United States Court of Appeals
For the First Circuit
No. 07-2419
UNITED STATES,
Appellee,
v.
ARMAN TER-ESAYAN,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. William E. Smith, U.S. District Judge]
Before
Toruella, Baldock,* and Lipez,
Circuit Judges.
Eugene Patrick Harris, with whom Mark J. Geragos and George G.
Buehler were on brief, for appellant.
Donald C. Lockhart, Assistant United States Attorney, with
whom Robert Clark Corrente, United States Attorney, and Lee H.
Vilker, Assistant United States Attorney, were on brief, for
appellee.
June 26, 2009
*
Of the Tenth Circuit, sitting by designation.
LIPEZ, Circuit Judge. Arman Ter-Esayan appeals the 72-
month sentence he received after pleading guilty, pursuant to a
written plea agreement, to a two-count criminal information
charging him with conspiracy to commit access device fraud and
aggravated identity theft. The government asks us to dismiss this
appeal because Ter-Esayan waived the right to appeal his sentence
in the plea agreement. Ter-Esayan argues that we should disregard
that waiver and proceed to examine his claim that the district
court improperly construed the definition of "victim" under
U.S.S.G. § 2B1.1, and thereby increased his sentence. We conclude
that Ter-Esayan validly waived his right to appeal the guideline
sentence imposed by the district court, and that enforcing the
waiver would not work a "miscarriage of justice" in light of the
decision filed today in the related case of United States v.
Stepanian, No. 08-1053, slip op. at 8 (1st. Cir. June 26, 2009).
Therefore, we dismiss this appeal.
I.
Although we have recounted the undisputed facts of this
case in Stepanian, No. 08-1053, slip op. at 2-4, we repeat them
here. Beginning in January 2007, appellant and three co-
conspirators -- Mikael Stepanian, Arutyun Shatarevyan, and Gevork
Baltadjian -- engaged in a plan to steal debit card numbers,
personal identification numbers ("PINs"), and credit card numbers
from the customers of 24-hour Stop & Shop grocery stores in Rhode
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Island. To accomplish this, they surreptitiously replaced the
credit and debit card payment terminals in Stop & Shop checkout
aisles with altered terminals. The altered terminals were equipped
with a device that recorded debit card numbers, PIN codes, and
credit card numbers whenever customers swiped their cards to make
a purchase.
After returning to the targeted stores to retrieve a
converted payment terminal and replacing it with the store's
original terminal, the co-conspirators possessed the private
account information of every customer who had used the compromised
terminal during the intervening period. The men were able to use
the stolen information to make unauthorized transactions, including
cash withdrawals from automatic teller machines ("ATMs"). Their
unauthorized transactions totaled roughly $132,300.
The scheme was discovered when one bank's internal
investigation of unauthorized ATM withdrawals revealed that many
affected account holders had recently used their cards at Stop &
Shop stores in Coventry and Cranston, Rhode Island.1 Stop & Shop
security personnel soon located surveillance video showing
appellant, Baltadjian, and Shatarevyan entering the Cranston store
in the early hours of the morning on February 1, 2007. While
1
The investigation was also aided when one of the altered
terminals malfunctioned and was sent out of the store for
servicing. When it was opened for repairs on February 13, 2007, it
was discovered that card-skimming equipment had been placed inside
the terminal.
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Baltadjian engaged the night clerk in conversation, appellant and
Shatarevyan approached the credit card terminal in a deserted
checkout aisle. Shatarevyan quickly disconnected the original
terminal from its cables and handed it to appellant, who concealed
it in his coat. Shatarevyan then removed a second terminal from
his own coat and connected it to the cables. Stop & Shop
surveillance personnel located similar footage of the three men
switching terminals in the Coventry and Providence, Rhode Island
stores. As revealed by the surveillance video, the process of
substitution only took about twelve seconds.
On February 26, 2007, Stop & Shop employees at one of the
targeted stores recognized the co-conspirators from the
surveillance video and called the police. The responding officers
arrested appellant, Baltadjian, and Shatarevyan inside the store.
They also arrested Stepanian, who was sitting behind the wheel of
a vehicle parked immediately outside the store's exit. Police
later searched a nearby hotel room that had been rented in
Stepanian's name, where they found materials used to alter the
credit card terminals and a laptop containing the private account
information of customers who had shopped at the Cranston and
Coventry Stop & Shop stores.
On May 21, 2007, appellant signed a written plea
agreement in which he agreed to plead guilty to: 1) conspiracy to
violate 18 U.S.C. § 1029(a)(2) by trafficking in and using one or
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more unauthorized access devices with intent to defraud, in
violation of 18 U.S.C. § 371 (Count I), and 2) knowing transfer,
possession, or use of other persons' means of identification in
relation to the felony offenses of access device fraud, 18 U.S.C.
§ 1029(a)(2) and (3), and conspiracy to commit access device fraud,
18 U.S.C. §§ 371, 1029(b)(2), constituting aggravated identity
theft in violation of 18 U.S.C. § 1028A (Count II). The plea
agreement contained a provision stating that Ter-Esayan understood
that "the Court alone [would make] all sentencing decisions,
including the application of the Guidelines and the sentence to be
imposed," and that appellant would not be able to withdraw his
guilty plea even if the court's sentence was not what he expected.
The agreement also contained a waiver of appellant's right to
appeal his sentence, which read in pertinent part: "Defendant
understands that Defendant may have the right to file a direct
appeal from the sentence imposed by the Court. Defendant hereby
waives Defendant's right to file a direct appeal, if the sentence
imposed by the Court is within the guideline range determined by
the Court or lower."
In paragraph two of the written agreement, the government
agreed to: 1) recommend a two- to three-level reduction in the
appellant's offense level, 2) recommend that the court impose a
sentence at the low end of the guidelines range, and 3) not seek an
adjustment based on Ter-Esayan having played an aggravating role in
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the offense. The agreement was silent about whether the government
would suggest an enhancement for the number of victims of the
offense, and further specified that, "[e]xcept as expressly
provided in paragraph 2 above, there is no agreement as to which
Offense Level and Criminal History Category applies in this case."
At a plea hearing on May 30, 2007, the district court
questioned Ter-Esayan to ensure that he understood both the charges
against him and the terms of the written plea agreement. The court
confirmed that Ter-Esayan understood that any sentencing
recommendations made by the government were not binding and that,
if the court chose not to accept the recommendations, he would not
be able to change his plea. The court also inquired about Ter-
Esayan's waiver of appeal:
The Court: I also want to draw your attention
to paragraph 13 of your plea agreement, which
provides that you may and normally have a
right to appeal a sentence imposed by the
Court, but you are agreeing to waive your
right to appeal if the sentence I impose is
within the guideline range or lower. Now, you
. . . understand that?
Mr. Ter-Esayan: Yes, your honor.
After finding that he was competent to enter a plea and that his
plea was knowing and voluntary, the district court accepted
appellant's guilty plea.
A presentence report ("PSR") prepared by the Probation
Office stated that the guideline total offense level ("TOL") for
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Count I, access device fraud, was 23. This calculation included a
base offense level of 6, a ten-level upward adjustment for crimes
involving a loss of more than $120,000 but less than $200,000, a
six-level upward adjustment for crimes involving 250 or more
victims, a two-level upward adjustment for use of sophisticated
means, a two-level upward adjustment for the production or
trafficking of an unauthorized access device, and a three-level
downward adjustment for acceptance of responsibility. In
conjunction with appellant's criminal history of Category I, this
TOL produced a guideline sentencing range of 46 to 57 months. As
for Count II, aggravated identity theft, the PSR noted that a two-
year consecutive sentence was prescribed by statute.
At his sentence hearing, appellant objected to the PSR's
calculation of the number of victims of the offense. He argued
that the six-level increase for crimes against more than 250
victims was inappropriate because only Stop & Shop and the 26
financial institutions that had ultimately reimbursed the defrauded
bank account holders were "victims" for the purpose of the multiple
victim enhancement. According to Ter-Esayan, account holders who
had been reimbursed by their banks could not be victims under the
relevant guideline provision because it defines the term to include
only those who have sustained foreseeable economic loss and
specifically excludes those who have suffered only "emotional
distress, harm to reputation, or other non-economic harm."
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U.S.S.G. § 2B1.1, cmt. nn. 1, 3(A). Appellant therefore urged the
court to impose only the two-level multiple victim enhancement
applicable to crimes involving 10 to 50 victims.2 He pointed to a
Sixth Circuit decision, United States v. Yagar, 404 F.3d 967 (6th
Cir. 2005), to support his position.
In response to appellant's objection, the government
countered that some account owners had reported serious financial
consequences from the unauthorized withdrawals even though they
were ultimately reimbursed by their banks. The government
described one account owner who temporarily did not have enough
money to buy food and gas for his family, and another who had been
forced to borrow $500 from a family member to make ends meet.3 The
government cited an Eleventh Circuit case, United States v. Lee,
427 F.3d 881 (11th Cir. 2005), in support of its reading of
"victims" as including the individual account holders even if they
only sustained temporary financial loss.
Acknowledging a circuit split on the issue, the district
court agreed with the Sixth Circuit's decision in Lee, and found
that the victims included 238 individuals, 26 banks, and the Stop
2
Appellant's calculation of the number of victims would
result in an offense level of 19 for Count I, which, in conjunction
with his criminal history of Category I, would yield a sentencing
range of 30-37 months.
3
At sentencing, appellant argued that only seven individual
bank account holders had reported suffering any kind of temporary
financial hardship.
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& Shop chain. Those numbers resulted in a six-level multiple
victim enhancement. The court adopted the PSR's guideline
calculation and sentenced Ter-Esayan to the low end of the
guideline range for Count I, 48 months, with a consecutive 24-month
sentence on Count II. Ter-Esayan now appeals his sentence, arguing
that his appeal waiver should not be enforced and that his sentence
must be vacated because the district court misunderstood the term
"victim" under section 2B1.1.
II.
Our initial inquiry must be whether to enforce
appellant's waiver of the right to bring this appeal. In
determining whether to enforce a waiver of the right to appeal, we
use the three-tiered analysis set forth in United States v. Teeter,
257 F.3d 14 (1st Cir. 2001). See, e.g., United States v. Chandler,
534 F.3d 45 (1st Cir. 2008); United States v. Edelen, 539 F.3d 83
(1st Cir. 2008). First, we consider whether the written plea
agreement "contains a clear statement elucidating the waiver and
delineating its scope." Teeter, 257 F.3d at 24. Next, we examine
the transcript of the plea hearing to determine whether the trial
court specifically inquired into the waiver of appellate rights to
ensure that the defendant "freely and intelligently" waived his
right to appeal. Id. Finally, we consider whether enforcing the
waiver would "work a miscarriage of justice." Id. at 25.
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Appellant argued in his brief that the language of his
plea agreement did not clearly delineate the scope of the waiver.
The written plea agreement stated that appellant waived his right
to appeal the sentence imposed by the court if it was "within the
guideline range determined by the Court or lower." After the
submission of appellant's brief and before oral argument in this
case, we decided in Chandler, 534 F.3d at 49, that language nearly
identical to that in appellant's plea agreement sufficiently
delineated the scope of a waiver of appellate rights and therefore
passed the first stage of the Teeter inquiry. As a result,
appellant conceded at oral argument that the language of his plea
agreement had adequately delineated the scope of the waiver.
Therefore, the first prong of the Teeter test is not at issue.
The waiver also passes the second prong of the Teeter
inquiry. At the change-of-plea hearing the district court ensured
appellant's waiver was made "freely and intelligently" by inquiring
into whether appellant was aware that he would otherwise have had
the right to appeal and that he was waiving that right. Appellant
responded, "Yes, your Honor."
Thus, appellant's only argument for the unenforceability
of his waiver of the right to appeal is that enforcing the waiver
would constitute a miscarriage of justice. He argues that the
district court's inclusion of reimbursed bank account holders in
the tally of victims is an error that amounts to a miscarriage of
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justice. That argument is now precluded by the decision we have
issued today in Stepanian, No. 08-1053, slip op. at 8-14. In that
case, which is based on the same facts as this one, we conclude
that the district court was correct to count the reimbursed account
holders as victims for purposes of the multiple victim enhancement.
Given the absence of any error in the court's application
of the guidelines, there can be no miscarriage of justice caused by
enforcing appellant's waiver of the right to appeal. Hence, we
dismiss his appeal.
So ordered.
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