Relatedly, he claims that, under his narrower reading
of the indictment, the evidence was insufficient to
support a conviction. With respect to his sentence,
Mr. Natour challenges both the application of the en-
hancement for being “in the business of receiving and
selling stolen property,” see U.S.S.G. § 2B1.1(b)(4), and
the district court’s loss calculation. We address each
contention in turn.
A. Constructive Amendment of the Indictment in
Violation of the Grand Jury Clause
Mr. Natour contends that his rights under the Grand
Jury Clause of the Fifth Amendment were violated
No. 11-2577 11
because the Government’s evidence at trial and the
jury instruction constructively amended the indictment
to include additional offense conduct beyond the
language of the indictment. Mr. Natour acknowledges
that he failed to object to the instruction or to otherwise
raise the issue in the district court and that, therefore,
review is for plain error. United States v. Penaloza, 648
F.3d 539, 546 (7th Cir. 2011). Nevertheless, he argues
that the error is plain and per se reversible.
A constructive amendment “occurs where the permissi-
ble bases for conviction are broadened beyond those
presented to the grand jury.” United States v. Blanchard,
542 F.3d 1133, 1143 (7th Cir. 2008). That is, a constructive
amendment can be demonstrated if the “proof at trial
‘goes beyond the parameters of the indictment in that
it establishes offenses different from or in addition to
those charged by the grand jury.’ ” United States v. Pigee,
197 F.3d 879, 886 (7th Cir. 1999) (quoting United States
v. Willoughby, 27 F.3d 263, 266 (7th Cir. 1994)) (emphasis
added). “As such, we are primarily concerned with
changes made to the indictment that affect elements of
the crime.” United States v. Mitov, 460 F.3d 901, 906 (7th
Cir. 2006). The Fifth Amendment is not offended when
a difference between the indictment and the proof at
trial is insignificant, or a broadly worded indictment
provides sufficient room for the evidence presented at
trial. See, e.g., United States v. Trennell, 290 F.3d 881, 887-89
(7th Cir. 2002) (holding that an indictment that referred
to “wholesale quantities of cocaine and cocaine base”
was sufficiently broad to include the specific quantities
of drugs actually found by the jury). By contrast, reversal
12 No. 11-2577
is required where, although the conviction is within
the statutory prohibition, it is outside the indictment, by
which the theory of criminal liability effectively is nar-
rowed. See Stirone v. United States, 361 U.S. 212, 213-14,
219 (1960) (reversing a conviction under a statute that
prohibited interference with either the import or export
of various products, where the indictment charged only
that the defendant had interfered with importation,
but evidence at trial and the jury instructions would
have allowed the jury to convict on either basis); Pigee,
197 F.3d at 886-87 (reversing a conviction for “manufac-
turing, storing, distributing, or using” cocaine, when
only “storing” was alleged in the indictment, but evidence
of distribution was introduced at trial). Finally, even
where we have found a constructive amendment, we
have not reversed if the error is harmless because the
defendant was unable to show that the outcome of his
trial would have been different if the constructive amend-
ment had not occurred. See United States v. Murphy,
406 F.3d 857, 861 (7th Cir. 2005) (affirming where
an indictment charged that a defendant had used
“physical force,” but the jury instruction also permitted
a conviction if he had used less severe “intimidation,”
reasoning that “the jury would have obviously reached
the same result because there was strong evidence
of physical force and injury”).
In order to assess Mr. Natour’s contention, we must
examine and compare the statute of conviction, the in-
dictment, the proof at trial and the specific jury instruction.
Mr. Natour was charged with a violation of 18 U.S.C.
§ 2314, which provides, in relevant part:
No. 11-2577 13
Whoever transports, transmits, or transfers in
interstate or foreign commerce any goods, wares,
merchandise, securities or money, of the value of
$5,000 or more, knowing the same to have been
stolen, converted or taken by fraud . . . [s]hall be fined
under this title or imprisoned not more than
ten years, or both.
Id. (emphasis added). This section provides no definition
for the terms “stolen,” “converted” or “taken by fraud.”
The indictment charged Mr. Natour with five separate
counts under the same statute, for transporting across
state lines cell phones with a value in excess of $5,000,
“knowing the same to have been stolen and converted.” 8
The indictment does not allege explicitly that the cell
phones in question may have been “taken by fraud.”
According to Mr. Natour, however, the Government’s
evidence at trial was intended to demonstrate that
the phones had been acquired by fraudulent means. In
reaching this conclusion, Mr. Natour relies heavily on
Stock’s testimony on behalf of Sprint that, for purposes
of internal accounting, many of the phone “purchases”
for which Sprint ultimately adjusted accounts were cate-
gorized as involving fraud. Mr. Natour treads carefully
with this argument, however, because he also disputes
whether there was sufficient evidence to determine
that the phones were taken by fraud.
The jury was charged using a Seventh Circuit pattern
jury instruction defining the term “stolen”:
8
R.116 at 1-5.
14 No. 11-2577
The word “stolen” as used in these instructions
means any taking with the intent to deprive the
owner of his or her rights and benefits of owner-
ship. The taking may be accomplished through
the use of false pretenses, trickery, or misrepresen-
tation in obtaining possession. It is not neces-
sary, however, that the taking be initially unlaw-
ful. Even if possession is first acquired lawfully,
the taking falls within the meaning of “stolen” if
the defendant thereafter forms the intent to de-
prive the owner of his or her ownership [inter-
ests].9
In Mr. Natour’s view, the Government limited its
theory of the case by indicting him on narrower grounds
than the statute would have permitted, specifically, by
eliminating the term “taken by fraud.” He further
asserts that the proof at trial, which was suggestive of
fraud, combined with an instruction that explicitly re-
broadened the theory of liability to include transfer of
property acquired by fraud, amounts to an impermis-
sible constructive amendment of the indictment, in viola-
tion of his right under the Grand Jury Clause.
Mr. Natour invites our attention to United States v.
Sayan, 968 F.2d 55 (D.C. Cir. 1992), a case involving the
same statute of conviction. In Sayan, the indictment
charged that the defendant had transported money
known to have been “taken by fraud,” without reference
to the other statutory language in § 2314. Id. at 59. The
9
R.192 at 170.
No. 11-2577 15
jury was instructed, however, that if the money in
question had been acquired through any of the means
listed in § 2314, it would be sufficient to convict.
On appeal, the defendant claimed that the indictment
had been constructively amended. Id. The District of
Columbia Circuit noted that, although it was “con-
ceivabl[e]” that this instruction “could have broadened
the theories regarding the method [the defendant] used
to achieve [her] end” from that presented in the indict-
ment, the proof at trial was limited to fraud; therefore,
no constructive amendment had occurred. Id. at 60.
We do not read Sayan to conclude that the statutory
terms must be read as entirely distinct, with no intersec-
tion or overlap. The District of Columbia Circuit’s con-
clusion is merely that such a result is “conceivabl[e],”
under some circumstances that were not presented to it.
Id. Moreover, the tentative nature of that conclusion
was further qualified by the court through the addition
of a footnote in which it specifically declined to address
the scope of the statutory terms and cited cases that
“might support a conclusion that the phrase ‘taken by
fraud’ as used in Sayan’s indictment encompasses
‘stolen, converted or taken by fraud.’ ” Id. at 60 n.5.
The statement in Sayan that Mr. Natour reads as suppor-
tive of his view, is, therefore, not as definitive as he
would have us conclude. We therefore turn to a more
detailed examination of the history of § 2314 and the
case law interpreting it.
Section 2314 was enacted in 1934 as the National
Stolen Property Act (the “Act”). At that time, the Act’s
16 No. 11-2577
prohibition employed similar—though not identi-
cal—language to the current version under which
Mr. Natour was charged. Specifically, the 1934 Act made
it a crime to “transport or cause to be transported . . .
any goods, wares or merchandise, securities or money, of
the value of $5,000 or more, theretofore stolen or taken
feloniously by fraud or with intent to steal or purloin.” See
National Stolen Property Act, § 3, Pub. L. No. 73-246, 48
Stat. 794, 794-95 (May 22, 1934) (emphasis added). The
section was revised in 1939, in response to a letter from
the Attorney General in which he noted that it would
be “desirable to include within [the statute’s] provi-
sions property, money, or securities that have been em-
bezzled as well as those that have been stolen.” S. Rep. No.
76-674, at 1 (1939). The resulting amendment included,
for the first time, language relating to property “feloni-
ously converted.” Pub. L. No. 76-255, 53 Stat. 1178,
1178 (Aug. 3, 1939).
Interestingly, the original 1934 Act was drafted as an
act “to extend the provisions of the National Motor
Vehicle Theft Act to other stolen property.” H. Rep. No. 73-
1599, at 1 (1934) (Conf. Rep.); see also Dowling v. United
States, 473 U.S. 207, 218-20 (1985) (describing the history
of the National Stolen Property Act). The National
Motor Vehicle Theft Act, enacted in 1919 and codified
at 18 U.S.C. § 2312, consistently has punished the trans-
portation in interstate commerce of motor vehicles
known to be “stolen,” without further expansion of the
terms parallel to those contained in the National Stolen
Property Act. See Pub. L. No. 66-70, 41 Stat. 324, 325 (1919).
The Supreme Court has held that the term “stolen” as
No. 11-2577 17
it is used in the National Motor Vehicle Theft Act encom-
passes activities involving virtually any illegally
acquired property, regardless of the specific means. In
United States v. Turley, 352 U.S. 407, 417 (1957), the Court
specifically rejected an interpretation that would have
limited the statute to common-law larceny and held
that the statute punishes “all felonious takings” of
property within the statute’s reach. Notably, the Court
specifically emphasized that “ ‘steal’ ‘may denote the
criminal taking of personal property either by larceny,
embezzlement, or false pretenses.’ ” Id. at 412 (quoting
Black’s Law Dictionary (4th ed. 1951)). Indeed, the Court
emphasized that “ ‘stolen’ and ‘steal’ have been used in
federal criminal statutes, and the courts interpreting
those words have declared that they do not have a neces-
sary common-law meaning coterminous with larceny
and exclusive of other theft crimes.” Id. The Court
quoted with approval the comment of the Court of
Appeals for the Fourth Circuit that “steal” has become
“ ‘the generic designation for dishonest acquisition.’ ” Id.(quoting Boone v. United States, 235 F.2d 939, 940 (4th
Cir. 1956)). Finally, the Court also noted that the practice
of the federal courts comported with generally accepted
dictionary usage. Consequently, although amendment
of the National Stolen Property Act ostensibly was in-
tended to clarify the breadth of its coverage, the act
from which it originated has been interpreted to reach
equally as far, without the addition of terms related
specifically to conversion or fraud.
Shortly after Turley, the Fifth Circuit considered the
reach of the statutory term “stolen” in § 2314. Lyda v.
18 No. 11-2577
United States, 279 F.2d 461, 463-65 (5th Cir. 1960), found
Turley squarely applicable. In Lyda, the defendant was
charged in an indictment referencing only “stolen” prop-
erty, while he claimed that the evidence at trial demon-
strated clearly that he had embezzled, rather than
stolen, a truckload of pecans. The Fifth Circuit found
the distinction irrelevant in the context of § 2314. The
court concluded that
[t]he term “stolen” as used here is certainly as
comprehensive as “theft” which, we have said, “is
not like ‘larceny’, a technical word of art with a
narrowly defined meaning but is, on the
contrary, a word of general and broad connotation,
intended to cover and covering any criminal
appropriation of another’s property to the use
of the taker, particularly including theft by swin-
dling, false pretenses, and any other form of guile.”
Id. at 464 (quoting Edwards v. Bromberg, 232 F.2d 107,
110 (5th Cir. 1956). Furthermore, the court continued,
[w]hile we need not here draw upon the adjacent
terms of “converted or taken by fraud” as they
appear in § 2314, we think their presence is rele-
vant. The aim of the statute is, of course, to pro-
hibit the use of interstate transportation facilities
for goods having certain unlawful qualities. This
reflects a congressional purpose to reach all ways
by which an owner is wrongfully deprived of
the use or benefits of the use of his property. It
was one way to meet the difficulties in legislative
draftsmanship. . . . Congress by the use of broad
No. 11-2577 19
terms was trying to make clear that if a person
was deprived of his property by unlawful
means amounting to a forcible taking or a taking
without his permission, by false pretense, by
fraud, swindling, or by a conversion by one right-
fully in possession, the subsequent transporta-
tion of such goods in interstate commerce was
prohibited as a crime. Since the aim of Congress
was to reach all such deprivations, it would distort
that purpose if by a sort of reverse process the transac-
tion under review had to consider whether the property
was stolen or converted or taken by fraud. The con-
tiguous presence of all three descriptives lends
meaning to each.
Id. (emphasis added) (citations omitted) (internal quota-
tion marks omitted); see also United States v. Long Cove
Seafood, Inc., 582 F.2d 159, 163 (2d Cir. 1978) (calling a
broad reading of the term “stolen” in § 2314, borrowed
from Turley’s interpretation of § 2312, “relatively
well-established”).
In light of the Act’s history and the Supreme Court’s
decision in Turley, we, like the Fifth Circuit in Lyda, are
not inclined to read the term “stolen” to narrow artificially
its meaning. The most natural reading of the statute, and
the one we adopt, views the three descriptive terms as
containing a significant amount of overlap. “Stolen” is
broad enough to encompass the kind of fraudulent
taking the evidence in this case supported.
The alternative interpretation, favored by Mr. Natour,
is that, whatever “stolen” means, it must at the very least
20 No. 11-2577
exclude anything within the definition of “converted” or
“taken by fraud.” See Appellant’s Br. 21-22 & n.4. In
support of this argument, Mr. Natour relies principally
on the familiar canon of construction that, in inter-
preting ambiguous statutory language, courts should
strive to give meaning to every word and should reject
any interpretation that renders any portion of the
statute superfluous. See, e.g., United States v. Menasche,
348 U.S. 528, 538-39 (1955); Connecticut Nat’l Bank v.
Germain, 503 U.S. 249, 253 (1992).
We are not persuaded that the canon commands that
we adopt a meaning of the terms that understands
each as entirely distinct. As the Supreme Court has re-
minded us,
canons are not mandatory rules. They are guides
that “need not be conclusive.” Circuit City Stores,
Inc. v. Adams, 532 U.S. 105, 115 (2001). They are
designed to help judges determine the Legisla-
ture’s intent as embodied in particular statutory
language. And other circumstances evidencing
congressional intent can overcome their force.
Chickasaw Nation v. United States, 534 U.S. 84, 94 (2001);
see also Connecticut Nat’l Bank, 503 U.S. at 253-54 (“Redun-
dancies across statutes are not unusual events in
drafting, and so long as there is no positive repugnancy
between two laws, a court must give effect to both.”
(citation omitted) (internal quotation marks omitted));
id. (“[C]anons of construction are no more than rules of
thumb that help courts determine the meaning of legisla-
tion . . . .”). Section 2314 does include duplication and
No. 11-2577 21
even redundancy for the sake of clarity and complete-
ness. Any violation of the canon of construction caused
by the most sensible reading of the statute is otherwise
supported by the history and precedents.
Finally, Mr. Natour asserts that any ambiguity in the
meaning of the statute requires the court to employ
the rule of lenity in favor of Mr. Natour. As the
Supreme Court has cautioned, however, “we have
always reserved lenity for those situations in which a
reasonable doubt persists about a statute’s intended
scope even after resort to the language and structure,
legislative history, and motivating policies of the stat-
ute.” Moskal v. United States, 498 U.S. 103, 108 (1990)
(citation omitted) (internal quotation marks omitted)
(rejecting a plea for application of the rule of lenity to
§ 2314 after concluding that the defendant’s conduct
unambiguously fell within the statute). Our review of the
appropriate sources leaves us with no such ambiguity.
Because we conclude that the terms included within
the indictment were themselves sufficiently broad
enough to encompass goods “taken by fraud,” we also
must conclude that the proof at trial and the jury instruc-
tions did not constructively amend Mr. Natour’s indict-
ment. The district court did not plainly err in instructing
the jury using a related pattern instruction that incorpo-
rated “fraud” into the definition of “stolen.” 1 0
10
Although Mr. Natour separately contends that there was
insufficient evidence that the phones were either “stolen” or
(continued...)
22 No. 11-2577
B. Enhancement for Being “In the Business of
Receiving and Selling Stolen Property”
Mr. Natour next challenges the district court’s determi-
nation that he “was a person in the business of re-
ceiving and selling stolen property” and therefore sub-
ject to a 2-level increase in his guidelines calculation at
sentencing. See U.S.S.G. § 2B1.1(b)(4). Mr. Natour submits
both that application of the enhancement is improper
on the merits and that the district court’s treatment of the
matter was so insufficient as to be procedurally unrea-
sonable. The district court’s findings of fact stand
unless clearly erroneous; however, we review de novo
whether the facts as found are sufficient to support an
enhancement under the Guidelines. United States v.
Pabey, 664 F.3d 1084, 1094 (7th Cir. 2011). We also
review de novo whether a district court committed pro-
cedural error, such as by failing to explain adequately
its sentencing determinations. United States v. Olmeda-
Garcia, 613 F.3d 721, 723 (7th Cir. 2010).
The application notes for § 2B1.1(b)(4) provide:
For purposes of subsection (b)(4), the court shall
consider the following non-exhaustive list of
factors in determining whether the defendant was
in the business of receiving and selling stolen
property:
10
(...continued)
“converted” as those terms were used in the indictment,
we consider this submission to be simply a repackaging of
his statutory interpretation argument. We therefore are
not persuaded for the reasons already identified.
No. 11-2577 23
(A) The regularity and sophistication of
the defendant’s activities.
(B) The value and size of the inventory of
stolen property maintained by the defen-
dant.
(C) The extent to which the defendant’s
activities encouraged or facilitated other
crimes.
(D) The defendant’s past activities involv-
ing stolen property.
U.S.S.G. § 2B1.1, cmt. 5.
The sentencing transcript includes relatively little on
this question, although, in the context of Mr. Natour’s
argument below, it is not surprising. In response to the
recommendation of the PSR that the enhancement apply,
the portion of Mr. Natour’s sentencing memorandum
addressing this subject consists of only four sentences,
the essence of which is that he “was involved in legiti-
mate business in addition to also being involved in
the instant offense. This section of the fraud statute was
designed with the ‘fence’ in mind and we submit that
the evidence does not support such an increase.” 1 1 At
11
R.157 at 6. The Government’s memorandum provided a
fuller analysis of the relevant guideline section and Mr. Natour’s
conduct. See R.161 at 5-8. The Government argued that
Mr. Natour’s conduct fell within all four of the Guideline’s
suggested factors, that Mr. Natour probably could be con-
(continued...)
24 No. 11-2577
the sentencing hearing, when defense counsel reached
this point, he indicated that he was “not going to
address further the in the business” enhancement,
because the argument in the memorandum was “pretty
straightforward.” 12 As an initial response, the court
stated simply, “[w]ell, I reject your argument.” 1 3 It
later returned to the subject, however, stating that the
Guidelines posed “no question. He could have a
legitimate business and still be in the business of
buying and selling stolen property.” 1 4
When read in context, the court’s treatment of the
issue did not fall below acceptable procedural levels.1 5
11
(...continued)
sidered a “fence” and that the Guideline does not exempt
business owners who conduct some legitimate business
in addition to their sale of stolen goods. R.161 at 6-7.
12
R.186 at 19.
13
R.186 at 19.
14
R.186 at 39.
15
We have stated that the district court’s burden of ruling on an
objection explicitly and providing a statement of reasons need
not result in lengthy discussion and imposes only a “minimal
burden,” United States v. Sykes, 357 F.3d 672, 674 (7th Cir. 2004):
Federal Rule of Criminal Procedure 32(i)(3) requires a
district court to rule on all controverted matters that
will affect sentencing. This requirement ensures that
the court addresses all of the defendant’s objections
and provides a record of how the objections were
(continued...)
No. 11-2577 25
Although the court did not analyze extensively all the
factors listed in the application note, it did address the
principal objection that Mr. Natour raised—that he oper-
ated a legitimate business and was not a professional
“fence.” 1 6 Moreover, on the facts, application of the
15
(...continued)
resolved for later reference. But Rule 32 does not
impose an onerous burden. The district court can
often satisfy the rule by adopting the proposed
findings in the presentence report (PSR), even as to
contested facts, so long as the PSR articulates a suffi-
ciently clear basis for the sentence, and the reviewing
court can be sure that “the district court made a deci-
sion of design rather than of convenience.”
Id. (citations omitted).
16
Although Mr. Natour’s brief to the district court was not
clear on this point, the “fence test” was the test previously
used in this circuit to determine the applicability of the Guide-
line, and it referred to the difference between selling goods
one had stolen himself versus professionally selling
goods unlawfully acquired by others. See, e.g., United States
v. Braslawsky, 913 F.2d 466, 468 (7th Cir. 1990) (stating that only
the latter category of criminal warranted the Guidelines en-
hancement). The Guidelines were amended in 2001 to adopt
the totality of the circumstances test embodied in the current
application note. Moreover, it is undisputed that Mr. Natour
both received and sold unlawfully acquired property; indeed,
he admitted that he bought the phones in question from
Williams. Therefore, to the extent that the question
whether a person is a “professional fence” is still relevant, see
(continued...)
26 No. 11-2577
enhancement appropriately accounts for the scope of
Mr. Natour’s illegal conduct. Mr. Natour was convicted
of making four large shipments of illegally obtained
phones in less than a one-month period. In his initial
statement to police, he admitted to dealing roughly 1500
phones so acquired. The value of those phones was esti-
mated to be somewhere between $100,000 and $300,000.
Further, in order to operate his end of the illegal business,
others had to obtain illegally phones for him and still
others had to sell to consumers the phones so obtained;
thus, his behavior encouraged additional criminal con-
duct. Mr. Natour also operated a legitimate business that
contained legitimate inventory, but there is simply
no reason that operation of a separate, legitimate enter-
prise undermines the fact that, over a period of several
months, he engaged in a pattern of serious criminal
conduct involving a significant quantity of stolen
goods. Under these circumstances, application of the
Guideline was not erroneous.
C. Loss Calculation
Mr. Natour’s final contention is that the district court
erred in calculating the amount of loss caused by
his offense, and, in so doing, improperly calculated
the applicable guidelines range. “We review the district
16
(...continued)
United States v. Vigil, 644 F.3d 1114, 1120-21 (10th Cir. 2011),
Mr. Natour clearly engaged in conduct that fell within the
Guideline.
No. 11-2577 27
court’s interpretation and application of the guidelines
de novo and its findings of fact for clear error.” United
States v. Sutton, 582 F.3d 781, 783-84 (7th Cir. 2009).
The district court’s loss calculation itself, “which need
only be ‘a reasonable estimate of the loss,’ ” is reviewed for
clear error. Id. at 784 (quoting U.S.S.G. § 2B1.1 cmt. 3(C)).1 7
17
The language of the Guideline refers only to “loss.”
§ 2B1.1(b)(1). The commentary clarifies that “loss” is “the greater
of actual loss or intended loss.” Id. cmt. 3(A). The commentary
continues:
(i) Actual Loss.--“Actual loss” means the reasonably
foreseeable pecuniary harm that resulted from the
offense.
(ii) Intended Loss.--“Intended loss” (I) means the
pecuniary harm that was intended to result from the
offense; and (II) includes intended pecuniary harm
that would have been impossible or unlikely to
occur (e.g., as in a government sting operation, or
an insurance fraud in which the claim exceeded
the insured value).
....
(B) Gain.--The court shall use the gain that resulted
from the offense as an alternative measure of loss only
if there is a loss but it reasonably cannot be determined.
(C) Estimation of Loss.--The court need only make a
reasonable estimate of the loss. The sentencing judge
is in a unique position to assess the evidence and
estimate the loss based upon that evidence. For this
reason, the court’s loss determination is entitled to
appropriate deference. See 18 U.S.C. § 3742(e) and (f).
(continued...)
28 No. 11-2577
In order to understand his objection, it is necessary
to examine the sentencing proceedings on loss amount
in some detail.
Beginning with the PSR and the responses by the
parties and continuing through the sentencing hearing,
17
(...continued)
The estimate of the loss shall be based on available
information, taking into account, as appropriate and
practicable under the circumstances, factors such as
the following:
(i) The fair market value of the property un-
lawfully taken, copied, or destroyed; or, if the
fair market value is impracticable to determine
or inadequately measures the harm, the cost
to the victim of replacing that property.
(ii) In the case of proprietary information (e.g.,
trade secrets), the cost of developing that
information or the reduction in the value of
that information that resulted from the offense.
(iii) The cost of repairs to damaged property.
(iv) The approximate number of victims multi-
plied by the average loss to each victim.
(v) The reduction that resulted from the offense
in the value of equity securities or other corpo-
rate assets.
(vi) More general factors, such as the scope and
duration of the offense and revenues generated
by similar operations.
Id. cmt. 3.
No. 11-2577 29
numerous bases for the loss amount were proposed
and considered, among them proven loss to Sprint, gain
to the defendant as profit and fair market value of the
property. The PSR recommended basing the loss amount
on the adjustments made to Sprint accounts to which
Stock had testified, namely, $104,742.16. Mr. Natour
proposed various numbers before the district court in
loss calculation ranging between $0 and $70,000.1 8
The Government urged that the loss amounts should be
the total value of the phones as estimated by Sprint (as
the manufacturer’s suggested retail price or “MSRP”),
and contended that the amount was $302,000; in the
alternative, the Government suggested using “gain” to
the defendant as a measure, as estimated by the
cash-on-delivery amounts received for the four
convicted counts, resulting in a loss of roughly $136,000.
The defendant objected that the cash-on-delivery or
MSRP estimates, which would value each phone around
$200, were unrealistic: “nobody is getting two, $300
18
Mr. Natour apparently based this figure on the Guidelines
rather than a particular interpretation of facts relevant to loss.
In his response to the PSR, he stated that although he was “not
in a position to suggest to the Court an exact dollar amount
that would more accurately reflect the actual loss” than that
of the PSR, “based on the nature of the business and the poten-
tial recovery of their loss . . . the real figure should be well
below the $70,000 amount required to increase the level by 8,”
referring to the breaking points in the Guidelines chart. R.157
at 5-6.
30 No. 11-2577
for these phones, whether legitimate or otherwise.” 1 9
The court responded:
Well, apparently they were because that’s what
they were, had to pay on these. So if that isn’t a
reasonable value for the rest of the phones, why
isn’t it up to you to show that it isn’t? My only
concern is that you don’t actually, you don’t
know who suffered the loss, and so I suppose
we don’t know how much it is.
But if it’s fair to do it as a fair retail value and
that’s a fair measure of damages, then I think
we’ve got pretty good evidence that that’s what
they actually had to pay back. Obviously some
people bought them at that price, enough people
that they paid back 100 some thousand dollars.
I think I’m going to go with the government’s
figures. I don’t have anything else really to go by.
I’m not going to—I can’t go out on the street and
say, “How much are you selling them for?” And
the fact that they may have deals, that just, I think
it’s supposed to be an approximation. They have
more than an approximation on a third of those
phones. So you can take out the ones on that one
count if you want. I don’t know if it makes
much difference.
[COUNSEL FOR DEFENDANT]: So I apologize,
then, Judge. Which numbers is the Court going
to use?
19
R.186 at 29.
No. 11-2577 31
THE COURT: The government’s 300 some thou-
sand minus the 50 phones or whatever it was,
55 phones. I doubt that that makes any big dif-
ference, but maybe it does. I don’t know.2 0
The resultant sentence, therefore, took the Government’s
figures, based on the MSRP, for all phones associated
with the charges of conviction, thus omitting from that
estimate only the 55 phones associated with the dis-
missed Count 4.
Mr. Natour now argues that the district court effec-
tively “g[a]ve up” 2 1 and accepted the Government’s
figures without adequate explanation. He also contends
that the loss calculation is clearly erroneous.
First, reading the sentencing proceedings as a whole,
we are not persuaded that the district court failed to
adequately explain its reasoning. Mr. Natour is correct
that the ruling is not a model of clarity. The court certainly
struggled to put a number to the loss, but also clearly
was dissatisfied with a number that reflected only the
379 phones upon which an adjustment had been made
by Sprint. The court acknowledged that, although
Sprint had not documented further losses, the remainder
of the phones were taken unlawfully and someone
had sustained a loss, the reasonable value of which could
be extrapolated from the known losses with respect to a
portion of the phones. Reading the transcript as a whole,
20
R.186 at 29-30.
21
Appellant’s Br. 40.
32 No. 11-2577
the district court did not provide so scant a rationale as
to deprive us of a reasonable basis for review. See
United States v. Leiskunas, 656 F.3d 732, 738 (7th Cir. 2011)
(remanding for a rationale when the district court pro-
vided no reasoning whatsoever for a loss amount).
With respect to the substance of the calculation, we
also perceive no reversible error by the district court.
First, “[t]he court need only make a reasonable estimate
of the loss,” U.S.S.G. § 2B1.1(b)(1), cmt. 3(C), and, in
arriving at that figure, may employ an “approximate
number of victims multiplied by the average loss to
each victim,” id., cmt. 3(C)(iv). That is, the Guidelines
specifically contemplate that exact figures will not
always be available and among other acceptable methods
of arriving at an approximation, is one in which limited
evidence is scaled to reflect the scope of the loss in-
volved. Accordingly, the district court was not required to
limit its loss figure to the amount that reflected only the
379 phones associated with an adjustment from Sprint.
Furthermore, the inclusion of the additional phones at
similar costs was supported by record evidence that
phones not associated with an “adjustment” still resulted
in a loss to someone. Specifically, the evidence estab-
lished that if phones were purchased through fake busi-
nesses and the accounts with Sprint were in default, the
accounts would not have appeared as “adjusted” to reflect
an unauthorized charge and thus would not have ap-
peared in the total, although Sprint would have suffered a
loss; this is consistent with Mr. Natour’s post-arrest
statement about obtaining phones from Williams. Simi-
larly, if a consumer, likely a business with large bills, failed
No. 11-2577 33
to notice or report an unauthorized line-item charge,
the account would not be adjusted, but the customer
would have paid for a phone it did not receive; this is
consistent with the evidence that Mr. Natour received
phones ordered by “Frito-Lay” on a corporate account
not associated with an adjustment.2 2 The district court,
therefore, did not err in accounting for all of the
phones related to the charges of conviction.
Although we find no error in the inclusion of these
phones, we still must determine if the estimate itself is
clearly erroneous. “A defendant challenging a district
court’s loss calculation must not only demonstrate that
it is inaccurate, but also outside the realm of permissible
computations.” United States v. Kimoto, 588 F.3d 464, 493-
94 (7th Cir. 2009) (internal quotation marks omitted). On
this point, Mr. Natour’s argument also falters: We
have accepted fair market value of stolen goods as a
reasonable estimate of loss. See United States v. Wasz, 450
F.3d 720, 727 (7th Cir. 2006). We also find persuasive
a factually similar case in which the Fifth Circuit ap-
proved of a loss calculation based on the “fair market
value” of stolen goods and explicitly rejected a “replace-
ment value” or “wholesale value” calculation that
reflects the lower amount Sprint would have to pay
a wholesaler to replace the phones. See United States v.
Lige, 635 F.3d 668, 671-72 (5th Cir. 2011). For reasons
similar to those expressed in Lige, we would be sus-
picious of a figure that was based on, for example,
22
See R.186 at 25 (Government’s explanation of losses not
covered by adjustments).
34 No. 11-2577
the cash-on-delivery value or the discounted price at
which Sprint might have chosen to offer phones to cus-
tomers in exchange for a service contract. As our col-
leagues in the Fifth Circuit reasoned in Lige, the victims
here were not in the business of selling phones at cost.
The phone had a greater value to the victim and an eco-
nomically realistic measure of that value is the price
for which that phone could be “sold” in its business,
either as an outright sale to retail customers or as an
inducement to enter a long-term service arrangement
with that customer. The retail value of the phone is an
“economically realistic” measure of the monetary loss
to the victim. Lige, 635 F.3d at 671.
The district court’s singular task was to value the
goods in order to estimate the loss to the victim, and
the method chosen by the court here, among the
available options under the facts of this case, rests on
solid ground.
Although the district court’s reasoning was discernible
in context and its result not clearly erroneous, we never-
theless believe that this case presents us with an oppor-
tunity to respectfully remind district courts that cost
calculations should be undertaken with great care and
with maximum possible clarity of the record.
Conclusion
The judgment of the district court is affirmed.
A FFIRMED
11-9-12