U.S. v. Anderson

• Decision Date: 03 September 2009
• Docket Number: No. 08-2925.,08-2925.
• Citation: 580 F.3d 639
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Leslie ANDERSON, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

580 F.3d 639

UNITED STATES of America, Plaintiff-Appellee, v. Leslie ANDERSON, Defendant-Appellant.

No. 08-2925.

United States Court of Appeals, Seventh Circuit.

Argued May 5, 2009.

Decided September 3, 2009.

Stephen B. Clark, Attorney, Bruce E. Reppert, Attorney (argued), Office of The United States Attorney, Fairview Heights, IL, for Plaintiff-Appellee.

Stephanie A. Brennan, Attorney (argued), Kirkland & Ellis LLP, Chicago, IL, for Defendant-Appellant.

Before RIPPLE and SYKES, Circuit Judges, and LAWRENCE, District Judge.^*

RIPPLE, Circuit Judge.

As a result of his involvement with a fraudulent telemarketing scheme, Leslie Anderson was charged with wire fraud, mail fraud and conspiring to commit an offense against the United States. After a five-day trial, Mr. Anderson moved for a judgment of acquittal. The district court denied the motion, and the jury convicted Mr. Anderson on each of the twenty-four counts charged. At his sentencing hearing, Mr. Anderson raised a number of objections to the sentencing enhancements recommended by the Government, but the district court, with two exceptions, applied the recommended enhancements. As a result, the court determined Mr. Anderson's adjusted offense level to be 42 and his criminal history category to be I. The court departed from the recommended sentencing range, imposing a below-guidelines sentence of 280 months' imprisonment. Mr. Anderson now appeals. He claims that the evidence presented at trial was insufficient to support the jury's verdict; he also raises a number of challenges to his sentence. For the reasons set forth in this opinion, we affirm the judgment of the district court.

I BACKGROUND

A.

On May 17, 2005, Mr. Anderson was charged with several offenses arising out of his involvement with 1492828 Ontario, Inc., a Canadian telemarketing company doing business as First Capital Consumers Group ("First Capital"). Specifically, Mr. Anderson was charged with one count of conspiracy, in violation of 18 U.S.C. § 371, five counts of mail fraud, in violation of 18 U.S.C. § 1341, and eighteen counts of wire fraud, in violation of 18 U.S.C. § 1343. At Mr. Anderson's jury trial, the Government presented the following evidence.

1. The Creation of First Capital

Mr. Anderson, a Canadian citizen, became acquainted with David Dalglish through Mr. Anderson's Toronto-based home improvement business. Dalglish helped Mr. Anderson secure a lucrative contract with the city of Toronto, and Mr. Anderson, in return, loaned Dalglish a large sum of money so that Dalglish could open up a telemarketing business with his friend, Lloyd Prudenza. That business ultimately became known as First Capital.

By way of background, Dalglish had worked with Prudenza in the past. Specifically Prudenza ran Consumer Credit Services ("CCS"), a telemarketing business that sold a "credit repair program" to individuals with poor credit histories. R.196 at 82-83. After a CCS telemarketer sold the product to a customer, a "verifier" from Vertech, an affiliate of CCS, would contact the customer, confirm the details of the purchase and obtain the customer's authorization to debit the customer's bank account. Id. at 83-85; R.199 at 145.

Dalglish hired Mark Lennox, a former Vertech employee, to work for First Capital. Dalglish informed Mr. Anderson of the hire and explained that Lennox was the "top verifier" at Vertech. R.199 at 145. He also informed Mr. Anderson that he needed additional funds for First Capital. In response, Mr. Anderson contributed an additional $20,000 to the company, this time in the form of an equity investment.

In 2001, Lennox, Dalglish and Mr. Anderson met to discuss First Capital's business model. Lennox explained to Dalglish and Mr. Anderson that First Capital would hold itself out as a "credit recovery business" that sold "benefits packages" to consumers. These benefits packages included coupons, brochures, a credit-repair guide and a "stored-value card." The stored-value card bore a MasterCard logo, but it was not a credit card because it had no independent purchasing power. Instead, before making a purchase, a user first was required to credit funds to the stored-value card. The user's purchasing power was limited to the amount of funds he had credited to the card in advance of the purchase. Lennox explained that the stored-value cards were the most important part of First Capital's benefits packages because they allowed First Capital's salespersons to tell its customers that they would receive a MasterCard with their benefits packages. The customers would then assume that they would be receiving credit cards that permitted them to make purchases that could be paid for later, either by a single payment or by a payment plan.

According to Lennox, stored-value cards were a relatively new concept in 2001. Therefore, Lennox claimed, "if you said to somebody that it was a bank card and it was a MasterCard, 100 percent would assume that you were talking about a credit vehicle, [and] that this thing had a credit limit to it. And we knew that, so this was a ... huge advantage." R.196 at 93. Lennox also testified that he had informed Mr. Anderson that a stored-value Master-Card would be included in the benefits packages. Lennox knew that Mr. Anderson would be responsible for approving his salary and other compensation, and he hoped that, by using the MasterCard as a "selling point," he could procure a large signing bonus. Id. at 92-95.

After that first meeting, Mr. Anderson wrote a letter to the Mill Haven Penal Institution, where Prudenza was serving a sentence for conspiracy to commit fraud, in order to facilitate Prudenza's early release on parole. Prudenza testified that, as part of his application for parole, he was required to "establish a game plan for [his] release." R.198 at 29. Mr. Anderson "provided [him] with a letter of employment to fit that game plan." Id. Shortly after Prudenza's release, he, Dalglish and Mr. Anderson met at Mr. Anderson's office. Prudenza brought his fiancee, Lesley McCloud, to the meeting, but she left after Mr. Anderson complained about her presence. Later, Mr. Anderson explained to Prudenza that "he didn't want women around when we're talking about things that ... are illegal.... Because they would turn around and would rat on the situation." Id. at 32-33.

Prudenza testified that, at the meeting, he and Mr. Anderson discussed his incarceration and his criminal offense; he claimed that Mr. Anderson "knew ... what [he had] been in jail for," and explained that his telemarketing experience and criminal conviction were an "enticement to bringing [him] aboard." R.199 at 49, 50. Prudenza further testified that everyone at the meeting, including Mr. Anderson, understood that they did not have, and could not obtain, authorization to sell any type of MasterCard. He noted that, at the meeting, Mr. Anderson reviewed a sample "sales script"¹ and described the script as a "good gaff"² and a "good con." R.198 at 35, 39. In addition, Prudenza claimed that he discussed the possibility of police intervention with Mr. Anderson, telling him that they had to do things "in a certain way to avoid being caught right away." Id. at 37-38.

Later, after First Capital had begun preliminary operations, Lennox, Dalglish, Prudenza and Mr. Anderson met to discuss the sales scripts for telemarketers and verifiers. Lennox testified that he went over the scripts while Mr. Anderson was present. He testified that the scripts were intended to deceive First Capital's customers by convincing them that they would receive a credit card from a major bank in exchange for a fee.

2. First Capital's Business Operations

First Capital hired hundreds of telemarketing sales representatives who placed telephone calls from Toronto to United States residents with poor credit histories.³ The representatives, using First Capital's sales scripts, would suggest that First Capital could help its customers obtain credit cards in exchange for a fee. When a customer accepted First Capital's offer, a verifier would make a second call to the customer in order to obtain the customer's bank account information and the customer's permission to make an electronic funds transfer from the customer's bank account. The second call was recorded.

After receiving the customer's authorization and account information, the verifier would cause funds to be transferred out of the customer's bank account through an automated clearing house ("ACH"). First Capital used three ACHs during the course of its operation—ACH Direct, United Capturedyne Technologies ("UCT") and Check Recovery Systems ("CRS"). Mr. Anderson helped Dalglish and Prudenza establish a business relationship with ACH Direct. R.197 at 21-22; R.200 at 64-65. The relationship between First Capital and ACH Direct was short-lived, however, because ACH Direct received a large number of complaints from dissatisfied First Capital customers. From November 2001 through the summer of 2002, First Capital processed its electronic transfers through UCT. Like ACH Direct, UCT received a number of complaints and ceased providing services for First Capital. After First Capital's relationship with UCT ended, First Capital's managers and assistant managers—including Mr. Anderson, Dalglish, Prudenza and Lennox—met to discuss their problems with ACH Direct and UCT and to attempt to find a new processor.⁴ First Capital then turned to CRS for ACH processing; that company also received numerous complaints from customers who had received no product, who had not received the product they were promised or who could not contact First Capital. R.197 at 40-42. These complaints were summarized in call logs that were later sent to First Capital.

At the height of its operations, First Capital had 250 employees. Lennox estimated that First Capital placed at least 10,000 telemarketing calls each week, resulting in about 500 successful sales per week. Over the course of its...