United States v. Adetiloye

• Decision Date: 03 May 2013
• Docket Number: 12–1919.,Nos. 12–1617,s. 12–1617
• Citation: 716 F.3d 1030
• Parties: UNITED STATES of America, Plaintiff–Appellee v. Adekunle Olufemi ADETILOYE, Defendant–Appellant United States of America, Plaintiff–Appellant v. Adekunle Olufemi Adetiloye, Defendant–Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

716 F.3d 1030

UNITED STATES of America, Plaintiff–Appellee

v.Adekunle Olufemi ADETILOYE, Defendant–Appellant

United States of America, Plaintiff–Appellant

v.Adekunle Olufemi Adetiloye, Defendant–Appellee.

Nos. 12–1617, 12–1919.

United States Court of Appeals,

Eighth Circuit.

Submitted: Dec. 12, 2012.

Filed: May 3, 2013.

Steven R. Morrison, Fargo, ND, argued, for appellant/cross-appellee.

Nicholas W. Chase, Asst. U.S. Atty., Fargo, ND, argued (Timothy Q. Purdon, U.S. Atty., on the brief), for appellee/cross-appellant.

Before WOLLMAN, BYE, and BENTON, Circuit Judges.

BYE, Circuit Judge.

Adekunle Adetiloye pleaded guilty to one count of mail fraud. The district court sentenced him to 214 months of imprisonment. He raises four sentencing issues on appeal. The government cross-appeals, contending the district court improperly denied restitution to nearly all of the individual and institutional victims of Adetiloye's fraud scheme and miscalculated the value of property Adetiloye was required to forfeit because of the scheme. We affirm Adetiloye's sentence but vacate the restitution and forfeiture orders and remand to allow the parties to present more detailed evidence regarding the amount of loss the victims sustained and the value of the property Adetiloye gained from the scheme.

I

In March 2004, someone identifying himself as Donald Douglas obtained corporate status and a business license in Delaware for a company called Syspac Financial Services, Inc. (“Syspac”). With this license, Syspac bought subscriptions to ChoicePoint, LexisNexis, and Investigative Professionals (“IP”), commercial databases which maintain confidential personal information about individuals and entities in the United States. These companies allow only certain organizations, including law enforcement, financial companies, and debt collectors, to access their databases. Syspac gained access by falsely representing itself as a debt collection company. “Donald Douglas” and Syspac used the databases to conduct searches and view the protected personal information of thousands of people. A second company, Commet Consultant, Inc. (“Commet”), was opened by “Craig Kobrin” and performed similar searches. Donald Douglas and Craig Kobrin are real people, but neither of them is involved in the debt collection business. Each had his identity stolen and used to further the scheme.

Using the personal information obtained in these searches, Adetiloye opened approximately 500 fraudulent accounts, in the form of credit cards and balance transfer checks. To receive these cards and checks, Adetiloye opened approximately 130 Commercial Mail Receiving Agency (“CMRA”) boxes, which are commercial mailboxes some people use as an alternative to government-operated mail service. The CMRAs had no real purpose. Instead, they created the illusion the supposed new bank or credit card customers lived in various locations throughout the United States.

The scheme worked in the following way. When Adetiloye first applied for the credit cards and other bank accounts, he would intentionally misstate the actual address of the person whose identity he had stolen. Once sent to the incorrect address, the newly-opened account documentation would be returned to the sender as undeliverable. Then, Adetiloye would contact the bank to explain the “mistake” and request a new card be sent to the “correct address,” a CMRA in the United States. No one picked up mail from these CMRAs. Instead, Adetiloye provided directions for the mail to be forwarded to one of a group of CMRAs in Toronto. Adetiloye used the cards and accounts to withdraw cash, make purchases, and transfer funds between the accounts.

In 2007, Postal Inspector Matthew Hoffman received an anonymous email tip stating a group of Nigerians was running a fraud scheme in Toronto. That same year, Syspac's Delaware business license expired and required renewal. Hoffman sent a “ruse” letter to “Donald Douglas” purporting to require a Syspac employee to complete an updated state registration form to avoid suspension of its business license. “Donald Douglas” completed the form and listed a return address in Toronto. The return envelope containing the form revealed Adetiloye's fingerprints.

Adetiloye was first arrested by Canadian police on December 1, 2007, after he had just picked up a large amount of mail from a CMRA. Police searched Adetiloye's vehicle and discovered credit cards, letters, packages, bank statements, check stock, and bills in the names of many different people. Adetiloye also possessed a receipt for a CMRA in Toronto which matched the return address of the FedEx envelope in which “Donald Douglas” returned the Delaware registration form. Finally, Adetiloye had two cellular phones. Investigators traced the calls made from these phones and discovered they had made more than 130 calls to banks in the month prior to Adetiloye's arrest. Many of these calls were recorded. Hoffman listened to them, as did Gregory Krier, the head of U.S. Bank's credit card fraud investigation team. Hoffman and Krier concluded the calls from the phone were all made by the same person. The record shows Adetiloye made the calls.

Adetiloye was arrested for the second time on August 26, 2009. On February 9, 2011, he pleaded guilty to one count of mail fraud in violation of 18 U.S.C. §§ 1341 and 2, and a forfeiture allegation pursuant to 18 U.S.C. §§ 981(a)(1)(C), 982(a)(3), and 28 U.S.C. § 2461(c). The district court conducted a three-day evidentiary sentencing hearing. On January 18, 2012, the court issued a seventeen-page sentencing memorandum explaining its guidelines calculation. On January 23, 2012, the court sentenced Adetiloye to 214 months' imprisonment.

After the parties failed to agree on restitution and forfeiture amounts, the court held another hearing. The government presented evidence already in the record and asked for $743,948.42 in restitution for sixty-five victims and $743,948.42, representing the proceeds of Adetiloye's illegal conduct, in a forfeiture money judgment. The court expressed concern the government's documents did not contain any itemization or explanation of what money the victims had actually lost. Unwilling to indulge speculative evidence, the court entered a restitution order of $1,659.72. This figure represented the total loss of the three victims who, according to the court, sufficiently documented their claims. The court entered a forfeiture order in the same amount.

Adetiloye appeals four sentencing issues. He contends the district court (1) did not adequately explain its sentence; (2) improperly granted only a one-level reduction for acceptance of responsibility pursuant to United States Sentencing Guidelines (“U.S.S.G.”) Manual § 3E1.1; (3) erred in imposing a four-level leadership enhancement pursuant to U.S.S.G. § 3B1.1(a); and (4) erroneously applied a two-level upward departure for an offense level which understates the seriousness of the offense pursuant to U.S.S.G. § 2B1.1 cmt. n. 19(A). The government appeals the restitution and forfeiture orders.

II

A. Explanation of Sentence

Adetiloye argues the district court committed reversible procedural error by failing to adequately explain its factual determinations related to Adetiloye's sentence, including the time frame and scope of Adetiloye's involvement in the scheme, the amount of loss, and the number of victims. We review the procedural soundness of a sentence for abuse of discretion. Gall v. United States, 552 U.S. 38, 51, 128 S.Ct. 586, 169 L.Ed.2d 445 (2007).

The district court is required to provide some explanation of its consideration of the 18 U.S.C. § 3553(a) factors. Rita v. United States, 551 U.S. 338, 356–57, 127 S.Ct. 2456, 168 L.Ed.2d 203 (2007). But the district court is not obligated to make a specific finding regarding every fact which underlies a defendant's sentence. See United States v. Perkins, 526 F.3d 1107, 1110 (8th Cir.2008); United States v. Franklin, 397 F.3d 604, 606 (8th Cir.2005) (quotation and citation omitted). “To ‘properly analyze[ ] the relevant sentencing factors,’ a district court ... must ‘set forth enough to satisfy the appellate court that he has considered the parties' arguments and has a reasoned basis for exercising his own legal decisionmaking authority.’ ” United States v. Robinson, 516 F.3d 716, 718 (8th Cir.2008) (quoting Rita, 551 U.S. at 356, 127 S.Ct. 2456). Adetiloye's argument, which insists upon a more exhaustive fact-finding responsibility of the district court, misstates the law.

We are satisfied the district court had a reasoned basis for concluding as it did. The court issued a seventeen-page sentencing memorandum in which it analyzed the evidence and explained its guidelines calculations. Moreover, at the sentencing hearing, the court thoroughly considered the § 3553(a) factors. Tr. 629–35. The nature of Adetiloye's scheme was sophisticated and large in scope. He did not comply with court orders, tried to obfuscate the prosecution despite pleading guilty, and generally showed a lack of remorse. The court further explained that although Adetiloye had no criminal history, the need for general deterrence of criminal conduct of this sort is significant. This analysis is sufficient to satisfy the standard set forth in Rita. The district court did not procedurally err in calculating Adetiloye's sentence.

B. Acceptance of Responsibility

Adetiloye argues the district court erred when granted only a one-level reduction for acceptance of responsibility. SeeU.S.S.G. § 3E1.1. Adetiloye contends he is entitled to a two-level reduction.

“We review the district court's denial of an acceptance of responsibility reduction for clear error.” United States v. Smith, 665 F.3d 951, 957 (8th Cir.2011). Clear error exists when the court is left “with the definite and firm conviction that a mistake has been committed.” United States v. Lalley, 257 F.3d 751, 758 (8th Cir.2001) (quotation and citation omitted...