U.S. v. Deutsch
| Decision Date | 11 February 1993 |
| Docket Number | Nos. 491,D,861,s. 491 |
| Citation | 987 F.2d 878 |
| Parties | UNITED STATES of America, Appellee, v. Melvin P. DEUTSCH, Defendant-Appellant. ockets 92-1174, 92-1319. |
| Court | U.S. Court of Appeals — Second Circuit |
Martin Goldberg, Franklin Square, NY, for defendant-appellant.
Mark S. Cohen, Asst. U.S. Atty., E.D.N.Y., Brooklyn, NY (Andrew J. Maloney, U.S. Atty., Emily Berger, Asst. U.S. Atty., of counsel), for appellee.
Before: OAKES, MINER and McLAUGHLIN, Circuit Judges.
Melvin Deutsch appeals from a judgment entered on June 5, 1992, in the United States District Court for the Eastern District of New York, Jacob Mishler, Judge. Deutsch was convicted, following a jury trial, of committing credit card fraud in violation of 18 U.S.C. §§ 1029(a)(2) and 1029(c)(1) (1988). He was sentenced to a term of 63 months in prison and three years of supervised release. The district court fined Deutsch $60,000, imposed a $50 special assessment and ordered Deutsch to pay $34,401.33 in restitution to AT & T, the victim of the fraud.
Deutsch presents two challenges to his conviction. First, he argues that his statements at arrest should have been suppressed as federal agents had illegally entered his house without a warrant. Second, Deutsch argues that the district court erred in excluding certain trial testimony.
Deutsch also contests his sentence. He claims that the district court erred in upwardly departing from the range of 33 to 41 months provided in the federal Sentencing Guidelines to a range of 51 to 63 months. See U.S.S.G. § 5A Sentencing Table (Nov. 1992) ("Guidelines"). He also argues that the district court erroneously calculated the adjusted base offense level by improperly estimating the intended or probable loss caused by his fraud rather than the actual loss and by adding points for Deutsch's violation of a judicial order.
We find his arguments challenging the sentencing court's calculation of loss and upward departure to have merit and therefore remand for resentencing in light of this opinion.
In October 1990, Deutsch applied for an AT & T Universal Credit Card, in his own name, using a false date of birth and social security number. AT & T issued Deutsch a card with an $8,000 credit limit. Over the next three months, approximately $34,000 was charged on the card, despite the $8,000 credit limit. In what might be called a credit-card-kiting scheme, Deutsch wrote nine checks seriatim to AT & T, all of which bounced, as he had known they would. The checks, drawn on two accounts at the Royal Bank of Canada ("RBC"), were dishonored by the RBC because Deutsch had previously closed those accounts. Due, however, to AT & T's policy of giving immediate credit upon receipt of each check, pending collection, each dishonored check maintained the active status of Deutsch's account and increased his credit line. As in all such schemes, the string ran out, and after three months, Deutsch's fraud was uncovered.
In March 1991, AT & T informed Secret Service Special Agent Alan Bergman of Melvin Deutsch's suspected fraudulent use of an AT & T credit card. The card at that time already had over $30,000 charged on it. Bergman soon discovered that the social security number provided by Deutsch on his application was not actually Deutsch's number. Bergman also learned that another AT & T card, issued under a different name, had been sent subsequently to Deutsch's address and that yet another had been ordered.
Bergman chose to deliver this last card himself. On May 15, 1991, Bergman, another special agent, and two postal inspectors drove up to Deutsch's house in a mail truck. Five large dogs, including two Great Danes, were outside the house. Hearing the truck's horn, Robert Ervin, one of Deutsch's housemates, left the house and approached the truck. Ervin signed for the package containing the third AT & T card.
Bergman then identified himself to Ervin and asked if he were Deutsch. Ervin replied that he was not. With gun drawn but pointing downwards to protect against the dogs, Bergman asked Ervin for identification. Ervin said his identification was inside and returned to the house accompanied by the agents. After a quick sweep of the house, Bergman holstered his gun. The agents noticed an office with photocopier, eight or nine telephones, law school diplomas bearing Deutsch's name, and a stack of credit card applications. The agents were told that Deutsch was in Chicago and would return at 6:00 p.m.
The agents left and returned at 6:30 p.m. without an arrest warrant. The agents wore their police identification badges outside their shirts and kept their guns holstered. In response to the doorbell, Deutsch's girlfriend, now his wife, Camilia El Didi, opened the door. The agents identified themselves and asked to speak with Deutsch. El Didi closed the door. After the agents again rang the bell, El Didi opened the door again. The agents saw Deutsch in the hallway. According to Bergman, Deutsch walked toward him and Bergman stepped inside. When informed that the visit was to investigate credit card fraud, Deutsch invited the two agents to talk in the living room.
Deutsch denied any involvement in credit card fraud. After receiving Miranda warnings, Deutsch told the agents he was an attorney and knew his rights. He subsequently refused to allow a search of the house after determining that the agents did not have a search warrant. The agents then drove Deutsch to the Secret Service office, giving him further Miranda warnings on the way and taking down information such as Deutsch's claimed social security number. Deutsch was later indicted for credit card fraud.
Deutsch moved prior to trial for suppression of statements made by himself, El Didi, Ervin and Jack Kessel, another colleague who had been present at the morning search. According to Deutsch, the agents' entry into his house had been unlawful because of their failure to obtain a warrant. All four testified that the agents had used force to enter the house in the morning and in the evening of May 15, 1991. The district court denied Deutsch's motion to suppress the statements of El Didi, Ervin, and Kessel on the grounds that "Fourth Amendment rights are personal and can be asserted only by those whose rights are violated." The court also denied Deutsch's motion to suppress his own statements, crediting the testimony of Bergman where it contradicted Deutsch's statements. Thus, the court determined that the agents had obtained consent to enter Deutsch's house from Ervin in the morning and from Deutsch in the evening. During the hearing, Deutsch claimed he was an attorney, that he had attended law school at "McGill, York and Drake" and--not without reason--that he had "considerable experience and [was] quite knowledgeable" about United States criminal law.
At the trial, several witnesses testified as to the means employed by Deutsch to effect the fraud as well as to the extent of AT & T's loss. Agent Bergman also offered testimony about the investigation and arrest of Deutsch. El Didi was the only witness for the defense. She testified that from October 1990 to December 1990 she had lived with Deutsch and a series of sublessees or co-tenants, including Allan Berube. Berube had moved in shortly after his release from jail in October, 1990. According to El Didi, Berube gave Deutsch a credit card in Deutsch's name and told Deutsch he could use the card, since an unnamed "friend" of Berube's had offered to pay the bill. At the time of trial, Berube was again in prison, this time for violating the conditions of his parole.
Deutsch sought to call Berube, with the suggestion that doing so would prove that Berube had ordered the credit card in Deutsch's name and had committed the fraud. Deutsch wanted to treat Berube as a hostile witness, using Berube's elderly parents to impeach his testimony. Expressing concern for Berube's fifth amendment rights, the district court appointed counsel for Berube and had him testify outside the presence of the jury. Berube testified only to general background information, asserting his privilege against self-incrimination on the questions regarding the credit card fraud.
The district court denied Deutsch's motion to have Berube testify before the jury. Citing United States v. Martin, 526 F.2d 485, 487 (10th Cir.1975), the district court held that it was improper for Deutsch to call Berube for the sole purpose of compelling him to invoke his fifth amendment privilege in front of the jury. In addition, the district court held that the rest of Berube's testimony was irrelevant, and that, therefore, his testimony should be excluded. The jury found Deutsch guilty of credit card fraud.
The district court sentenced Deutsch on June 5, 1992. Judge Mishler added six points to the base offense level of 6 for fraud, by measuring the "intended or probable loss" as $114,000, rather than AT & T's actual loss of approximately $34,000. The district court evidently reached this figure by adding together all the checks Deutsch had written to AT & T.
Under Section 2F1.1(b)(3)(B) of the Guidelines, the court also added two points for Deutsch's violation, in the course of the fraud, of a judicial order forbidding him from holding himself out as an attorney. 1 The final adjusted offense level, which included other adjustments not challenged on appeal, was 18. At Deutsch's criminal history category of III, the guideline range was 33 to 41 months. The district court upwardly departed to offense level 22 which carries a range of 51 to 63 months in the criminal history category. The district court stated that this was a vertical departure and that the departure was based "on the defendant's long history of criminal activity, [his] unreliability, perjury and fraud" as well as on his likelihood of recidivism. The district court specifically noted that the upward departure was not based on the fact that...
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