U.S. v. Bahhur

• Decision Date: 21 April 1999
• Docket Number: No. 98-5386,98-5386
• Citation: 200 F.3d 917
• Parties: (6th Cir. 2000) United States of America, Plaintiff-Appellee, v. Adnan Bahhur, Defendant-Appellant. Argued:
• Court: U.S. Court of Appeals — Sixth Circuit

Page 917

200 F.3d 917 (6th Cir. 2000)

United States of America, Plaintiff-Appellee, v. Adnan Bahhur, Defendant-Appellant.

No. 98-5386

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: April 21, 1999

Decided and Filed: January 14, 2000

[Copyrighted Material Omitted]

Appeal from the United States District Court for the Western District of Tennessee at Memphis; No. 95-20122--Jon Phipps McCalla, District Judge.

Lawrence J. Laurenzi, OFFICE OF THE U.S. ATTORNEY, Memphis, Tennessee, for Appellee.

Bruce I. Griffey, Federal Public Defender, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Memphis, Tennessee, for Defendant-Appellant.

Before: SILER and MOORE, Circuit Judges; SMITH, District Judge.^*

OPINION

SMITH, District Judge.

Defendant Adnan Bahhur appeals his sentence of 97 months' incarceration and 3 years' supervised release, following his guilty plea to engaging in a prohibited monetary transaction, in violation of 18 U.S.C. § 1957; food stamp fraud, in violation of 7 U.S.C. § 2024(b)(1); and failure to appear, in violation of 18 U.S.C. § 3146(a)(1).

On appeal, Bahhur raises the following issues: (1) whether the district court had subject matter jurisdiction over his offense of engaging in a prohibited monetary transaction; (2) whether the district court erred in calculating Bahhur's guideline score using the prohibited monetary transaction guideline, pursuant to U.S.S.G. § 2S1.2; (3) whether the district court erred in increasing Bahhur's sentence by three levels based on the value of the funds attributable to the defendant, pursuant to U.S.S.G. § 2S1.2(b)(2); (4) whether the district court erred in imposing a three-level increase in Bahhur's sentence for an aggravating role, pursuant to U.S.S.G. § 3B1.1; and (5) whether the district court erred in increasing defendant's sentence by three levels, pursuant to U.S.S.G. § 2J1.7 on his underlying prohibited monetary transaction conviction, instead of applying the enhancement to his conviction for failing to appear. For the following reasons, we affirm in part and reverse in part the judgment of the district court, and remand for resentencing.

I.

Beginning in 1993 and continuing until 1995, the defendant Adnan Bahhur and seven other co-defendants engaged in a fraudulent food stamp redemption scheme. The Bahhurs operated two convenience stores, United Family Foods Grocery and the Shop-N-Save Grocery. At these stores, federal food stamp coupons were purchased at a discount for cash and redeemed for full value through the Federal Food Stamp Program by depositing the coupons in various bank accounts held in the names of grocery stores operated by the Bahhurs.

On November 25, 1997, the defendant pleaded guilty to Count 10, engaging in a prohibited monetary transaction in violation of 18 U.S.C. § 1957, and Count 34, food stamp fraud in violation of 7 U.S.C. § 2024(b)(1), in district court case number 95-20122; and one count of failing to appear in violation of 18 U.S.C. § 3146(a)(1), in district court case number 97-20227.¹

On February 18, 1998, a revised presentence investigation report was prepared that calculated the defendant's guideline range to be 97-121 months based on a total offense level of 28 and a criminal history category III. The defendant filed several objections to the presentence investigation report.

On February 24 and 25, 1998, the district court conducted a sentencing hearing. At the sentencing hearing the court first addressed defendant's objection to the presentence report wherein the defendant received a three level enhancement under U.S.S.G. § 2S1.2(b)(2) based upon the value of the criminally derived funds being more than $350,000 but less than $600,000. The government relied upon the testimony of Special Agent Robert Johnson. Agent Johnson testified that he was able to locate six accounts which were used in the illegal food stamp enterprise.

Agent Johnson obtained records for these accounts from the period of September of 1994 to March of 1995. During this eight month period $440,933.00 was deposited into the accounts. Of that amount, food stamps constituted $393,843.00 or 88.5% of the deposits (JA Vol. I, 212; Ex. 3, JA Vol. II, 299). Moreover, Agent Johnson testified that during the time the defendant was cooperating with the government the defendant told him (Johnson) that the amount of legitimate sales for the store on Tillman was an average of one hundred and fifty to two hundred dollars a day (JA Vol. I, 229), and the two stores were open six days a week (JA Vol. I, 250). In addition, the defendant testified that only about half of the $393,843 in food stamps, including beer sales, was obtained fraudulently (JA Vol. I 256). The court did not find defendant to be a credible witness (JA Vol. I, 282).

The district court found that the value of criminally derived funds was greater than $350,000 but less than $600,000 (JA Vol. I, 179). The district court stated that:

This involved multiple locations, multiple bank accounts, in all likelihood millions of dollars, and we just simply have a snapshot of a period of time which gives us a glimpse of what was transpiring. It is clear to me, and I think the evidence does preponderate in favor of the determination that these are not all the accounts and that monies were deposited, food stamps were deposited in other accounts. That's just from listening very carefully to Mr. Bahhur's own testimony. . . . I will tell you that if we had to say what was the exact amount, I couldn't do it. I could tell you that I believe it is very substantially in excess of $350,000, but I don't know that anybody would ever be able to do that. . . . I know from my experience with these cases that these percentages of food stamps will be extremely high. I can almost take judicial notice of facts such as that. When you get to 90 plus percent, when you get 84 percent, you're way way past any legitimate operation, and the suggestion that somehow being in a neighborhood that had Section 8 housing and had public housing, that would not affect the fact that the testimony supported the conclusion that most of the sales from these - when there were sales, most of the sales were of beer and cigarettes, which are non food stamp items. . . .

(JA Vol. I, 279).

The defendant then objected to the enhancement under U.S.S.G. § 3B1.1 for his role in the offense. In addressing the management role issue, the government elicited the testimony of Agent Johnson who characterized the defendant as being responsible for conducting the banking in five of the accounts. In addition, Agent Johnson indicated that Adnan Bahhur recruited a co-defendant, Robert Davis, to open up two of the accounts in Davis' name (JA Vol. I, 215). Johnson explained that Robert Davis would sign the checks in blank and defendant would be responsible for filling in the remaining portions of the check (JA Vol. I at 204). Moreover, Johnson indicated that a third and fourth account in the name of Eagle Food Market #2 and S&S Market were opened by the defendant using the alias of Judeh Fiaz (JA Vol. I, 208).

The district court applied a three level enhancement pursuant to U.S.S.G. § 3B1.1 because defendant was the signator on the bank accounts, and thus had control of the accounts and assets. Specifically, the district court stated that "the person who was in charge of these accounts, which was really the only thing that mattered was Adnan Bahhur." (JA Vol. I, 277).

The defendant then objected to the three level enhancement pursuant to U.S.S.G. § 2J1.7 for committing an offense while on release. The district court found that the presentence report was correct and that the guidelines allow for an enhancement for committing an offense while on release to be added to the underlying offense along with the obstruction of justice enhancement, pursuant to U.S.S.G. §§ 2J1.6 and 3C1.1.

Defendant then argued that the district court lacked subject matter jurisdiction over his conviction under 18 U.S.C. § 1957. Defendant maintained that his offense level in the PSI report was incorrect because his offense level should have been calculated using U.S.S.G. § 2F1.1 relating to fraud. The district court rejected defendant's position and relied on its earlier decision on defendant's motion to dismiss, finding that the sums involved in the fraudulent food stamp transactions can be aggregated (JA Vol. I, 80).

The district court then adopted the presentence report and determined the defendant's total offense level to be 28 and his criminal history score to be a category III (JA Vol. I, 287). The defendant was sentenced to 97 months of incarceration: fifty-seven months on the underlying offenses of food stamp fraud and engaging in a prohibited monetary transaction, seventeen months consecutive pursuant to 18 U.S.C. § 3146(b)(2) for failure to appear, and twenty-three months consecutive pursuant to 18 U.S.C. § 3147 for commission of an offense while on release, to be followed by three years of supervised release and a special assessment of $150. The Judgment was filed on March 2, 1998, and defendant filed his notice of appeal on March 4, 1998.

II.

A. District Court's Subject Matter Jurisdiction

Defendant Bahhur argues that the district court lacked subject matter jurisdiction over his conviction under 18 U.S.C. § 1957. Defendant maintains that 18 U.S.C. § 1956 defines "specified unlawful activity" for purposes of 18 U.S.C. § 1957 as a felony (singular) food stamp transaction (singular) that involves a quantity of coupons having a value of not less than $5,000. Defendant sets forth that he never engaged in a transaction involving a quantity of coupons in excess of $5,000, therefore, the district court was without subject matter jurisdiction. "Questions of subject matter jurisdiction are questions of law that are reviewed de novo." United States v. Yanott, 42 F.3d 999, 1003 (6th Cir. 1994).

Title 18 United States Code § 1957, states in relevant part:

(A) Whoever, in any...