United States v. Cage , 134 F. App'x 833 ( 2005 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 05a0400n.06
Filed: May 13, 2005
No. 04-5218
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, )
)
Plaintiff-Appellee, )
)
v. ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR THE
JANELL CAGE, ) WESTERN DISTRICT OF TENNESSEE
)
Defendant-Appellant. )
)
)
Before: COLE and GIBBONS, Circuit Judges; SCHWARZER, District Judge.*
JULIA SMITH GIBBONS, Circuit Judge. Defendant-appellant Janell Cage obtained
names, addresses, and social security numbers of other individuals and used this information to
apply for loans and credit cards and take over existing bank accounts. She pled guilty to one count
of access device fraud in violation of 18 U.S.C. § 1029(a)(2). Cage was sentenced to thirty months
of imprisonment followed by three years of supervised release. She appeals the district court’s
determination that two enhancements applied to her base offense level for purposes of determining
her sentencing range under the United States Sentencing Guidelines. In light of United States v.
Booker, 125 S. Ct. 738 (2005), we vacate Cage’s sentence and remand for resentencing.
*
The Honorable William W Schwarzer, Senior United States District Judge for the Northern
District of California, sitting by designation.
United States v. Cage, No. 04-5218
I.
From approximately December 13, 2002, through May 9, 2003, Cage used her position as
a medical transcriptionist in order to access confidential information about patients, including
names, dates of birth, and social security numbers. Armed with this information, Cage submitted
over thirty applications for credit and took over four existing accounts. She obtained cash advances,
bought various items, and bought and insured a car.
The United States Postal Inspection Service initiated an investigation into Cage’s activities
on March 4, 2003, after receiving information from USAA Credit Card that an individual in
Memphis had taken over several credit card accounts. Agents interviewed Cage, who admitted
using her employment to obtain credit reports on the Internet and then apply for new accounts or
take over existing accounts.
A federal grand jury in the Western District of Tennessee indicted Cage on June 30, 2003.
On October 17, 2003, Cage pled guilty to Count I of the indictment, which charged that Cage
knowingly and with intent to defraud used an unauthorized access device issued by USAA to Karl
and Theresa Robinson, in violation of 18 U.S.C. § 1029(a)(2). The remaining counts were
dismissed. However, the offense level for purposes of sentencing included all relevant conduct
pertaining to all counts of the indictment.
A presentence investigation report was prepared. It assigned Cage a base offense level of
six. It then added ten levels pursuant to U.S.S.G. § 2B1.1(b)(1)(F)1 for causing a loss of more than
1
All references to individual guideline provisions refer to the 2003 edition of the Guidelines
Manual.
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$120,000. Included in Cage’s relevant conduct were three checks issued by People First Finance
(drawn on accounts that Cage opened) that totaled $100,722.22. People First Finance determined
that the checks were fraudulent and cancelled the accounts from which they were drawn before Cage
could cash them, thus preventing any actual loss to the company. The report also recommended
adding two levels for the unlawful use of any means of identification to obtain another means of
identification, under U.S.S.G. § 2B1.1(b)(9)(C)(i). Cage’s total offense level of eighteen, combined
with her criminal history category of II, gave her a guidelines range of thirty to thirty-seven months.
At the sentencing hearing, the district court adopted the recommendations of the presentence
report. It also declined to decrease Cage’s offense level by three levels, rejecting Cage’s argument
that because she did not pass the People First Finance checks, her possession of these checks should
be considered an attempt. The district court sentenced Cage to thirty months of imprisonment,
followed by three years of supervised release.
Cage filed a timely notice of appeal.
II.
Cage appeals the district court’s decision to apply a ten level enhancement to her base
offense level. Pursuant to U.S.S.G. § 2B1.1(b)(1)(F), the court increased Cage’s offense level by
ten levels, because the loss involved more than $120,000. Cage argues that the ten level
enhancement should not apply and that additionally she should receive a three level reduction under
the attempt guideline provision of U.S.S.G. § 2X1.1(a) because she never intended to negotiate three
checks from People First Finance. She also argues that her sentence should be vacated in light of
Blakely v. Washington, 124 S. Ct. 2531 (2004) (and accordingly Booker, 125 S. Ct. at 738).
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We conclude that the district court, while appropriately determining in a pre-Booker context
that the amount of intended loss exceed $120,000, made a factual finding that violated Cage’s Sixth
Amendment rights and requires us to vacate Cage’s sentence and remand for resentencing. We also
conclude that the attempt provision does not apply to the facts of Cage’s case. On remand, the
district court should not apply that provision when determining Cage’s advisory guidelines range.
A.
U.S.S.G. § 2B1.1(b)(1)(F) requires the district court to increase a defendant’s offense level
by ten if the loss perpetrated by the defendant totaled more than $120,000. Cage objects to the
inclusion in the loss calculation of three blank checks issued by People First Finance, which totaled
$100,722.22. The checks include: (1) a check on the account of Gordon McMurchie in the amount
of $33,100, mailed to Cage on January 6, 2003; (2) a check on the account of Lisa Wilson in the
amount of $22,022.22, mailed to Cage on December 13, 2002; and (3) a check on the account of
Janell Caldwell in the amount of $45,600, mailed to Cage on March 20, 2003. People First Finance
cancelled the accounts from which the first two checks were issued on January 16, 2003, and
cancelled the account from which the third check was issued on March 21, 2003.
The application notes for § 2B1.1(b)(1) indicate that the court is to apply the enhancement
based upon the greater of the actual or intended loss. In this case, there was no actual loss to People
First Finance, because the checks were determined to be fraudulent before they were cashed. Thus,
loss for the purposes of this section of the sentencing guidelines is the intended loss, defined as “(I)
the pecuniary harm that was intended to result from the offense; [which] (II) includes pecuniary
harm that would have been impossible or unlikely to occur.” U.S.S.G. § 2B1.1(b)(1), application
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note 3(A)(ii).
In United States v. Watkins, this court set forth the standard used to evaluate intended losses.
994 F.2d 1192 (6th Cir. 1993). “In calculating the ‘intended or attempted loss’ enhancement under
USSG § 2F1.1, Watkins imported the standard for assessing attempted substantive offenses from
USSG § 2X1.1(b)(1).” United States v. DeSantis, 237 F.3d 607, 611 (6th Cir. 2001). Watkins held
that, in order for an amount to be included as an intended loss, the court must find that three factors
apply. “First, . . . the defendant must have intended the loss. Second, it must have been possible
for the defendant to cause the loss. Third, the defendant must have completed or been about to
complete but for interruption, all of the acts necessary to bring about the loss.” Watkins, 994 F.2d
at 1196. In November 2001, U.S.S.G. § 2B1.1 was revised such that intended loss now includes loss
that “would have been impossible or unlikely to occur.” U.S.S.G. § 2B1.1, application note
3(A)(ii)(II). This revision effectively overruled the second prong of the Watkins test. See United
States v. McBride, 362 F.3d 360, 374 (6th Cir. 2004). Nevertheless, the other prongs of Watkins
provide guidance for assessing when the intended loss enhancement should apply.
In this case, Cage opened three accounts and obtained checks on those accounts in the
amount of $100,722.22. Cage does not contest the fact that these checks totaled that amount.
Instead, she argues that she never intended to negotiate those checks. The district court found,
however, that the time period between the mailing of the checks and the cancellation of the accounts
was not so long as to indicate that she was not going to negotiate the checks. Essentially, the district
court determined under Watkins that Cage was “about to complete but for interruption [the
cancellation of the accounts], all of the acts necessary to bring about the loss.” 994 F.2d at 1196.
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The district court did not clearly err in applying this enhancement. See United States v.
Guthrie, 144 F.3d 1006, 1011 (6th Cir. 1998) (establishing that this court will not disturb an amount
of loss calculation unless clearly erroneous). Cage argues that the time period between the issuance
of the checks and the cancellation of the accounts evidences that she did not intend to negotiate the
checks. She relies on United States v. Aideyan, 11 F.3d 74 (6th Cir. 1993), to establish that an
intended loss enhancement is improper if the defendant does not negotiate checks in a timely
fashion. In Aideyan, the defendant possessed an envelope containing three stolen checks. Id. at 75.
The checks were dated May 1991, but not discovered until March 1992. Id. This court decided that
“the district court could not fairly conclude that he was ‘about to complete’ the offense when
apprehended.” Id. at 77.
In this case, the time period between the issuance of the checks and the cancellation of the
accounts was much less than the time period at issue in Aideyan. A check was issued to Janell
Caldwell on March 20, 2003, and the account was cancelled on March 21, 2003. Another check
issued on the account of Gordon McMurchie on January 6, 2003, and that account was cancelled on
January 16, 2003. A third check issued on December 13, 2002, and the account was cancelled on
January 16, 2003. Cage’s possession of these checks for a period of one day to one month does not
indicate that she was never going to negotiate them. Thus, these checks were properly considered
as part of the intended loss in the pre-Booker context.
Cage next contends that the district court’s application of the ten level enhancement violated
her Sixth Amendment rights. She received this enhancement based on the district court’s factual
finding that the three People First Finance checks, whose amounts were not disputed by Cage, were
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an intended loss. See Guthrie, 144 F.3d at 1011 (noting that the determination of the amount of loss
is a finding of fact). Cage did not raise a Booker argument in the district court with respect to the
application of this enhancement. Therefore, this court’s review of her sentence is for plain error.
United States v. Oliver, 397 F.3d 369, 378 (6th Cir. 2005).
In this case, Cage received an enhanced sentence based upon the district court’s
determination of the amount of loss attributable to her conduct. This factual finding violated her
Sixth Amendment rights and accordingly constitutes plain error under this court’s case law
interpreting Booker. See id. at 378-81. We therefore vacate Cage’s sentence and remand her case
to the district court for resentencing.
B.
In addition to arguing that the ten level enhancement should not apply, Cage argues that she
is entitled to a three level reduction pursuant to U.S.S.G. § 2X1.1(b)(1), the guideline for attempt,
because she never negotiated the three People First Finance checks. Cage’s contention is without
merit and, on remand, the district court should not grant her a three level reduction for purposes of
determining her advisory guidelines range.
The attempt guideline applies to substantive offenses. U.S.S.G. § 2X1.1(a). Substantive
offenses are defined as “the offense[s] that the defendant was convicted of soliciting, attempting,
or conspiring to commit.” Id., application note 2. “[T]he relevant substantive offense for purposes
of evaluating § 2X1.1(b)(1) attempts is the fraud itself, not fraudulent deprivation of a particular
sum.” DeSantis, 237 F.3d at 612-13. Thus, failure to complete all the steps necessary to reach the
full amount of the intended loss does not “mandate[ ] application of the three-level § 2X1.1(b)(1)
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reduction for attempted substantive offenses.” Id. at 612.
Cage was convicted of violating 18 U.S.C. § 1029(a)(2) when she pled guilty to Count I of
the indictment, which charged that she used an unauthorized access device to obtain merchandise,
cash, and services in excess of $1,000. Thus, the substantive offense that Cage was charged with
was fraud with an unauthorized access device. There is no argument that Cage only attempted to
engage in such fraud; rather, by pleading guilty to Count I of the indictment, Cage admitted that she
engaged in this fraud. The fact that Cage may not have caused an actual loss of the same amount
as the intended loss does not mean that she only attempted the crime. Therefore, Cage cannot
receive a three level reduction for attempt because she was convicted of a fully completed crime.
III.
Cage additionally contests the district court’s application of a two level enhancement under
U.S.S.G. § 2B1.1(b)(9)(C)(i). Section 2B1.1(b)(9)(C)(i) (changed to U.S.S.G. § 2B1.1(b)(10)(C)(i)
in 2004) provides that the base offense level should be increased two levels “[i]f the offense
involved . . . the unauthorized transfer or use of any means of identification unlawfully to produce
or obtain any other means of identification.” It applies when “a means of identification of an
individual other than the defendant . . . is used without that individual’s authorization unlawfully
to produce or obtain another means of identification.” U.S.S.G. § 2B1.1(b)(9)(C)(i), application
note 8(C)(i) (2003). Examples of situations that it covers include a defendant’s use of an
individual’s name and address or social security number to obtain a bank loan or credit card. Id.,
application note 8(C)(ii).
Cage pled guilty to a violation of 18 U.S.C. § 1029(a)(2) for knowingly and with intent to
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defraud using an unauthorized access device issued by USAA to Karl and Theresa Robinson to
obtain merchandise, cash, and services in excess of $1,000. According to the presentence
investigation report, Cage admitted using her position as a medical transcriber to obtain names, dates
of birth, and social security numbers to procure credit reports on the Internet. Cage then used this
information to apply for and obtain credit cards or loans and take over existing accounts.
Cage did not object to the aforementioned facts in the presentence report. Cage also did not
object to the application of the enhancement. “The district court is allowed to accept as true all
factual allegations in a presentence report to which the defendant does not object.” United States
v. Levy, 250 F.3d 1015, 1018 (6th Cir. 2001). Therefore, it was permissible for the district court to
accept as true the fact that Cage used her position to gather names, dates of birth, and social security
numbers to obtain credit cards, loans, and bank accounts. These facts constitute the basis for
applying the enhancement pursuant to U.S.S.G. § 2B1.1(b)(9)(C)(i) and mirror the examples listed
in the application notes. The district court correctly applied the enhancement and may properly
apply it on remand for the purpose of determining Cage’s advisory guidelines range.2
IV.
For the foregoing reasons, we vacate Cage’s sentence and remand for resentencing in light
of Booker and this opinion.
2
We note that the application of this enhancement did not violate the Sixth Amendment,
because Cage admitted to the facts underlying the enhancement and the district court did not engage
in any fact finding. See Booker, 125 S. Ct. at 756 (“Any fact . . . which is necessary to support a
sentence exceeding the maximum authorized by the facts established by a plea of guilty . . . must
be admitted by the defendant or proved to a jury beyond a reasonable doubt.”).
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