United States v. Karl Popovski
2017 U.S. App. LEXIS 18751
| 7th Cir. | 2017Background
- Karl Popovski pleaded guilty to wire fraud for encoding stolen credit/debit account numbers onto blank cards and withdrawing funds via ATMs.
- He was responsible for >1,000 account numbers and planned to use 800 of them in Peru; district court excluded those 800 when calculating intended loss.
- The district court calculated intended loss at $131,000 by applying Application Note 3(F)(i) to U.S.S.G. §2B1.1 ($500 minimum loss per counterfeit/unauthorized access device), adding eight offense levels and sentencing Popovski to 30 months.
- Popovski argued that only cards or numbers that actually produced money or were demonstrably functional should count toward the $500-per-device loss floor.
- The government and the Sixth Circuit (via Moon) argued that the statutory definitions encompass access devices even if expired, revoked, or canceled, and that the Guidelines’ aggregate approach applies without card-by-card proof.
- The Seventh Circuit affirmed, endorsing Moon’s reading, rejecting the Ninth Circuit’s Onyesoh approach, and holding that district judges retain discretion under 18 U.S.C. §3553(a) to avoid unreasonable sentences when the Guidelines overstate seriousness.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Application Note 3(F)(i) and 18 U.S.C. §1029 require proof that each access device actually worked or produced money before counting it toward the $500-per-device loss floor | Popovski: an access device counts only if demonstrably functional or produced money; canceled/expired/exhausted cards should not count | Government: §1029(e)(3) treats lost/stolen/expired/revoked/canceled devices as access devices; Note 3(F)(i)’s aggregate $500 floor applies without device-by-device proof | Court: Rejected Popovski; §1029’s paragraphs reconcile to define access device by nature, not guaranteed functionality; apply Note 3(F)(i) aggregate rule; district courts may adjust under §3553(a) if Guidelines overstate offense seriousness |
Key Cases Cited
- United States v. Moore, 788 F.3d 693 (7th Cir. 2015) (held Note 3(F)(i) includes all access devices defendant possessed)
- United States v. Onyesoh, 674 F.3d 1157 (9th Cir. 2012) (held only devices that actually worked or produced money count)
- United States v. Moon, 808 F.3d 1085 (6th Cir. 2015) (rejected Onyesoh; held statute and Guideline cover expired/canceled devices obtained with intent to defraud)
- United States v. Booker, 543 U.S. 220 (2005) (established that sentences must be reasonable under 18 U.S.C. §3553(a), permitting departure from Guidelines when appropriate)