U.S. v. Khedr

• Decision Date: 05 September 2003
• Docket Number: Docket No. 02-1354.
• Citation: 343 F.3d 96
• Parties: UNITED STATES of America, Appellee, v. Sofwat KHEDR, Defendant, Abdullah Alhumoz, Defendant-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

343 F.3d 96

UNITED STATES of America, Appellee, v. Sofwat KHEDR, Defendant Abdullah Alhumoz, Defendant-Appellant.

Docket No. 02-1354.

United States Court of Appeals, Second Circuit.

Argued: February 28, 2003.

Decided: September 5, 2003.

COPYRIGHT MATERIAL OMITTED

Roland R. Acevedo, Seiff, Kretz & Maffeo (Thomas Eddy, on the brief), New York, NY, for Defendant-Appellant.

Jo Ann M. Navickas, Assistant United States Attorney for the Eastern District of New York (David C. James, Assistant United States Attorney, of counsel; Roslynn R. Mauskopf, United States Attorney, on the brief), Brooklyn, NY, for Appellee.

Before: STRAUB, KATZMANN, and RAGGI, Circuit Judges.

Judge RAGGI concurs in part and dissents in part in a separate opinion.

STRAUB, Circuit Judge.

Defendant-Appellant Abdullah Alhumoz appeals from a judgment of the United States District Court for the Eastern District of New York (Nina Gershon, Judge) convicting him, following a jury trial, of conspiring to commit bank and credit card fraud in violation of 18 U.S.C. § 371. Alhumoz is a used-car dealer in Brooklyn who was involved in a scheme to make money by securing auto loans for customers and cars that did not exist. He argues on appeal that his conviction should be reversed because he received ineffective assistance from his trial counsel. Alhumoz also asserts that the District Court improperly enhanced his sentence for (i) obstructing justice and (ii) receiving more than $1 million in "gross receipts" from his crime. We decline to address the ineffective-assistance claim, and affirm the District Court's application of the gross-receipts sentencing enhancement, but hold that there was insufficient evidence to support the application of the obstruction-of-justice enhancement to Alhumoz's sentence. We therefore remand for resentencing on this limited ground.

BACKGROUND

In January 2002, Alhumoz was tried in the Eastern District of New York for conspiracy to commit bank fraud and credit card fraud, together with co-defendant Safwat Khedr, a merchant who participated in a related scheme. The charges against Alhumoz arose out of his participation in a scheme led by an acquaintance, Mustafa Yassin, who later cooperated with the government and testified against Alhumoz at trial. Yassin recruited and paid "customers" to give him their Social Security numbers, birthdates, and other personal information. Yassin used the information for his credit card schemes and also gave the information to Alhumoz, who used it to apply for fraudulent car loans on the Internet. Whenever a loan was granted, Yassin brought the check to Alhumoz, who cashed the check, paid part of the proceeds to Yassin, and kept the remainder for himself. The car loans were never repaid.

Yassin's trial testimony about the scheme was corroborated by another cooperating witness, Salaheldin Fawzy, who testified that he was recruited to be a "customer" by Yassin, that Alhumoz applied for a car loan in Fawzy's name, and that he had carried money from Alhumoz to Yassin on several occasions. Both witnesses' testimony was corroborated by excerpts of a conversation that Fawzy recorded with Alhumoz in which Alhumoz discussed his unsuccessful attempt to obtain a car loan in Fawzy's name.

In addition, the government introduced bank files relating to 21 car loan applications that had been submitted over the Internet. All but one of the applications were submitted in cooperating witness Yassin's name, the name of one of his aliases, or a name that Yassin identified at trial as one of his customers. Evidence adduced at trial demonstrated that the vehicle identification numbers listed in the loan application materials were either invalid or used for more than one loan, and the car dealerships listed on the applications did not exist at the addresses listed.

The government connected Alhumoz to these 21 fraudulent loan applications through several pieces of physical evidence. A computer seized from Alhumoz's apartment held files relating to the e-mail addresses used to submit the applications, along with information for "Qamar Echevarria," an alias that Alhumoz admitted he used. Of the nine loan checks introduced at trial, three carried Alhumoz's fingerprints, and one of the loan checks had Alhumoz's telephone number written on the face of the check. Further, invoices for two of the dealerships listed on the fraudulent loan applications were found in Alhumoz's possession, while blank invoices and corporate records for these dealerships, along with uncashed car loan checks, were found at apartments used by Alhumoz.

After a seven-day trial, Alhumoz was convicted of conspiring to commit bank fraud and credit card fraud in violation of 18 U.S.C. § 371. He was sentenced to five years' imprisonment and three years' supervised release, and ordered to pay restitution in the amount of $453,400. He is currently serving his sentence.

Alhumoz appeals his conviction, arguing that it is constitutionally infirm because he was provided ineffective assistance of counsel. He also challenges the application of two enhancements to his sentence, arguing that the District Court erred in increasing his sentencing range based on "gross receipts" totaling more than $1 million from his crime, and obstruction of justice.

DISCUSSION

I. Ineffective Assistance

Defendant's primary challenge to his conviction is that he received ineffective assistance of counsel at trial in violation of the Sixth Amendment, and should therefore receive a new trial. Although defendant has had new counsel representing him at sentencing and on appeal, this court has expressed a "baseline aversion to resolving ineffectiveness claims on direct review." United States v. Williams, 205 F.3d 23, 35 (2d Cir.) (quoting United States v. Salameh, 152 F.3d 88, 160-61 (2d Cir.1998)), cert. denied, 531 U.S. 885, 121 S.Ct. 203, 148 L.Ed.2d 142 (2000). Among the reasons for this preference is that the allegedly ineffective attorney should generally be given the opportunity to explain the conduct at issue. See Sparman v. Edwards, 154 F.3d 51, 52 (2d Cir.1998) (per curiam). This court has, however, entertained ineffective assistance claims for the first time on direct appeal when their "resolution is `beyond any doubt' or to do so would be in the interest of justice." United States v. Matos, 905 F.2d 30, 32 (2d Cir.1990) (quoting United States v. Aulet, 618 F.2d 182, 186 (2d Cir.1980)).

The Supreme Court recently had occasion to remind us that "in most cases a motion brought under § 2255 is preferable to direct appeal for deciding claims of ineffective-assistance." Massaro v. United States, ___ U.S. ___, 123 S.Ct. 1690, 1694, 155 L.Ed.2d 714 (2003). In Massaro, the Supreme Court indicated that ineffective-assistance claims should ordinarily "be litigated in the first instance in the district court, the forum best suited to developing the facts necessary to determining the adequacy of representation during an entire trial." Id. Accordingly, the Supreme Court explained, few ineffective-assistance claims "will be capable of resolution on direct appeal." Id. at 1695. Consistent with this approach, we decline to address the ineffective assistance claim on this direct appeal.

II. Gross Receipts Enhancement

Alhumoz also challenges two issues related to his sentence. The first challenge is to the District Court's application of four additional levels to his base sentencing level, pursuant to U.S.S.G. § 2F1.1(b)(7)(B),¹ because Alhumoz derived more than $1 million in "gross receipts" from the crime.

A. Standard of Review

The government argues that Alhumoz waived his objection to the inclusion of these loans by failing to object at sentencing, and specifically agreeing to the government's representation that approximately $1.7 million was the "actual loss amount" attributable to defendant's crime. Although defendant did not contest the "actual loss" calculation for purpose of U.S.S.G. § 2F1.1 (b)(1)(N), he did object to the government's contention that he should receive a sentencing enhancement pursuant to U.S.S.G. § 2F1.1 (b)(7)(B) for having derived more than $1,000,000 in "gross receipts" from his crime. Therefore, this challenge was not waived.

Nonetheless, it is undisputed that defendant did not specifically object to the particular loans — $186,000 borrowed from the companies Peoplefirst.com and Giggo.com — that he now challenges on appeal, and therefore his challenge is subject to "plain error" review. See Fed.R.Crim.P. 52(b). Defendant argues that this challenge should be reviewed under a less rigorous standard based on United States v. Sofsky, 287 F.3d 122, 125-26 (2d Cir.2002), because he did not receive prior notice of the fact that the companies did not claim that they actually lost money on the loans. Although defendant did have prior notice that these loans were being attributed to him as part of the "gross receipts" calculation, he claims in his brief on appeal that he did not know that these companies were not claiming losses on these loans until he was handed the Third Addendum to the PSR, only minutes before the sentencing proceeding in District Court was to begin. We need not decide, however, whether this circumstance warrants application of a more relaxed plain error standard, see id. at 125, because we conclude that the District Court's application of this enhancement was proper under any standard.

B. Application of Enhancement

Under § 2F1.1(b)(7)(B), the District Court is to provide a four-level enhancement to a defendant's offense level if the offense "affected a financial institution and the defendant derived more than $1,000,000 in gross receipts from the offense." At sentencing, the government argued that defendant was responsible for borrowing $1,718,000 in phony auto loans, and that defendant received 60 percent of the face value of these loans, or $1,031,085. The 60 percent figure was arrived at after deducting the 10 percent the...