Sentencing Guidelines/Loss Amount – Payments to a victim made to further a fraudulent scheme or conceal it should still be counted towards the total loss, not offset against it.
Sentencing Guidelines/Role Enhancement – Four-level enhancement applied where, despite the defendant only having 2 employees, his crime was “otherwise extensive” in that it involved hundreds of fraudulent accounts from 150 multi-dwelling buildings over 6 years.
The defendant was convicted of mail fraud based on a scheme in which he falsely held himself out as an “authorized” dealer with DIRECTV in order to use his cable installing companies to install cheaper “single-family” receivers in more expensive “multi-dwelling buildings,” using the proceeds from the multi-dwelling customers to pay DIRECTV for the single-family accounts and pocketing the rest.
The Court rejected the defendant’s arguments that the district court erred in calculating the loss amount to DIRECTV. The defendant had argued that there was no loss, that the payments he made to DIRECTV on the fraudulent single-family accounts should be “fully” credited to him. The Court countered, however, that loss amounts should not be offset by “payments made in furtherance of the scheme” and that the defendant’s payments for the accounts were insufficient anyway given how he was using them in his scheme.
The district court had properly adopted the Government’s proposed loss calculation that was based on the concrete losses actually resulting from the defendant’s scheme—which included delinquent accounts that the defendant had stopped paying for, the value of receivers not returned to DIRECTV, and the value of credits DIRECTV gave to fraudulent accounts. The Court noted that this was a conservative estimate since the value of the stolen channels the defendant provided his customers were too speculative to include in the loss amount.
The Court also affirmed the four-level role enhancement. Despite the defendant only having 2 employees, the Court found the criminal activity was “otherwise extensive.” Here, the defendant kept up hundreds of fraudulent accounts from 150 multi-dwelling buildings for over 6 years, using personal information from customers without their knowledge and using his three businesses to perpetuate his fraud and make his living. The Court held that this was “otherwise extensive” justifying an aggravated role enhancement.
Appeal from the Northern District of Illinois
Opinion by Brennan, joined by Rovner and Hamilton