United States v. Alburay, Fayez ( 2005 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-3848
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
FAYEZ ALBURAY,
Defendant-Appellant.
____________
Appeal from the United States District Court for
the Northern District of Illinois, Eastern Division.
No. 02 CR 235—George W. Lindberg, Judge.
____________
ARGUED FEBRUARY 17, 2005—DECIDED JULY 29, 2005
____________
Before POSNER, RIPPLE, and MANION, Circuit Judges.
MANION, Circuit Judge. Fayez Alburay ran a grocery
store as well as a food stamp scam that defrauded the
United States Department of Agriculture (“USDA”) out of
more than a million dollars. His scheme landed him in
federal court, where he pleaded guilty to wire fraud, and in
federal prison, where he is serving a fifty-one-month
sentence. On appeal, he challenges his sentence, a condition
of his supervised release, and the district court’s $1,750,000
restitution award. We affirm the sentence but remand with
instructions on the supervised release and restitution issues.
2 No. 03-3848
I.
Fayez Alburay owned and operated a neighborhood
grocery—as it turned out, appropriately named the Shady
Food Store—located at 11300 South Wentworth Avenue in
Chicago, Illinois. Upon Alburay’s application on behalf of
his store, the USDA authorized Shady Food to operate
under the federal food stamp program. Under the program,
Shady Food accepted food stamps or the modern electronic
1
equivalent thereof (collectively, “food stamps” or “stamps”)
from food stamp recipients as payment for qualified food
items such as fruit and vegetables (and not for such things
as alcohol and tobacco products). On behalf of Shady Food,
Alburay then redeemed the stamps by presenting them to
a bank that would then credit the store with a cash deposit.
The USDA would then reimburse the bank for the cash
value of the stamps.
The food stamp program no doubt generated business
volume that Shady Food may not have otherwise had. For
Alburay, however, that increase was apparently not enough.
He devised a scheme whereby he would accept food stamps
in exchange for cash instead of qualified food items (cash
that could then be used for anything). Alburay made these
unlawful exchanges worth his while by paying less than the
1
Traditional food stamp coupons have been replaced by
“electronic benefit transfer cards.” The card system sends food
stamp program benefits to recipients through electronic fund
transfers, by which program benefits are added to a recipient’s
card each month. In order for the recipient to access the benefits,
he must present his card to an authorized retailer to acquire
eligible food items. Authorized retailers have a unique point-
of-sale machine designed to accept these cards. Retailers then
redeem the received card benefits through additional electronic
fund transfers.
No. 03-3848 3
face value of the stamps. For example, someone would give
Alburay $100 worth of stamps, and Alburay would return
only $70 worth of cash. “Customers” apparently preferred
the lower cash amount instead of the higher- valued but
restricted stamps. To complete the scheme, Alburay pre-
sented the unlawfully obtained stamps to the bank and
received the full face value of the stamps, thereby fraudu-
lently acquiring funds from the USDA. The scheme ran from
1996 to 1998, spanning twenty-five months.
Alburay’s guilt in these matters is undisputed. After the
government charged Alburay with nine criminal counts, he
pleaded guilty to one count of wire fraud, 18 U.S.C. § 1343.
In accordance with a written plea agreement, the other
counts were dismissed. The dismissed charges were two
additional counts of wire fraud, three counts of mail fraud,
18 U.S.C. § 1341, and three counts of food stamp fraud, 7
U.S.C. § 2024(c).
In the deal, the government and Alburay agreed that
U.S.S.G. § 2F1.1(a) (1997) provided the appropriate base
offense level for this case—six. They also agreed that the
offense involved more than minimal planning, and, as a
result, two more levels were added pursuant to
§ 2F1.1(b)(2)(A). In the agreement, the government stated
that it believed that the amount of loss caused by the
scheme ranged from $1,500,000 to $2,500,000, which would
carry a twelve-level enhancement under § 2F1.1(b)(1)(M).
Alburay, on the other hand, maintained that the loss figure
was lower and reserved the right to argue the issue. Also,
under the agreement, Alburay was on track for a three-level
reduction for his acceptance of responsibility under U.S.S.G.
§ 3E1.1.
Nevertheless, Alburay’s opportunity for an acceptance-of-
responsibility reduction dissipated because, after pleading
guilty and while on release pending sentencing, Alburay
4 No. 03-3848
failed to appear for his sentencing hearing. The district court
issued a fugitive warrant, and, several weeks later, he was
arrested after a routine traffic stop in Elko, Nevada.
Alburay, a citizen of Jordan, had obtained a passport under
an alias and was apparently preparing to flee the United
States to avoid his impending punishment. Alburay’s
detour was a costly mistake. At sentencing, the district court
rejected the acceptance-of-responsibility reduction and
added a two-level obstruction-of-justice enhancement for
willfully failing to appear for sentencing in accordance with
U.S.S.G. § 3C1.1.
As to the loss amount, the government submitted an
analysis to the probation officer estimating the loss at
$1,750,000, which the probation officer incorporated into her
presentence investigation report. The district court adopted
the $1,750,000 figure for purposes of sentencing and restitu-
tion. As indicated above, a loss amount of $1,750,000
equated to a twelve-level enhancement under
§ 2F1.1(b)(1)(M).
Additionally, Alburay moved for a downward departure
based upon hardships resulting from his status as a deport-
able alien. See, e.g., United States v. Meza-Urtado, 351 F.3d
301, 304-05 (7th Cir. 2003). The district court, however,
sua sponte entertained the idea of an upward departure,
believing that Alburay’s category I criminal history vastly
understated his past conduct and that his past conduct
coupled with his multiple aliases, social security numbers,
and driver’s licenses showed a serious disregard for the law.
Balancing these considerations, the district court denied
Alburay’s motion and opted against an upward departure.
The bottom line was a total offense level of twenty-two
(six for the base, two for more than minimal planning,
twelve for the loss, and two for obstructing justice). With the
category I criminal history, the sentencing range was forty-
No. 03-3848 5
one to fifty-one months of imprisonment, and the district
court sentenced at the top of the range. Alburay appeals the
fifty-one-month sentence.
The district court also imposed three years of supervised
release. At the sentencing hearing, the district court ordered
a special condition of supervised release concerning depor-
tation and re-entry into the United States. The text of the
condition in the district court’s written judgment, however,
did not match up with what the district court had said on
the record. Alburay appeals the discrepancy. Additionally,
as mentioned above, the district court ordered $1,750,000 in
restitution. Alburay also challenges that figure on appeal.
II.
A.
The basis of Alburay’s sentencing challenge is
United States v. Booker, 125 S. Ct. 738 (2005). Under Booker,
the formerly mandatory federal sentencing guidelines have
become advisory. Id. at 767. A sentence violates the Sixth
Amendment, according to Booker, when it exceeds the maxi-
mum sentence authorized through the facts established by
a jury verdict or a guilty plea or by facts otherwise admitted
to by the defendant. Id. at 756. Here, Alburay’s plea au-
thorized the base offense level as well as the enhancement
for more than minimal planning. As to the rest, they were
imposed as the result of judge-found facts under mandatory
guidelines. Alburay’s sentence thus runs afoul of the Sixth
Amendment, as interpreted by Booker, because, under the
mandatory guidelines, the sentence exceeded the maximum
sentence authorized by the facts established by the plea and
Alburay’s admissions and concessions. Id. Alburay, how-
ever, did not raise this Sixth Amendment argument before
the district court. The matter is therefore governed by the
6 No. 03-3848
plain-error standard of review and our decision in United
States v. Paladino, 401 F.3d 471 (7th Cir. 2005).
After oral argument in this appeal, we ordered a limited
remand, pursuant to Paladino, to ascertain whether the Sixth
Amendment error was prejudicial. Id. at 483-85. Specifically,
under the Paladino procedure, we retained jurisdiction over
the appeal while ordering “a limited remand to permit the
sentencing judge to determine whether he would (if re-
quired to resentence) reimpose his original sentence.” Id. at
484. In our limited remand order, we postponed adjudica-
tion of Alburay’s supervised release and restitution argu-
ments until we received the district court’s Paladino answer.
On limited remand, the district court first ordered each
party to submit a memorandum presenting their positions
on the matter. After reviewing the memoranda and the
record at the time of sentencing, the district court then
issued a statement ruling that, if required to resentence, it
would reimpose the original fifty-one-month sentence.
Given the district court’s decision, Alburay cannot show
prejudice. Id. at 483-84. Nonetheless, the district court’s
decision does not end all appellate review of the sentence.
As we held in Paladino: “If [the district court determines that
it would reimpose the original sentence], we will affirm the
original sentence against a plain-error challenge provided
that the sentence is reasonable, the standard of appellate
review prescribed by Booker.” Id. at 484 (citing Booker, 125 S.
Ct. at 765). Therefore, we now turn to reasonableness, the
“final component of the Paladino plain error equation.”
United States v. Mykytiuk, ___ F.3d ___, No. 04-1196, 2005
WL 1592956, at *1 (7th Cir. July 7, 2005).
Pursuant to Booker, the reasonableness of a sentence is
guided by the factors set forth in 18 U.S.C. § 3553(a). 125 S.
Ct. at 765-66 (“Section 3553(a) . . . sets forth numerous
No. 03-3848 7
factors that guide sentencing. Those factors in turn will
guide appellate courts . . . in determining whether a sen-
tence is unreasonable.”). Among other items, these factors
include the nature and circumstances of the offense, the
history and characteristics of the defendant, the need for the
sentence to reflect the seriousness of the offense, the need to
promote respect for the law, the need to provide just
punishment for the offense, the need to afford adequate
deterrence to criminal conduct, and the need to protect the
public from further crimes of the defendant. 18 U.S.C.
§§ 3553(a)(1) & (2)(A)-(C). Importantly, the relevant factors
also include the now-advisory guidelines, which means that
the guidelines “must” still be “consult[ed]” and “take[n] into
account when sentencing.” Booker, 125 S. Ct. at 767 (citing 18
U.S.C. §§ 3553(a)(4) & (5)); see also United States v. George,
403 F.3d 470, 472 (7th Cir. 2005). In the end, therefore, given
the comprehensive scope of the guidelines, “[j]udges need
not rehearse on the record all of the considerations that 18
U.S.C. § 3553(a) lists; it is enough to calculate the [guideline]
range accurately and explain why (if the sentence lies
outside it) this defendant deserves more or less.” George, 403
F.3d at 472-73 (analogizing the current sentencing landscape
to sentencing after supervised-release violations for which
the guidelines have always been advisory and mandating
the same approach, post-Booker, for the guidelines as a
whole) (citing United States v. Salinas, 365 F.3d 582, 588-90
(7th Cir. 2004); United States v. Hale, 107 F.3d 526, 529-30 (7th
Cir. 1997)); see also Mykytiuk, ___ F.3d ___, 2005 WL 1592956,
at *1-2; United States v. Dean, ___ F.3d ___, No. 04-3172, 2005
WL 1592960, at *4-5 (7th Cir. July 7, 2005).
Here, in its limited remand statement, the district court
first reviewed the § 3553(a) factors and then defended its
multifaceted sentencing decision under the guidelines with
this explanation:
8 No. 03-3848
Defendant Alburay (1) committed numerous criminal
acts and engaged in more than minimal planning in
committing the offense, (2) possessed three social se-
curity numbers, two driver’s licenses, and five aliases,
(3) failed to appear for his sentencing hearing, and (4)
was found with an alias when arrested after the issu-
ance of a fugitive warrant. When coupled with his
convictions and arrests not resolved by conviction or
acquittal, these facts establish Defendant Alburay’s
gross disregard for the law and a pattern of recidivism.
They also establish that Defendant Alburay went to
great lengths to avoid detection of his criminal behavior.
Based on the record at the time of sentencing and the
Government’s and Probation Office’s recommendations,
it was determined that Defendant Alburay’s offense
resulted in a loss amount of $1,750,000.00. This loss
amount is significant and indicative of the serious
nature of Defendant Alburay’s offense. Finally,
Defendant Alburay’s criminal history grossly under-
states the likelihood that he will continue to commit
financial crimes and otherwise disregard the law. In
fact, the Court initially considered departing upward
from the sentencing range proscribed by the guidelines
before settling, instead, on its [original] sentence at the
high end of the range. For all of these reasons, the Court
declares that it would reimpose its [original] sentence if
required to resentence Defendant Alburay. The fact that
the sentencing guidelines are advisory does nothing to
change this result.
The district court’s limited remand decision presents a more
than adequate justification of the sentence under the
§ 3553(a) factors. See George, 403 F.3d at 473. Here, more-
over, we have a sentence within the guideline range, which
was accurately calculated. See id. Alburay’s only colorable
No. 03-3848 9
attack on the district court’s guideline determination is the
loss amount under § 2F1.1(b)(1)(M). However, as will be
shown below, the $1,750,000 figure used by district court
was accurate enough given that the range under
§ 2F1.1(b)(1)(M) is $1,500,000 to $2,500,000. For all of the
above reasons, Alburay’s fifty-one-month sentence is not
unreasonable and is therefore affirmed under the plain-error
analysis set forth in Paladino.
B.
Alburay also challenges a special condition of his super-
vised release pertaining to deportation and re-entry into the
United States. At the sentencing hearing, the district court
imposed the following special condition: “If deported, you
are ordered not to re-enter the United States without the
express written permission of the Attorney General of the
United States.” However, in the written judgment that
followed, the district court expanded and altered the
condition, stating: “Upon completion of his term of impris-
onment, the defendant shall surrender to the immigration
authorities for immediate deportation. As a further condi-
tion of supervised release, if deported, the defendant shall
remain outside of the United States during his term of
supervised release. If deported the defendant may not
return to the United States without first obtaining the
consent of the U.S. Attorney General.”
Arguing that the written version of the condition is
inconsistent with the oral version, Alburay seeks to have the
written version replaced with the oral version. The govern-
ment concedes the argument. The written version contra-
dicts the oral version in that the oral version does not order
“immediate deportation” in any shape or form. (The written
version is also internally inconsistent: the conditional phrase
10 No. 03-3848
“if deported” does not square with the order for “immediate
deportation.”) The rule in such situations is clear: “If an
inconsistency exists between an oral and the later written
sentence, the sentence pronounced from the bench con-
trols.” United States v. Bonanno, 146 F.3d 502, 511 (7th Cir.
1998) (quoting United States v. Becker, 36 F.3d 708, 711 (7th
Cir. 1994)). Further, as the oral version is unambiguous,
there is no need to look beyond the oral version for any
clarification from the written version. See Bonanno, 146 F.3d
at 511-12 (quoting United States v. Daddino, 5 F.3d 262, 266
(7th Cir. 1993)). The written version is thus a nullity, not
requiring further discussion. The cleanest way to end the
matter is to remand with a corrective instruction. An
additional hearing is not required. See United States v. Maro,
272 F.3d 817, 825 (7th Cir. 2001); United States v. Parker, 101
F.3d 527, 528 (7th Cir. 1996). Accordingly, the matter is
remanded with following instruction: the district court shall
enter a corrected judgment, deleting the current written
special condition (quoted above) about deportation and re-
entry in its entirety and replacing it with the exact language
of the pertinent special condition (quoted above) announced
from the bench.
C.
Lastly, we turn to the district court’s restitution award,
which it derived from the government’s loss calculations. To
determine the USDA’s loss caused by a food stamp scheme,
the proper calculation is to take the total food stamp
redemptions (i.e., both the fraudulent and legitimate
redemptions) less the legitimate food stamp sales. See United
States v. Hassan, 211 F.3d 380, 383 (7th Cir. 2000) (citing
United States v. Barnes, 117 F.3d 328, 335 (7th Cir. 1997)). This
formula’s applicability to the present restitution matter is
not in dispute.
No. 03-3848 11
For the redemption figure in its calculation, the govern-
ment used the amount of $2,100,000 for the twenty-five
months covering the duration of the scheme. The exact and
undisputed redemption amount is $2,106,632.08, and
Alburay has asked us to use that figure. However, while it
is unclear why the government rounded the exact amount
down to $2,100,000, the rounding actually benefitted
Alburay by reducing his restitution obligation. In the afore-
mentioned formula, a lower redemption figure will always
yield a lower loss figure. Therefore, there is no need for us
to take issue with the government’s unexplained rounding
of the redemption figure in this appeal.
Next, the government estimated legitimate sales by using
the estimate that Alburay included on his 1996 application
to join the food stamp program—$180,000 per year. Alburay
disputes the use of that figure, but more on that point
below. The government then put the two amounts in
monthly terms. Thus, the government divided the
$2,100,0000 figure by twenty-five months to arrive at a re-
demption amount of $84,000 per month, and it divided the
$180,000 figure by twelve months to arrive at a legitimate
sales amount of $15,000 per month. It then determined the
monthly loss figure to be $70,000, even though $84,000 per
month in redemptions less $15,000 per month in legitimate
sales produces a monthly loss figure of $69,000. The gov-
ernment continues to cling to the $70,000 figure but offers
no explanation for why it used $70,000 instead of $69,000.
Finally, multiplying the $70,000 per month figure by
twenty-five months, the government arrived at a loss total
of $1,750,000.
The district court adopted the government’s loss calcu-
lations wholesale and ordered Alburay to pay $1,750,000 in
restitution. The district court did so without objection from
Alburay, who concedes that our review is thus limited to
12 No. 03-3848
plain error. See United States v. Randle, 324 F.3d 550, 555 (7th
Cir. 2003). Even under this demanding standard, however,
Alburay is entitled to some relief on account of the govern-
ment’s inaccurate loss calculation. See United States v. Boyle,
10 F.3d 485, 492 (7th Cir. 1993) (“The restitution amount
must be ascertained and delineated with an accurate com-
putation . . . . ”) (citing United States v. Lovett, 811 F.2d 979,
990 (7th Cir. 1987)). The government has given us no reason
to believe that its use of the $70,000 monthly figure, which
yielded the $1,750,000 total figure, was anything other than
an arithmetical error which increased the restitution
amount. Plugging the government’s numbers of $84,000 per
month in redemptions and $15,000 per month in legitimate
sales into the formula, the correct loss figure is $69,000 per
month or $1,725,000 for the twenty-five-month period. Thus,
the inflated $1,750,000 amount offered by the government
and adopted by the district court is a plain error that
prejudiced Alburay to the tune of $25,000. See Randle, 324
F.3d at 558 (several thousand-dollar plain error in restitu-
tion held to have affected defendant’s substantial rights).
While the erroneous amount is a tiny fraction of the total
amount owed, it is nevertheless an error deserving of
correction on remand. See id. There is, however, no need to
acquire additional information or perform further analysis.
Our computation above will suffice, and, thus, a new hear-
ing before the district court is not required. See Maro, 272
F.3d at 825; Parker, 101 F.3d at 528. The matter is therefore
remanded with the following instruction: the district court
shall enter a corrected judgment, deleting the current
$1,750,000 restitution amount and replacing it with the
amount of $1,725,000 set forth above.
Before concluding, we briefly turn to Alburay’s complaint
about the $180,000 per year estimate for legitimate sales. The
exact legitimate sales figure is unavailable; thus, an estimate
No. 03-3848 13
had to be used. Alburay suggests a number of alternative
estimates based upon the sales of a handful of other stores
in his area of Chicago from the relevant period. His alterna-
tives would yield a lower restitution award, in the neighbor-
hood of $1,300,000 to $1,500,000. The trouble with Alburay’s
argument, however, is there is little reason to believe that
his suggested estimates from other selected stores are any
more reliable than the $180,000 estimate that he used for
Shady Food’s USDA application. While the other stores are
relatively close to Shady Food, they still operate at different
locations, each having its own idiosyncrasies affecting sales,
e.g., busy street versus side street. Likewise, while their
markets certainly overlapped, the stores were of differing
types, serving different segments of the marketplace, e.g.,
convenience store versus neighborhood corner grocery.
Also, the sample size (i.e., number of stores in the estimates)
2
is small. Such matters certainly influence the reliability of
a sales estimate. It is therefore difficult to say that the
estimates based upon the other stores’ figures are better,
that is, more accurate, than Alburay’s own estimate for
Shady Food. After all, Alburay’s application estimate
pertains to the precise location and marketplace in question.
He made his application estimate in 1996, after being in
business for five months and shortly before he began
perpetrating his fraud. Moreover, he included the $180,000
annual estimate on a federal form that he signed, swore to,
and never sought to amend. Given these considerations,
using the $180,000 figure in the restitution formula was not
plainly erroneous.
2
It is also likely that his sales were inflated when the word got
out that food stamps could be exchanged for a discounted
amount of cash. Assuming the other stores were not providing
similar discounts, any comparison would be irrelevant.
14 No. 03-3848
III.
As Alburay’s fifty-one-month sentence for his food stamp
scheme is not unreasonable, we AFFIRM the sentence. How-
ever, a special condition of Albuary’s supervised release
and the amount of the restitution award require correction.
Nonetheless, a new hearing before the district court is not
required. The case is REMANDED WITH INSTRUCTIONS for the
district court to enter a corrected judgment with respect to
the special condition at issue and the restitution award as
stated above.
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—7-29-05