U.S. v. Turcks

• Citation: 41 F.3d 893
• Decision Date: 30 November 1994
• Docket Number: No. 93-1322,93-1322
• Parties: UNITED STATES of America v. Arthur TURCKS, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 893

41 F.3d 893

UNITED STATES of America v. Arthur TURCKS, Appellant.

No. 93-1322.

United States Court of Appeals Third Circuit.

Argued Sept. 23, 1994.

Decided Nov. 30, 1994.

Peter Goldberger (argued), Law Office of Peter Goldberger, Ardmore, PA, for appellant.

Tammy E. Avery (argued), Office of U.S. Atty., Philadelphia, PA, for appellee.

Before: BECKER, COWEN and GARTH, Circuit Judges.

OPINION OF THE COURT

GARTH, Circuit Judge:

Defendant Arthur Turcks was convicted on each count of a nineteen-count indictment, charging conspiracy, credit card fraud and bank fraud. On appeal, Turcks contests the jury instructions, the failure to merge the nine counts of "access device" fraud, 18 U.S.C. Sec. 1029(a)(2), into one offense, and the district court's restitution order.

We have jurisdiction pursuant to 28 U.S.C. Sec. 1291. Because Turcks did not object to any of the district court's rulings, we review for "plain error". ¹ Although we find no "plain error" in the jury instructions or with respect to the multiplicity of counts, the restitution ordered by the district court was not supported by the necessary fact-finding as required by United States v. Copple, 24 F.3d 535 (3d Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 488, 130 L.Ed.2d 400 (1994). Hence we affirm the district court's rulings in all matters other than its restitution order. As to the portion of the district court's sentence affecting restitution, we reverse and remand for appropriate fact-finding and a redetermination of the restitution order.

I

Arthur Turcks and co-defendant Earl Warfield were co-owners of the Lansdowne Video Store in Philadelphia, Pennsylvania. On May 27, 1992, a federal grand jury returned a nineteen count indictment against Turcks and Warfield. ²

Count One charged Turcks and Warfield with conspiring to commit credit card fraud in violation of 18 U.S.C. Sec. 1029(b)(2). ³ Counts Two through Ten charged Turcks with access device fraud in violation of 18 U.S.C. Sec. 1029(a)(2). ⁴ Counts Eleven through Nineteen charged Turcks with bank fraud in violation of 18 U.S.C. Sec. 1344. ⁵ These charges all arose from the use of lost or stolen credit cards to consummate fraudulent retail sales between February 1989 and February 1990.

At trial, the government adduced evidence that, in the operation of the Lansdowne Video store, lost or stolen credit cards were fraudulently used to complete purported retail sales. In the thirteen months prior to January 1989, Lansdowne Video had recorded $6,394.00 in credit card sales. In the thirteen months following January 1989, Lansdowne Video recorded $97,794.08 in credit card sales. Only Turcks and Warfield had access to the store's credit card processing machines and at least one of them was present whenever the store was open.

A handwriting expert testified, using handwriting exemplars, that Turcks had probably signed four of the invalid credit card sales slips which were charged to four separate credit card accounts. The government had placed in evidence the fraudulent credit card slips and the handwriting exemplars from both defendants.

When defendants opened their credit card merchant account, they agreed to process each customer's card through an authorization device and to comply with any instructions or authorizations received. Bank records demonstrated that numerous transactions initiated at Lansdowne Video were rejected with instructions to call the bank but no calls were ever made. Indeed, in many instances, cards were "worked" or processed seeking lesser and lesser amounts in an attempt to obtain an authorization despite prior denials.

The credit slips derived from these fraudulent transactions were deposited in Lansdowne's merchant banking account at Mellon Bank. Turcks signed many of the deposit slips which reflected the deposit of fraudulent credit slips.

By means of these fraudulent procedures, Lansdowne Video generated $102,137.99 in illegal credit card transactions. Apparently however some of the credit card transactions were never processed to completion. This circumstance may have given rise to the probation department's subsequent reduction in the calculation of the loss.

At the close of the trial, the district court, without objection, charged the jury on the substantive counts of the indictment as follows:

A person may be guilty of a crime on one or more of three different bases. First, a person is guilty if the person himself or herself committed the crime, that is actually perpetrated the crime. Second, a person is guilty as a co-conspirator if the person was a member of the conspiracy when the crime was committed, and if it was committed in furtherance of or as a foreseeable consequence of the conspiracy. Third, a person is guilty of a crime committed by someone else if the person aids and abets the commission of the crime....

If any one or more of these three bases is shown by the evidence beyond a reasonable doubt, that is that the person was the actual perpetrator of the crime, that the person was responsible as a co-conspirator, or that the person was an aider or abetter, the person may be found guilty of the crime charged.

App. 46a-47a. The jury convicted Turcks on all nineteen counts in a general verdict.

At a March 4, 1993 hearing, the district court sentenced Turcks to twenty-five months imprisonment from a range of twenty-one to twenty-seven months, followed by three years supervised release. Despite indications that Turcks was insolvent, the district court, without determining the extent of his financial ability to pay or his future needs, ordered Turcks to pay $102,137.99 in restitution to the defrauded banks. The $102,137.99 figure was derived from the presentence report. The district court did not make findings reflecting the basis for this amount, or to whom the monies should be paid, or the relationship between the restitution imposed and the loss caused by Turcks' conduct. The district court also ordered Turcks to pay $950 in Special Assessments.

Despite the district court's oral sentence, the judgment that was entered thereafter ordered Turcks to pay only $85,835.99 to twenty-one named banks and attributed the entire amount of the restitution order to Count Two. The $16,298 difference between the amount initially ordered by the district court and the amount recorded in the written judgment apparently resulted from later calculations made by the probation department.

Turcks filed an untimely appeal, but sought and received an order finding excusable neglect under Federal Rule of Appellate Procedure 4(b).

II

Turcks challenges the jury instructions given by the district court. He contends that the district court erroneously charged the elements of co-conspirator liability under Pinkerton v. United States, 328 U.S. 640, 66 S.Ct. 1180, 90 L.Ed. 1489 (1946), and that, as a result, the jury convicted him improperly.

A.

Because Turcks did not object to the challenged instruction, we will reverse only if we find "plain error." Fed.R.Crim.P. Rule 52(b) ⁶; United States v. Retos, 25 F.3d 1220, 1228 (3d Cir.1994). The Supreme Court has stated that, "[i]t is the rare case in which an improper instruction will justify reversal of a criminal conviction when no objection has been made in the trial court." Henderson v. Kibbe, 431 U.S. 145, 154, 97 S.Ct. 1730, 1736, 52 L.Ed.2d 203 (1977).

For "plain error" to exist:

There must be an "error" that is "plain" and that "affect[s] substantial rights." Moreover, Rule 52(b) leaves the decision to correct the forfeited error within the sound discretion of the Court of Appeals, and the court should not exercise that discretion unless the error "seriously affect[s] the fairness, integrity or public reputation of the judicial proceedings."

United States v. Olano, --- U.S. ----, ----, 113 S.Ct. 1770, 1776, 123 L.Ed.2d 508 (1993) (quoting United States v. Young, 470 U.S. 1, 15, 105 S.Ct. 1038, 1046, 84 L.Ed.2d 1 (1985)).

A deviation from a legal rule is error. Olano, at ----, 113 S.Ct. at 1777. A "plain" error is "clear" or "obvious." Id. In most cases, an error will be deemed to have "affected substantial rights" where it is prejudicial. Prejudicial error, affecting substantial rights, must have "affected the outcome of the District Court proceedings." Id. at ----, 113 S.Ct. at 1778.

When these elements are met, "the Court of Appeals has authority to order correction, but is not required to do so." Id. We will exercise our discretion "where the defendant is actually innocent, or where, regardless of the defendant's innocence or guilt, the error 'seriously affect[s] the fairness, integrity or public reputation of judicial proceedings.' " United States v. Retos, 25 F.3d at 1229 (quoting Olano, --- U.S. at ----, 113 S.Ct. at 1779).

B.

The government concedes that the district court's instruction was erroneous and obvious. Under Pinkerton v. United States, 328 U.S. 640, 66 S.Ct. 1180, 90 L.Ed. 1489 (1946), and pursuant to our jurisprudence, a jury must find that a party to the conspiracy committed a crime both "in furtherance of" and "as a foreseeable consequence of" the conspiracy to find a co-conspirator guilty of a substantive offense committed by a co-conspirator. Id. at 646, 66 S.Ct. at 1183; United States v. Gonzales, 918 F.2d 1129, 1135-36 (3d Cir.1990), cert. denied, 499 U.S. 982, 111 S.Ct. 1637, 113 L.Ed.2d 733 (1991). Thus, the district court should have charged the jury in the conjunctive rather than the disjunctive, using "and" instead of "or" in its instruction. As noted earlier, the district court charged "a person is guilty as a co-conspirator for the crimes committed by another co-conspirator if the person was a member of the conspiracy when the crime was committed, and it was committed in furtherance of or as a foreseeable consequence of the conspiracy." App. 46a (emphasis added). By charging in the disjunctive, the district court clearly erred. Therefore, the first two elements of "plain...