[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 04-12268 November 29, 2005
________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 03-00275-CR-J-20TEM
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
DARRYL ARLENE GRANT, a.k.a. Mack Hardy,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(November 29, 2005)
Before BLACK, WILSON and COX, Circuit Judges.
BLACK, Circuit Judge:
Darryl Arlene Grant appeals his sentence for producing and possessing
counterfeit corporate checks, in violation of 18 U.S.C. §§ 2 and 514. On appeal,
he argues the district court clearly erred by calculating an intended loss of
$230,009.54 and imposing a 12-level sentence enhancement under U.S.S.G.
§ 2B1.1(b)(1)(G).1 Specifically, he contends the district court’s intended loss
calculation should not have included the $182,899.54 total face value of
photocopies of stolen corporate checks found in his possession. We affirm.
I. BACKGROUND
The facts are not in dispute. We briefly address them to place the legal
issue in context. Over the course of several months in 2003, Grant and a number
of unindicted coconspirators participated in identity theft, bank fraud, theft from
the United States mails, and manufacturing and negotiating counterfeit checks.
Grant’s counsel described his client’s role in the criminal enterprise as follows:
[T]his case was about obtaining legitimate checks and specifically a
photocopy of a legitimate check and going to a home computer with
check writing software and inserting legitimate routing numbers and a
legitimate business name into your computer on your check writing
software and reproducing checks that you could then . . . go out and
attempt to negotiate.
....
1
All Guidelines citations are to the 2002 edition of the Guidelines.
2
[The photocopied checks] are -- I guess the best word is
templates. You take the body of the check. You reproduce it and
then you put in whatever amount you want to put in and attempt to
negotiate it . . . .
A federal grand jury indicted Grant for producing and possessing
counterfeit corporate checks, in violation of 18 U.S.C. §§ 2 and 514. He pled
guilty to the charge.
At his sentencing hearing, Grant argued the district court’s intended loss
calculation should not include the full face value of four photocopied checks
found in his apartment. Specifically, he objected to consideration of
(1) photocopies of two corporate checks from Professional Escrow Services,
which totaled $177,899.54, and (2) photocopies of two corporate checks from
Colony Insurance, which totaled $5000. After considering the parties’ arguments,
the district court overruled Grant’s objection, finding “the intended loss [was] the
face amount of the checks that could have actually been reproduced on the
computer because that’s how much the banks would have said were in there to
3
cover them.” Accordingly, the district court imposed a 12-level sentence
enhancement under § 2B1.1(b)(1)(G).2
II. STANDARD OF REVIEW
We review for clear error the district court’s determination regarding the
amount of loss under the Guidelines. United States v. Manoocher Nosrati-
Shamloo, 255 F.3d 1290, 1291 (11th Cir. 2001).
2
Under § 2B1.1(b)(1)(G), a twelve-level enhancement can be assessed for intended losses
of more than $200,000. The $182,899.54 total face value of the photocopied checks, plus the
$47,110 uncontested intended loss amount, brought Grant’s total intended loss calculation to
$230,009.54.
4
III. DISCUSSION
The only issue on appeal is whether a district court clearly errs by including
the full face value of photocopied corporate checks in its calculation of intended
loss.3 This issue is one of first impression in our circuit.
Section 2B1.1 of the Guidelines provides a base offense level of six for
crimes involving altered or counterfeit instruments, and includes an enhancement
based on the dollar value of the loss. “Loss” is defined as the greater of “actual
loss” or “intended loss,” where the actual loss includes “the reasonably foreseeable
pecuniary harm that resulted from the offense,” and intended loss “(I) means the
pecuniary harm that was intended to result from the offense; and (II) includes
intended pecuniary harm that would have been impossible or unlikely to occur.”
U.S.S.G. § 2B1.1 cmt. n.2(A)(i), (ii). In calculating the amount of loss, the district
court “need only make a reasonable estimate of the loss.” Id. § 2B1.1 cmt. n.2(C).
Although a “‘district court must not speculate concerning the existence of a fact
3
In his October 7, 2005, initial appeal brief, Grant for the first time asserted the district
court violated his Sixth Amendment right to trial by jury when it made extra-verdict factual
findings in a mandatory Guidelines system. Grant urged us to vacate his sentence and remand for
resentencing in light of Blakely v. Washington, 542 U.S. 296, 124 S. Ct. 2531 (2004). On
August 2, 2005, however, Grant submitted a supplemental authority brief in which he conceded
his inability to establish plain error under United States v. Booker, 543 U.S. ___, 125 S. Ct. 738
(2005). Additionally, he expressly waived his Sixth Amendment claim out of “fear[] that a
remand of this case under an advisory guidelines scheme might result in a harsher sentence.”
Accordingly, we need not address this issue.
5
which would permit a more severe sentence under the guidelines,’ its reasonable
estimate of the intended loss will be upheld on appeal.” United States v.
Dominguez, 109 F.3d 675, 676 (11th Cir. 1997) (quoting United States v. Wilson,
993 F.2d 214, 218 (11th Cir. 1993)) (citation omitted).
The other circuits to address this issue have held a district court does not
clearly err when it uses the full face value of a check to calculate intended loss. In
United States v. Osborne, 332 F.3d 1307 (10th Cir. 2003), the Tenth Circuit
considered a case involving a counterfeit check scheme similar to the one in which
Grant participated. The defendants stole checks from the mail and then used a
computer program to scan the stolen checks, alter the payee and amount, and print
counterfeit checks. Id. at 1309. In other words, the defendants utilized the stolen
checks as templates from which they could produce counterfeit checks. The
district court determined the defendants intended to use the $708,519 face value of
seized stolen and counterfeit checks and included this amount in its calculation of
the intended loss. Id.
On appeal, one of the defendants challenged the district court’s intended
loss calculation, asserting the “‘face amount of the checks at the [coconspirators’]
residence ha[d] nothing to do with the amount for which said checks would be
counterfeited.’” Id. at 1312–13. The Tenth Circuit rejected the defendant’s
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argument, noting (1) expert testimony any check with an account number could
potentially be negotiated, (2) the fact all of the checks seized from the
coconspirators’ residence had account numbers on them, and (3) the
uncontroverted fact a single stolen check would be counterfeited multiple times
for increased amounts. Id. at 1313. Based on this evidence, the Tenth Circuit
determined the district court did not clearly err in using the full face value of the
seized checks to estimate the intended loss. Id.
The Third Circuit has also held a district court does not commit clear error
when, in the absence of sufficient evidence to the contrary, it determines the
defendant intended to utilize the full face value of worthless checks. See United
States v. Geevers, 226 F.3d 186, 188 (3d Cir. 2000). In United States v. Himler,
355 F.3d 735 (3d Cir. 2004), the Third Circuit clarified the holding in Geevers.
The defendant in Himler was convicted of using two counterfeit checks to
purchase a condominium, and the district court included the full face value of the
counterfeit checks in its intended loss calculation. Id. at 738–39.4 On appeal, the
4
Grant attempts to differentiate his case from that of the defendants in Osborne and
Himler by pointing out he possessed photocopies of corporate checks, as opposed to actual
corporate checks. Because the photocopies themselves were non-negotiable, he asserts, they
cannot be said to reflect the intended loss.
This argument relies on a classic distinction without a difference. Although art gallery
curators eschew reproductions of Rembrandt paintings in favor of the originals, counterfeiters
need not be so discerning when it comes to reproductions of negotiable instruments. So long as
the photocopied checks contain the same routing numbers, business names, and account balance
7
defendant argued the district court “based its [intended loss] finding solely on the
face value amount of the forged checks and that, because this Court . . . rejected
[in Geevers] a per se rule that intended loss can be inferred from the face value of
the check, the District Court committed an error of law.” Id. at 741.
The Third Circuit dismissed the defendant’s reading of Geevers. “What
Geevers stands for is not only that it is reasonable to infer that a defendant in [the
defendant’s] position intends the full loss of the face value of his false checks, but
also that the matter ‘is not to be determined as a question of law, but as one of
fact.’” Id. (quoting Geevers, 226 F.3d at 193). After reviewing the evidence
presented against the defendant, the Third Circuit determined the district court did
not commit clear error in finding the intended loss included the full face value of
the checks. Id.5
information as the original checks, counterfeiters can effectively pursue their criminal craft.
Grant admitted his intention to use the photocopies of stolen corporate checks as templates from
which to produce counterfeit checks. In the context of his counterfeiting enterprise, we therefore
see no difference between using an actual check as a counterfeiting template and using a
photocopy of an actual check as a counterfeiting template.
5
In addition to the Third and Tenth Circuits, at least two other circuits have determined a
district court did not clearly err when it included the full face value of a check in calculating a
defendant’s sentence under the Guidelines. See United States v. Joetzki, 952 F.2d 1090, 1096–97
(9th Cir. 1991) (determining the district court did not clearly err by including the full face value
of a worthless check in calculating the amount of loss under former § 2F1.1); United States v.
Quertermous, 946 F.2d 375, 377–78 (5th Cir. 1991) (holding the full face value of stolen checks
could be attributed to the defendant as income derived from his crime for purposes of imposing a
criminal livelihood sentence enhancement under § 4B1.3); see also United States v. Haggert, 980
F.2d 8, 13 (1st Cir. 1992) (determining the district court did not err by including the full face
8
Although this appeal presents an issue of first impression in our circuit, we
do not lack analogous case law. In United States v. Manoocher Nosrati-Shamloo,
the defendant was convicted of stealing mail and using the personal information
contained therein to open credit card accounts. 255 F.3d 1290, 1290–91 (11th Cir.
2001). At the sentencing hearing, the Government presented circumstantial
evidence indicating the defendant intended to utilize all of the credit available on
the cards, and the defendant failed to present countervailing evidence. Id. at 1292.
The district court calculated an intended loss of $43,000, the amount of the
combined credit limits on the cards obtained through the stolen mail. Id. at 1291.
On appeal of the district court’s intended loss calculation, we determined
“once a defendant has gained access to a certain credit line by fraudulently
applying for credit cards, a district court does not err in determining the amount of
the intended loss as the total line of credit to which Defendant could have access,
especially when Defendant presents no evidence that he did not intend to utilize
all of the credit available on the cards.” Id. Moreover, we noted “[a] defendant’s
intent is often difficult to prove and often must be inferred from circumstantial
value of fraudulent sight drafts in calculating the amount of loss under former § 2F1.1). In this
case, the district court applied a 12-level enhancement to Grant’s sentence under § 2B1.1.
Joetzki is therefore especially relevant, because former § 2F1.1 was consolidated into § 2B1.1 on
November 1, 2001. See U.S.S.G. app. C, amend. 617.
9
evidence.” Id. at 1292 (citing United States v. Ethridge, 948 F.2d 1215, 1217
(11th Cir. 1991); Hill v. Kemp, 833 F.2d 927, 930 (11th Cir. 1987)).
In this case, Grant admitted the purpose of the photocopied Personal Escrow
Services and Colony Insurance checks was to use them as templates for producing
counterfeit checks on his personal computer. Grant also admitted (1) one of his
coconspirators opened a bank account using counterfeit checks purported to be
drawn on a Professional Escrow Services account, and (2) he had produced or
possessed counterfeit checks in order to withdraw funds from a Colony Insurance
account. The photocopied Professional Escrow Services and Colony Insurance
checks not only provided him with routing numbers and business names, but also
information about the companies’ account balances. As the Government asserted
during the sentencing hearing, “[i]f there’s a huge amount in the account,
obviously the people who are using those checks and manufacturing the
counterfeit versions know they can pass larger checks than if there’s only a $3,000
or a $5,000 amount on the check.” Additionally, law enforcement officers seized
numerous blank counterfeit checks and several boxes of check stock paper from
Grant’s apartment. All of this evidence circumstantially supports the conclusion
Grant intended to utilize the full face value appearing on the photocopies of the
Professional Escrow Services and Colony Insurance checks. And as we
10
established in Manoocher Nosrati-Shamloo, such circumstantial evidence suffices
to support an intended loss determination.
Moreover, like the defendant in Manoocher Nosrati-Shamloo, Grant failed
to produce evidence tending to show he did not intend to use the full face value of
the stolen corporate checks. Indeed, in his supplemental authority brief, Grant’s
counsel appears to concede his client’s inability to present such evidence, stating:
“While counsel cannot argue that Mr. Grant would not have created additional
counterfeit checks with the same account numbers on them, because he was
apprehended, it did not happen.” The only countervailing evidence presented was
“that the photocopy of the check . . . was months old and presumably the bank on
which it was drawn was aware of the possible fraudulent activity with respect to
it.” Yet, evidence the bank may have discovered Grant’s fraudulent activities
before he cashed the counterfeit checks has no bearing on the issue of whether he
subjectively intended to utilize the checks’ full face value. Grant simply fails to
proffer any evidence indicating his intent to use less than the full face value of the
stolen corporate checks. Considering the principles set forth in Manoocher
Nosrati-Shamloo, and reviewing the totality of the evidence against Grant, we
11
conclude the district court did not clearly err when it determined Grant intended to
utilize the full face value of the stolen corporate checks.6
To be clear, we hold when an individual possesses a stolen check, or a
photocopy of a stolen check, for the purpose of counterfeiting, the district court
does not clearly err when it uses the full face value of that stolen check in making
a reasonable calculation of the intended loss. Although a district court cannot
equate the full face value of stolen checks with intended loss as a matter of law in
every case, it can still find a defendant intended to utilize the full face value of
stolen checks. Where the Government presents evidence indicating the defendant
intended to utilize the full face value of the checks, and the defendant fails to
present countervailing evidence, a district court is especially justified in including
the checks’ full face value in its intended loss calculation.
IV. CONCLUSION
6
Although Manoocher Nosrati-Shamloo dealt with a credit card’s full line of credit, and
this appeal revolves around a check’s full face value, this distinction does not alter our final
analysis. True, the face value of a check might exceed the actual funds available; thus,
unbeknownst to a counterfeiter, it could be impossible to utilize the check’s full face value.
Once a thief obtains a credit card, on the other hand, he or she can automatically utilize the card’s
entire line of credit. However, “‘[i]ntended loss’ . . . includes intended pecuniary harm that
would have been impossible or unlikely to occur (e.g., as in a government sting operation, or an
insurance fraud in which the claim exceeded the insured value).” U.S.S.G. § 2B1.1 cmt.
n.2(A)(ii) (emphasis added). In other words, the latent impossibility of actually utilizing a
check’s full face value does not automatically negate the counterfeiter’s subjective intent to do
so. Accordingly, even if a check’s face value exceeds the available account balance, a district
court need only find the defendant intended to utilize the full face value of the check.
12
For the foregoing reasons, we affirm the district court’s calculation of the
$230,009.54 intended loss amount and its application of a 12-level enhancement
to Grant’s sentence under § 2B1.1(b)(1)(G) of the Guidelines.
AFFIRMED.
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