United States v. Sandra WhiteUnited States v. Sandra White
ARGUED: Matthew T. Nelson, WARNER, NORCROSS & JUDD LLP, Grand Rapids, Michigan, for Appellant. Hagen W. Frank, UNITED STATES ATTORNEY’S OFFICE, Grand Rapids, Michigan, for Appellee. ON BRIEF: Matthew T. Nelson, C. Ryan Grondzik, WARNER, NORCROSS & JUDD LLP, Grand Rapids, Michigan, for Appellant. Hagen W. Frank, UNITED STATES ATTORNEY’S OFFICE, Grand Rapids, Michigan, for Appellee.
KAREN NELSON MOORE, Circuit Judge.
Sandra White (“White”) and her husband Joseph White operated а travel agency. In order to obtain low airline fares for the agency’s clients, White routinely booked military-rate travel for her non-military-member clients. When airlines became suspicious of White’s practices, and asked her for proof of her clients’ military status, White manufactured fake military identification cards and sent them to the airlines as alleged proof of her clients’ military credentials. The airlines suspected that the military identification cards were forged and contacted investigаtors. After a jury trial, White was convicted of mail fraud and aggravated identity theft, and sentenced to a total of ninety-four months of imprisonment.
White now challenges her conviction and sentence on the basis that (1) the district court read an improper definition of the term “use” into the aggravated identity theft statute; (2) the district court abused its discretion in refusing to admit certain evidence of White’s intention to repay some of the airlines’ losses; and (3) the district court erred in calculating the amount of White’s victims’ lоsses. For the reasons set forth below, we AFFIRM the judgment of the district court.
I. FACTS AND PROCEDURE
Defendant Sandra White and her husband Joseph White owned and operated Corporate Travel Consultants/Travel by Design, Inc. (“CTC”) from 1989 through 2011. R. 89 (Stipulation) (Page ID #480). The agency’s accreditation was revoked in 2003 after audits conducted by United Airlines determined that CTC generally and White specifically had engaged in fraudulent ticketing schemes that cost the airline nearly $100,000 in airfares. R. 112 (Presentence Investigation Report (“PSR”)) (Page ID #572). White nonetheless continued her work as a travel agent as a subcontractor for other accredited travel agencies throughout the country, enabling her to maintain her practice of acquiring and selling airfares. Id. White continued to obtain fraudulent ticket fares for her clients by providing false information about her clients’ ages, possession of various discount certificates, and military status. Id. As a travel agent, White had an opportunity to obtain additional revenue through commissions, service fees, and additional bookings. R. 143 (Trial Tr. Vol. 4 at 735) (Page ID #1477). At trial, White’s victims testified that she charged service fees and other airfare directly to her clients’ credit cards, sometimes for persons other than those specific clients, and sometimes without their permission. R. 142 (Trial Tr. Vol. 3) (Page ID #1264, 1343-44).
The fraudulent scheme that is largely at issue in this case concerns White’s practice of securing lower rates by falsely informing airlines that her clients were members of the United States Armed Forces. R. 143 (Trial Tr. Vol. 4) (Page ID #1497-99); R. 144 (Trial Tr. Vol. 5) (Page ID #1656-57). Because of the volume of White’s bookings, airlines and other travel agencies became suspicious. When White was asked by her subcontracting partners to produce proof that her customers qualified for military discounts, she created false Armed Forces Identification (“AFID”) cards using customers’ real names and actual dates of birth. R. 143 (Trial Tr. Vol. 4) (Page ID #1500-1501). The airlines determined that the cards White manufactured were fraudulent and subsequently notified the United States Secret Service. R. 139 (Trial Tr. Vol. 1) (Page ID #923-28).
Sandra White was charged with wire fraud in a single-count Indictment on November 7, 2013. R. 1 (Indictment) (Page ID #1). On February 27, 2014, the Government filed a First Superseding Indictment charging White with wire fraud and aggravated identity theft. R. 2 (First Superseding Indictment) (Page ID #9). In addition, her husband, Joseph White, was charged. The Government offered the Whites a deal wherein White would plead guilty to the wire fraud count and Joseph White would accept a diversionary disposition. R. 31 (Plea Agreement) (Page ID #77). Joseph White refused the agreement, and the Whites proceeded toward trial. Two months before trial, White moved to dismiss Count Two, the aggravated identity theft count, which the government opposed. R. 53 (Mot. to Dismiss) (Page ID #190); R. 56 (Resp. in Opp.) (Page ID #215). The district court denied the motion. R. 148 (Mot. Hr’g) (Page ID #2160-61); R. 63 (Order) (Page ID #242). White filed a motion for reconsideration immediately before trial, R. 81 (Mot. for Reconsideration) (Page ID #453), and the district court again denied the motion to dismiss Count Two. R. 91 (Order) (Page ID #484); R. 139 (Trial Tr. Vol. 1) (Page ID #743-745).
During trial, White attempted to offer evidence about her repayment of some of the airlines’ and travel agencies’ losses that resulted from her scheme. The district court permitted White to examine witnesses about actual repayments that were made to victims; however, White was not permitted to delve into loss-recoupment negotiations that took place long after White was confronted by her victims. R. 143 (Trial Tr. Vol. 4) (Page ID #1530-31).
The jury found White guilty on both counts on June 2, 2015. Joseph White was acquitted. On September 25, 2015, the court sentenced White to seventy months of imprisonment on Count One and twenty-four months on Count Two, to be served
II. ANALYSIS
A. Standard of Review
Whether the district court properly construed the meaning of the word “uses” within the ambit of
We review a district court’s evidentiary rulings for abuse of discretion. United States v. Freeman, 730 F.3d 590, 595 (6th Cir. 2013). “An abuse of discretion occurs when a district court relies on clearly erroneous findings of fact, improperly applies the law, or uses an erroneous legal standard.” United States v. Dixon, 413 F.3d 540, 544 (6th Cir. 2005). “[W]e will leave rulings about admissibility of evidence undisturbed unless we are left with the definite and firm conviction that the [district] court ... committed a clear error of judgment in the conclusion it reached.” United States v. Wagner, 382 F.3d 598, 616 (6th Cir. 2004) (internal quotation marks omitted).
“We review a district cоurt’s calculation of the ‘amount of loss’ for clear error, but consider the methodology behind it de novo.” United States v. Meda, 812 F.3d 502, 519 (6th Cir. 2015). We have previously instructed district courts “to determine the amount of loss [under
B. Defining “Use” Pursuant to 18 U.S.C. § 1028A
White first argues that the district court incorrectly applied Sixth Circuit precedent in holding that “use” of a means identification under
(1) In general.—Whoever, during and in relation to any felony violation enumerated in subsection (c), knowingly transfers, possesses, or uses, without lawful authority, a means оf identification of another person shall, in addition to the punishment provided for such felony, be sentenced to a term of imprisonment of 2 years.
White’s First Superseding Indictment alleged that she “did knowingly use, without lawful authority, means of identification of other persons, to wit, the names of 27 persons for whom she had previously obtained significantly reduced military fares by fraudulently representing that they were members of the Armed Forces of the United States ...” R. 2 (First Superseding Indictment at 7) (Page ID #15). The Government further alleged that “[White] used the noted means of identification to manufacture fake Armed Forces Identification Cards, which she then sent by means of interstate wire communications to Delta Airlines, Cain Travel, and The Travel Agent Company in an attempt to justify reduced fares that she had previously obtained in the course of committing wire fraud.” Id.
White argues that the district court failed to apply correctly two of our decisions: United States v. Medlock, 792 F.3d 700 (6th Cir. 2015), and United States v. Miller, 734 F.3d 530 (6th Cir. 2013). Although Miller and Medlock are instructive, we cannot conclude that they counsel in favor of reversal.
In Miller, defendant David Miller was convicted by a jury of two cоunts of making false statements to a bank and two counts of aggravated identify theft in violation of
The defendant’s argument in Miller was that “
In analyzing
We applied our holding in Miller to a somewhat different set of facts in Medlock. There, Mr. and Mrs. Medlock operated a non-emergеncy ambulance service (“MAS”) that transported patients to kidney dialysis. Medlock, 792 F.3d at 703. The couple’s transport company was later reimbursed for those transports by Medicare. Id. Pursuant to United States Department of Health and Human Services (“HHS”) guidelines, a non-emergency ambulance transport company is reimbursed “only when such transport is medically necessary for bedridden patients.” Id. In those circumstances, the ambulance company must have an Emergency Medical Technician (“EMT”) accompany the passenger. Id. at 703-04. Additionally, “[t]he ambulance company documents each trip with a certification of medical necessity (CMN), signed by a doctor, and a ‘run sheet,’ which a Medicare contractor other than the ambulance company reviews to determine whether Medicare should reimburse the company for the trip.” Id. at 704 (footnote omitted). An investigation into MAS concluded that the company’s records lacked some CMNs, and surveillance revealed “four patients walking, riding in the front sеat, being double-loaded in an ambulance (i.e., being driven two patients, rather than one, at a time), being driven by single-staffed ambulances, or being transported by wheelchair (rather than stretcher).” Id. Each of those transports had been billed as “single-passenger and ‘stretcher required’ (or equivalent).” Id. Investigators also found at the couple’s home a number of forged CMNs and run tickets. Id.
The government in Medlock argued “that the Medlocks ‘used’ the name and Medicare Identification Numbers of Medicare beneficiaries when they ‘caused a claim to be submitted to Medicare for reimbursement that contained’ such names and numbers ‘without lawful authority to do so because the claim falsely stated that’ stretchers were required for transport.” Id. at 705. Finding the Miller rationale “persuasive,” we concluded that the term “use” “must have a more limited definition than the government suggests.” Medlock, 792 F.3d at 706. In comparing Medlock to Miller, we noted that “the defendant in Miller lied about what his partners did and the Medlocks lied about what they did ....” Id. (emphasis in original). In finding that the Medlocks did not “use” the names of their patients in violation of
In responding to our decisions in Miller and Medlock, the Government argues here that “[v]iewed in a continuum, then, from (1) using names in a lie about what one did [Medlock], to (2) using names in a lie about what others did [Miller], to (3) using names to manufacture fake identification documents and then purporting to submit them on behalf of those persons [White], the facts in this case are well within the reach of the statute as it has now twice been construed.” Gov. Br. at 30. The Government asks that we focus not “on what White did with clients’ names at the time she obtained economic value through fraud,” but “on what she did with their names afterwards when she was attempting to avoid having to repay that value.” Id. at 31. Indeed, Count Two of the First Superseding Indictment alleges that White “used the noted means of identification to manufacture fake Armed Forces Identification Cards, which she then sent by means of interstate wire communications to Delta Airlines, Cain Travel, and The Travel Agent Company in an attempt to justify reduced fares that she had previously obtained” during the commission of her wire fraud scheme. R. 2 (First Superseding Indictment at 7) (Page ID #15).
We conclude that White’s actions are distinguishable from both the Miller and Medlock defendants, and that White’s actions in this case are most similar to Kathy Medlock’s affirmed aggravated identity theft conviction for signature forging in the Medlock addendum. Both of those cases were principally about defendants who lied about their own actions. And, importantly, the personal information used in both Miller and Medlock was memorialized in documents that were submitted to other parties with the Miller and Medlock defendants’ names and identities included on those documents. White did more than simply lie about whether her clients were eligible for military discounts. Indeed, she did more than assert to the airlines that her clients were eligible. She took a significant additional step, and submitted what she represented to be actual identification that the United States Military purportedly had issued for her clients. When White’s sсheme simply involved telling the airlines that her clients were members of the military, her statements to the airlines were similar to the resolution submitted to the bank in Miller and the inaccurate CMNs in Medlock because she was submitting false information about others in her own name. The distinction in this case (and the similarity to Kathy Medlock’s valid conviction under
The parties do not dispute whethеr the manufactured military identification cards constituted means of identification or whether they were possessed without lawful authority. We note that “the phrase ‘without lawful authority’ in
C. Evidentiary Rulings on After-the-Fact Repayment Negotiations
White next argues that the district court abused its discretion by limiting her ability to admit documents related to after-the-fact repayment negotiations with victims of her fraud. As noted supra, we review evidentiary rulings for abuse of discrеtion. White, however, argues that the district court was not ruling on evidentiary issues, but rather was ruling that a particular defense was not available to White as a matter of law. Def. Br. at 25. White is incorrect. The district court excluded some of the evidence of post-loss repayment negotiations on the ground that the evidence was inadmissible pursuant to
The Government points to United States v. Carter, 483 Fed.Appx. 70 (6th Cir. 2012), a case upon which the district court relied, as the case most instructive on this point. Gov. Br. at 35; R. 146 (Trial Tr. Vol. 7) (Page ID #2007). In Carter, a defendant sought to offer testimony from its corporate counsel that certain efforts were made to remedy and investigate apparent fraud after a demand for repayment had been made. The district court in Carter excluded the evidence, and we affirmed, stating:
A defendant’s intention to repay the victims of fraud is no defense. Likewise, subsequent investigations, repayments, or settlement attempts shed no light on whether a defendant had a previous intent to defraud. These efforts have at best ... small probative value for the purpose of showing lack of evil intent. Defendant’s subsequent attempts to rectify the fraud are irrelevant to his earlier intent or state of mind, and the district court was within its broad discretion under
Rule 403 to exclude that evidence.
Carter, 483 Fed.Appx. at 75 (citations omitted). Three other circuits join the Sixth Circuit in curtailing admission of evidence of post-accusation repayment. See United States v. Jimenez, 513 F.3d 62, 75 (3d Cir. 2008); United States v. Suba, 132 F.3d 662, 677 (11th Cir. 1998); United States v. Sirang, 70 F.3d 588, 595 (11th Cir. 1995); United States v. Foshee, 578 F.2d 629, 632 (5th Cir. 1978).
We note that the trial judge did admit evidence regarding repayments that White actually made. The district court did not, however, permit the admission of evidence of loss-recoupment negotiations that transpired after White’s plan was uncovered. White sought to admit evidence that, long after her fraudulent scheme was discovered, she attempted to repay some of her victims for some of their losses. These negotiations between White and her victims transpired only after White was confronted by the airlines, her victims, and law enforcement. The temporal relationship between the fraudulent activity and the attempts at repayment is too attenuated to warrant a reversal. The trial judge, having received full briefing on this issue, R. 94 (Def. Trial Br.) (Page ID #489); R. 98 (Gov. Resp.) (Page ID #500), decided that some of the evidence of repayment was inadmissible under both Carter and
D. Calculating Loss Attributable to Defendant White
White’s final argument is that the district court was speсulative and incorrect in calculating the amount of loss the airlines suffered. The Probation Office calculated the loss to White’s victims under
“We review a district court’s calculation of the ‘amount of loss’ for clear error, but consider the methodology behind it de novo.” Meda, 812 F.3d at 519. “[T]he district court is to determine the amount of loss [under
We cannot conclude from the record that the district court’s determination of loss in this case was “outside the universe of acceptable computations,” or that the methodology used to calculate loss was incorrect. Id. The trial record reveals that the airlines used standard ticket-auditing practices to determine the difference between the fares White obtained fraudulently and the next-cheapest fare possible. Several of the airline witnesses testified about the auditing procеss during trial, and several audit records were admitted into evidence.
Prior to sentencing, White filed several objections to the PSR, and the government responded. R. 115 (Def. Sent. Obj.) (Page ID #638); R. 116 (Gov. Resp.) (Page ID #654). In her sentencing memorandum, White stated her belief that “[t]he elements of the loss calculation are incorrect and overstated.” R. 115 at Page ID #645. At sentencing, the government represented that “[a]s far as the guidelines go, meeting with [White’s counsel], there is no dispute at this point as to the loss figures .... [White’s counsel] has lоoked over my filing, Docket Number 116, and agrees with the government’s calculations as far as loss goes.” R. 150 (Sent. Hr’g Tr. at 4) (Page ID #2203); R. 116 (Gov. Sent. Mem. at 7) (Page ID #660). The government then specified the loss amount as $663,610. R. 150 (Sent. Hr’g Tr. at 5) (Page ID #2204). White’s counsel then stated, “I agree on the loss number that we have come to, your Honor, in this sense: Of course we have raised objections about the
The record does not support a finding that the loss calculation offered by the government and accepted by the district court was outside the universe of acceptable computations. Indeed, the method used to calculate the loss was one that several airline industry witnesses agreed was reasonable, and White did not present evidence that an alternate theory was preferable. Moreover, White did not present evidence that her method would result in an amount below the beginning of the range in
III. CONCLUSION
For the reasons set forth above, we AFFIRM the judgment of the district court.