U.S. v. Arnaout
| Decision Date | 21 December 2005 |
| Docket Number | No. 03-3297.,No. 03-3412.,03-3297.,03-3412. |
| Parties | UNITED STATES of America, Plaintiff-Appellee, Cross-Appellant, v. Enaam M. ARNAOUT, also known as Abu Mahmoud, also known as Abdel Samia, also known as Abu Mahmoud Al Suri, also known as Abu Mahmoud Al Hamawi, Defendant-Appellant, Cross-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
John C. Kocoras (argued), Office of the U.S. Atty., Chicago, IL, for Plaintiff-Appellee.
Jeffrey M. Brandt (argued), Robinson Law Offices, Cincinnati, OH, for Defendant-Appellant.
Before BAUER, ROVNER, and WILLIAMS, Circuit Judges.
Enaam Arnaout pled guilty to conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act ("RICO") in violation of 18 U.S.C. § 1962(d). On appeal, both the government and Arnaout challenge the sentence imposed by the district court. We find that the district court erred when it imposed an enhancement for an offense involving fifty or more victims pursuant to U.S.S.G. § 2B1.1(b)(2)(B) because there is insufficient evidence in the record that Arnaout caused an actual loss to at least 50 people. In addition, we find that the district court erred when it failed to consider whether Arnaout qualified for the abuse of trust enhancement pursuant to U.S.S.G. § 3B1.3. Finally, we find that a defendant need not have been convicted of a federal crime of terrorism as defined by 18 U.S.C. § 2332b(g)(5)(B) for the district court to consider whether to apply the terrorism sentencing enhancement pursuant to U.S.S.G. § 3A1.4. The district court, however, did not err when it did not impose this enhancement on Arnaout. We, therefore, vacate Arnaout's sentence and remand this case for resentencing.
On January 2, 2003, Arnaout was charged in an eight-count Second Superseding Indictment. The Indictment alleged that Arnaout conspired to defraud donors to a charity he operated, the Benevolence International Foundation, Inc. ("BIF"). Arnaout represented to donors that BIF would use donated funds solely for humanitarian purposes. In reality, Arnaout along with others diverted a portion of the money raised to support groups engaged in armed confrontations and violence overseas.
On February 10, 2003, Arnaout pled guilty, pursuant to a written plea agreement, to conspiring to violate RICO in violation of 18 U.S.C. § 1962(d). In the plea agreement, Arnaout acknowledged that beginning in May 1993, he was responsible for and directed BIF's operations in the United States. Arnaout admitted that, while he directed BIF's operations, he solicited donations from the public by purporting that BIF and its related overseas offices were part of a charitable organization involved solely in humanitarian work for the benefit of civilian populations, including refugees and orphans. Arnaout also admitted that he and others agreed to conceal from donors, potential donors, and federal and state governments that a material portion of the donations received by BIF were being used to support soldiers overseas. The support he and others agreed to provide included boots intended for ultimate use by Chechen soldiers, and boots, tents, uniforms and an ambulance intended for ultimate use by Bosnian soldiers. Arnaout also used donor funds to purchase uniforms for a department of a provisional but unrecognized government in Chechnya.
Following the 2001 version of the Sentencing Guidelines for fraud,1 the district court calculated Arnaout's offense level as follows:
• Base offense level of six pursuant to § 2B1.1(a); plus
• twelve levels based on an amount of loss calculated to be between $200,000 and $400,000 pursuant to § 2B1.1(b)(1)(G); plus
• four levels based on the fraudulent scheme affecting at least fifty victims pursuant to § 2B1.1(b)(2)(B); plus
• four levels pursuant to § 3B1.1(a) because Arnaout was the leader of a criminal activity; plus
• two levels based on the offense involving misrepresentations while acting on behalf of a charitable organization pursuant to § 2B1.1(b)(7)(A); plus
• two levels pursuant to § 2B1.1(b)(8)(B) because a substantial part of the offense occurred out-side of the United States; plus
• two levels pursuant to § 3C1.1 for Arnaout's obstruction of justice; and minus
• two levels pursuant to § 3E1.1 for Arnaout's acceptance of responsibility in light of his plea.
The court then departed upward an additional two levels based on the harm Arnaout caused to those who should have received the charitable donations, which brought the total offense level to 32. The court determined that Arnaout was in criminal history category I, which corresponded to a Guidelines range of imprisonment between 121 and 151 months. The court sentenced Arnaout to 136 months.
Post-Booker, we continue to review the district court's factual findings at sentencing for clear error and the application of those facts to the Sentencing Guidelines de novo. United States v. Turner, 400 F.3d 491, 500 (7th Cir.2005).
The Guidelines, pursuant to § 2B1.1(b)(8)(B), allow for a two-point enhancement if a substantial part of a fraudulent scheme was committed from outside of the United States. Arnaout admits that the results of his crime occurred outside of the United States, but argues that the district court erred in applying the enhancement because the racketeering acts of mail fraud, wire fraud, and money laundering were all completed within the United States. We find that the district court did not err in applying this enhancement because, even though all of Arnaout's racketeering activities occurred within the United States, the fraud in this case was not complete until the diverted funds from the charitable organization were used to deliver resources to soldiers overseas. The district court's application of this enhancement, therefore, was entirely appropriate.
The Guidelines allow for an enhancement of four levels where an offense involves fifty or more victims. U.S.S.G. § 2B1.1(b)(2)(B). The term victim is defined as "any person who has sustained any part of the actual loss." U.S.S.G. § 2B1.1 cmt. n. 1 (2002). Arnaout argues that the district court erred in applying this enhancement to him because there was no showing that the funds of fifty donors were illegally diverted and used for non-charitable purposes. Arnaout admits that a portion of the total donations to BIF went to non-humanitarian, non-charitable uses and that more than fifty donors contributed to BIF during his time as executive director. Arnaout argues that the district court erred when it failed to account for each dollar diverted and did not trace each diverted dollar back to a specific donor. We agree with Arnaout.
According to the record, between 1994 and 2001, BIF received over $17 million in donations from over 17,000 individuals, businesses and organizations. The district court found that the amount of loss attributable to Arnaout, however, was approximately $300,000. There is insufficient evidence in the record to support a calculation of the number of donors that contributed the approximate $300,000. It is entirely conceivable that of the over 17,000 potential victims, more than fifty contributed to the $300,000, but we cannot find proof by a preponderance of the evidence in the record that at least fifty donors contributed the amount attributable to Arnaout. Accordingly, we reverse the district court's application of this enhancement.
The government argues that the district court erred in not applying the abuse of trust enhancement pursuant to § 3B1.3. At sentencing, the district court stated that it was not persuaded that the application of the abuse of trust enhancement was appropriate in this case after having already applied enhancements for the defendant's fraudulent misrepresentations while acting on behalf of a charity pursuant to § 2B1.1(b)(7)(A) and for the defendant's role as a leader or organizer of criminal activity pursuant to § 3B1.1(a). The court reasoned that applying the abuse of trust enhancement would result in "significant double counting" as there was already "substantial overlap" between the predicate offense and the two enhancements already applied. We disagree.
Impermissible double counting occurs when identical conduct justifies two upward adjustments under the Guidelines. United States v. Beith, 407 F.3d 881, 888 (7th Cir.2005) (citations omitted). In other words, a sentencing court may not describe the same conduct in two different ways to justify two separate upward adjustments. Id. So long as there is a sufficient factual basis for each upward adjustment, a district court does not engage in double counting when it enhances a defendant's sentence for separate elements of the same act. Id.
We find that the district court incorrectly held that applying a separate enhancement for Arnaout's abuse of trust would amount to impermissible double counting. Abuse of trust is not an element of Arnaout's predicate offense of fraud, and the application of the abuse of trust enhancement could account for behavior separate from Arnaout's fraudulent misrepresentations while acting on behalf of a charitable activity and separate from his role as leader or organizer of a criminal activity.
The § 2B1.1(b)(7)(A) enhancement for fraudulent misrepresentation while acting on behalf of a charity captures the aggravating nature of Arnaout's conduct in soliciting money from donors who thought that their money was being applied to humanitarian assistance for needy individuals. This enhancement would apply equally to a low-level BIF employee who solicited donors without leveraging any trust the donors placed in...
To continue reading
Request your trial
-
U.S. v. Stewart
...act] was to bring or help bring into being a crime listed in 18 U.S.C. 2332b(g)(5)(B)." Id. at 1248; accord United States v. Arnaout, 431 F.3d 994, 1001-02 (7th Cir.2005). The district court declined to apply the terrorism enhancement to Yousry's sentence. The court This is a motivational r......
-
U.S. v. Robertson
...F.3d 979, 985-87 (9th Cir.2006) (concluding that after Booker the Guidelines' departure provisions are obsolete); United States v. Arnaout, 431 F.3d 994, 1003 (7th Cir.2005) (same), with United States v. Jackson, 467 F.3d 834, 838-39 (3d Cir.2006) (affirming the post-Booker vitality of the ......
-
U.S. v. Walker, 05-16756.
... ... 490 F.3d 1294 ... whether a proffered reason was pretextual. The record does not always show us definitively what the district court saw and heard. Miller-El v. Cockrell, 537 U.S. 322, 339, 123 S.Ct. 1029, 1041, 154 L.Ed.2d 931 (2003) (noting ... Although we have not directly compared these two enhancements, the Seventh Circuit ruled in United States v. Arnaout, 431 F.3d 994, ... 490 F.3d 1301 ... 999-1000 (7th Cir.2005), that the two enhancements are distinct and both may be applied because they punish ... ...
-
Haouari v. U.S., 04 CIV.4502(JFK).
...a defendant need not be convicted of an enumerated crime of terrorism for the Section 3A1.4 enhancement to apply. United States v. Arnaout, 431 F.3d 994, 1002 (7th Cir.2005). In summary, Haouari does not convince the Court that his appellate counsel's performance was substandard or that he ......
-
No prior notice to defendant required, rules 7th Circuit.
...The court noted that it has previously held that, post-Booker, the concept of upward departures is "obsolete." U.S. v. Arnaout, 431 F.3d 994, 1003 (7th Cir. 2005). Accordingly, the court xcase: U.S. v. Vitrano, No. 06-1512. xissues: Can a court impose an above-guideline sentence without pri......
-
ACTIVISM OR DOMESTIC TERRORISM? HOW THE TERRORISM ENHANCEMENT IS USED TO PUNISH ACTS OF POLITICAL PROTEST.
...of the terrorism enhancement allowed them to sentence him under the enhancement. See id. at 1247-48. (111.) See United States v. Arnaout, 431 F.3d 994, 1000-01 (7th Cir. 2005) ("[A] defendant need not be convicted of a federal crime of terrorism as defined by [section] 2332(g)(5)(B) for the......