United States v. Sepulveda

United States Court of Appeals,

Eleventh Circuit

No. 95-4769.

UNITED STATES of America, Plaintiff-Appellee,

v.

Alice SEPULVEDA and Placido Mendez, Defendants-Appellants.

June 20, 1997.

Appeals from the United States District Court for the Southern District of Florida. (No. 94-327-CR-
JLK, James Lawrence King, Judge.

Before TJOFLAT and EDMONDSON, Circuit Judges, and O'NEILL*, Senior District Judge.

THOMAS N. O'NEILL, Senior District Judge:

Appellants Alice Sepulveda and Placido Mendez were convicted of possessing and

conspiring to possess, with intent to defraud, fifteen or more unauthorized access devices in

violation of 18 U.S.C. § 1029(a)(3). Their convictions rested on evidence that they possessed

fourteen "cloned" cellular telephones programmed to charge unauthorized calls to subscribers'

accounts and four unprogrammed numerical combinations corresponding to additional accounts.

Appellants contend that they are entitled to acquittal because the unprogrammed combinations are

not additional access devices that can be added to the fourteen cloned telephones to establish the

fifteen or more access devices required for conviction. We find that the unprogrammed
combinations constitute access devices within the meaning of § 1029. We therefore affirm the

judgments of conviction.

Appellants also challenge the increased sentences they received based on the district court's

determination that their conduct caused losses of $42,124.32. Because we conclude that

uncertainties in the loss analysis precluded a finding by a preponderance of the evidence that the

losses exceeded $40,000 as required by United States Sentencing Guidelines § 2F1.1(b)(1)(F), we

reverse the district court's application of that provision and remand for resentencing.

*
Honorable Thomas N. O'Neill, Jr., U.S. District Judge for the Eastern District of
Pennsylvania, sitting by designation.
 I.

Federal agents arrested appellants on June 2, 1994 after executing a search warrant at a

clothing store where, it was established at trial, appellants operated a "call sell" service using

"cloned" cellular telephones. Store clerks would escort a customer to one of several dressing rooms

that served as telephone booths, dial the requested number, hand the customer a cellular telephone,

and charge the customer by the minute for the call. Upon searching the clothing store the agents

seized fourteen cellular telephones1 and ledgers listing hundreds of callers' names and the locations

they had called. A customer of the call sell service testified that she placed calls from appellants'

store two to three times per week between January and May, 1994 and that each time there were

"many people waiting" to place calls.

Experts testified that a cellular telephone, when dialed, emits both an eight-digit Electronic

Serial Number, or ESN, and a ten-digit Mobile Identification Number, or MIN, both of which are

stored on the cellular telephone's internal microchip.2 Emission of the ESN-MIN combination

("ESN-MIN") results in charges against the subscriber account bearing the same numbers.

"Cloning" involves reprogramming the microchip to emit an illegitimately obtained ESN-MIN and

thus to charge unauthorized calls to the corresponding account.3 The procedure requires a personal

1
The trial court suppressed evidence of three additional telephones seized from the trunk of
Sepulveda's car.
2
The ESN is the instrument identifier inscribed on the microchip by the manufacturer. The
MIN, which usually corresponds to the subscriber's area code and telephone number, is assigned
by the cellular service provider and is programmed onto the microchip when the subscriber's
account is activated.
3
Cloning, which illicitly charges a specific account, is distinct from "tumbling," which "free
rides" on the cellular telephone system by emitting random ESN-MINs which are changed
before the system can identify them as invalid. See United States v. Brady, 13 F.3d 334, 336
(10th Cir.1993). Because the ESN-MINs in this case corresponded to individual accounts, cases
excluding tumbling cellular telephones from § 1029 on the grounds that they do not access
"distinct identifiable accounts" are inapposite. See id. at 339-40; United States v. Morris, 81
F.3d 131, 134 (11th Cir.1996) (noting in dictum that § 1029 should not be extended beyond
"devices which access an individual account"); but see United States v. Ashe, 47 F.3d 770, 774
(6th Cir.) (holding that "invasion of an identifiable customer's account is not a necessary element
of proof"), cert. denied, --- U.S. ----, 116 S.Ct. 166, 133 L.Ed.2d 108 (1995); United States v.
Bailey, 41 F.3d 413, 418 (9th Cir.1994) (holding that § 1029 extends to "tumbling" because such
activity incurs charges between cellular carriers and § 1029 "nowhere implies that the only
"account' protected against improper "access' is one maintained by an end consumer"), cert.
computer, specialized software and cables connected to the telephone's microchip. In a process that

takes approximately thirty seconds to three minutes the ESN-MIN is typed into the computer which

then transcribes the numbers to the microchip. Thereafter the telephone emits the unauthorized

ESN-MIN and illicitly charges the unsuspecting subscriber each time it is dialed. By using a device

that "reads" a telephone's ESN-MIN emissions and comparing those emissions to cellular telephone

company records the government established that the telephones seized from appellants were cloned.

In addition to the fourteen cloned cellular telephones, the agents seized a piece of paper

bearing four handwritten ESN-MIN combinations which corresponded to four additional subscribers'

accounts.4 A government witness testified that until transcribed by a computer to a microchip such

unprogrammed combinations could not be used to place calls. No such computer or other cloning

equipment was found at appellants' store. Testimony from cellular telephone company

representatives established that some of the unprogrammed ESN-MINs had in fact been used to

place unauthorized calls.

Appellants, emphasizing that the handwritten ESN-MINs in their unprogrammed form were

incapable of obtaining access to cellular telephone accounts, moved for acquittal on the grounds that

the evidence failed to establish the requisite fifteenth access device. The district court denied the

motions and the jury returned verdicts of guilt. After their post-trial motions were denied appellants

appealed. We review the district court's denial of a motion for judgment of acquittal de novo.

United States v. Kelly, 888 F.2d 732, 739 (11th Cir.1989).

II.

Appellants were convicted of violating and conspiring to violate 18 U.S.C. § 1029(a)(3),

which proscribes possession, with intent to defraud, of "fifteen or more ... counterfeit or

unauthorized access devices." § 1029(a)(3). An access device is defined as "any card, plate, code,

account number, or other means of account access that can be used, alone or in conjunction with

denied, --- U.S. ----, 115 S.Ct. 2563, 132 L.Ed.2d 815 (1995).
4
Cellular telephone company representatives testified that both the handwritten ESN-MINs
and the ESN-MINs programmed in the seized telephones were assigned to legitimate customers
who had not authorized appellants' use thereof.
another access device, to obtain money, goods, services, or any other thing of value...." §

1029(e)(1).5

Appellants do not dispute that their possession of fourteen cloned telephones programmed

for immediate transmission of unauthorized ESN-MINs established possession of fourteen

unauthorized access devices. Appellants contend, however, that the four unprogrammed ESN-MINs

are not additional access devices because they must be transcribed through a computer before being

transmitted to place cellular telephone calls. According to appellants, the need for the computer

precludes a finding that the unprogrammed ESN-MINs "can be used ... in conjunction with another

access device" to obtain cellular telephone service, both because the computer is not an access

device and because no such computer was found in appellants' possession.6

A.

The ESN-MINs, which are account-identifying information like the "codes" and "account

numbers" enumerated in § 1029(e)(1), constitute a "means of account access" under § 1029(e)(1).7

Similarly, cellular telephone microchips, which serve as a medium for storing and transmitting this

account information, are sufficiently analogous to the "cards" and "plates" used to store and convey

other types of account information to constitute another "means of account access" under §

5
An amended provision that took effect after appellants were indicted includes any "electronic
serial number, mobile identification number, personal identification number, or other
telecommunications service, equipment, or instrument identifier." See Pub.L. No. 103-414, 108
Stat. 4279 (codified as amended at 18 U.S.C. § 1029(e)(1)(1994)). Appellants argue that
because the amended version, which does not govern this case, explicitly includes ESNs and
MINs and because amendments are presumed to have a "real and substantial effect," Stone v.
I.N.S., 514 U.S. 386, ----, 115 S.Ct. 1537, 1545, 131 L.Ed.2d 465 (1995), the prior version
should be read to exclude ESN-MINs. Congress may, however, "amend a statute to clarify
existing law, to correct a misinterpretation, or to overrule wrongly decided cases. Thus, an
amendment to a statute does not necessarily indicate that the unamended statute meant the
opposite." Hawkins v. United States, 30 F.3d 1077, 1082 (9th Cir.1994), cert. denied, --- U.S. ---
-, 115 S.Ct. 2576, 132 L.Ed.2d 827 (1995). We find the subsequent amendment inconclusive
and analyze the applicable statute based on its plain language and legislative purpose.
6
It is undisputed that the unprogrammed ESN-MINs could not be used "alone" to place
cellular telephone calls.
7
Appellants argue that the unprogrammed ESN-MINs are not access devices but do not
dispute that they are a means of account access.
1029(e)(1).8 While it is undisputed that the ESN-MINs, once programmed onto microchips, can be

used in conjunction with microchips to obtain cellular telephone services, appellants contend that

because such ESN-MINs must be used in conjunction with a computer, which is not an access

device, they cannot be used in conjunction with another access device within the meaning of § 1029.

Appellants' argument misconstrues the plain statutory language.

The statute does not define the concept of use in conjunction with another access device.

Terms that are not statutorily defined are ascribed their "ordinary or natural meaning." National

Coal Ass'n v. Chater, 81 F.3d 1077, 1081 (11th Cir.1996) (per curiam) (citing Federal Deposit Ins.

Corp. v. Meyer, 510 U.S. 471, 476, 114 S.Ct. 996, 1001, 127 L.Ed.2d 308 (1994)); United States

v. Myers, 972 F.2d 1566, 1572 (11th Cir.1992).9 The statutory definition of access device extends

to "any" means of account access that "can be used ... in conjunction" with another access device

to obtain goods or services. The ordinary and natural meaning of this language includes any means

of account access that can be brought together with another access device and used in combination

therewith for the common purpose of obtaining goods or services. See WEBSTER'S THIRD

INTERNATIONAL DICTIONARY 479 (15th ed. 1968) (defining "conjunction" as a "state of being

conjoined," which is in turn defined as "joined together for a common purpose or a common end").

Thus the plain statutory language requires only that a means of access be able to be

combined with and used together with another access device to obtain services. Under this language
the use of an additional item which is not itself an access device to bring two items together or to

facilitate their use in conjunction with one another does not preclude a finding that the two items can

be used in conjunction with one another to obtain goods or services.

8
See Newsom v. Friedman, 76 F.3d 813, 819 (7th Cir.1996) (holding that, under statutory
construction principles of ejusdem generis and noscitur a sociis, general terms following a series
of more specifically enumerated terms refer to items similar in structure and function to the
enumerated terms).
9
Because Congress is " "not required to define each and every word in a piece of legislation in
order to express clearly its will' " a statute is not ambiguous merely because it contains a term
without a statutory definition. Newsom v. Friedman, 76 F.3d 813, 817 (7th Cir.1996) (quoting
Gardner v. Brown, 5 F.3d 1456, 1459 (Fed.Cir.1993), aff'd, 513 U.S. 115, 115 S.Ct. 552, 130
L.Ed.2d 462 (1994)).
 We " "must give effect to this plain language unless there is good reason to believe Congress

intended the language to have some more restrictive meaning.' " McNely v. Ocala Star-Banner

Corp., 99 F.3d 1068, 1073 (11th Cir.1996) (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97,

103 S.Ct. 2890, 2900, 77 L.Ed.2d 490 (1983)), cert. denied, --- U.S. ----, --- S.Ct. ----, --- L.Ed.2d

----, 65 U.S.L.W. 3587 (U.S. May 19, 1997) (No. 96-1318). We find no reason to believe Congress

intended a more restrictive meaning than the plain language of § 1029 denotes.10 While criminal

statutes must be strictly construed, this canon "is not an inexorable command to override common

sense and evident statutory purpose.... Nor does it demand that a statute be given the "narrowest

meaning;' it is satisfied if the words are given their fair meaning in accord with the manifest intent

of the lawmakers." United States v. Moore, 423 U.S. 122, 145, 96 S.Ct. 335, 347, 46 L.Ed.2d 333

(1975) (quoting United States v. Brown, 333 U.S. 18, 25-26, 68 S.Ct. 376, 380, 92 L.Ed. 442

(1948)); see also United States v. Parker, 749 F.2d 628, 632 (11th Cir.1984) (holding that "while

penal statutes are to be strictly construed, the courts are not required to abandon common sense").11

A common sense, practical reading of the plain language of § 1029 encompasses any means

of account access that can be combined with another access device and used in conjunction

10
As other courts construing § 1029 have noted, Congress drafted the statute broadly to
address the "misuse of account numbers" without regard to the particular mechanics or
technologies involved in such conduct. See United States v. Caputo, 808 F.2d 963, 966 (2d
Cir.1987) (citing S.Rep. No. 98-368 (1984), reprinted in 1984 U.S.C.C.A.N. 3647 and holding
that § 1029 is aimed at misuse of accounts regardless of the "particular medium" on which
account information is stored); see also United States v. McNutt, 908 F.2d 561, 563 (10th
Cir.1990) (quoting H.R.Rep. No. 98-894 (1984), reprinted in 1984 U.S.C.C.A.N. 3182 and
noting that Congress "sought to include in its definition of access devices ... "other methods of
obtaining goods and services' "); United States v. Brewer, 835 F.2d 550, 553 & n. 1 (5th
Cir.1988) (quoting S.Rep. No. 98-368 (1984), reprinted in 1984 U.S.C.C.A.N. 3182 and
H.R.Rep. No. 98-894, reprinted in 1984 U.S.C.C.A.N. 3689 and noting that § 1029 was "
"intended to be broad enough to encompass technological advances' ").
11
Appellants urge a narrow interpretation of § 1029 based on the rule of lenity. See United
States v. Witek, 61 F.3d 819, 822 (11th Cir.1995) (holding that under rule of lenity ambiguities in
criminal statutes must be construed in favor of the accused), cert. denied, --- U.S. ----, 116 S.Ct.
738, 133 L.Ed.2d 688 (1996). This rule, however, has no application where the fair meaning of
the statute is clear; it " "comes into operation at the end of construing what Congress has
expressed, not at the beginning as an overriding consideration of being lenient to wrongdoers.' "
United States v. Elgersma, 971 F.2d 690, 695 n. 13 (11th Cir.1992) (quoting Callanan v. United
States, 364 U.S. 587, 596, 81 S.Ct. 321, 326, 5 L.Ed.2d 312 (1961)). Because the statutory
language in this case is unambiguous the rule of lenity does not apply.
therewith to obtain goods or services. Read in context the phrase "alone or in conjunction with

another access device" does not restrict the reach of § 1029 to means of account access that require

nothing more than one other access device in order to obtain immediate account access, but rather

extends the definition of access device to any means of account access that can be used to obtain

goods or services regardless of whether the means of access is alone sufficient to complete the

transaction or whether it must be used in conjunction with another access device to do so. Because

nothing in the statutory language requires that a means of account access be immediately capable

of use solely, exclusively or directly in conjunction only with one other access device, we decline

to impose such a requirement. See McNely, 99 F.3d at 1074, 1077 (holding that "importing the term

"solely' ... is not warranted under the statute's plain language" which should be construed as "no

more restrictive ... than the ordinary, everyday meaning of the words would be understood to

imply"); see also Nguyen, 81 F.3d at 914 (holding that appellant's "argument that a card without a

number cannot gain access to an account simply misperceives the plain language of the statute").12

Only by construing the "in conjunction" language restrictively to require immediate, direct

and exclusive conjunction can appellants contend that two means of account access are not capable

of use in conjunction with one another merely because a third item, which is not an access device,

is used to combine the two means of account access for use in conjunction with one another. The

statutory language does not support this construction. We therefore conclude that the
unprogrammed ESN-MINs, which can be used in conjunction with microchips to obtain cellular

telephone services, are not excluded from the statutory definition of access device merely because

12
Criminal statutes must provide an "ordinary person with ... clear notice" of what is
prohibited. Daniel v. City of Tampa, 38 F.3d 546, 550 (11th Cir.1994), cert. denied, --- U.S. ----,
115 S.Ct. 2557, 132 L.Ed.2d 811 (1995). Section 1029 affords clear notice that it includes "any"
means of account access that can be used in conjunction with another access device and would
not lead an ordinary person to believe that the statute includes only means of access that require
no additional items to link them to another access device for use in conjunction therewith. The
requirements that the means of account access be "counterfeit or unauthorized" and be possessed
"with intent to defraud" further eliminate any risk that § 1029 could be violated unknowingly.
See United States v. Brewer, 835 F.2d 550, 553 (5th Cir.1987) ("a practical reading of [§ 1029]
"provides a person of ordinary intelligence a reasonable opportunity to know what is proscribed'
").
a computer which is not an access device is used to transfer such ESN-MINs to the microchips.13

B.

We turn now to appellants' contention that, without proof that appellants possessed the

computer equipment needed to transcribe the ESN-MINs, the evidence failed to establish that the

unprogrammed ESN-MINs could actually be used to obtain cellular telephone services. We do not

agree because the evidence viewed as a whole would permit a reasonable factfinder to conclude that

the ESN-MINs were in fact realistically and foreseeably capable of being used to obtain cellular

telephone services.

In assessing the sufficiency of the evidence we must view it in the light most favorable to

the government, making all reasonable inferences and credibility choices in the government's favor.

United States v. Lyons, 53 F.3d 1198, 1200 (11th Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 350,

133 L.Ed.2d 246 (1995). To sustain a verdict of guilt the evidence "need not exclude every

reasonable hypothesis of innocence" or be "wholly inconsistent with every conclusion except that

of guilt," as long as a reasonable factfinder choosing from among reasonable constructions of the

evidence could find that the evidence establishes guilt beyond a reasonable doubt. United States v.

Kelly, 888 F.2d 732, 740 (11th Cir.1989). This standard of review applies to both direct and

circumstantial evidence. United States v. Ismoila, 100 F.3d 380, 387 (5th Cir.1996), cert. denied, ---

U.S. ----, 117 S.Ct. 1712, --- L.Ed.2d ---- (1997).

While appellants are correct that unprogrammed ESN-MINs in isolation cannot be used to

obtain cellular telephone services, the evidence in this case established that appellants did not

possess the ESN-MINs in isolation. According to undisputed evidence appellants also possessed

numerous devices used to store such ESN-MINs and transmit them to obtain cellular telephone

13
The fact that the computer is only used initially to combine the two means of account
access, which thereafter can be used immediately and exclusively in conjunction with one
another to access cellular subscribers' accounts, further supports the conclusion that the ESN-
MINs are means of account access that can be used in conjunction with another access device to
obtain services. Thus even if the computer constitutes "device-making equipment" under §
1029(e)(6) as appellants contend, the computer's role in facilitating the use of ESN-MINs in
conjunction with microchips does not alter the fact that the ESN-MINs can be used in
conjunction with microchips to obtain cellular telephone services.
service. Moreover, appellants were emitting numerous other such unauthorized ESN-MINs to place

cellular telephone calls and had done so extensively over a period of months.14

Experts testified that whereas legitimate ESNs and MINs are programmed into microchips

by cellular telephone manufacturers and service providers, unauthorized ESN-MINs such as those

appellants were using must be illicitly programmed using cloning equipment. The testimony further

revealed that an unauthorized ESN-MIN can be used only until the legitimate subscriber detects and

reports the unauthorized use. When viewed favorably to the government as it must be in assessing

the sufficiency of the evidence, see Lyons, 53 F.3d at 1200, this testimony supports the inference that

appellants could not have sustained their high-volume unauthorized calling operation over an

extended period without regularly identifying and activating new unauthorized ESN-MINs.

The expert testimony further established that, although cloning requires special software and

accessories to link a personal computer to a cellular telephone's microchip, the process can be

accomplished within thirty seconds to three minutes. From this testimony a reasonable jury could

infer that the process could be completed quickly and discreetly in many locations without complex

technology or highly specialized skills, and thus would have been readily accessible to persons

knowledgeable about and extensively involved in cloned cellular telephone activity. A reasonable

factfinder could thus conclude that appellants' access to cloning equipment or services was regular

and not merely occasional or sporadic.

Appellants simultaneously possessed over fifteen distinct means of account access

corresponding to more than fifteen distinct subscribers' accounts. Fourteen of those account

combinations were stored on microchips to allow immediate transmission. While the others were

stored in a form that required an added step before they could be emitted to place cellular telephone

calls, the surrounding evidence demonstrated that an ongoing cloned cellular telephone operation

14
The extensiveness of appellants' operation was established by the testimony of a customer
who had used appellants' service several times per week over several months and had regularly
seen "many people waiting" to place calls. Ledgers documenting hundreds of calls corroborated
this evidence of heavy and continuous use of appellants' telephones.
like appellants' would have had access to the means to complete that added step.15 Indeed, as the

district court emphasized in denying the motions for judgment of acquittal, several of the

unprogrammed combinations had actually been used to place unauthorized calls.

In light of the evidence that the precise ESN-MINs at issue were actually used to obtain

cellular telephone services, that appellants had extensively used and were extensively using other

such unauthorized ESN-MINs to place cellular telephone calls, and that cloning equipment and

processes were not particularly complex or inaccessible under the circumstances, a reasonable

factfinder could conclude that the additional ESN-MINs were capable of being used to obtain

cellular telephone services even absent proof of cloning implements in appellants' immediate

possession.16 Because the evidence was sufficient to prove that the unprogrammed ESN-MINs

constituted additional access devices, and thus that appellants possessed and conspired to possess

fifteen or more access devices, we affirm the denial of the motions for judgment of acquittal and the

verdicts of guilt. See Lyons, 53 F.3d at 1200.

III.

At sentencing the district court found that appellants' call sell operation had caused

15
In United States v. Nguyen, 81 F.3d 912 (9th Cir.1996), the appellant, who possessed
account numbers and blank credit cards but no encoder with which to program the account
numbers onto the cards' magnetic strips, argued that the cards did not constitute access devices
"in the absence of evidence that the card and number could actually cause a debit to an account
or would be so used." Id. at 914. Citing circumstantial evidence that the appellant would have
had access to the means to combine the account numbers with the cards, the court held that the
unprogrammed cards were access devices despite the lack of an encoder in the appellant's
possession. See id. at 915. While Nguyen analyzed § 1029(e)(1)'s definition of "access device"
in the context of a sentencing issue governed by a preponderance of the evidence standard, it
nonetheless recognized that a means of access can constitute an access device even if use of that
means of access requires an added step involving equipment that is not immediately available.
See also United States v. Caputo, 808 F.2d 963, 966 (2d Cir.1987) (holding, without analysis of
steps required to put account information to use, that credit card numbers printed on restaurant
checks were access devices because § 1029 imposes no "requirement that the [account] number
be printed on any particular medium").
16
It is undisputed that ESN-MINs can potentially be used in conjunction with microchips to
obtain cellular telephone services. Because the evidence established that this potential was
realistic and foreseeable, we need not decide whether the definition of access device excludes
means of account access whose capability of use is remote or speculative. Nor need we decide
whether the analysis would differ under the amended definitional section that does not govern
this case. See supra note 5.
$42,124.32 in losses to cellular telephone companies. Accordingly the court applied United States

Sentencing Guidelines § 2F1.1(b)(1)(F) which increases the offense level by five when criminal

conduct results in losses exceeding $40,000. While conceding that some loss, "maybe even a

substantial loss, was attributable to [their] call sell operation,"17 appellants contend that the

government failed to carry its burden of proving the amount of loss. "When a defendant challenges

one of the factual bases of his sentence ... the Government has the burden of establishing the

disputed fact by a preponderance of the evidence." United States v. Lawrence, 47 F.3d 1559, 1566

(11th Cir.1995). This burden must be satisfied with "reliable and specific evidence." Id.18 We

review the district court's loss determination for clear error. See United States v. Goldberg, 60 F.3d

1536, 1539 (11th Cir.1995).

The government initially ascribed to appellants $80,924.63 in unauthorized calls that had

been made using the ESN-MIN combinations found in appellants' possession. The evidence

established, however, that multiple unauthorized users often use the same unauthorized ESN-MIN

and that calls cannot be conclusively traced to a particular origin. To establish which of the

$80,924.63 in calls were more likely than not attributable to appellants, the government presented

a "cell site" analysis to identify the geographic area from which the calls emanated. As the

government's expert explained, cell towers, each servicing an area referred to as a "cell site," are

located across a geographic region to forward cellular telephone signals to the "cellular switch" that

processes calls.19 Cell sites are further divided into sectors. While cellular telephone company

records do not reveal the precise location from which a call was placed, they do reveal the cell site

and sector from which the call originated.20

Appellants' call sell service was located in cell site 18, which covered an area of one to one

17
Appellants' Brief at 22.
18
See also United States v. Bernardine, 73 F.3d 1078, 1080-81 (11th Cir.1996) (holding that
government must prove facts warranting more serious sentence with evidence bearing "sufficient
indicia of reliability to support its probable accuracy").
19
See Transcript of Sentencing Proceedings at 36-37.
20
See id. at 37, 39.
and three quarter square miles. The government's expert described the area as "very congested."21

Test calls placed from appellants' store originated from sector A of that cell site.22 However, in

attributing $42,124.32 in unauthorized calls to appellants, the government's expert included calls

originating from both sector A and sector B because appellants' store was "right on the corner" of

those two sectors.23 When asked the proportion of the $42,124.32 in calls that originated in sector

A versus sector B, the expert responded that she did not know.24

The testimony also revealed that during peak calling times when an area's capacity is

exceeded calls may be diverted or "bounced" to adjacent sectors and sites, making those calls

indistinguishable from calls that actually originated in the adjacent sectors or sites. Thus some calls

originating in cell site 18 sectors A and B but diverted elsewhere would be excluded from the record

of calls placed from those sectors, while some calls that actually originated elsewhere would be

improperly identified as originating in those sectors if heavy calling in the surrounding sectors or

sites had diverted those calls into cell site 18 sectors A and B.25

For sentencing purposes the loss attributable to a defendant "need not be determined with

precision. The court need only make a reasonable estimate of the loss, given the available

information." U.S.S.G. § 2F1.1(b), comment (n. 8). While estimates are permissible, courts "must

not speculate concerning the existence of a fact which would permit a more severe sentence under

the guidelines." United States v. Wilson, 993 F.2d 214, 218 (11th Cir.1993). We must decide
whether the district court erred by finding that the government proved by a preponderance of the

evidence that the loss attributable to appellants could be reasonably estimated without impermissible

speculation at $42,124.32.

The cell site analysis offered by the government and relied on by the district court contained

21
See id. at 39.
22
See id. at 44, 47. Cell site 18 had three sectors.
23
See id. at 47.
24
See id.
25
The surrounding sites covered an area of ten to twenty square miles.
inherent uncertainties. Although all test calls placed from outside appellants' store originated from

sector A, the government also included all calls from sector B on the grounds that appellants' store

was "on the corner" between the two sectors. While the fact that appellants' store was at the

intersection between the two sectors suggests that appellants' calls could have gone to either sector,

it does not, without more, support the inference that appellants were responsible for all calls from

both sectors when none of the test calls originated from sector B. Moreover, while some calls may

have "bounced" between sectors A and B, there was no evidence that more calls bounced out of

sector A than into it and thus no evidence as to what portion, if any, of the sector B calls was more

likely than not attributable to appellants.26

The evidence revealed that because bouncing occurs across cell sites as well as sectors, some

of the calls shown as originating in cell site 18 sectors A and B may have actually originated in other

cell sites. When questioned about the relative levels of calling traffic in cell site 18 versus an

adjacent cell site the government's expert could not identify which cell site was busier and thus more

likely to divert more calls to the other.27 Therefore the evidence was inconclusive as to whether the

number of calls bounced into cell site 18 from elsewhere, and thus improperly attributed to

appellants, exceeded the number calls bounced out of cell site 18 and thus improperly excluded from

the analysis.28

To justify a five-level increase under U.S.S.G. § 2F1.1(b)(1)(F), the government was
required to prove by a preponderance of the evidence that a "reasonable estimate" of the losses

exceeded $40,000. The government's estimate of $42,124.32, which the district court did not

26
The government's expert testified that bouncing occurred primarily during rush hours
totalling approximately four hours per day. The evidence provided no basis from which to
estimate the proportion of the calls that occurred within those times and no basis from which to
determine which sector was busier and thus more likely to divert calls to the other.
27
See id. at 49.
28
The analysis assumes that appellants were the only unauthorized users of the ESN-MINs in
their concededly "very congested" calling area, although the government's expert stated that
another fraudulent scheme had generated unauthorized calls from many locations including cell
site 18 and that the government did not know whether the ESN-MINs in question were obtained
from or shared with anyone else in the neighborhood. See id. at 57.
discount despite conceded uncertainties in the analysis, was only $2,124.31 above the minimum

amount required by § 2F1.1(b)(1)(F). The government offered no evidence to support an inference

that the margin of error in its calculation was less than $2,124.31 or that the analysis was more likely

to underestimate than to overestimate the calls attributable to appellants. Thus the government did

not establish by a preponderance of the evidence that the amount of loss could be reasonably

estimated at over $40,000.29 Because the government's figure of $42,124.32 was not a "reasonable

estimate of the loss," reliance thereupon constitutes clear error. See Wilson, 993 F.2d at 218.30

IV.

For the foregoing reasons we affirm the judgments of conviction, reverse the loss

determination and remand for resentencing.

29
The government suggests that the $42,124.32 figure resolved uncertainties in favor of
appellants because it excluded nearly $40,000 in additional calls that used the ESN-MINs in
question. However, there was no evidence linking appellants to the additional calls, whose
origins were geographically remote from appellants' call sell service. The exclusion of those
calls thus does not resolve uncertainties as to whether appellants generated all the relevant
unauthorized calls from the "congested" area surrounding their call sell service. Since the
amount of loss can be estimated from "general factors" such as the "nature and duration" of the
conduct, see § 2F1.1(b)(1), comment (n.8), the government need not attribute specific calls to
appellants. The government must, however, offer reliable, specific evidence estimating the
volume of unauthorized calls appellants generated and the dollar amount reasonably attributable
thereto. The evidence failed to establish by a preponderance that a reasonable estimate of these
losses exceeds $40,000. We express no opinion as to whether on remand the government should
be permitted to offer additional evidence. We leave that matter to the discretion of the trial
court.
30
Appellants were also ordered to pay $42,124.32 in restitution. Our conclusion applies to
both the offense level computation and the order of restitution.