Monday, September 09, 2013

Clones, Chats and Fraud

A jury in a federal trial convicted Joanne Tragas of one count of conspiracy to commit various access device fraud offenses, in violation of 18 U.S. Code § 1029(b), seven counts of aiding and abetting unlawful activity under the Travel Act in violation of 18 U.S. Code §1952(a),  one count of bank fraud, in violation of 18 U.S. Code § 1344 and two counts of wire fraud, in violation of 18 U.S. Code § 1343”.  U.S. v. Tragas, 2013 WL 4483514 (U.S. Court of Appeals for the 6th Circuit 2013). The judge who had the case then sentenced her to “300 months” in prison, to be followed by “a five-year term of supervised release”, she appealed.  U.S. v. Tragas, supra.

As to the facts that led to her conviction, the Court of Appeals explains that the evidence presented at Tragas’ trial

established that she acted as a middleman between overseas suppliers of stolen credit and debit card information and street-level users of that information. [Tragas’] suppliers obtained the information that is typically encoded in the magnetic strip on the back of credit and debit cards and sold the information to her using international wire transfers. After receiving the stolen data, [she] re-sold the information to her co-conspirators in the United States.

[Her] customers, many of whom later became her co-defendants, used machines to encode the information they received from [Tragas] onto the magnetic strips of actual plastic cards. Any card with a magnetic strip could be and was used, including gift cards, hotel key cards, and actual credit cards. Once encoded, these cards contained the same information that the legitimate cards contained.

Thus armed with these `clones’ of legitimate credit and debit cards, the conspirators purchased various kinds of consumer goods, including high-end electronics, as well as bona fide gift cards. In this way, the conspirators could quickly convert stolen credit card information into cash or easily transferable property. 

[Tragas’] primary customers in Detroit were twin brothers Dion and Dionte Hunter, who purchased stolen credit and debit card information from [her] and then either used it themselves or sold it to others.

[Tragas] and the Hunters never met in person, but they communicated extensively via online chat services, which were variously described as instant messages or `ICQ's.’ Police discovered stored records of these chat conversations on a laptop computer belonging to the Hunters.

U.S. v. Tragas, supra.

At her trial, the prosecution

introduced the transcripts of these chat conversations into evidence, and the prosecutor, together with Secret Service Agent Robert Kuykendall, read many of the conversations aloud to the jury. Although the parties to these communications did not use names, a picture of [Tragas] was the profile picture associated with the ICQ account-holder that supplied the Hunters with stolen data.

Furthermore, [she] was shown to have made purchases with the gift card information exchanged during the ICQ conversations with the Hunters. Circumstantial evidence also indicated that the individual conversing with the Hunters and supplying them with stolen information was in fact [Tragas]. For example, [she] purchased a house in Florida after the Hunters' supplier talked of buying and furnishing a new beach house in Florida.

These conversations revealed the scope and nature of [Tragas’] role in the conspiracy. She sold credit and debit card information to the Hunters in exchange for payment in a variety of different forms, including cash deposits into her bank account, wire transfers, and information that allowed her to use the genuine gift cards that the Hunters and others purchased with stolen card data.

[She] used the money she received to pay her overseas suppliers, and she sometimes directed the Hunters to wire money directly to facilitate these payments. [Tragas] purchased and re-sold the stolen personal information of hundreds of credit and debit card users, and their financial institutions suffered losses of approximately $2.18 million as a result.

U.S. v. Tragas, supra.

Tragas made several arguments on appeal, but this post only examines one.  The Court of Appeals began its analysis of the issue by noting that she first argued that a new trial

is warranted because the prosecutor, together with Agent Kuykendall, read to the jury transcripts of online chat conversations between [Tragas] and her co-conspirators. The exact basis for [her] objection to this evidence is difficult to pin down, but for the reasons that follow, we find nothing improper in the reading aloud of a properly admitted transcript under these circumstances.

U.S. v. Tragas, supra.

The court began its analysis of Tragas’ argument on this issue by explaining that she

argues that merely by reading the transcripts aloud, the prosecutor and the case agent conducted a `theatrical performance’ akin to a re-enactment. [Tragas] argues that the prosecutor and Agent Kuykendall essentially play-acted the chat conversations, with the prosecutor `performing’ the role of [Tragas], and Kuykendall playing various co-conspirators. 

In so doing, [she] argues, the prosecutor interpreted and characterized the otherwise properly admitted documentary evidence and portrayed [her] written communications in a way that telegraphed to the jury that she was guilty.

U.S. v. Tragas, supra.

The court pointed out that Tragas

offers no support for her proposition that the mere reading aloud of previously admitted documentary evidence is improper or prejudicial. On the contrary, there is nothing inherently problematic about reading such evidence to the jury. See Bank of Nova Scotia v. United States, 487 U.S. 250 (1988) (no prejudice to a defendant where two IRS agents read in tandem from a transcript before a grand jury). . . .  

As long as the evidence itself is properly admitted pursuant to the Rules of Evidence and does not run afoul of other safeguards like the Confrontation Clause, we do not see how a defendant could be prejudiced if the evidence is read aloud to the jury.

U.S. v. Tragas, supra.

Tragas did not claim the transcripts were not properly admitted under the Federal Rules of Evidence or they violated her rights under the 6th Amendment’s Confrontation Clause. U.S. v. Tragas, supra. The court noted that a “staged performance or re-enactment of an event by a prosecutor would undoubtedly be problematic insofar as it strayed from the direct evidence introduced at trial or reflected the prosecutor's opinions,” but found that the “prosecutor’s conduct in this case cannot possibly be described as a re-enactment.”  U.S. v. Tragas, supra.

The Court of Appeals then explained that, in addition to “her broad contention that the prosecutor and case agent were doing theater”, Tragas raised three specific legal challenges to the procedure. U.S. v. Tragas, supra.

First, she asserts that the testimony presented an improper overview or summary. A defendant may indeed be prejudiced if a law enforcement officer is able to introduce otherwise inadmissible evidence by giving an overview of the government's case at the outset of the trial, . . .  but once again, [Tragas] does not contend that the chat conversations themselves were inadmissible. 

Moreover, Kuykendall cannot be said to have summarized anything; rather, he was merely reading directly from a transcript that had already been provided to the jury in written form.

Even if Kuykendall had summarized other evidence, [Tragas] concedes that the jury was properly instructed regarding summary evidence. . . .

U.S. v. Tragas, supra.

Tragas also argued that the prosecutor’s reading the chat conversations

constitutes impermissible vouching, which occurs when `a prosecutor supports the credibility of a witness by indicating a personal belief in the witness's credibility thereby placing the prestige of the office of the United States Attorney behind that witness.’ U.S. v. Trujillo, 376 F.3d 593 (U.S. Court of Appeals for the 6th Circuit 2004).

This seems to be a different theory to support [Tragas’] primary argument that, merely by uttering the words from a document aloud, a prosecutor imbues the evidence with some sort of magical power. However, [she] fails to identify any comments or statements that could be construed as bolstering or vouching for the evidence, and we find no support for the proposition that admissible documentary evidence somehow becomes more credible if the prosecutor reads it aloud.

U.S. v. Tragas, supra.

Finally, Tragas argued that

because the prosecutor is not a witness and cannot be cross-examined, any opinions, testimony, or interpretations of evidence offered by the prosecutor are prohibited by the Confrontation Clause of the 6th Amendment. As with her other arguments, [Tragas’] contention fails because she can point to nothing in the record indicating that the prosecutor actually made any such statements or verbally interpreted the evidence in any particular way.

As for the transcripts themselves, we note that [her] own statements were properly admitted as statements by a party-opponent under Rule 801(d)(2)(A), and the statements by the Hunters were admitted as co-conspirator statements under Rule 801(d)(2)(E). As coconspirator statements made in furtherance of the conspiracy, they were categorically non-testimonial and also within a `firmly rooted/ exception to the hearsay rule. See U.S. v. Mooneyham, 473 F.3d 280 (U.S. Court of Appeals for the 6th Circuit 2007). . . .

U.S. v. Tragas, supra.

For these and other reasons, the Court of Appeals affirmed Tragas’ convictions. U.S. v. Tragas, supra. If you would like to read a little more about the facts in the case and see a photo of Tragas, check out the news story you can find here.

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