U.S. v. Draves

• Decision Date: 28 February 1997
• Docket Number: 96-1666,Nos. 96-1408,s. 96-1408
• Citation: 103 F.3d 1328
• Parties: UNITED STATES of America, Plaintiff-Appellee, Cross-Appellant, v. Frederick R. DRAVES, Defendant-Appellant, Cross-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1328

103 F.3d 1328

UNITED STATES of America, Plaintiff-Appellee, Cross-Appellant, v. Frederick R. DRAVES, Defendant-Appellant, Cross-Appellee.

Nos. 96-1408, 96-1666.

United States Court of Appeals Seventh Circuit.

Argued Oct. 24, 1996.

Decided Jan. 3, 1997.

Rehearing Denied Feb. 28, 1997.

Andrew B. Baker, Jr., Office of U.S. Atty., Dyer, IN, Donald J. Schmid (argued), Office of U.S. Atty., South Bend, IN, for U.S.

James J. Shea (argued), Daniel J. Palmer, Hunt, Suedhoff, Borror & Eilbacher, Fort Wayne, IN, for Frederick L. Draves.

Before CUMMINGS, ESCHBACH, and FLAUM, Circuit Judges.

ESCHBACH, Circuit Judge.

A jury convicted Frederick R. Draves of aiding and abetting credit card fraud in violation of 15 U.S.C. § 1644(a) and 18 U.S.C. § 2. On appeal, Draves challenges his conviction on jurisdictional, sufficiency of the evidence, and ineffective assistance of counsel grounds. The government counterappeals Draves' sentence, challenging the district court's refusal to apply a sentencing enhancement for obstruction of justice. We affirm both Draves' conviction and his sentence.

I. FACTS

On June 16, 1994, while enjoying a post-softball game beer at the City Limits Bar in South Bend, Indiana, Keith Hodgson discovered that his wallet was missing. Among other things, the wallet contained Hodgson's automatic teller machine card and his mother's VISA Gold card, an account on which Keith Hodgson was an authorized signatory. The thief was Jill Parmelee, who stole the wallet and then left the bar with the defendant, her acknowledged lover and periodic roommate since early 1994.

Immediately after the theft, Draves drove Parmelee on several errands. First, Draves took Parmelee to a nearby automatic teller machine ("ATM"), where Parmelee tried in vain to withdraw money from Hodgson's account using the stolen ATM access card. After Parmelee made several unsuccessful attempts to enter the correct personal identification number, the machine confiscated the card. Draves' next stop was a Meijer department store located on Grape Road in Mishawaka, Indiana, where Parmelee charged $298.20 worth of merchandise to the stolen VISA Gold card at 1:30 a.m. Draves then drove Parmelee to a second Meijer store, this one located on Portage Road in South Bend, where Parmelee charged another $714.69 worth of merchandise to the card at 2:41 a.m. Parmelee testified that Draves assisted her with these purchases by driving her to the stores, accompanying her into the stores, and carrying the merchandise to the car. Draves received merchandise from at least one of the transactions. The second Meijer store purchase was captured on store surveillance videotape, which revealed that Draves accompanied Parmelee through the checkout lane, and waited with her for approximately fifteen minutes while the transaction was processed. Parmelee then returned to the Mishawaka Meijer store, where she charged another $347.60 worth of merchandise to the stolen card at 4:49 a.m. Draves insists, and Parmelee testified, that Draves did not accompany Parmelee on this third shopping trip. Parmelee also testified that she made these hurried, pre-dawn shopping sprees to maximize her purchasing power before the card was reported stolen.

On September 6, 1995, the government returned an eight count indictment charging Parmelee, Draves, and three other participants with this and other related fraudulent credit card use. At trial, Draves contended, as he does here, that he was unaware that the credit card did not belong to Parmelee. After a two-day trial, the jury found Draves guilty of count 5 of the indictment, which alleged that Draves knowingly used or attempted to use a fraudulently obtained credit card in violation of 15 U.S.C. § 1644(a) and 18 U.S.C. § 2. Both Draves' counsel, and Draves himself proceeding pro se, filed motions for judgment of acquittal. Both motions were denied. The district court sentenced Draves to ten months imprisonment, a three year post-release supervision period, a $2,500 fine, and restitution payable to the issuing company of the stolen credit card. On this direct appeal, which we hear pursuant to 18 U.S.C. § 3742(a), Draves challenges his conviction, and the government challenges the sentence.

II. DISCUSSION

Draves makes three challenges to his conviction: 1) the district court lacked jurisdiction under § 1644(a); 2) the district court erred in denying his motion for judgment of acquittal; and 3) his trial counsel's assistance was ineffective. The government counterappeals Draves' sentence on the grounds that the district court should have, but did not, give an obstruction of justice enhancement. We proceed by issue.

1. Jurisdictional Challenge

Title 15 U.S.C. § 1644(a) punishes the knowing use of a fraudulently obtained credit card to acquire "money, goods, services, or anything else of value which within any one-year period has a value aggregating $1,000 or more." Draves challenges the jurisdiction of the district court because he argues that this dollar minimum, which is required for prosecution under the statute, was not met. Our review of a challenge to the district court's subject-matter jurisdiction is de novo. ¹ Waid v. Merrill Area Pub. Sch., 91 F.3d 857, 860 (7th Cir.1996). Although we agree that the $1,000 statutory minimum is jurisdictional, see United States v. DeBiasi, 712 F.2d 785, 790 (2d Cir.1983), we conclude that this minimum was met.

On the night of the fraudulent shopping spree, Parmelee made three purchases at two different Meijer department stores. The first purchase was at the Mishawaka Meijer store for $298.20, the second at the South Bend Meijer store for $714.69, and the third back at the Mishawaka Meijer store for $347.60. Parmelee testified that Draves did not accompany her for the third shopping trip. Even accepting this testimony, however, the first two purchases (which Draves indisputably aided by providing transportation) total $1012.89 if we include sales tax in the statutory aggregate value.

Draves argues that because he was only privy to the first two purchases, and because the combined retail ticket price of those two purchases before sales tax equaled $941, he cannot be charged under § 1644(a). The government counters that sales tax can be included in the calculation of the $1,000 threshold jurisdictional value under § 1644(a). In the alternative, the government argues that it proved Draves' involvement in Parmelee's third fraudulent purchase, and that even without sales tax, the three purchases exceed $1,000. We need not reach this second argument, however, because we agree with the first: sales tax is includable in "aggregate value" under § 1644(a). We reject Draves' contention that "retail price" is synonymous with "value" under the statute.

In United States v. Picquet, the Fifth Circuit addressed this very issue when interpreting 18 U.S.C. § 1029(a)(2), which prohibits the use of unauthorized access devices to obtain "anything of value aggregating $1,000 or more." 963 F.2d 54 (5th Cir.1992). In Picquet, the court rejected the defendant's argument that a sales tax payment is not a thing of value, and held that sales taxes were includable in determining the aggregate value of the goods and services obtained in violation of the statute. Id. at 56. The court reasoned that "anything of value," includes sales tax because it has value to several entities, including the defendant, the bankcard company, and the taxing authorities. Id. This reasoning is apposite here. In Indiana, a purchaser must, as a prerequisite to obtaining goods or services, pay tax. Defendant's argument that he received nothing of value when he used the credit card to pay a tax prerequisite to receiving the goods defies common sense.

The fair market value of property is commonly defined as the price a willing buyer would pay a willing seller for the property, when neither is under compulsion to buy or sell. See, e.g., United States v. Cartwright, 411 U.S. 546, 550, 93 S.Ct. 1713, 1716, 36 L.Ed.2d 528 (1973) (valuing property for federal income, estate, and gift taxes); United States v. Bakken, 734 F.2d 1273, 1278 (7th Cir.1984) (calculating value of stolen goods); United States v. Crown Equip. Corp., 86 F.3d 700, 707 (7th Cir.1996) (calculating contract damages) (interpreting Wisconsin law). In states that levy sales tax, buyers necessarily consider this mandatory amount in determining what they are willing to pay for an item. See, e.g., United States v. Burns, 894 F.2d 334, 336 (9th Cir.1990) (amount of loss, where "loss" is defined as the "value of property taken, damaged or destroyed," includes sales tax and shipping charges because a willing buyer is prepared to pay those charges).

In addition, the proper definition of "value" under § 1644(a) is specifically informed by the purpose of the statute. A violator of § 1644(a) is defrauding the issuing credit card company, which bears the ultimate responsibility to pay the merchant the total amount charged, not merely the retail sticker price of the goods. Therefore, the appropriate meaning of "value" under a statute penalizing fraudulent credit card use is the amount out of which the credit card company was defrauded: the total amount charged to the card. We hold that sales tax is includable in calculating the aggregate value under 15 U.S.C. § 1644(a). ²

2. Sufficiency of the Evidence

Draves next challenges the district court's denial of his motion for acquittal, insisting there was a "complete absence of evidence" that Draves shared Parmelee's criminal intent. Although our review of a denial of a motion for judgment of acquittal is de novo, United States v. Sax, 39 F.3d 1380, 1385 (7th Cir.1994), we review the entire record and accompanying inferences in the light most favorable to the government. United States v. Briscoe, 65 F.3d 576, 586 (7th Cir.1995). Under this deferential standard, we will reverse only if there is no evidence from which any rational trier...