415 F.3d 782 (7th Cir. 2005), 03-3848, United States v. Alburay

Docket Nº:03-3848.
Citation:415 F.3d 782
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Fayez ALBURAY, Defendant-Appellant.
Case Date:July 29, 2005
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 782

415 F.3d 782 (7th Cir. 2005)

UNITED STATES of America, Plaintiff-Appellee,

v.

Fayez ALBURAY, Defendant-Appellant.

No. 03-3848.

United States Court of Appeals, Seventh Circuit.

July 29, 2005

Argued Feb. 17, 2005.

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 02 CR 235 – George W. Lindberg, Judge.

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Thomas D. Shakeshaft (argued), Office of the United States Attorney, Chicago, IL, for Plaintiff-Appellee.

Richard H. Parsons, Johanna M. Christiansen (argued), Office of the Federal Public Defender, Peoria, IL, for Defendant-Appellant.

Before POSNER, RIPPLE, and MANION, Circuit Judges.

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MANION, Circuit Judge.

Fayez Alburay ran a grocery store as well as a food stamp scam that defrauded the United States Department of Agriculture ("USDA") out of more than a million dollars. His scheme landed him in federal court, where he pleaded guilty to wire fraud, and in federal prison, where he is serving a fifty-one-month sentence. On appeal, he challenges his sentence, a condition of his supervised release, and the district court's $1,750,000 restitution award. We affirm the sentence but remand with instructions on the supervised release and restitution issues.

I.

Fayez Alburay owned and operated a neighborhood grocery – as it turned out, appropriately named the Shady Food Store – located at 11300 South Wentworth Avenue in Chicago, Illinois. Upon Alburay's application on behalf of his store, the USDA authorized Shady Food to operate under the federal food stamp program. Under the program, Shady Food accepted food stamps or the modern electronic equivalent thereof (collectively, "food stamps" or "stamps") 1from food stamp recipients as payment for qualified food items such as fruit and vegetables (and not for such things as alcohol and tobacco products). On behalf of Shady Food, Alburay then redeemed the stamps by presenting them to a bank that would then credit the store with a cash deposit. The USDA would then reimburse the bank for the cash value of the stamps.

The food stamp program no doubt generated business volume that Shady Food may not have otherwise had. For Alburay, however, that increase was apparently not enough. He devised a scheme whereby he would accept food stamps in exchange for cash instead of qualified food items (cash that could then be used for anything). Alburay made these unlawful exchanges worth his while by paying less than the face value of the stamps. For example, someone would give Alburay $100 worth of stamps, and Alburay would return only $70 worth of cash. "Customers" apparently preferred the lower cash amount instead of the higher- valued but restricted stamps. To complete the scheme, Alburay presented the unlawfully obtained stamps to the bank and received the full face value of the stamps, thereby fraudulently acquiring funds from the USD A. The scheme ran from 1996 to 1998, spanning twenty-five months.

Alburay's guilt in these matters is undisputed. After the government charged Alburay with nine criminal counts, he pleaded guilty to one count of wire fraud, 18 U.S.C. § 1343. In accordance with a written plea agreement, the other counts were dismissed. The dismissed charges were two additional counts of wire fraud, three counts of mail fraud, 18 U.S.C. § 1341, and three counts of food stamp fraud, 7 U.S.C. § 2024(c).

In the deal, the government and Alburay agreed that U.S.S.G. § 2F1.1(a) (1997) provided the appropriate base offense level for this case – six. They also agreed that the offense involved more than minimal planning, and, as a result, two more levels

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were added pursuant to § 2F1.1(b)(2)(A). In the agreement, the government stated that it believed that the amount of loss caused by the scheme ranged from $1,500,000 to $2,500,000, which would carry a twelve-level enhancement under § 2F1.1(b)(1)(M). Alburay, on the other hand, maintained that the loss figure was lower and reserved the right to argue the issue. Also, under the agreement, Alburay was on track for a three-level reduction for his acceptance of responsibility under U.S.S.G. § 3E1.1.

Nevertheless, Alburay's opportunity for an acceptance-of-responsibility reduction dissipated because, after pleading guilty and while on release pending sentencing, Alburay failed to appear for his sentencing hearing. The district court issued a fugitive warrant, and, several weeks later, he was arrested after a routine traffic stop in Elko, Nevada. Alburay, a citizen of Jordan, had obtained a passport under an alias and was apparently preparing to flee the United States to avoid his impending punishment. Alburay's detour was a costly mistake. At sentencing, the district court rejected the acceptance-of-responsibility reduction and added a two-level obstruction-of-justice enhancement for willfully failing to appear for sentencing in accordance with U.S.S.G. § 3C1.1.

As to the loss amount, the government submitted an analysis to the probation officer estimating the loss at $1,750,000, which the probation officer incorporated into her presentence investigation report. The district court adopted the $1,750,000 figure for purposes of sentencing and restitution. As indicated above, a loss amount of $1,750,000 equated to a twelve-level enhancement under Additionally, Alburay moved for a downward departure based upon hardships resulting from his status as a deport-able alien. See, e.g., United States v. Meza-Urtado, 351 F.3d 301, 304-05 (7th Cir. 2003). The district court, however, sua sponte entertained the idea of an upward departure, believing that Alburay's category I criminal history vastly understated his past conduct and that his past conduct coupled with his multiple aliases, social security numbers, and driver's licenses showed a serious disregard for the law...

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