Sentencing Guidelines – The enhancement for receiving stolen property and engaging in the business of receiving and selling stolen property does not apply to defendants who are selling property they themselves stole.
Sentencing Guidelines – The enhancement for the production or trafficking of unauthorized access devices can apply even if a defendant is also being sentenced for aggravated identity theft if the trafficking goes beyond the mere possession, transfer, or use of an unauthorized access device.
Radu Miclaus and Bogdan Nicolescu were charged with operating a “cyber fraud ring” out of Romania and were convicted of wire fraud, wire fraud conspiracy, computer fraud conspiracy, aggravated identity theft, money laundering conspiracy, and conspiracy to traffic in counterfeit service marks. The alleged fraud involved posting fake car auctions on eBray, installing viruses on ebay users’ computers through spam emails and links in the group’s ebay auctions that helped the defendants obtain personal identifying information, and using the infected computers to mine cryptocurrency. The group also sold stolen credit cards on the dark web.
On appeal, the defendants raised several claims, including several challenges to their sentences. One challenge focused on whether the enhancement under U.S.S.G. 2B1.1(b)(4) was warranted, which applies if “the offense involved receiving stolen property, and the defendant was a person in the business of receiving and selling stolen property.” The defendants argued that the enhancement was intended to apply to defendants who “fence” stolen goods for others, i.e. serve as middlemen who sell stolen goods. In contrast, the defendants were selling credit cards that they themselves stole. Thus, they had not “received” stolen property.
As a matter of first impression, the Court agreed that the enhancement should not have applied and rejected the government’s argument that it was sufficient for a defendant to “receive” the property from a co-conspirator or to “receive” the property from a computer virus.
The Court also considered whether the sentencing court erroneously applied the enhancement under U.S.S.G. 2B1.1(b)(11)(B)(i), which applies if the offense involved “the production or trafficking” of unauthorized access device. If a defendant is sentenced for aggravated identity theft as well as an underlying offense, the Guidelines preclude enhancements “for the transfer, possession, or use of a means of identification when determining the sentence for the underlying offense.” In theory, that is because the sentence for aggravated identity theft already takes that conduct into account.
The Court held that the enhancement under 2B1.1(b)(11)(B)(i) could still apply because the defendants in this case were receiving an enhancement for “trafficking” means of identification, not merely “transferring” them. This was additional conduct that could serve as the basis for an enhancement, not withstanding a defendant’s other sentence for aggravated identity theft. The Court acknowledged that its approach is at odds with those of other circuits, including the First, Seventh, Eighth, and Eleventh circuits.
Appeal from the Northern District of Ohio
Opinion by White, except Section III, Part D
Partial Dissent by White
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