U.S. v. Koenig

• Decision Date: 13 August 1991
• Docket Number: Nos. 89-50523,89-50530,89-50533 and 89-50547,89-50524,s. 89-50523
• Citation: 952 F.2d 267
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Scott KOENIG, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Mark KOENIG, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Jacklyn BOBBY, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Robert HUSSEY, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Bobbi Jo BOBBY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 267

952 F.2d 267

UNITED STATES of America, Plaintiff-Appellee, v. Scott KOENIG, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Mark KOENIG, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Jacklyn BOBBY, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Robert HUSSEY, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Bobbi Jo BOBBY, Defendant-Appellant.

Nos. 89-50523, 89-50524, 89-50530, 89-50533 and 89-50547.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Aug. 13, 1991

(Nos. 89-50523, 89-50524, and 89-50530).

Submitted Aug. 13, 1991 ^*

(Nos. 89-50533 and 89-50547).

Decided Dec. 19, 1991.

Charles Pereyra-Suarez, McKenna, Conner & Cuneo, Carlton F. Gunn, Deputy Federal Public Defender; Joseph F. Walsh, Los Angeles, Cal., Robert Hussey, Lompoc, Cal., John D. Robertson, Robertson & Sherron, Los Angeles, Cal., for defendants-appellants.

Vicki S. Marani, U.S. Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California.

Before WALLACE, Chief Judge, GOODWIN, Circuit Judge, and TANNER, ^** District Judge.

WALLACE, Chief Judge:

Mark Koenig, Scott Koenig, Jacklyn Bobby, Robert Hussey and Bobbi Jo Bobby (conspirators), appeal their sentences, following guilty pleas to conspiracy to produce and use counterfeit access devices and various other crimes in violation of 18 U.S.C. § 1029. The district court exercised jurisdiction pursuant to 18 U.S.C. § 3231. We have jurisdiction over these timely appeals pursuant to 28 U.S.C. § 1291. We affirm.

I

Through his work as a computer consultant, Mark Koenig gained access to information regarding automated teller machine (ATM) transactions. This data, which was transmitted from various ATM machines to the appropriate banking institution, was encoded to ensure confidentiality. In November 1988, Mark Koenig discovered a way to decode the information and, as a result, gained access to account and personal identification numbers.

Subsequently, he developed a plan to use the information to withdraw funds from numerous Bank of America accounts. He obtained the account numbers, personal identification numbers, and ATM card expiration dates for 7,470 Bank of America accounts. He also developed a method for manufacturing counterfeit ATM cards consisting of poster board and magnetic tape encoded with the stolen account information. He made several sample cards and verified that the cards functioned properly.

Jacklyn Bobby, Robert Hussey, Bobbi Jo Bobby, and Scott Koenig agreed to help Mark Koenig with his plan. Mark Koenig also asked his wife, Jacklyn Bobby, to contact another individual (the informant) and ask her to participate in the conspiracy. The informant secretly notified the Secret Service of the plan and agreed to act as a confidential informant.

In various telephone conversations and meetings with the informant, the conspirators described their plan to use the counterfeit ATM cards during Presidents' Day weekend. Their final plan had Hussey working alone, the informant and Scott Koenig working as a team, and Mark Koenig and Bobby Joe Bobby also working as a team. Hussey and the two teams each intended to withdraw funds from ATM machines with the counterfeit cards.

Two weeks prior to President's day weekend, some of the conspirators met at Mark Koenig's home to manufacture ATM cards. At that time, Secret Service agents executed a previously obtained warrant. During the search, the agents seized approximately 1,480 encoded counterfeit ATM cards, 4,100 cards with magnetic tape that had not yet been encoded, and 800 cards to which magnetic tape had not yet been attached. They also found an encoding device that Mark Koenig brought home from work.

A six count indictment charged the conspirators with conspiracy to produce and use counterfeit access devices and with various other crimes in violation of 18 U.S.C. § 1029. Mark Koenig and Robert Hussey each pled guilty to all six counts. Mark Koenig was sentenced to 41 months' imprisonment, and Hussey was sentenced to 30 months' imprisonment. Jacklyn Bobby pled guilty to three of the counts charged, including conspiracy, and was sentenced to 30 months' imprisonment. Bobbi Jo Bobby pled guilty to two counts, including conspiracy, and was sentenced to a term of 21 months' imprisonment. Scott Koenig pled guilty to conspiracy and was sentenced to 18 months' imprisonment. The court ordered each conspirator to serve 3 years of supervised release and to pay $10,426 in restitution.

II

The conspirators argue that the district judge erred by increasing their offense levels by 10 points based upon a finding that the cumulative loss intended by the conspiracy exceeded two million dollars. See United States Sentencing Commission, Guidelines Manual, § 2F1.1 (Oct. 1988) (U.S.S.G.) (unless otherwise indicated, all references to the Sentencing Guidelines will be to the Guidelines as amended in October 1988, which were the guidelines in effect at the time of sentencing). They contend that the district judge misinterpreted the relevant guidelines and commentary and miscalculated the intended loss. We review the district court's application of the Guidelines de novo (independently). United States v. Davis, 922 F.2d 1385, 1387 (9th Cir.1991) (Davis ). Findings of fact made in the course of applying the Guidelines, however, are reviewed for clear error. Id. at 1387-88.

The district court determined that the appropriate measure of loss was the "intended" loss. Apparently, the district judge relied on application note 7 to section 2F1.1, which provides that "if a probable or intended loss that the defendant was attempting to inflict can be determined, that figure [should] be used if it [is] larger than the actual loss." U.S.S.G. § 2F1.1, comment. (n. 7). Although the conspirators appear to concede the applicability of this commentary, they argue that the term "intended loss" should be interpreted to mean "the probable loss which would have resulted from execution of the defendants' intended plan." Construing the term in this way, they argue that the district court erred by not making a finding that: (1) it was probable that the conspirators would have stolen over two million dollars pursuant to the intended plan, or (2) they would have varied from the intended plan had they not obtained over two million dollars.

The commentary to section 2F1.1 states that the "probable or intended" loss may be calculated. Id. (emphasis added). The phrase "probable or intended" is disjunctive. See Davis, 922 F.2d at 1392. If the district judge chooses to calculate the intended loss, there is no requirement mandating consideration of the "probable loss" that would result from the intended plan.

The conspirators' attempt to avoid the clear language of the application note by arguing that there was no intended loss in this case, since they only intended to use the cards to steal as much as possible during a fixed period of time. However, it was permissible for the district judge to find that there was an intended loss because there was evidence that the conspirators considered and discussed how much money the scheme would produce. For example, in response to a comment by Hussey, Mark Koenig indicated that 1,000 cards could produce $500,000. In light of the language of application note 7 and the evidence of intent, the district judge did not err by basing the section 2F1.1 loss calculation on the intended loss.

We also reject the conspirators' argument that the district judge's factual finding on the amount of the intended loss was clearly erroneous. There was evidence, including statements by some of the conspirators, that justified the district judge's finding that the intended loss was over two million dollars. For example, as stated above, Mark Koenig commented on one occasion that 1,000 ATM cards represented $500,000. Since it appears that the conspirators were attempting to make about 7,470 cards, the intended loss would be approximately 3.74 million dollars. Even if we assume that one-third of the cards were not used, the intended loss would still be greater than two million dollars. Although one statement or calculation may not always conclusively establish that the conspirators intended a loss of over two million dollars, the evidence taken as a whole supports the conclusion that the district judge did not clearly err in calculating the intended loss.

The conspirators argue that the figures are speculative and merely reflect their inflated expectations about the potential success of the conspiracy. However, section 2F1.1 only requires a calculation of "intended loss" and does not require a finding that the intentions were realistic. In addition, the conspirators' characterizations of their calculations as "off the cuff" and "mere guesswork" are contradicted by the evidence. The conspiracy was highly planned, well-organized, and sophisticated. Given the extent of the organization and planning, the district judge did not clearly err in taking the conspirators' plans and loss assessment seriously in calculating the intended loss to be over two million dollars.

The government contends that even if the district court erred in calculating the intended loss, the sentences were also justified as upward departures from the applicable guideline range. We need not reach this issue because we hold that the district court did not err in calculating the intended loss.

III

The conspirators next argue that they are entitled to an offense level adjustment under section 2X1.1(b) of the Sentencing Guidelines, which provides that sentencing judges should reduce the offense level by three points for certain attempts and conspiracies. The conspirators did not raise this issue in the district court; therefore, we review only for plain error. United States v. Lopez-Cavasos, 915 F.2d 474,...