Second Circuit Rules Identity Theft Techniques Trigger Sentencing Enhancements

In an identity theft case, James Rinaldo Jackson pled guilty to 29 counts of criminal activity, including credit card fraud (18 U.S.C. § 1029(a)(2), (b)(1), (c)(1)(B)), mail fraud (18 U.S.C. § 1341), bank fraud (18 U.S.C. § 1344), wire fraud (18 U.S.C. § 1343), and conspiracy (18 U.S.C. § 371). Jackson found his targets by searching for wealthy people on the Internet and then purchasing their personal information from Internet “information brokers.” He impersonated his targets in phone calls to banks, credit card companies, and hotels in order to get his targets’ credit card numbers, card expiration dates, or other private information. Jackson used this information to buy valuable merchandise, which he would have delivered to hotels or courier services. In sentencing Jackson to 96 months imprisonment, the trial judge applied the Sentencing Guidelines’ “sophisticated means” enhancement, under U.S.S.G. 2F1.1(b)(5)(C). Jackson appealed the enhancement, arguing that his crimes did not involve sophisticated means and that the enhancement impermissibly duplicated the enhancements he was also given for leading “extensive” criminal activity.The court held that the “sophisticated means” enhancement was applicable to Jackson’s case. Regarding Jackson’s claim that his scheme was unsophisticated — “no more intricate than ‘a game of Three-Card Monte’” — the court held that even “not elaborate” techniques like phone calls and Internet searches could combine to form a scheme “sophisticated in the way all the steps were linked together.” The court also rejected Jackson’s claim that an Application Note of the Sentencing Guidelines which applies the enhancement to crimes involving “inside information,” “special technology,” “corporate shells,” and “offshore bank accounts” limits the enhancement to crimes involving those and similar techniques. The decision noted that other Application Notes found “sophisticated means” in cases not involving those techniques. The court also rejected Jackson’s argument that the enhancement applies only to sophisticated attempts to evade detection, because the Application Notes explicitly define the enhancement to apply to “conduct pertaining to the execution or concealment of an offense.”
The court held that the “sophisticated means” enhancement could apply even though activities which triggered that enhancement may have also triggered other enhancements, but remanded the case to the trial judge to consider whether to reduce the sentence for that reason. Jackson had argued that aspects of his scheme which made it “sophisticated” — such as exploiting unwitting strangers like hotel employees — had already triggered a sentencing enhancement for leading an “extensive” criminal activity. The court held, however, that the sophisticated means enhancement could have been triggered by aspects of his crime besides the involvement of others. Further, it wrote: “[T]he imposition of two somewhat overlapping enhancements does not necessarily result in prohibited double counting” The court said even if elements of his crime triggered multiple enhancements, this is permitted “where a single act is relevant to two dimensions of the Guidelines analysis” (quoting United States v. Campbell, 967 F.2d 20, 25 (2d Cir. 1992)). However, the court noted that a case decided after Jackson’s sentence was imposed held that at times “somewhat overlapping enhancements, even if not amounting to double counting, can justify a downward departure” United States v. Lauersen, No. 01-1526L, 2003 WL 22119742 (2d Cir. 2003). Therefore, the court remanded the case to the District Court to consider reducing Jackson’s sentence based on the Lauersen precedent.

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