UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 11-4549
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
IHEANYI FRANK CHINASA,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond. James R. Spencer, Chief
District Judge. (3:10-cr-00169-JRS-1)
Submitted: June 19, 2012 Decided: July 24, 2012
Before TRAXLER, Chief Judge, and WILKINSON and DUNCAN, Circuit
Judges.
Affirmed by unpublished per curiam opinion.
John O. Iweanoge, II, IWEANOGE LAW CENTER, Washington, D.C., for
Appellant. Neil H. MacBride, United States Attorney,
Alexandria, Virginia, Michael C. Moore, Assistant United States
Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Richmond,
Virginia; Denis J. McInerney, Chief, Fraud Section, Kevin B.
Muhlendorf, Trial Attorney, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Iheanyi Frank Chinasa appeals his convictions and
sentence for crimes arising from a scheme to fraudulently obtain
millions of dollars worth of computer parts. Finding no error,
we affirm.
I.
Cisco Systems, Inc., manufactures and sells
telecommunications and information technology equipment and
related products. It sells products directly as well as through
authorized resellers. It also offers warranties for its
products, that, depending on the price, entitle the customer to
different levels of service or product replacement.
Customers experiencing problems with a Cisco product
and in need of technical assistance may communicate with Cisco
via telephone or email, or through Cisco’s website. Cisco
maintains a worldwide network of Technical Assistance Centers
(TACs) that process service requests concerning its products.
When a TAC receives a service request, a Cisco employee will
determine whether the problem can be resolved without replacing
the product in question, which is the case 70-80% of the time.
If replacement is necessary, then in some cases Cisco’s warranty
will require a process known as advance replacement, in which
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Cisco replaces the product in question with a new or refurbished
product before the customer has even returned the faulty part.
Robert Chambliss was employed from August 2007 through
June 2010 at Packet 360, an authorized reseller of Cisco
products based in Glen Allen, Virginia. During that time,
Chambliss worked extensively with Cisco equipment, often
initiating service requests with Cisco on behalf of Packet 360
clients. Before and during this time, Chambliss also had a side
business selling computer equipment on eBay.
Chambliss met Chinasa in 2004 through his side
business. Chinasa told Chambliss that he lived in Gaithersburg,
Maryland, and ran a business called DataNet Communications.
When Chambliss began working for Packet 360, Chinasa asked
Chambliss to help him by using warranties purchased for Packet
360 clients to replace malfunctioning Cisco products. Chambliss
agreed, using a warranty contract held by Medicorps Health, even
though Chinasa had no right to make claims under Medicorps’s
warranty. Chinasa also eventually purchased his own warranty to
use for some returns.
From September 2006 to May 2010, Chinasa and Chambliss
initiated hundreds of service requests with Cisco, causing Cisco
to ship parts worth millions of dollars. These requests shared
many common characteristics. First, each contained a specific
complaint that the referenced part was either not responding or
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not powering up, and that other parts worked in the same
chassis. Chambliss had told Chinasa that use of such wording
would cause Cisco to send a replacement part instead of trying
to resolve the problem through on-line trouble-shooting. Use of
that verbiage was important to the scheme because normally only
20-30% of service requests received by Cisco resulted in
shipment of a replacement part.
Chinasa and Chambliss had the parts delivered to
different addresses in order to avoid detection. Chinasa
instructed Chambliss to have the parts shipped to Chambliss’s
house, to Chinasa, and to Chambliss’s friends located in
Richmond, Virginia. Chinasa (and others) periodically travelled
from Gaithersburg to Chambliss’s house to pick up the parts
Cisco had sent and to drop off the parts Chambliss was to send
to Cisco.
In the fall of 2009, Cisco became aware of Chinasa’s
and Chambliss’s scheme and started tracking their service
requests and intercepting parts that they returned. Initial
inspections of intercepted parts revealed that the “returned”
parts in fact were not genuine Cisco products. Indeed, none of
the intercepted parts were found to be genuine Cisco products.
The transactions also contained considerable indicia
of fraud. For example, Chambliss often used the warranties
purchased for Packet 360 customers even though the product
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sought was for Chinasa. He also started using a second Cisco
user name after Cisco flagged the first one for initiating too
many service requests. Additionally, Chambliss did business in
the names of shell companies and fictitious entities. Finally,
Chambliss had replacement parts shipped to friends’ home
addresses and to the home address of Zainab Kamara, a DataNet
employee.
Chinasa and Chambliss were eventually charged in a
superseding indictment with one count of conspiracy to commit
mail and wire fraud, in violation of 18 U.S.C.A. § 1349 (West
Supp. 2012) (Count 1); nine counts of mail fraud, in violation
of 18 U.S.C.A. § 1341 (West Supp. 2012) (Counts 2-10); two
counts of wire fraud, in violation of 18 U.S.C.A. § 1343 (West
Supp. 2012) (Counts 11-12); and one count of obstructing an
official proceeding, in violation of 18 U.S.C.A. § 1512(c)(2)
(Count 13). Chinasa pled not guilty and proceeded to trial.
At the close of evidence, the district court dismissed
Count 12 on the government’s motion and granted Chinasa’s motion
to dismiss Count 7. The jury found Chinasa guilty of the
remaining counts.
The district court imposed a sentence of 84 months’
imprisonment. Chinasa was also held jointly and severally
responsible with Chambliss for $18,761,825 in restitution.
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II.
A.
Chinasa first argues that the evidence was
insufficient to support his convictions for conspiracy to commit
mail and wire fraud and for the substantive offenses of mail and
wire fraud. We disagree.
We must sustain a jury verdict “if there is
substantial evidence, taking the view most favorable to the
Government, to support it.” Glasser v. United States, 315 U.S.
60, 80 (1942). When we undertake this review, “the relevant
question is whether, after viewing the evidence in the light
most favorable to the prosecution, any rational trier of fact
could have found the essential elements of the crime beyond a
reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319
(1979) (emphasis omitted).
The evidence was easily sufficient to prove that
Chinasa committed mail and wire fraud and that he and Chambliss
conspired to do so. Chambliss explicitly testified that he and
Chinasa conspired to defraud Cisco. As Chambliss explained,
each of their transactions with Cisco began with, and was based
on, a lie that a particular part purportedly was not responding
or not powering up. Chinasa gave Chambliss the serial numbers
to use, and Chinasa knew the statements Chambliss was making
about the parts were false, as Chinasa did not even deliver a
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part to Chambliss until after Chambliss had filed the
corresponding claim. Moreover, the parts Chinasa provided
Chambliss to be “returned” to Cisco were counterfeit. And, in
light of the evidence that the scheme was a coordinated effort
between Chambliss and Chinasa, the jury certainly could have
reasonably found that each of the mailings and the wire
transmissions on which the substantive counts against Chinasa
were based were reasonably foreseeable to Chinasa. See
Pinkerton v. United States, 328 U.S. 640, 646-47 (1946).
Chinasa argues that the conspiracy conviction under 18
U.S.C.A. § 1349 should be overturned because the indictment did
not allege any overt act in furtherance of the conspiracy and
the government did not prove such an act. However, even
assuming that Chinasa has properly preserved this issue, 1 § 1349
does not contain any overt act requirement. See United States
v. Fishman, 645 F.3d 1175, 1195 (10th Cir. 2011). An overt act
is an element under the general conspiracy statute, which
requires as an element that one or more of the conspirators “do
an[] act to effect the object of the conspiracy.” 18 U.S.C.A.
1
The government maintains that the issue is not preserved
because Chinasa did not object to the jury instructions in the
district court and did not challenge the indictment before
trial.
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§ 371 (West 2000). Section 1349, however, does not contain
equivalent language. The Supreme Court, construing other
conspiracy statutes that do not explicitly state that proof of
an overt act is an element, has held that their plain language
demonstrates that an overt act is in fact not an element. See
Whitfield v. United States, 543 U.S. 209, 214 (2005) (construing
18 U.S.C. § 1956(h)); Salinas v. United States, 522 U.S. 52, 63
(1997) (construing 18 U.S.C. § 1962(d)); United States v.
Shabani, 513 U.S. 10, 17 (1994) (construing 21 U.S.C. § 846).
As the Whitfield Court explained, “Congress has included an
express overt-act requirement in at least 22 other current
conspiracy statutes, clearly demonstrating that it knows how to
impose such a requirement when it wishes to do so.” 543 U.S. at
216. 2
B.
At trial, the government introduced Government Exhibit
14A, a compact disc that contained the service requests and
2
Chinasa cites United States v. Hedgepeth, 418 F.3d 411
(4th Cir. 2005), and United States v. Dozie, 27 F.3d 95 (4th
Cir. 1994) (per curiam), for the proposition that commission of
an overt act is an element of conspiracy to commit mail or wire
fraud in violation of 18 U.S.C. § 1349. However, the statements
in Hedgepeth and Dozie indicating that proof of an overt act is
an element of conspiracy under § 1349 are merely non-binding
dicta. See Hedgepeth, 418 F.3d at 420; Dozie, 27 F.3d at 97.
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shipping information for 557 product returns that Chinasa and
Chambliss initiated between 2007 and 2010. Over a defense
objection, the government also introduced a compact disc
containing a chart prepared by Cisco employee Tony Barberi that
summarized the contents of the service requests and shipping
information contained in Government Exhibit 14A. The court also
admitted: (a) a summary chart establishing the total number of
shipments linked with certain user names and shipping addresses,
as well as the value of those parts; and (b) a summary chart of
transactions specifically charged in the superseding indictment.
Chinasa argues that the district court erred in
admitting the summary charts. We review for abuse of discretion
a district court’s decision to admit evidence. See United
States v. Lighty, 616 F.3d 321, 351 (4th Cir. 2010). We find no
abuse of discretion here.
Summary charts may be used when they aid the jury in
understanding the summarized evidence. See United States v.
Loayza, 107 F.3d 257, 264 (4th Cir. 1997). Chinasa contends
that the admission of the three charts was improper for three
reasons: (1) they were not relevant under Federal Rule of
Evidence 401; (2) they were unduly prejudicial under Federal
Rule of Evidence 403 as they unfairly suggested that all of the
parts underlying the claims were counterfeit; and (3) he was not
permitted to inspect every piece of equipment underlying the
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charts. None of these reasons warranted excluding the charts,
however.
First, the charts were undoubtedly relevant. If for
no other reason, the sheer number of the requests and the use of
the shell companies and multiple delivery addresses tended to
show Chinasa’s intent to defraud. Chinasa argues that admission
of the charts was prejudicial in that they “caused the jury to
believe [Chinasa] was responsible for far more fraud than the
government was actually able to prove beyond a reasonable
doubt.” Appellant’s brief at 12. However, Chinasa does not
explain how that was the case. Barberi specifically testified
that the charts do not “contain any representation that any
specific transaction is fraudulent.” J.A. 316. Chinasa’s
contention that the charts were not admissible because he was
not given the opportunity to inspect each of the parts
referenced in the charts fails for the same reason. The charts
purported only to summarize Chinasa’s service requests and
shipping information; they did not purport to provide
information about the parts returned to Cisco.
C.
Chinasa next challenges his sentence, specifically the
guideline offense-level enhancements he received for loss
calculation and leadership role. Because Chinasa’s arguments
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relate solely to the district court’s factual findings
concerning the loss amount and leadership role rather than any
question regarding the interpretation of the guidelines, we
review for clear error only. See United States v. Miller, 316
F.3d 495, 503 (4th Cir. 2003).
Chinasa first objects to application of an enhancement
for leadership role pursuant to U.S.S.G. § 3B1.1(a), which
requires a four-level increase in offense level when the
defendant was an “organizer or leader of a criminal activity
that involved five or more participants or was otherwise
extensive.” Chinasa does not challenge the determination
regarding the extensiveness of the criminal activity, but he
does challenge the finding that he was an organizer or leader.
However, the evidence was plainly sufficient to support that
finding. Evidence showed that Chinasa recruited Chambliss to
participate in this scheme. See U.S.S.G. § 3B1.1 cmt. n.4
(explaining that “recruitment of accomplices” is a factor in
determining leadership role). It also showed that Chinasa
directed the activities of the other individuals involved in the
scheme, including instructing Chambliss what parts to order and
where to have them shipped and directing Chambliss to recruit
others to sign for parts and to use multiple addresses and
business names in shipping the parts. Chinasa also paid
Chambliss. Indeed, the fact that the conspiracy netted Chinasa
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parts valued at millions of dollars while Chinasa paid Chambliss
only a few hundred thousand dollars is further evidence
supporting the enhancement. See U.S.S.G. § 3B1.1 cmt. n.4
(providing that “claimed right to a larger share of the fruits
of the crime” is a factor in determining leadership role).
Chinasa’s argument concerning the loss amount fares no
better. In calculating the loss, the district court estimated
the retail list price of the parts obtained in the scheme, then
discounted that amount by 40% to reflect the approximate
discount that Cisco gives its distributors, which left
$20,160,766. Recognizing that this amount was very close to the
bottom of the more-than-$20-million-to-$50-million loss range,
and noting the possibility that Cisco may have recovered some of
its losses by refurbishing some “returned” parts and reselling
them, the court gave Chinasa “the benefit of the doubt over into
the 7 million to 20 million range,” holding him responsible for
$18,761,625. J.A. 1012. On appeal, Chinasa does not challenge
the correctness of the $20,160,766 figure but maintains that the
district court erred in determining that Cisco’s loss even
exceeded $400,000 in light of the amounts Cisco may have netted
by refurbishing some of the parts and reselling them. We
disagree.
In calculating loss, the district court need only make
a “reasonable estimate.” U.S.S.G. § 2B1.1 cmt. n.3(C). Here,
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the evidence indicated the purpose of the scheme was to use
counterfeit Cisco parts to obtain the real thing. Thus,
regardless of whether each returned part was individually shown
to be counterfeit, the district court had reason to conclude
that the vast majority of the “returned” parts were counterfeit
and therefore not able to be refurbished and resold. In holding
Chinasa responsible for only $18,761,625, the district court
certainly gave Chinasa the benefit of the doubt, and Chinasa’s
responsibility for at least that amount was well supported by
the evidence.
III.
In sum, finding no error, we affirm Chinasa’s
convictions and sentences. We dispense with oral argument
because the facts and legal contentions are adequately presented
in the materials before the court and argument would not aid the
decisional process.
AFFIRMED
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