United States v. Inman

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT June 7, 2005
_____________________
Charles R. Fulbruge III
04-10136 Clerk
_____________________

UNITED STATES OF AMERICA

Plaintiff - Appellee
v.

FRANKLIN DELANO INMAN

Defendant - Appellant
___________________

Appeal from the United States District Court
for the Northern District of Texas
___________________

Before GARWOOD, BENAVIDES, and STEWART, Circuit Judges.

BENAVIDES, Circuit Judge:

Appellant Franklin Delano Inman appeals his conviction and

sentence for wire fraud under 18 U.S.C. § 1343 and access device

fraud under 18 U.S.C. § 1029(a)(2). As discussed below, we

affirm Inman’s conviction and prison sentence but remand the

restitution portion of Inman’s sentence for modification.

I. Background

From April 1997 through March 2001, Inman worked as a

computer system administrator in the information technology

(“IT”) department of Corning Systems (“Corning”), a wholesale

business that manufactures equipment for telephones. During that

time, Jean Maddox (“Maddox”) worked in Corning’s IT department as

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a leasing administrator. Her duties included purchasing computer

parts for employees in the company. Corning issued to Maddox a

Wachovia VISA credit card, which Maddox, Inman, and other IT

employees were authorized to use for company purchases, but not

for personal purchases.

During his employment with Corning, Inman repeatedly used

the VISA card to make purchases from a company named Cutting Edge

Technologies (“Cutting Edge”). Cutting Edge was a shell company

(an entity that sold no product or service) that Inman had

started. The shell company was able to make phantom credit card

sales through a merchant account set up in October, 1997, with

Nova Information Systems, a credit card processing company.

Proceeds from the phantom purchases were deposited by Nova into a

Bank One account that Inman had opened for “Inman Consulting,

Incorporated” in September 1997.

Maddox became suspicious of Inman in early 2001 because of

the numerous purchases from Cutting Edge that appeared on the

VISA statement and because she never saw any of the items Inman

allegedly purchased. After Maddox reported the suspicious

activity to the IT Department Manager, it was discovered that

Cutting Edge did not really exist. When asked to explain the

purchases, Inman told the IT Department Manager that he would

explain the transactions after he returned to work from vacation.

However, Inman never returned.

Subsequently, a jury convicted Inman on ten counts of wire

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fraud in violation of 18 U.S.C. § 1343 and one count of access

device fraud in violation of 18 U.S.C. § 1029(a)(2). The

district court sentenced Inman to 21 months of imprisonment, a

3-year term of supervised release, a $1,100 mandatory special

assessment, and $135,283.11 in restitution.

II. Discussion

Inman challenges his conviction, restitution order, and

sentence enhancements. First, he argues that there was

insufficient evidence to uphold his conviction for access device

fraud under 18 U.S.C. §1029(a)(2). Second, he contends that the

trial court’s restitution order was improper because it exceeded

the temporal scope of the indictment. Third, Inman argues that

his prison sentence is unconstitutional because the district

court enhanced his sentence based on facts not found by a jury.

We discuss each argument in turn.

A. Insufficiency of Evidence

Inman first argues that there is insufficient evidence to

sustain his conviction under 18 U.S.C. § 1029(a)(2) because one

of the statutory elements of that provision, the use of an

unauthorized access device, was not proved at trial. Thus, he

contends that the district court’s denial of his timely motion

for a new trial was erroneous.

We review the evidence to determine whether any reasonable

trier of fact could have found that the evidence established

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guilt beyond a reasonable doubt. United States v. Martinez, 975

F.2d 159, 160-61 (5th Cir. 1992). We view the evidence in the

light most favorable to the government, drawing all reasonable

inferences from the evidence in favor of the jury’s verdict. Id.

at 161; United States v. Shabazz, 993 F.2d 431, 441 (5th Cir.

1993).

Section 1029(a)(2) provides that a person who “knowingly and

with intent to defraud traffics in or uses one or more

unauthorized access devices during any one-year period, and by

such conduct obtains anything of value aggregating $1,000 or more

during that period” is subject to criminal penalties. 18 U.S.C. §

1029(a)(2).

According to Inman, the evidence at trial showed that the

credit card was an authorized access device, rather than an

unauthorized one, and that Corning was aware of the charges he

made on the credit card. Inman acknowledges that arguably he may

have exceeded his authority to charge on the card, but he asserts

that such action does not violate § 1029(a)(2). We disagree.

Section 1029(e)(3) defines an “unauthorized access device”

as “any access device that is lost, stolen, expired, revoked,

canceled, or obtained with intent to defraud.” 18 U.S.C. §

1029(e)(3). Because neither party claims that the VISA credit

card used by Inman was stolen, expired, revoked, or canceled, the

relevant inquiry here is whether the card was “obtained with

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intent to defraud.”

The evidence at trial showing that Inman intended to defraud

Corning when he obtained the card from Maddox was substantial.

The government presented evidence that before obtaining the VISA

card, Inman had already created the fraudulent company, Cutting

Edge, from which he would later falsely purchase products;

acquired a merchant account for the company; and opened a

recipient bank account for the transfer of the credit card

transaction proceeds. Thus, a jury would have sufficient evidence

to find that Inman obtained the card with intent to fraudulently

collect money from the VISA card issuer at Corning's expense.

Moreover, while Inman had authorization to use the VISA card

for company purchases, he was unauthorized to use the card for

personal purchases. Thus, Inman directly violated Corning’s

mandate against using the card for personal purchases when he

fraudulently made phantom purchases from Cutting Edge. Such

misuse of the card served as further evidence of an unauthorized

access device. See H.R. Rep. 98-894, *14, 1984 U.S.C.C.A.N. 2689,

**3700, 3703 (describing an unauthorized access device as a

“genuine access device[] being used without authority” and

“genuine but misused” in distinguishing between “counterfeit

access device” as defined in § 1029(E)(2) and an “unauthorized

access device” in § 1029 (E)(3)).

B. Restitution Order

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 Inman next argues that the district court erred in ordering

restitution in the amount of $ 135,283.11 because the order

exceeds the amount of loss incurred during the temporal scope of

the indictment. The indictment charged Inman with actions

occurring from March, 2000, to February, 2001. The amount of loss

resulting from actions during that time period totaled

$64,501.97. However, the district court calculated Inman’s

restitution at $135,283.11 based on actions occurring between

November 6, 1997, and February 22, 2001.

Because Inman did not raise his challenge to the restitution

order below, we review for plain error. See United States v.

Olano, 507 U.S. 725, 731-32 (1993). Thus, Inman must show that

(1) there is an error, (2) the error is plain, and (3)the error

affects substantial rights. Id. at 732. When all three of these

requirements are met, we will exercise our discretion to correct

the error if it “seriously affect[s] the fairness, integrity or

public reputation of judicial proceedings.” Id. at 734 (quoting

United States v. Young, 470 U.S. 1, 15 (1985)).

Here, Inman has shown that there is an error that is plain.

A defendant sentenced under the Mandatory Victim Restitution Act

(“MVRA”) is only responsible for paying restitution for the

conduct underlying the offense for which he was convicted. United

States v. Mancillas, 172 F.3d 341, 343 (5th Cir. 1999). “[W]here

a fraudulent scheme is an element of the conviction, the court

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may award restitution for ‘actions pursuant to that scheme.’”

United States v. Cothran, 302 F.3d 279, 289 (5th Cir. 2002)

(quoting United States v. Stouffer, 986 F.2d 916, 928 (5th Cir.

1993)). However, the restitution for the underlying scheme to

defraud is limited to the specific temporal scope of the

indictment. See United States v. Pepper, 51 F.3d 469, 473 (5th

Cir. 1995) (affirming district court’s restitution order based on

fraudulent scheme where indictment gave dates during which the

scheme occurred and described the actions of which the scheme to

defraud consisted); Stouffer, 986 F.2d at 928-29 (affirming

district court’s inclusion of all losses caused by a scheme to

defraud where “the scheme to defraud was specifically defined in

the indictment–-i.e., the indictment described in detail the

duration of [the scheme] and the methods used”). Here, Inman’s

restitution order under the MVRA was based, in part, on

transactions that were not alleged in the indictment and occurred

over two years before the specified temporal scope of the

indictment. Thus, the district court plainly erred.

The third prong of the plain error test is also met. The

restitution order affected Inman’s substantial rights because the

outcome of the district court proceedings would have been

different if the error had not occurred. See Olano, 507 U.S. at

734. Had the district court based the restitution order on the

temporal scope provided in the indictment, the restitution order

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could not have exceeded $64,501.97. This variance of over

$70,000 merits correction.

C. Constitutionality of Sentence Enhancements

Finally, Inman argues that his sentence is unconstitutional

under United States v. Booker, --- U.S. ----, 125 S.Ct. 738

(2005), because his sentence was based on facts neither admitted

by Inman nor found by a jury.

Under the United States Sentencing Guidelines, Inman’s base-

offense level was calculated at 6. This base-offense level,

given Inman’s criminal history category, would have yielded a

term of imprisonment of 0 to 6 months. However, the district

court applied a 2-level enhancement to Inman’s offense level

pursuant to U.S.S.G. § 2F1.1(b)(2) for engaging in more than

minimal planning and a 7-level enhancement under U.S.S.G. §

2F1.1(b)(1)(H) for a total loss to victims above $120,000. Under

the guidelines, the resulting total offense level of 15 resulted

in an imprisonment range of 18 to 24 months. The district court

sentenced Inman to 21 months of imprisonment. During the

pendency of this appeal, the U.S. Supreme Court issued its

opinion in Booker, 125 S.Ct. 738, rendering the Guidelines,

including the provisions for enhancing a defendant’s sentence

based on facts not found by the jury, advisory rather than

mandatory. Inman argues that under the holding of Booker, his

prison sentence is unconstitutional. Because Inman raises his

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challenge to his prison sentence for the first time on appeal, we

review for plain error. United States v. Mares, 402 F.3d 511, 520

(5th Cir. 2005); Olano, 507 U.S. at 731-32.

The first prong of the plain error test is met here. Inman’s

enhancements were based on the amount of planning in which Inman

engaged and a total loss of over $120,000, neither of which were

charged in the indictment or found by a jury. Thus, Inman’s

sentence was enhanced based on facts found by the judge under a

mandatory Guidelines regime in violation of the Sixth Amendment.

See Mares, 402 F.3d 520-21.

The error is also plain in that it is clear at the time of

our review. See id. at 521; Johnson v. United States, 520 U.S.

461, 468 (1997) (holding that error is plain for purposes of

plain error review as long as the law regarding the issue is

settled at the time of appellate consideration).

However, the third prong of the plain error inquiry, which

requires the appellant to show that the error affected

substantial rights, is not met here. Inman has pointed to no

evidence that the sentencing judge would have imposed a different

sentence under an advisory scheme rather than a mandatory one.

See Mares, 402 F.3d at 521. Neither has our review of the record

revealed any such evidence. See United States v. Villanueva,

—F.3d ----, 2005 WL 958221, *7 (5th Cir. Apr. 27 2005) (finding

no effect on substantial rights where “there is no indication in

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the record . . . that gives us any clue” as to what the

sentencing judge would have done absent a mandatory sentencing

scheme); Mares, 402 F.3d at 521 (same). To the contrary, the

sentencing judge expressed his belief that the sentence was

appropriate for Inman’s offense in stating, “A sentence at the

middle of the guideline range meets the Court’s sentencing

objectives of punishment and deterrence.” We thus find no plain

error in Inman’s sentence of imprisonment.

III. Conclusion

For the above stated reasons, we AFFIRM Inman’s conviction

and sentence, with the exception of the restitution order, which

we REMAND to the district court for modification consistent with

this opinion.

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