United States v. Tulaner ( 2008 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,  No. 06-10304
Plaintiff-Appellee,
v.  D.C. No.
CR-04-20159-1-JW
LADI M. TULANER,
OPINION
Defendant-Appellant.

Appeal from the United States District Court
for the Northern District of California
James Ware, District Judge, Presiding
Argued and Submitted
November 5, 2007—San Francisco, California
Filed January 9, 2008
Before: Sidney R. Thomas, Richard C. Tallman, and
Sandra S. Ikuta, Circuit Judges.
Opinion by Judge Tallman;
Partial Concurrence and Partial Dissent by Judge Thomas
307
310 UNITED STATES v. TULANER
COUNSEL
Jerald W. Newton, Sedona, Arizona, for the appellant.
H.H. (Shashi) Kewalramani, Assistant United States Attorney,
Oakland, California, for the appellee.
OPINION
TALLMAN, Circuit Judge:
Ladi Tulaner devised a scheme to defraud Johnson
Matthey, Inc. (JMI) and Applied Materials, Inc. (Applied) by
posing as an executive of Applied to obtain twelve valuable
platinum sputtering discs used in the manufacture of semicon-
ductor chips. His scheme failed and he was arrested before he
obtained any of them. Tulaner pled guilty to one count of wire
fraud and was sentenced to 71 months incarceration. See 18
U.S.C. § 1343.1
Tulaner appeals his sentence arguing that the district court
improperly determined the “intended loss” of his scheme and
therefore applied the wrong offense level increase under Sen-
tencing Guideline § 2B1.1(b)(1). We disagree and hold that
1
18 U.S.C. § 1343 provides in relevant part: “Whoever, having devised
or intending to devise any scheme or artifice to defraud, or for obtaining
money or property by means of false or fraudulent pretenses, representa-
tions, or promises, transmits or causes to be transmitted by means of wire,
radio, or television communication in interstate or foreign commerce, any
writings, signs, signals, pictures, or sounds for the purpose of executing
such scheme or artifice, shall be fined under this title or imprisoned not
more than 20 years, or both.”
UNITED STATES v. TULANER 311
the district court properly determined that the intended loss
was the value of the twelve sputtering discs Tulaner originally
sought to obtain, rather than the value of the four discs
Tulaner thought he was receiving the day he was arrested. We
also reject Tulaner’s argument that the district court should
have applied an offense level reduction for a partially com-
pleted offense, because the crime to which Tulaner pled guilty
was complete when an interstate wire transmission was made
by a phone call placed in furtherance of his fraudulent
scheme. We affirm.
I
In furtherance of his scheme to fraudulently obtain plati-
num sputtering discs, Tulaner registered a website and created
an email address in Applied’s name and, pretending to be an
Applied executive, he contacted victim JMI seeking to pur-
chase twelve discs worth approximately $2.3 million by trans-
mitting a purchase order by email. JMI would not agree to
ship all twelve without advance payment and instead pro-
posed shipping four separate batches of three discs each, with
each subsequent batch to be shipped after payment for the
preceding batch had been received. Tulaner countered by
email, requesting that JMI send three shipments of four discs
each, and JMI agreed.
Before actually shipping the first batch of four discs, JMI
became suspicious and discovered that Applied had not in fact
ordered the sputtering discs. JMI then contacted the FBI,
which arranged for a controlled delivery of worthless material
to Tulaner. Tulaner believed he was receiving four sputtering
discs worth between $700,000 and $800,000. Tulaner was
arrested after he received the shipped package, which did not
contain any platinum sputtering discs.
Tulaner was charged with conspiring to commit mail and
wire fraud, mail fraud, wire fraud, and aiding and abetting to
commit the offenses. He pled guilty to one count of com-
312 UNITED STATES v. TULANER
pleted wire fraud. At the sentencing hearing, Tulaner argued
that the district court should find that the intended loss of his
scheme was between $700,000 and $800,000. The district
court rejected Tulaner’s argument and valued the intended
loss at $2.3 million, the value of all twelve discs. Accord-
ingly, the district court applied a 16-level enhancement. After
adjusting the base offense level for all other relevant enhance-
ments and reductions, the applicable sentencing range was 57-
71 months. The district court imposed a sentence of 71
months.
II
The district court’s interpretation and application of the
sentencing guidelines is reviewed de novo. United States v.
Blitz, 151 F.3d 1002, 1009 (9th Cir. 1998) (quoting United
States v. Newland, 116 F.3d 400, 402 (9th Cir. 1997)). Factual
findings, including the calculation of the victim’s loss, are
reviewed for clear error. Id. (citing United States v. Clayton,
108 F.3d 1114, 1118 (9th Cir. 1997), cert. denied, 522 U.S.
893 (1997)). The ultimate sentence is reviewed for “reason-
ableness.” United States v. Cantrell, 433 F.3d 1269, 1279 (9th
Cir. 2006).
III
[1] Under Sentencing Guideline § 2B1.1(b)(1), the base
offense level for a crime involving fraud is increased by a
number of levels depending on specific offense characteris-
tics, including the value of the loss caused by the fraud. In
determining the amount of the loss, the greater of the actual
or intended loss applies. U.S.S.G. § 2B1.1 app. n.3(A). Here,
the FBI interceded before any platinum discs were shipped, so
there was no actual loss. The question before us is how to
value the intended loss for purposes of determining the appro-
priate increase to the base offense level.
[2] Intended loss, under the guidelines, is “the pecuniary
harm that was intended to result from the offense . . . and . . .
UNITED STATES v. TULANER 313
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).” U.S.S.G. § 2B1.1 app. n.3(A)(ii).
[3] Pursuant to the Sentencing Guideline’s commentary, as
explicated by our circuit’s case law, the value of the intended
loss does not have to be “realistic,” nor must the “defendant
be capable of inflicting the loss he intends.” See United States
v. Robinson, 94 F.3d 1325, 1328 (9th Cir. 1996). Rather, the
full scope of the defendant’s fraudulent conduct is taken into
account when calculating the intended loss.
For example, in United States v. Joetzki, 952 F.2d 1090,
1093 (9th Cir. 1991), the defendants were convicted of mail
and wire fraud after issuing thirty-four checks on a cash man-
agement account they opened but did not fund. The district
court included a $5 million check in the intended loss calcula-
tion at sentencing, even though the bank knew that the
account balance was not sufficient and defendants did not
expect the bank to honor the check. Id. at 1096. We affirmed,
holding that the check was properly included in the calcula-
tion because defendants sought to inflict a $5 million loss by
writing the check on the unfunded account. Id. The fact that
the check was “obviously fraudulent” and not likely to be
taken seriously was not relevant to determining the amount of
the intended loss. Id.; see also Blitz, 151 F.3d at 1009-10
(valuing the intended loss based on the amounts pledged by,
not received from, victims of defendants’ telemarketing
scheme and noting that “the telemarketers may not have
inflicted all of the loss they really wanted to inflict, but that
was not from any lack of intent”); United States v. Salemo, 81
F.3d 1453, 1463 (9th Cir. 1996) (holding that the defendant
intended to defraud his victims of more than $5 million where
he fraudulently applied for bank loans totaling that amount,
even though he knew that some of the applications would be
rejected).
314 UNITED STATES v. TULANER
[4] In this case, Tulaner fraudulently ordered twelve sput-
tering discs from JMI, intending to steal all twelve. Tulaner
argues that once he realized that JMI was only willing to ship
four discs at a time, he intended to steal only the first four
shipped, not all twelve. Assuming that to be the case, Tulaner
was limited by the manner in which JMI structured the con-
tract, not any lack of intent on his part. The fact that JMI’s
prudent business practices, like those of the bank in Joetzki,
thwarted Tulaner’s effort to realize more from his fraud is not
relevant to determining the amount of loss he intended to
inflict. See Joetzki, 952 F.2d at 1093, 1096; Blitz, 151 F.3d at
1010 (“We have not . . . hesitated to hold defendants responsi-
ble for the full reach of their intent, even when that intent was
thwarted.”).
[5] As the district court noted, if Tulaner’s scheme had
been successful, he would have received over $2.3 million
dollars worth of platinum sputtering discs from JMI. Thus we
hold that the district court properly valued the intended loss
based on the full reach of the scheme to defraud by applying
the offense level increase for a $2.3 million intended loss.
IV
Tulaner argued that even if the district court properly found
that he intended to steal all twelve discs, he should have
received an “attempt reduction” for a partially completed
offense. He relies on Application Note 17 to Sentencing
Guideline § 2B1.1, which provides: “In the case of a partially
completed offense (e.g., an offense involving a completed
theft or fraud that is part of a larger, attempted theft or fraud),
the offense level is to be determined in accordance with the
provisions of § 2X1.1 . . . .” Application Note 4 to Sentencing
Guideline § 2X1.1 states that where the participants “have
completed (or have been about to complete but for apprehen-
sion or interruption) all of the acts necessary for the success-
ful completion of part, but not of all, of the intended offense
. . . the offense level for the count” is the greater of “the
UNITED STATES v. TULANER 315
offense level for the intended offense minus 3 levels . . . or
the offense level for the part of the offense for which the nec-
essary acts were completed” (emphasis added).
The cited provisions are inapplicable in this case. Tulaner
pled guilty to one count of wire fraud under 18 U.S.C. § 1343,
which makes it a crime to “transmit[ ] or cause[ ] to be trans-
mitted by means of wire . . . any writings, signs, signals, pic-
tures, or sounds for the purpose of executing [any scheme or
artifice to defraud, or for obtaining money or property by
means of false or fraudulent pretenses] . . . .” Cases in this and
other circuits have recognized the “unique characteristic” of
wire fraud, namely, that it is complete when a transmission is
made to further the overall scheme to defraud. E.g., Blitz, 151
F.3d at 1011 (citing cases); United States v. Carrington, 96
F.3d 1, 7-8 (1st Cir. 1996), cert. denied, 520 U.S. 1150
(1997).
Tulaner argues that because the count of wire fraud to
which he pled guilty was based on a phone call made on the
day of his arrest, after the package he believed contained four
sputtering discs had been delivered, the call was made to
obtain four discs, not all twelve. Therefore, he argues, the
“completed offense” of wire fraud involved a scheme to
obtain four discs and the scheme to defraud JMI out of twelve
discs for a total loss of $2.3 million was only “partially com-
pleted” entitling him to the attempt reduction.
[6] A wire fraud conviction does not require proof that
defendant’s actions caused the harm the scheme sought to
inflict. Blitz, 151 F.3d at 1011 (holding that the defendants
were not entitled to the attempt reduction for partially com-
pleted offenses because each call to a victim “was a separate,
completed fraud offense . . . even if the object of the fraud
was not ultimately attained”); Carrington, 96 F.3d at 7 (“The
crime of wire fraud does not require that the defendant’s
object be attained. It only requires that the defendant devise
316 UNITED STATES v. TULANER
a scheme to defraud and then transmit a wire communication
for the purposes of executing the scheme.”).
[7] As described in the superceding indictment, the relevant
“scheme to defraud” for purposes of the wire fraud count
involved obtaining twelve sputtering discs. The phone call in
furtherance of that scheme, even if only related to shipment
of four discs, completed the offense. There is no “larger,
attempted . . . fraud” of which the completed fraud is a part.
See U.S.S.G. § 2B1.1 app. n.17. Thus, in the case of wire
fraud, the attempt reduction for partially completed offenses
is inapplicable even where, as here, the substantive content of
the wire transmission for which the defendant is convicted
relates to only part of the overall scheme to defraud.
[8] Tulaner also argues the offense was only partially com-
pleted because additional steps had to be taken before he
received all twelve discs. He relies on United States v.
Martinez-Martinez, 156 F.3d 936 (9th Cir. 1998). In that case,
the defendants conspired to steal $880,000 dollars worth of
merchandise from cargo containers in a transportation yard.
Id. at 937, 940 n.6. The district court found that the theft was
substantially complete and therefore refused to apply the
attempt reduction. Id. at 938. We reversed, holding that the
attempt reduction was appropriate because “[c]ompletion of
the crime [theft from interstate shipments] was not inevitable”
insofar as the defendants needed to secure approval from their
“boss” before stealing the cargo containers. Id. at 940. In
other words, in Martinez-Martinez, the theft was not com-
plete. Here, however, the wire fraud was complete as soon as
an interstate wire transmission was sent in furtherance of the
fraudulent scheme.2
2
Judge Thomas argues that Tulaner’s position is indistinguishable from
that of the defendants in Martinez-Martinez because, like the defendants
in Martinez-Martinez, Tulaner “would have had to take additional steps to
realize the proceeds of the entire fraudulent scheme.” Dissent at 319.
However, unlike Tulaner, the defendants in Martinez-Martinez would
UNITED STATES v. TULANER 317
[9] The fact that Tulaner would have had to take additional
steps to get the other eight discs is irrelevant to determining
whether the substantive scheme to defraud by mail or wire
had been completed. See Carrington, 96 F.3d at 7 (rejecting
the argument that the attempt reduction for partially com-
pleted offenses applies when the harm has not been com-
pleted and instead holding that the provision applies “only
where the defendant has not completed the actions necessary
to the substantive offense” (emphasis added)); see, e.g.,
United States v. Gallagher, 99 F.3d 329, 334 (9th Cir. 1996);
United States v. Petersen, 98 F.3d 502, 509 (9th Cir. 1996);
United States v. Koenig, 952 F.2d 267, 272 (9th Cir. 1991).
As discussed above, Tulaner completed all of the acts neces-
sary for the offense of conviction and he is not entitled to an
attempt reduction for a partially completed offense.
V
Tulaner developed an elaborate scheme to steal twelve plat-
inum sputtering discs with a total value of more than $2.3 mil-
lion. The fact that JMI’s refusal to ship more than four discs
at a time thwarted Tulaner’s ability to see “the seed that [he]
had so hopefully sowed . . . grow into a harvest crop” does
not relieve him from responsibility for the “full reach” of his
intent. See Blitz, 151 F.3d at 1010. For the purposes of deter-
mining the intended loss under the sentencing guidelines, the
district court correctly held him responsible for the total pecu-
niary harm he sought to inflict. Likewise, the attempt reduc-
tion for partially completed offenses is not applicable in this
case as the wire fraud was a completed offense. See id. at
have had to take additional steps to complete the substantive offense.
Martinez-Martinez, 156 F.3d at 940. There was no completed theft offense
that was part of a larger scheme. As a result, the only count of conviction
in Martinez-Martinez to which defendants pled guilty was the crime of
conspiracy. See id. at 938. Contrary to Judge Thomas’s suggestion, there
is a significant distinction between the two cases on this ground.
318 UNITED STATES v. TULANER
1011.
AFFIRMED.
THOMAS, Circuit Judge, concurring in part and dissenting in
part:
I agree that the district court did not clearly err in finding
that the intended loss of Tulaner’s fraudulent scheme was
approximately $2.3 million, the value of the twelve sputtering
discs Tulaner sought to obtain. I respectfully dissent, how-
ever, from the conclusion that Tulaner was ineligible for an
“attempt reduction” for partially completed offenses.
Application Note 17 to Sentencing Guideline § 2B1.1 and
Application Note 4 to Sentencing Guideline § 2X1.1 provide
that in the case of a “partially completed offense” — includ-
ing a completed fraud that is part of a larger attempted fraud
— the offense level for the count is the greater of “the offense
level for the intended offense minus three levels . . . or the
offense level for the part of the offense for which the neces-
sary acts were completed.”
The offense of wire fraud is complete when the relevant
wire transmission is made. United States v. Blitz, 151 F.3d
1002, 1011 (9th Cir. 1998). Thus, the telephone call — in
connection with which Tulaner pled guilty to wire fraud —
was undoubtedly a completed offense.
I respectfully disagree, however, with the conclusion that
Tulaner’s conviction for the completed offense of wire fraud
precludes application of the partially completed offense provi-
sion. This construction is contradicted by the plain language
of Application Note 17, which explicitly contemplates that a
completed fraud may be part of a larger attempted fraud. Such
is the case here: Tulaner placed a phone call in furtherance of
UNITED STATES v. TULANER 319
the delivery of four sputtering discs. The phone call was a
completed fraud, but was also part of a larger fraudulent
scheme, the object of which was to obtain twelve discs. To
hold otherwise would be in conflict with the district court’s
finding, which we have upheld on appeal, that the intended
loss was the value of the twelve sputtering discs. In short, this
is a paradigmatic case of a partially completed offense to
which Application Note 17 applies.
Tulaner’s position is indistinguishable from that of the
defendants in United States v. Martinez-Martinez, 156 F.3d
936, 940 (9th Cir. 1998). In Martinez-Martinez, we held an
attempt reduction to be appropriate because the defendants
would have had to take additional steps to realize the proceeds
of their crime. Here, although Tulaner had completed the
offense of wire fraud, he would have had to take additional
steps to realize the proceeds of the entire fraudulent scheme.
Because Tulaner’s completed fraudulent offense was also part
of a larger attempted fraud, Tulaner’s offense level should
thus be calculated under the partially completed offense pro-
vision. Therefore, I would vacate the sentence and remand to
the district court for proper sentence calculation taking into
consideration the import of Application Note 17.