U.S. v. Hunter

• Decision Date: 13 April 1995
• Docket Number: 94-5462,Nos. 94-5461,s. 94-5461
• Citation: 52 F.3d 489
• Parties: UNITED STATES of America, v. Vanessa HUNTER, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 489

52 F.3d 489

UNITED STATES of America, v. Vanessa HUNTER, Appellant.

Nos. 94-5461, 94-5462.

United States Court of Appeals Third Circuit.

Argued Feb. 16, 1995.

Decided April 13, 1995.

Victor Ashrafi (argued), Office of U.S. Atty., Newark, NJ and Paul H. Zoubek, Office of U.S. Atty., Camden, NJ, for appellee U.S.

John M. Holliday (argued), Paglione & Massi, Trenton, NJ, for appellant Vanessa Hunter.

Before: STAPLETON and COWEN, Circuit Judges, and HUYETT, District Judge ^*.

OPINION OF THE COURT

COWEN, Circuit Judge.

Vanessa Hunter appeals from final orders of the United States District Court for the District of New Jersey, which imposed: (1) two concurrent terms of imprisonment of eighteen months each, and a three year period of supervised release; and (2) restitution in an aggregate amount of $75,000 as a condition of supervised release. Because the district court properly applied Guideline Section 3B1.1 in finding that Hunter was a manager of a criminal conspiracy and subject to a two level enhancement pursuant to Section 3B1.1(c), we will affirm those portions of the orders of the district court. On Hunter's claim that the district court failed to make the required factual findings to support its restitution orders, however, we will reverse and remand.

I.

Nu Skin International of Provo, Utah, markets Nu Skin skin-care products through a multi-level network of independent distributors, buying wholesale and selling at a markup. To expand its distributor network the company encourages sponsorship of new distributors; as new distributors are recruited, sponsors are promoted to "executive" or "upline" distributors of the new "downline" distributor. Nu Skin pays monthly commissions to upline executives whose downline distributors attain a target sales volume.

Hunter began selling Nu Skin in the summer of 1990, and she signed as a downline distributor of Joseph Fanelli. Hunter contends that Fanelli assumed total control over Hunter's daily affairs, including controlling her business matters and personal checking account. She maintains that her tolerance of Fanelli's control was based on her dependent nature and the promise that Fanelli would make Hunter a successful upline distributor.

Fanelli urged Hunter to locate sources of credit card account numbers. Fanelli and Hunter planned to use these account numbers to purchase Nu Skin products, which they would then sell on consignment in health centers and hair salons. Thereafter, in the late summer or early fall of 1990, Hunter telephoned a friend, Martin Guzman. After Guzman said he did not have access to credit card data, Hunter urged him to recruit as her source Roel "Roy" Trevino, an employee of the St. Anthony Hotel in San Antonio, Texas. Over the following few weeks, Hunter discussed the matter several times with both Guzman and Trevino, and offered to pay Trevino for every stolen credit card account number.

Hunter maintains that she initially believed that Fanelli would repay Nu Skin as a "loan." She also contends that she feared that Fanelli would physically harm her or her family if she were to disobey him. According to Hunter, Fanelli even boasted of his "ties to the mob" as a means of intimidating her.

Throughout the month of October 1990, Trevino periodically stole credit card data from the St. Anthony Hotel and read it over the telephone to Hunter. Ultimately he compromised the accounts of more than 200 patrons. Hunter paid Trevino by arranging for money to be wired to him in San Antonio. Between October 1990 and December 1991, Hunter, Fanelli, and others working at their direction, used Visa and Mastercard account numbers supplied by Trevino and other sources to place orders for Nu Skin at a total cost in excess of $293,000. Hunter and Fanelli caused orders to be shipped to persons who were willing to hold the shipments until they or any of several accomplices could pick up the shipments. In addition, Hunter and Fanelli caused all fraudulent orders to be made by "distributors" they sponsored, sometimes creating fictitious distributors by executing new distributor agreements using aliases. By placing orders in the names of distributors purportedly sponsored by Hunter and Fanelli, they also caused Nu Skin to issue them checks totalling more than $28,000 for commissions earned on the fraudulent orders.

Fanelli reaped most of the profits from the scheme. Hunter became financially dependent on her sister and eventually was supported by food stamps. She later declared bankruptcy. Since November of 1993, however, Hunter has acquired a job at Fitch Investors in New York where she has continued to work.

The United States filed an information in the District of New Jersey alleging credit card fraud, contrary to 18 U.S.C. Sec. 1029(a)(2), and filed a superseding information in the Western District of Texas, alleging conspiracy to traffic in and use unauthorized access devices, contrary to 18 U.S.C. Secs. 1029(a)(2) and (b)(2). Pursuant to Rule 20 of the Federal Rules of Criminal Procedure, the superseding information from the Western District of Texas was transferred to the District of New Jersey.

Hunter and the Government reached a negotiated plea agreement, and she entered her pleas of guilty. When Hunter re-appeared before the district court for sentencing, the district court imposed two concurrent terms of imprisonment, each of eighteen months, and a three-year period of supervised release. Restitution was also ordered in the aggregate amount of $75,000 as a condition of the supervised release. This appeal followed.

II.

Hunter argues that the district court improperly increased the base offense level by two points upon the erroneous finding that Hunter was a "manager" or "supervisor," pursuant to U.S.S.G. Sec. 3B1.1(c). The determination of Hunter's aggravating role in the offense is essentially factual in nature and, therefore, we will reverse the findings of the district court only for clear error. See United States v. Ortiz, 878 F.2d 125, 126-27 (3d Cir.1989).

Hunter's base offense level was enhanced two levels by the district court under Sec. 3B1.1(c) of the Sentencing Guidelines in order to reflect Hunter's role as a manager/supervisor in the credit card conspiracy. Section 3B1.1 provides:

Based on the defendant's role in the offense, increase the offense level as follows:

(a) If the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive, increase by 4 levels.

(b) If the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants or was otherwise extensive, increase by 3 levels.

(c) If the defendant was an organizer, leader, manager, or supervisor in any criminal activity other than described in (a) or (b), increase by 2 levels.

U.S.S.G. Sec. 3B1.1.

The guideline commentary lists factors that should be considered by the sentencing court in determining whether to apply the "aggravating role enhancement": (1) the exercise of decision making authority; (2) the nature of participation in the commission of the offense; (3) the recruitment of accomplices; (4) the claimed right to a larger share of the fruits of the crime; (5) the degree of participation in planning or organizing the offense; (6) the nature and scope of the illegal activity; and (7) the degree of control and authority exercised over others. U.S.S.G. Sec. 3B1.1, commentary, n. 4. The commentary also acknowledges that more than one person can qualify as a leader of a criminal conspiracy, and emphasizes that the aggravating role enhancement "is included primarily because of concerns about relative responsibility." Id. & background.

It is stipulated that the entire loss incurred as a result of the scheme totalled approximately $321,000. The Government does not contest Hunter's assertion that she never possessed a substantial portion of these sums. Hunter argues that the fact that she led a low-income lifestyle is the most compelling and objective evidence that she was not a "supervisor."

While it may be true that Hunter's low-income lifestyle weighs against the "claimed right to a larger share of the fruits of the crime" factor, we do not believe that considering the record as a whole, the district court was clearly erroneous in its decision to give an enhancement.

The district court imposed on Hunter two points, the lowest enhancement under Sec. 3B1.1. The district court stated:

Because if you look at the record, if you look at the presentence report, she is up to her eyeballs here. She recruited Guzman, Tr[e]vino, she received credit card information from them and others; she used credit card data to place orders for N[u] Skin; she created fictitious distributors; she signed fraudulent credit card slips herself....

Because these are all managerial type things, or at least her role here was clearly managerial. I mean I suggest that when and if Mr. Fanelli is convicted, he will get more than a two point enhancement. He will get at least a three. Because his role was greater than hers. But that is not inconsistent with saying that she too was a manager and supervisor of Guzman, of Tr[e]vino, for starters.

App. at 42-43. The district court also recognized Hunter's argument that her sentence should not be enhanced because she did not profit as much as Fanelli, yet nevertheless was persuaded that based on the facts in the record as a whole, there was sufficient basis for the two point enhancement. App. at 48.

We conclude that there was ample support in the record for the district court's enhancement determination. As the district court found, the fact that Hunter did not receive the bulk of the profits or live a lavish lifestyle as a result of the crime does not change the analysis of her relative individual conduct and culpability. The district court was not clearly erroneous in concluding that Hunter was a manager or...