U.S. v. Robertson

• Decision Date: 27 July 2007
• Docket Number: No. 06-13267.,06-13267.
• Citation: 493 F.3d 1322
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Joseph W. ROBERTSON, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

493 F.3d 1322

UNITED STATES of America, Plaintiff-Appellee, v. Joseph W. ROBERTSON, Defendant-Appellant.

No. 06-13267.

United States Court of Appeals, Eleventh Circuit.

July 27, 2007.

Brian Mendesohn, Nicole Marie Kaplan and Stephanie Kearns, Federal Public Defenders, Federal Defender Program, Inc., Atlanta, GA, for Defendant-Appellant.

Amy Levin Weil, Byung J. Pak, Atlanta, GA, for Plaintiff-Appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before PRYOR, KRAVITCH and ALARCÓN,^* Circuit Judges.

PRYOR, Circuit Judge:

The two main issues in this appeal relate to restitution under the Mandatory Victim Restitution Act, 18 U.S.C. § 3663A: (1) was it an abuse of discretion to assign the same restitution value to each stolen good, regardless of whether that good was later sold by the offender; and (2) was a purchaser of the stolen goods, who was sued by and settled with the manufacturer on grounds not disclosed in the record, a victim entitled to restitution of the cash paid in settlement? A jury convicted Joseph W. Robertson of wire and mail fraud for fraudulently obtaining software from Novell, Inc., through the use of fictional purchasers. Robertson sold many units of that software to Network Systems Technology, Inc. Network Systems later paid Novell to settle a civil suit filed by Novell on grounds not disclosed in the record. The district court sentenced Robertson to 96 months of imprisonment and ordered restitution to Novell for the wholesale price of every unreturned unit of software and restitution to Network Systems for the money it paid Novell to settle. In addition to his appeals of two convictions and the application of a sentencing enhancement, all of which we affirm, Robertson challenges the calculation of the restitution owed Novell and argues that Network Systems was not a victim entitled to restitution. We agree with the latter argument, but not the former one. Because the district court did not abuse its discretion when it calculated the restitution owed Novell, we affirm that order of restitution. We vacate the order of restitution to Network Systems because it was not a victim.

I. BACKGROUND

We divide our description of the factual and procedural background into three parts. First, we describe Robertson's fraudulent acquisition of software from Novell. Second, we describe Robertson's sale of the stolen software to Network Systems. Third, we discuss Robertson's convictions and sentencing.

A. The Acquisition of the Units of Software

Novell manufactures computer software called Netware. Novell sells units of Netware, each of which includes a copy of the software and a license to use it, directly to end users, distributors, companies, and government agencies. During the period in which Robertson fraudulently acquired Netware from Novell, the company was headquartered in Utah. To order from Novell, a customer would communicate with the company by e-mail, telephone, or facsimile. Novell offered Netware to educational institutions at discounted prices, which could be as much as 90 percent lower than the retail prices.

In May 1999, Novell received a purchase order by facsimile from ACL Learning Center for units of Netware at discounted prices. The order was signed Joe Robertson/ACL Learning Center, and the address for shipment was that of a house in Georgia rented by Robertson's mother, where he then lived and maintained an office with file cabinets, a bed, a computer, copy machines, and a facsimile machine. Novell shipped the units of software and received two similar orders in June 1999, for which it shipped additional units.

In August 1999, Novell received a purchase order by facsimile from James Turner of Cobb Academy for units of Netware at discounted prices. As requested in the order, Novell shipped the units of software to a post office box at a Mail Boxes Etc. store. The post office box was rented by Robertson.

In November 1999, Novell shipped units of Netware at discounted prices to Fulton County Educational Services, but Novell has no record of how the order was placed. The address for Fulton County Educational Services was, in fact, the address for an apartment complex where Heather Sharpe then lived. Sharpe knew Robertson, although she testified that she never received a package for him, and there was no evidence that Robertson knew Sharpe's address or ever went to her apartment.

In February and March 2000, Novell received three purchase orders by facsimile from Jay McGhee of Atlanta City Educational Services for units of Netware at discounted prices. As requested in the order, Novell shipped the units of software to 253 Trinity Avenue, which was actually the address for an apartment rented by Lee Ann Vance. Vance knew Robertson and received at her apartment two or three packages for him.

Novell shipped a total of 378 units of Netware to ACL Learning Center, Cobb Academy, Fulton County Educational Services, and Atlanta City Educational Services. Each unit had a unique part number and license serial number. Novell never received payment for any of the units shipped. It is the policy of Novell not to ship software to any customer who has an outstanding balance for more than 30 days.

B. The Sale of Units of Software to Network Systems

In June 1999, an individual who identified himself as Gino Barrett offered to sell units of Netware for approximately $2000 each to Network Systems, a computer hardware and software engineering firm owned by Michael Oken. Because the wholesale price would have been around $10,000 each, Oken sent two individuals, Scott Richardson and Donald Coleman, to inspect the units of software. When asked how he obtained the units, Barrett stated that he was a dealer of Novell software. At trial, Richardson and Coleman identified Robertson as "Barrett."

Network Systems purchased units of Netware from Robertson on more than ten occasions. During the period in which Robertson acquired Netware from Novell, Network Systems bought Netware only from Robertson. Robertson admits that Network Systems purchased 239 of the 378 units of Netware shipped by Novell to ACL Learning Center, Cobb Academy, Fulton County Educational Services, and Atlanta City Educational Services. There is no evidence that Robertson sold the other 139 units.

Network Systems resold the units of Netware for a profit of $42,721. If the customer requested it, the unique serial number of each unit purchased was printed on the sales invoice. Serial numbers reflected in the sales invoices of Network Systems match serial numbers of units of Netware shipped by Novell to all four fictional educational institutions.

In November 2004, Network Systems and Novell settled civil litigation related to the Netware purchased from Robertson. As part of a confidential settlement agreement, Network Systems paid Novell $125,000. Robertson asserts that Novell sued Network Systems for breach of a distributor agreement, because Network Systems purchased units of Novell software from a source other than Novell or an authorized Novell distributor, but there is no evidence in the record of the precise grounds for the lawsuit between Network Systems and Novell. In a victim impact statement made at sentencing, Oken mentioned "[t]he Lanham Act" but did not elaborate further.

C. Robertson's Convictions and Sentencing

In January 2006, Robertson was convicted by a jury on eight counts of wire fraud 18 U.S.C. § 1343, for causing eight purchase orders to be sent in interstate commerce by facsimile on behalf of ACL Learning Center (counts 1 through 3), Cobb Academy (count 4), Fulton County Educational Services (count 5), and Atlanta City Educational Services (counts 6 through 8). Robertson was also convicted on eight counts of mail fraud, id. § 1341, for causing Novell products to be sent by private and interstate carrier boxes to ACL Learning Center (counts 9 through 11), Cobb Academy (count 12), Fulton County Educational Services (count 13), and Atlanta City Educational Services (counts 14 through 16). Robertson moved for a judgment of acquittal as to the counts relating to Fulton County Educational Services (counts 5 and 13), and the district court denied the motion.

The presentence investigation report applied the edition of the Sentencing Guidelines in effect at the time Robertson committed his offenses, see United States Sentencing Guidelines (Nov. 1998), because the later edition of the Guidelines in effect at sentencing would have resulted in higher offense levels. The presentence report calculated a total offense level of 23, which included an enhancement of 2 levels for sophisticated means. See id. § 2F1.1(b)(5)(C). The presentence report recommended restitution of $1,341,522 to Novell, which was the wholesale price of all 378 of the fraudulently obtained and unreturned units of software. The presentence report then mentioned the possibility of restitution of $125,000 to Network Systems for the money Network Systems paid Novell to settle its civil suit. Under the Restitution Act, defendants convicted of wire or mail fraud must make restitution to any "victim" of their offenses. See United States v. Dickerson, 370 F.3d 1330, 1335-36 (11th Cir.2004) (restitution required for wire fraud); United States v. Yeager, 331 F.3d 1216, 1227 (11th Cir.2003) (mail fraud).

The district court followed the recommended Guidelines calculations and imposed a sentence of 96 months of imprisonment. Robertson objected to the application of the enhancement for sophisticated means. The district court then ordered restitution to Network Systems in the amount of $125,000 and to Novell in the amount of $1,216,522, which the court calculated by subtracting $125,000 from $1,341,522. Robertson objected to the calculation of the amount of restitution owed Novell and to any award of restitution to Network Systems.

II. STANDARDS OF REVIEW

"We review de novo the legal question of whether the record...