This post examines an opinion recently issued by the U.S.Court of Appeals for the 6th Circuit: U.S. v. Webster, 2015 WL 3916403
(2015). The issue the court addresses in
the opinion is as follows:
After Jonathan Webster pleaded guilty
to stealing hundreds of individuals' identities with false offers of lending a
helping hand, the [U.S. District Court Judge] imposed an eleven-year sentence.
On appeal, Webster claims that the district court misapplied two enhancements
to his advisory sentencing range: one for lying about representing a charity,
the other for targeting vulnerable victims.
U.S. v. Webster, supra.
You can, if you are interested, read more in this press release
about the “fictitious charities” Webster used to carry out a “false income tax
returns” scam that apparently netted Webster “$1,457,936” to which he was not
entitled. You can also read about the
facts in the case in the news stories you can find here and here.
Getting back to the opinion, the Court of Appeals begins its
analysis of Webster’s arguments on appeal by explaining that
To trick people into sharing their
personal information, Jonathan Webster created websites for fake charities with
reassuring, vaguely religious names such as `The Angel Charity’ and `4 the
Glory Charity.’ . . . Webster invited those in need to apply for financial aid
and publicized the nonexistent charities in Job News, a
nationwide newsletter catering to unemployed and recently employed individuals.
Over three years, more than 250 people
trusted Webster with their names and Social Security numbers, which he used to
file false tax returns and steal nearly $1.5 million in tax refunds from the
government. Webster spent most of that money on shoring up his struggling
Columbus bar. Neither effort worked. The bar failed. And the tax-refund scheme
unraveled in 2013.
Webster pleaded guilty to wire fraud
and aggravated identity theft. See 18 U.S. Code §§
1028A, 1343.
U.S. v. Webster, supra.
Since Webster pled guilty, he is not challenging his
convictions for wire fraud and aggravated identity theft. Instead, as noted above, he is challenging
the sentence imposed on him. U.S. v. Webster, supra.
The Court of Appeals began its analysis of his arguments by
explaining that the U.S. District Court Judge who had the case
applied two sentencing enhancements to
the wire fraud conviction pertinent to this appeal: a two-level increase for misrepresenting
that he worked `on behalf of a charitable . . . organization,’ U.S. SentencingGuidelines § 2B1.1(b)(9)(A), and a two-level increase for preying on `vulnerable
victim[s],’ § 3A1.1(b)(1). These yielded a 108–to–135–month advisory guidelines
range for the wire fraud. Aggravated identity theft has no offense level or
guidelines range and carries a mandatory twenty-four-month consecutive prison
term. See 18 U.S. Code § 1028A(a)(1), (b)(2); U.S. SentencingGuidelines § 2B1.6. All in all, the court imposed a 132–month sentence.
Webster challenges each enhancement.
U.S. v. Webster, supra. As Wikipedia explains, sentencing in the
federal system is governed by the U.S. Sentencing Guidelines. You can, if you
are interested, find the 2014 edition of the U.S. Sentencing Commission
Guidelines Manual here.
The Court of Appeals addressed Webster’s argument in the
order given above, starting with the “charity enhancement.” U.S. v.
Webster, supra. It began by noting
that the
parties skirmish over whether we may
review the charity enhancement. The government claims that Webster waived any
objection to this enhancement by `agree[ing]”’to it and `recommend[ing]’ it in
his plea agreement, . . . and consenting to it during the sentencing hearing.
Waived claims are unreviewable claims. See U.S. v. Olano, 507 U.S. 725 (1993). Webster claims that he did not waive this argument but merely forfeited it
by failing to raise the point at his sentencing hearing. Forfeited claims are
reviewed for plain error. U.S. v. Vonner, 516 F.3d 382 (U.S.
Court of Appeals for the 6th Circuit 2008) (en banc). We need not resolve
the debate. Even if Webster only forfeited his objection to the enhancement, no
plain error occurred.
U.S. v. Webster, supra
(emphasis in the original).
The Court of Appeals then took up the substantive part of
Webster’s argument, noting that the charity-enhancement guideline
calls for
a two-level enhancement `[i]f the offense involved a misrepresentation that the
defendant was acting on behalf of a charitable, educational, religious, or
political organization, or a government agency.’ U.S. Sentencing Guidelines § 2B1.1(b)(9)(A).
The commentary notes that the charity enhancement `applies in any case in which
the defendant represented that the defendant was acting to obtain a benefit on
behalf of a charitable . . . organization.’ U.S. Sentencing Guidelines § 2B1.1 comment
8(B).
As the district court saw it and as the
government sees it, Webster deserves the enhancement. He pretended to `act[ ]
on behalf of a charitable . . . organization.’ U.S. Sentencing Guidelines §
2B1.1(b)(9)(A), when he solicited personal information from the victims on
behalf of fake charities.
As Webster sees it, the enhancement
does not apply. In his view, the commentary limits the application of the
charity enhancement, and he was not acting to obtain a benefit on behalf of a
charitable organization (as the commentary seems to require). As a general
matter, the text of a guideline trumps commentary about it. See Stinson
v. U.S., 508 U.S. 36 (1993) (holding that commentary is not
authoritative if it `is inconsistent with, or a plainly erroneous reading of,
the guideline it interprets or explains).
But we need not resolve whether the
commentary together with the guideline suggests that the enhancement does not
apply in this instance. Either way, Webster cannot credibly claim that any error
(if error there was) was `plain’ -- which is to say `obvious or clear.’ U.S.
v. Gardiner, 463 F.3d 445 (U.S. Court of Appeals for the 6th Circuit
2006) (quotation marks omitted). By itself, the text of the guideline favors
the government. The recently added commentary to be sure introduces a
complication but one that by no means makes the enhancement in this case
obviously wrong. No plain error thus occurred.
U.S. v. Webster, supra.
The Court of Appeals then took up Webster’s argument
involving the “vulnerable victim enhancement” under the U.S. Sentencing
Guidelines. U.S. v. Webster, supra. The
court began its analysis by explaining that the
sentencing guidelines also provide a
two-level enhancement `[i]f the defendant knew or should have known that a
victim of the offense was a vulnerable victim.’ U.S. Sentencing Guidelines §
3A1.1(b)(1). Before the district court, Webster argued that his identity-theft
victims were not `vulnerable.’
Webster takes a different tack on
appeal. Apparently conceding that the relevant individuals were vulnerable, he
now argues that they did not count as `victims’ because they never suffered any
financial loss. Because Webster never presented this ground to the district
court even after being given an opportunity to do so, we review only for plain
error. See U.S. v. Bostic, 371 F.3d 865 (U.S. Court of Appeals
for the 6th Circuit 2004); Cir.2004); U.S. v. Vonner, 516 F.3d
382 (U.S. Court of Appeals for the 6th Circuit 2008). That standard `equally applies to instances
where the objection raised on appeal . . . is not based upon the same grounds’ raised below. U.S. v. Campbell, 86
F. App'x 149 (U.S. Court of Appeals for the 6th Circuit 2004); see U.S.
v. Evans, 883 F.2d 496 (U.S. Court of Appeals for the 6th Circuit 1989).
U.S. v. Webster, supra.
The Court of Appeals then addressed the substance of
Webster’s argument regarding the vulnerable victim enhancement:
A vulnerable victim,’ the guidelines
tell us, is `a victim . . . who is unusually vulnerable’ due to conditions that
make him `particularly susceptible’ to the defendant's conduct. U.S. Sentencing
Guidelines G. § 3A1.1 cmt. 2. Who counts as a `victim’? At a minimum, the
term covers not only victims `of the offense of conviction’ but also victims of
`any conduct for which the defendant is accountable’ under the guidelines. U.S.
Sentencing Guidelines G. § 3A1.1 cmt. 2.
Unlike other guidelines, however, §
3A1.1 does not define `victim’ as a standalone term limited to those who
suffered a particular sort of injury. Compare U.S. Sentencing
Guidelines G. § 3A1.1 with U.S. Sentencing Guidelines § 2B1.1 cmts.
1 & 3(A)(i) (requiring `pecuniary harm’ or `bodily injury’). `In the absence of such a definition,’ we
give the term `its ordinary or natural meaning.’ FDIC v. Meyer, 510 U.S. 471 (1994).
Ordinary usage and legal usage in this
instance point in the same direction. In ordinary usage, a victim is
someone `tricked, duped, or subjected to hardship,’ or someone `used or taken
advantage of.’ Webster's Third New International Dictionary 2550
(rev. ed. 2002). In legal usage, a victim is someone `harmed by a crime.’ Black'sLaw Dictionary 1798 (10th ed.2014). Both definitions are broad, to be
sure. But there is nothing wrong with giving broad terms a broad reading. That
is especially so here because the Sentencing Commission omitted the
financial-or-physical-injury requirement included in [U.S. Sentencing
Guidelines] § 2B1.1. See Russello v. U.S., 464 U.S. 16 (1983).
Consistent with this understanding of
the term, the vulnerable-victim cases do not require a specific type of injury
to qualify someone as a victim, only an individualized `harm’ distinct from
injury to society at large. See U.S. v. Moon, 513 F.3d
527 (U.S. Court of Appeals for the 6th Circuit 2008); see also U.S. v. Kennedy, 554
F.3d 415 (U.S. Court of Appeals for the 3d Circuit 2009) (applying the
enhancement when the victims suffered no financial loss). . . .
U.S. v. Webster, supra.
The Court of Appeals then went on to explain that
Webster's identity-theft victims
qualify as `victims’ within the meaning of § 3A1.1(b)(1), even if they did
not suffer any (known) financial loss. People who have their identities stolen,
as we suspect any such person would agree, have been individually harmed. Not
only have they been duped and taken advantage of, but they also must correct the
problem, whether by establishing new bank accounts, obtaining new credit cards,
or reissuing other identifying information now in the possession of others.
Whether or not his victims lost money, Webster stole their personal information
and used it to file fraudulent tax returns. That in itself causes harm. Cf. Amendments
to the Sentencing Guidelines, 74 Federal Register 21,750, 21,751 (May 8,
2009) (stating that identity-theft victims who have been fully reimbursed
have nevertheless suffered loss—and are therefore victims—because of the
significant time involved in resolving credit problems and other related
issues).
The trouble associated with reclaiming
identities and sorting out any issues with the Internal Revenue Service is all
too real—a reality hardly lost on Webster. At sentencing he told the district
court he was `sure out of th[e] five hundred or so victims, I ruined a few of
their lives.’ . . .
U.S. v. Dixon, 66 F.3d 133
(U.S. Court of Appeals for the 6th Circuit 1995), Webster submits, requires
`financial loss’ to qualify someone as a victim. Yet Dixon is not that sweeping. It rejected a vulnerable-victim
enhancement because the alleged victim suffered no injury on account of the
defendant's offense of conviction. U.S. v. Dixon, supra (emphasis in the original).
That is not true here, where the
offense and the individuals protected by the statute overlap. Since U.S.
v. Dixon, moreover, the Sentencing Commission has expanded this
enhancement to victims `of the offense of conviction and any conduct
for which the defendant is accountable.’ U.S. Sentencing Guidelines §
3A1.1 comment 2 (emphasis added). That `relevant conduct’ includes all
acts committed `during . . . the offense of conviction.’ U.S. Sentencing
Guidelines § 1B1.3(a)(1); see U.S. v. Moon, supra.
Whether Dixon remains
good law in light of this new commentary remains to be seen. But for present
purposes it does not aid Webster.
U.S. v. Webster, supra.
Finally, the Court of Appeals pointed out that
U.S. v. Johns, 686 F.3d 438
(U.S. Court of Appeals for the 7th Circuit 2012), also does not aid Webster's
cause. It too did not issue a sweeping holding that an individual must suffer
financial loss to be a victim. As to individuals unable to access equity
in their homes due to Johns' illegal activity but who could not have accessed
that equity anyway, the court found no harm. U.S. v. Johns, supra. An identity-theft victim by contrast suffers
harm, even if often non-financial harm, due at a minimum to the difficulties
associated with restoring confidential identity information.
For these reasons, we affirm.
U.S. v. Webster, supra.
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