United States v. Jihad Zogheib ( 2021 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JAN 25 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 19-10379
20-10018
Plaintiff-Appellee,
D.C. No.
v. 2:16-cr-00057-LRH-VCF-1
JIHAD ANTHONY ZOGHEIB,
MEMORANDUM*
Defendant-Appellant.
Appeal from the United States District Court
for the District of Nevada
Larry R. Hicks, District Judge, Presiding
Submitted and Argued January 11, 2021
San Francisco, California
Before: WALLACE and M. SMITH, Circuit Judges, and RESTANI,** Judge.
Defendant-Appellant Jihad Anthony Zogheib (Zogheib) pleaded guilty to
eight counts of wire fraud in violation of 18 U.S.C. § 1343. The district court
sentenced Zogheib to ninety-six months’ imprisonment and ordered restitution in the
amount of $1,751,475. Zogheib appeals his sentence and order of restitution. This
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Jane A. Restani, Judge for the United States Court of
International Trade, sitting by designation.
court has jurisdiction pursuant to 18 U.S.C. § 3742 and 28 U.S.C. § 1291. Because
the parties are familiar with the facts, we do not recount them here, except as
necessary to provide context to our ruling. We AFFIRM in part, REVERSE in
part, VACATE Zogheib’s sentence and order of restitution, and REMAND the case
for further proceedings consistent with this disposition.
Sentence
Loss Calculation
Zogheib claims that the district court erred in calculating a loss amount of
$1,751,475 pursuant to U.S.S.G. § 2B1.1. Because the district court calculated a
loss amount of over $1,500,000, the Sentencing Guidelines’ range increased. See
id. § 2B1.1(b)(1)(I).
We assume, without deciding, that the district court was required to find the
loss amounts by clear and convincing evidence. See United States v. Armstead, 552
F.3d 769, 776 (9th Cir. 2008). We review the district court’s factual findings for
clear error. United States v. Popov, 742 F.3d 911, 914 (9th Cir. 2014).
First, as the Government acknowledges, the district court relied on an
erroneous Government filing that used the wrong sum for the loss amount. The
correct sum should have been $1,715,475, not $1,751,475. On remand, the district
court should correct this error.
Second, we affirm the district court’s loss amounts for victims K.L., K.W.,
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P.N., and D.T. Zogheib argues that K.L. was able to obtain property that Zogheib
purportedly owned previously and that the value of this property should be offset
against the loss amount. The Sentencing Guidelines allow such an offset only if the
property was returned before the offense was detected, or before the defendant
should have known that the offense was detected. See U.S.S.G § 2B1.1 cmt. 3(E)(i).
The record does not show that, even if Zogheib had owned the property, he returned
the property to K.L. before the fraud was detected.
Additionally, the district court did not err when determining the loss amounts
of K.W., P.N., and D.T. The district court can consider a variety of evidence at
sentencing. See United States v. Watts, 519 U.S. 148, 152 (1997) (citing 18 U.S.C.
§ 3661); United States v. Streich, 560 F.3d 926, 935 (9th Cir. 2009). We have no
reason to believe that a default judgment is not proper evidence under § 3661. See
United States v. Jiles, 102 F.3d 278 (7th Cir. 1996). Therefore, the district court
properly relied on the default judgment for K.W. Zogheib’s arguments about any
money he repaid K.W. are unavailing, as the record shows that he was obligated to
repay interest on loans to K.W. For P.N., the district court’s reliance on text
messages between Zogheib and P.N. and a copy of a civil judgment showing the loss
amount support the district court’s finding. Finally, for D.T., the combination of the
settlement agreement and state court plea provided sufficient evidence for the district
court’s calculation.
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Third, we reverse the district court on the loss amount for E.A. Although the
district court did not err in relying on a default judgment, the evidence in the record
does not connect the default judgment in question to E.A. The plaintiff in that default
judgment has the initials “M.A.,” not E.A. Additionally, the amount in the default
judgment does not match the $250,000 loss amount that the district court included
in the loss calculation for E.A. As a result, the default judgment contradicts the
evidence at sentencing. Under either the preponderance or clear and convincing
burdens of proof, it was clear error for the district court to find that the loss amount
for E.A. was $250,000 based on the evidence in the record.
Because the combination of the district court’s typographical error and the
error for E.A.’s loss amount could push the total loss amount below $1,500,000, the
Guidelines range could change. Therefore, we vacate the district court’s sentence
and remand for further factfinding.
U.S.S.G. § 5G1.3 Adjustment
Zogheib argues that the district court erred in assigning the Bureau of Prisons
“the responsibility of calculating [Zogheib’s] custodial time.” Zogheib’s first
objection regarding the two Nevada counts merging into one term of imprisonment
is without merit. Our decision in United States v. Kimble, 107 F.3d 712 (9th Cir.
1997), governs this matter.
The district court’s pre-trial ruling under Federal Rule of Evidence 404(b)
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does not govern the § 5G1.3 inquiry. The two provisions have different standards
for admissibility and relevancy. Compare United States v. Preston, 873 F.3d 829,
840 (9th Cir. 2017), with United States v. Hahn, 960 F.2d 903, 910 (9th Cir. 1992).
The conduct in Count Two of the Nevada indictment involved fraud of a different
nature than Zogheib’s frauds in this case. The district court did not clearly err, see
id. at 907, in concluding that the conduct was not relevant, see United States v. Allen,
153 F.3d 1037, 1043 (9th Cir. 1998), as amended (Sept. 22, 1998). Thus, it was
within the district court’s discretion to apply § 5G1.3(d) and allow the Bureau of
Prisons to calculate Zogheib’s custodial time.
Rule 35 Motion
Like the district court, we assume, without deciding, that Zogheib’s motion
under Federal Rule of Criminal Procedure 35 was proper. To the extent that Zogheib
repeats his arguments concerning the loss amounts and application of § 5G1.3, we
affirm the district court, except for E.A.’s loss amount. Zogheib’s argument that the
district court allegedly relied on facts outside the record is without merit. Unlike in
Gardner v. Florida, 430 U.S. 349, 358 (1977), the facts upon which the district court
relied in denying the Rule 35 motion were disclosed in the Presentence Investigation
Report, and the district court highlighted the same conduct at sentencing.
Based on the error for E.A.’s loss calculation, we vacate the sentence and
remand for re-sentencing. Upon remand, the district court should again consider the
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proper loss amount for E.A. and correct its typographical error. Because we vacate
Zogheib’s sentence, we do not address Zogheib’s arguments concerning the
reasonableness of his sentence. United States v. Davis, 854 F.3d 601, 606 n.3 (9th
Cir. 2017).
Order of Restitution
Zogheib first challenges the order of restitution because E.A. and D.T. were
not victims of the crimes charged in the federal indictment. Title 18 U.S.C.
§ 3663A(a)(2) “plainly calls for restitution encompassing losses stemming from
conduct throughout the scheme, and not only for the counts charged in the
indictment.” United States v. Anieze-Smith, 923 F.3d 565, 573 (9th Cir. 2019).
Additionally, the Government need not show that the “loss . . . flow[ed] directly
from the specific conduct that is the basis for the offense of conviction . . . if the
offense ‘involves as an element a scheme, conspiracy, or pattern of criminal
activity.’” United States v. May, 706 F.3d 1209, 1214 & n.4 (9th Cir. 2013) (quoting
18 U.S.C. § 3663A(a)(2)) (some internal quotation marks omitted). Zogheib’s
conviction for wire fraud requires “the existence of a scheme to defraud.” United
States v. Jinian, 725 F.3d 954, 960 (9th Cir. 2013). The district court did not err in
including restitution for E.A. and D.T.
Zogheib’s challenges to restitution for K.W. and P.N. are identical to his
challenges to the loss amounts for those two victims. Having already affirmed the
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loss calculations for K.W. and P.N., we likewise do so for the restitution order.
Zogheib also contests the restitution amount for K.L. Unlike the standard for
offsetting a loss amount pursuant to U.S.S.G. § 2B1.1 cmt. 3(E)(i), 18 U.S.C.
§ 3664(j)(2) provides that “[a]ny amount paid to a victim under an order of
restitution shall be reduced by any amount later recovered as compensatory damages
for the same loss by the victim in . . . any State civil proceeding.” The Government
concedes that K.L. recovered the property at issue. We agree that the district court
should conduct further factfinding as to whether the recovered property should
reduce restitution for K.L. On remand, the district court should consider the
property’s value at the time K.L. sold it, if the victim did sell the property. See
Robers v. United States, 572 U.S. 639, 641 (2014). The district court can also
consider whether K.L. had any attorney’s fees in recovering the property, though it
can only consider fees that “were directly, not tangentially, related to [Zogheib’s]
offenses.” United States v. DeGeorge, 380 F.3d 1203, 1221 (9th Cir. 2004).1
Finally, the district court might have made the same typographical error in its
order of restitution as it did for the loss calculation.
1
Zogheib requests that if this court remands on the restitution calculation for K.L.
that he have “the opportunity to present evidence on remand that K.L.’s recovery of
property reduced not just the restitution amount, but also the loss computation.” As
noted above, the standards governing the loss amount and restitution are different.
The district court did not err in calculating K.L.’s loss amount, and we do not remand
on that issue.
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The district court should consider any potential reduction for K.L.’s restitution
and correct any typographical error. Therefore, we vacate the order of restitution
and remand for further proceedings consistent with this disposition.
AFFIRMED IN PART, REVERSED IN PART, VACATED, AND
REMANDED.
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