United States v. Trevor Hinds

In the
United States Court of Appeals
For the Seventh Circuit
No. 13-3543
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
TREVOR HINDS,
Defendant-Appellant.
Appeal from the United States District Court for the
Southern District of Indiana, New Albany Division.
No. 4:13-cr-00015 — Tanya Walton Pratt, Judge.
ARGUED SEPTEMBER 11, 2014 — DECIDED OCTOBER 27, 2014
Before BAUER, MANION, and KANNE, Circuit Judges.
KANNE, Circuit Judge. Defendant-Appellant Trevor Hinds
appeals the district court’s imposition of a two-level sentencing
enhancement for production or trafficking under U.S.S.G. §
2B1.1(b)(11)(B)(i), as well as two special conditions of his
supervised release: one requiring him to pay a portion of his
court-ordered substance abuse treatment and drug testing and
the other requiring him to submit to suspicionless searches and
2 No. 13-3543
seizures. For the reasons set forth below, we affirm the two-
level enhancement but vacate the two special conditions at
issue. Accordingly, we remand for re-sentencing.
I. BACKGROUND
A. The Conspiracy
Between March and April 2013, Hinds, together with co-
conspirators Blandine Joseph, Paul Roberson, Tycia Peterson,
and Amanda Adam, obtained approximately 300 counterfeit
credit and debit cards. The conspirators’ names were embossed
on the front of the cards, but the cards were linked to accounts
held by other account holders with Fifth Third Bank and
Bremer Bank.
Plastic in hand, a shopping spree ensued. They made illegal
purchases at a Nordstrom department store in Columbus,
Ohio, and at various Sam’s Clubs in Pennsylvania, Ohio,
Kentucky, and Indiana. The sought-after items: cigarettes,
clothing, and Apple electronic devices. Along the way, Hinds
also rented a car and booked hotel rooms. Seventeen financial
institutions fell victim to the spree.1
1
Bank of America, Blackhawk Bank & Trust, Boeing Employees Credit
Union, Bremer Bank, Capital One Bank, Chase, Community State Bank of
Galva, Discover Financial Services, Fifth Third Bank, JP Morgan, Marion
County Bank, Northwest Bank & Trust, Schools First Federal Credit Union,
The Commercial Bank of Grayson, USAA, Valley Bank, and Wells Fargo.
No. 13-3543 3
But as the saying goes, all things (good or bad) must come
to an end. This particular shopping spree ended in Clarksville,
Indiana, on April 3, 2013. On that day, the Clarksville Police
Department contacted the Secret Service after receiving a
report from a local Sam’s Club loss-prevention manager. The
manager became suspicious after his store declined the credit
cards of Adam, Peterson, and Roberson—individuals who
matched the description of a Sam’s Club fraud alert. While the
manager verified the authenticity of the cards, he saw the men
exit his store to join Hinds and Joseph in their rented Nissan
Altima. So he went after them, tailing their car to a nearby Red
Lobster. He also called the police.
The police responded quickly. They found Hinds sitting at
a table inside the restaurant with his four co-conspirators.
Hinds identified the Nissan Altima as his rental car, and he
gave police consent to search it. Sergeant DeMoss of the
Clarksville Police Department found a plastic bag under the
driver’s seat containing approximately 275 fraudulent credit
and debit cards. The remaining cards, with the embossed
names of Hinds and Joseph, were found in the men’s and
women’s restrooms of the Red Lobster. An indictment fol-
lowed.2
2
During jail intake, police discovered five counterfeit ten-dollar bills and
five counterfeit twenty-dollar bills tucked inside Hinds’s shoes. That
discovery led to a possession-of-forged-securities charge to which Hinds
pled guilty. See 18 U.S.C. § 472.
4 No. 13-3543
B. The Plea and Sentence
Seven months later, on November 1, 2013, Hinds pled
guilty—via open plea—to conspiracy to use counterfeit
devices, possession of forged securities, and conspiracy to
commit bank fraud in violation of 18 U.S.C. §§ 1029(a)(1)-(b)(2),
472, 1344, and 1349, respectively. Hinds stipulated to the above
facts, supported largely through the sentencing testimony of
Secret Service Special Agent John Ely. His appeal centers on his
sentence, an issue to which we now turn.
The district court sentenced Hinds to imprisonment for
three concurrent terms of thirty months, a sentence at the
bottom of his calculated guideline range. This range resulted,
in part, from a two-level enhancement under U.S.S.G. §
2B1.1(b)(11)(B)(i) (adding two levels if the offense involved
production or trafficking), which was recommended in the
presentence report. Hinds objected to that enhancement at
sentencing. He argued there was no evidence to prove that he
actually produced or trafficked the fraudulent credit and debit
cards. After some back-and-forth between Hinds and the
government, the district court found the offense involved “the
production or trafficking of counterfeit devices,” (Sent. Tr. 57),
so it applied the enhancement.3 The district court also ordered
Hinds to pay restitution in the amount of $21,818.89, plus a
special assessment of $300.00. The district court did not,
3
Notably, if this two-level enhancement had not been applied, Hinds’s
guideline range with a criminal history category of II would have been
twenty-four to thirty months instead of thirty to thirty-seven months.
No. 13-3543 5
however, order Hinds to pay interest on this restitution. The
district court waived that requirement because it found he did
“not have the ability to pay interest … .” (Sent. Tr. 64.) The
district court also did not order Hinds to pay a fine “based on
[his] financial resources.” (Id.)
Despite its concern for Hinds’s indigence, the district court
imposed a special condition requiring him to pay a portion of
his substance abuse treatment and drug testing during his
period of supervised release (“payment condition”). Per the
district court:
[T]he defendant shall participate in a substance
abuse treatment program at the direction of his proba-
tion officer, which may include no more than eight drug
tests per month.
The defendant shall abstain from the use of all
intoxicants, including alcohol, while participating in the
substance abuse program, and he will be responsible for
paying a portion of the fees of substance abuse testing
and treatment.
(Sent. Tr. 66.) The district court did not establish what percent-
age accounts for Hinds’s “portion” of payment, or what will
happen to Hinds if he cannot pay. Nor did the district court
make this special condition contingent on Hinds’s ability to
pay. Evidently, the only qualification to this special condition
is that Hinds be subject to no more than eight drug tests per
month. Hinds challenges this payment condition on appeal.
6 No. 13-3543
Hinds also challenges a second condition imposed by the
district court—the search-and-seizure special condition. Per the
district court:
[T]he defendant shall submit to the search, with the
assistance of other law enforcement as necessary, of his
person, vehicle, office, business, residence, and prop-
erty, including computer systems and peripheral
devices.
The defendant shall submit to the seizure of any
contraband found and warn other occupants of the
premises that they may be subject to the searches.
(Sent. Tr. 65-66.) Absent from this condition is a prerequisite of
reasonable suspicion (or any level of suspicion) that he
committed an offense or violated a term of his supervised
release.
In issuing these special conditions, the district court offered
little support. Its sole explanation was that “[t]he substance
abuse testing and treatment, based on your reported substance
abuse history and the search and seizure, is being ordered
based on the nature of the instant offense.” (Sent. Tr. 69.) The
district court did not expressly address or attempt to justify its
payment condition.
Hinds did not object to these special conditions at sentenc-
ing. His sole objection, mentioned above, focused on the two-
level enhancement for production or trafficking of the counter-
No. 13-3543 7
feit access devices. On appeal, however, he objects to both the
enhancement and the special conditions of his supervised
release. We turn to the merits.
II. ANALYSIS
A. Sentencing Enhancement
We review a district court’s interpretation and application
of the federal sentencing guidelines de novo. United States v.
Sandoval-Velazco, 736 F.3d 1104, 1107 (7th Cir. 2013). Factual
determinations are reviewed for clear error. United States v.
Walsh, 723 F.3d 802, 807 (7th Cir. 2007). We affirm a district
court’s imposition of a sentence enhancement unless the
evidence leaves us with “the definite and firm conviction that
a mistake has been made.” United States v. Johnson, 489 F.3d
794, 796 (7th Cir. 2007). Because we are left with no such
conviction here, we affirm the two-level enhancement.
The relevant sentencing provision is U.S.S.G. §
2B1.1(b)(11)(B). That provision provides for a two-level
enhancement if the offense involved either the production or
the trafficking of any unauthorized or counterfeit access
device. An offense involves “production” if it “includes
manufacture, design, alteration, authentication, duplication, or
assembly.” U.S. Sentencing Guidelines Manual § 2B1.1 cmt.
n.10(A) (2013). An offense involves “trafficking,” by contrast,
if the perpetrator sought to “transfer, or otherwise dispose of,
8 No. 13-3543
to another, or obtain control of with intent to transfer or
dispose of” the counterfeit access devices. See 18 U.S.C. § 1029.4
Focusing solely on trafficking, Hinds argues there is no
proof that he or his co-conspirators trafficked in counterfeit
access devices. He faults the district court because, as he
observes, the trafficking enhancement requires proof of control
over a counterfeit access device with intent to transfer or
dispose. Because the district court made no finding of intent (it
found only he had obtained control over the credit and debit
cards), Hinds concludes the trafficking enhancement should
not apply.
If the court agrees with Hinds’s trafficking argument, he
asks us to stop our analysis there and vacate the sentence.
According to Hinds, the alternative “production” ground for
the § 2B1.1(b)(11)(B) enhancement is irrelevant because “the
district court relied only on trafficking.” (Appellant’s Br. 14.)
4
The Guidelines Manual does not define trafficking, so we use the
definition found in 18 U.S.C. § 1029–the statute under which Hinds stands
convicted. We note the definition of “traffic” as used in that statute is
substantially similar to the definition found in 18 U.S.C. § 2320–the statute
the district court applied. Compare 18 U.S.C. § 1029 (“‘traffic’ means transfer,
or otherwise dispose of, to another, or obtain control of with intent to
transfer or dispose of … .”) with 18 U.S.C. § 2320 (“‘traffic’ means to
transport, transfer or otherwise dispose of, to another, for purposes of
commercial advantage or private financial gain, or to make, import, export,
obtain control of, or possess, with intent to so transport, transfer, or
otherwise dispose of … .”). As Hinds concedes these statutes are similar, the
district court’s anomalous use of § 2320 merits no additional discussion
here.
No. 13-3543 9
The government disagrees. In its view, ample evidence
supports a finding that the offense involved either trafficking
or production. Because this issue impacts the scope of our
analysis on appeal, we address it first.
Appellant is right in one regard: the district court focused
much of its attention on trafficking. It discussed trafficking
with the parties. And after defining the word based on its
reading of 18 U.S.C. § 2320, the district court made an express
finding that Hinds had obtained control sufficient for the
enhancement to apply. (Sent. Tr. 55.)
But the sentencing transcript also reveals ample discus-
sion—and evidence—of the alternative production ground. See
U.S.S.G. § 2B1.1(b)(11)(B) (calling for enhancement if the
offense involve “production or trafficking”) (emphasis added).
The government argued, for example, that “this offense
absolutely involved the production” of counterfeit access
devices because, unlike stolen cards, these credit cards were
“produced specifically for these five individuals, as they were
embossed with their names.” (Sent. Tr. 50.) Special Agent Ely
testified to as much. Given that fact, the government asked the
district court to apply the two-level enhancement based on
production.
Though the district court did not make a finding as to
which particular type of production occurred (manufacture or
design or alteration, etc.), the district court did find “the
offense involved the production or trafficking” of the counterfeit
10 No. 13-3543
access devices prior to applying the enhancement. (Sent. Tr.
57.)
We therefore decline to limit our analysis to the trafficking
ground. The record is sufficiently developed to review the
court’s findings on either trafficking or production. We now
examine production.
The best evidence that the 18 U.S.C. § 1029 offense involved
production, sufficient to justify the enhancement, is the
established fact that the 304 credit and debit cards recovered
by law enforcement contained the embossed names of Hinds
and his co-conspirators. Here is the breakdown: 104 cards
featured the name of Paul Roberson, 95 featured the name of
Amanda Adam, 81 featured the name of Tycia Peterson, 15
featured the name of Blandine Joseph, and 9 featured the name
of Hinds.5
Regarding the production enhancement, then, the names on
the cards speak for themselves. This is not a crime where
Hinds used the stolen credit cards of John or Jane Doe. His
crime, a conspiracy to use counterfeit access devices, involved
cards designed specifically for him to use; they had his name on
them and were linked to various active accounts. Hinds’s co-
conspirators likewise had counterfeit cards bearing their
names. These undisputed facts are sufficient to support the
district court’s implicit finding that Hinds, his co-conspirators,
5
The nine cards bearing Hinds’s name were found in a toilet in the men’s
restroom at the Red Lobster.
No. 13-3543 11
or someone acting on their behalf, must have designed or
created these counterfeit cards in preparation for their crimes.
See United States v. Pollock, 757 F.3d 582, 592 (7th Cir. 2014)
(emphasizing “implicit findings will suffice as long as there is
‘sufficient, objective evidence in the record’ to support the
findings.”) (citations omitted). Hinds and his partners are
responsible for the foreseeable acts of others in preparation of
the offense. See United States v. Sliman, 449 F.3d 797, 801 (7th
Cir. 2006) (holding an appellant’s “offense level is determined
by examining all reasonably foreseeable acts and omissions” of
himself “and his co-conspirators in furtherance of the jointly
undertaken criminal activity.”). As a result, Hinds’s crime
involved the production of counterfeit access devices, and the
district court did not clearly err in applying the enhancement.
Though the district court did not offer explicit, detailed
findings as to how the production of these cards occurred, we
cannot find clear error where the record contains “sufficient,
objective evidence” to support the enhancement. United States
v. Locke, 643 F.3d 235, 244-45 (7th Cir. 2011) (collecting cases
where this court affirmed despite “a paucity of explicit
findings by the sentencing judge”) (citations omitted). Here,
the sufficient, objective evidence includes the testimony of
Special Agent Ely, the signed, stipulated factual basis of Hinds,
and the district court’s acceptance of the presentence report for
the record. Though more detailed findings may have been
helpful here, “the fact that more could have been said [by the
district court] does not compel us to vacate … .” United States
v. Smith, 218 F.3d 777, 783 (7th Cir. 2000). The district court’s
finding met the preponderance of the evidence standard. See
United States v. Belk, 435 F.3d 817, 819 (7th Cir. 2006) (stating
12 No. 13-3543
the preponderance of the evidence standard governs a district
court’s findings of fact during sentencing).
We emphasize, however, that our decision today rests
largely on the fact that Hinds’s name, along with the names of
his co-conspirators, appeared on the counterfeit access devices.
Were it not for this peculiar fact, the district court’s scant
findings in support of the enhancement would likely compel
a different result. It is only because we examine whether the
“district court’s account of the evidence is plausible in light of
the record viewed in its entirety,” United States v. Grigsby, 692
F.3d 778, 789 (7th Cir. 2012) (quoting Anderson v. City of
Bessemer City, N.C., 470 U.S. 564, 573-74 (1985)), that we affirm
on this basis today.
Additionally, Hinds places too much reliance on United
States v. Salem; that case is readily distinguishable, and it does
not compel relief. See United States v. Salem, 587 F.3d 868, 871
(8th Cir. 2009) (per curiam) (vacating a production enhance-
ment where there was “no evidence” that appellant “produced
or manufactured” fraudulent bar codes). The appellant
there—acting alone—placed fraudulent bar codes over actual
bar codes so that store merchandise would scan at a much
lower price upon checkout. Id. at 869-70. Because the Eighth
Circuit found “no evidence” regarding how the appellant
“procured the fraudulent bar code labels … or who produced
or manufactured them[,]” it vacated the district court’s
imposition of a production enhancement. Id. at 870-71. Impor-
tantly, Salem did not involve a conspiracy. Nor was the
appellant’s name embossed on any of the bar codes he placed
No. 13-3543 13
on the targeted merchandise. These distinctions are simply too
big to ignore. Accordingly, Appellant’s reliance on Salem is
unavailing.
As the record contains sufficient evidence to affirm the
enhancement on the production ground, we need not address
the alternative trafficking ground. For even if the district court
erred in finding the offense involved trafficking, we are
convinced the production enhancement would still apply,
rendering any such error harmless. See United States v. Hill, 645
F.3d 900, 906 (7th Cir. 2011) (“Harmless error review ‘removes
the pointless step of returning to the district court when we are
convinced that the sentence the judge imposes will be identical
to the one we remanded.’” (quoting United States v. Abbas, 560
F.3d 660, 667 (7th Cir. 2009))). We now turn to the special
conditions imposed on Hinds’s supervised release.
B. The Special Conditions of Supervised Release
Hinds challenges special conditions four and five of his
sentence: the payment condition and the search-and-seizure
condition, respectively. A district court’s decision to impose
special conditions is, by and large, discretionary. See United
States v. Farmer, 755 F.3d 849, 852 (7th Cir. 2014) (recognizing
only “a handful of conditions” that are required by the
Sentencing Reform Act) (citations omitted).
Though the Guidelines Manual recommends specific
special conditions for particular offenses, such recommenda-
tions are illustrative only. Id. at 852 (“[S]entencing judges can
14 No. 13-3543
impose conditions of their own devising.”) (citations omitted).
Conditions of supervised release, like other aspects of a
sentence, are limited by federal sentencing policy as reflected
in 18 U.S.C. § 3553(a). Id.
To ensure district courts are, in fact, complying with section
3553(a), judges are “required to give a reason, consistent with
the sentencing factors in section 3553(a), for every discretion-
ary part of the sentence … including any non-mandatory
conditions of supervised release.” United States v. Bryant, 754
F.3d 443, 444-45 (7th Cir. 2014). Failure to do so may result in
remand. Farmer, 755 F.3d at 717.
1. Waiver & Standard of Review
Because Hinds did not object to the special conditions of his
supervised release, the government argues waiver. Hinds, of
course, contends there was no waiver. He emphasizes that
neither of the special conditions at issue were advanced in the
presentence report, which means the first time he learned of
them came at the end of his sentencing hearing.6
In his view, merely answering “[n]o”, (Sent. Tr. 69), to the
district court’s question regarding awareness of legal reasons
why the sentence should not be imposed does not constitute
the intentional relinquishment of a right, sufficient for waiver
to apply. We agree. Waiver occurs when a defendant intention-
6
The government conceded as much at oral argument, acknowledging the
conditions were not announced before the sentencing hearing.
No. 13-3543 15
ally relinquishes a known right. See United States v. Staples, 202
F.3d 992, 995 (7th Cir. 2000) (citing United States v. Olano, 507
U.S. 725, 730-34 (1993)). A response to a general inquiry at the
end of sentencing, and unaccompanied by either (1) an explicit
approval of the condition or (2) a strategic reason to forego the
argument at the hearing, does not constitute waiver. Farmer,
755 F.3d at 853 (finding no waiver under similar facts).
Although we decline to apply waiver, the standard of
review remains an open question. For as its fallback position,
the government argues forfeiture, calling for application of
plain error review. Hinds disagrees. He contends there was no
forfeiture, so abuse of discretion is the proper standard of
review. Alternatively, Hinds maintains he still prevails even
under the stricter plain error standard. We agree with Hinds’s
either-or contention; he prevails no matter which standard
applies. We therefore maintain the same course as Farmer and
leave this question for another day. See 755 F.3d at 854 (leaving
open standard of review question where “the outcome … is the
same regardless of the standard” applied).
2. The Payment Special Condition
The payment condition, special condition four, requires
Hinds to pay “a portion of the fees of substance abuse testing
and treatment.” As a threshold matter, Hinds challenges the
district court’s authority to impose this condition. As he puts
it, “When Congress wants a defendant to pay for something,
Congress explicitly says so.” He cites various statutes that
expressly authorize special assessments, fines, and restitution,
16 No. 13-3543
see 18 U.S.C. § 3013(a)(2)(A) (special assessments); 18 U.S.C. §
3571 (fines); 18 U.S.C. § 3663 (restitution); 18 U.S.C. § 3663A
(restitution), and contrasts those statutes with the probation
and supervised release statutes, see 18 U.S.C. § 3563 (proba-
tion); 18 U.S.C. § 3583, which he notes are silent on the issue of
payment for treatment and testing services. This silence, in
Hinds’s view, is dispositive. He argues it means the condition
is prohibited. The government answers with its own statute, 18
U.S.C. § 3672. That statute provides in pertinent part:
The Director of Administrative Office of the United
States Courts … shall have the authority to contract
with any appropriate public or private agency or person
for the detection of and care in the community of an
offender who is an alcohol-dependent person, an addict
or a drug-dependent person … . This authority shall
include the authority to provide … testing; medical,
educational, social, psychological and vocational
services; corrective and preventive guidance and
training; and other rehabilitative services designed to
protect the public and benefit the alcohol-dependant
person, addict or drug-dependent person … .
Whenever the court finds that funds are available for
payment by or on behalf of a person furnished such
services, training, or guidance, the court may direct
such funds be paid to the Director.
18 U.S.C. § 3672. This statute is directly on point. It authorizes
a district court to impose a payment condition for substance
No. 13-3543 17
abuse treatment and drug testing. At least one other circuit
court has agreed with this conclusion. See United States v. Bull,
214 F.3d 1275, 1278 (11th Cir. 2000) (holding district court did
not clearly err in imposing a payment requirement for mental
health treatment relating to violence and anger control).
Accordingly, we find the district court acted within its author-
ity when it imposed the payment condition.
Of course, just because a court can do something does not
mean that it should. Our next inquiry, then, examines the
applicability of the payment condition to Hinds. Because the
district court made no findings regarding the connection of this
condition to Hinds’s offense (or person) under section 3553(a),
we are left with an undeveloped record on appeal. More
troubling, the part of the record that is developed appears
inconsistent with itself. For example, the district court ex-
pressly found Hinds lacked the ability to pay the interest
requirement on the restitution amount. So it waived it. The
district court also did not order a fine “based on the defen-
dant’s financial resources.”
Yet, despite Hinds’s indigence, the district court imposed
the payment condition—a condition, we note, that can be
imposed and reimposed up to eight times per month. And
unlike in Bull, 214 F.3d at 1279, the district court here did not
make this payment condition contingent on Hinds’s ability to
pay. Absent this contingency, the district court’s payment
condition is not only unsupported, but also inconsistent with
its previous findings regarding Hinds’s indigence.
18 No. 13-3543
We recently vacated a similar payment condition in United
States v. Siegel, 753 F.3d 705 (7th Cir. 2014). In that case, a
district court imposed a requirement that the defendant bear
the cost of substance abuse treatment, sex-offender treatment,
and the installation of filtering software for his computer. Id. at
714. There, like here, the district court set no contingency and
offered no explanation as to what would happen if the defen-
dant were unable to pay. Id. This silence concerned us because
“[r]evoking a defendant’s supervised release and recommitting
him to a prison for mere inability to pay would constitute
imprisonment for debt.” Given those facts, we remanded the
case for re-sentencing. Id. at 717.
Here, we are compelled to do the same. The district court
did not explain why it imposed this special condition. The
findings the district court did make—namely, that Hinds is
indigent—reveal a sentence demonstrably at odds with itself.
For these reasons, the district court erred in imposing the
payment condition. We will vacate it. We now turn to the final
issue on appeal.
3. The Search and Seizure Special Condition
The search and seizure condition, special condition five, can
be disposed of quickly. At oral argument, the government
conceded that this invasive condition is no different from the
one struck down in Farmer. See 755 F.3d at 854 (vacating a
search condition that required “no suspicion, reasonable or
otherwise,” to justify a search). The government also conceded
the special condition deserved to be vacated and remanded.
No. 13-3543 19
We accept the government’s concessions. Because the
search and seizure condition cannot be distinguished from the
unlawfully broad and invasive condition in Farmer, we will
vacate it today. In doing so, we do not rule out unannounced
and random searches where appropriate, but we note that
simply stating the condition “is being ordered based on the
nature of the instant offense[,]” does little to justify its imposi-
tion.
On remand, any revision to the condition, if it is reimposed,
should be accompanied by an explanation that connects the
condition to the offense, Hinds’s history and personal charac-
teristics, as well as society’s needs for deterrence, protection,
and rehabilitation. See United States v. Goodwin, 717 F.3d 511,
523 (7th Cir. 2013).
III. CONCLUSION
For the foregoing reasons, we AFFIRM in part and
REVERSE in part. We AFFIRM the imposition of the two-level
enhancement based on the production ground. We VACATE,
however, the special conditions requiring payment for sub-
stance abuse treatment and drug testing as well as
suspicionless search and seizure. The case is REMANDED to
the district court for further proceedings consistent with this
opinion.