United States v. Ferdman
| Decision Date | 24 October 2013 |
| Docket Number | No. CR 12-0411 JB,CR 12-0411 JB |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. JOSHUA FERDMAN, AMIR MEIR LEVI, JEFFREY P. CONTELLA, and JOSEPH COHEN, Defendants. |
| Court | U.S. District Court — District of New Mexico |
THIS MATTER comes before the Court on: (i) the Defendant's Objections to the Presentence Report and Restitution and Sentencing Memorandum, filed August 2, 2013 (Doc. 197)("Objections"); and (ii) the Defendant's Amended Objections to the Presentence Report, filed August 16, 2013 (Doc. 204)("Amended Objections"). The Court held a sentencing hearing on August 16, 2013. The primary issues are: (i) whether, under U.S.S.G. § 2B1.1, Sprint's retail value of the cellular telephones that Defendant Joshua Ferdman fraudulently obtained is the correct value to use in calculating Sprint's loss; (ii) whether, under U.S.S.G. § 2B1.1, the cellular telephones fraudulently obtained between May 8 and May 14, 2011, are properly included in the calculation of loss; (iii) whether Sprint's shipping costs are properly included in the calculation of loss; (iv) whether, under the Mandatory Restitution to Victims Act, 18 U.S.C. § 3663A ("MVRA"), the listed retail value of the cellular telephones fraudulently obtained is the correct value to use in determining the amount of restitution awarded to Sprint; and (v) whether Sprint's shipping and investigative costs are properly included in the restitution amount. The Court will overrule in part and sustain in part Ferdman's sentencing guidelinesobjections, resulting in a six-level enhancement for causing more than $30,000.00 and less than $70,000.00 in loss, based on the retail value of the cellular telephones fraudulently obtained between May 15 and May 25, 2011, and Sprint's shipping costs. The Court will overrule Ferdman's objections to the restitution calculation, and orders $48,715.59 in restitution to Sprint, based on the retail value of the cellular telephones fraudulently obtained between May 15 and May 25, 2011, plus Sprint's shipping and investigative costs.
Defendant Ferdman, along with co-defendants Amir Meir Levi, Jeffrey P. Contella, and Joseph Cohen, participated in a scheme to fraudulently obtain and resell electronic devices, mainly cellular telephones, from Sprint stores in multiple states. See Presentence Investigation Report ¶ 57, at 14, disclosed April 22, 2013 ("PSR"). Ferdman and Levi unlawfully accessed account information for Sprint customers, including account numbers, names, and other personal identification. See PSR ¶ 6, at 4. They traveled to Sprint stores in California, Arizona, and New Mexico, and impersonated an authorized representative of the account holder. See PSR ¶ 6 at 4. Ferdman and Levi obtained cellular telephones from Sprint free of charge by impersonating the account holders and billing the telephones to corporate accounts. See PSR ¶ 7, at 5. Receipts from these transactions show the retail price of the cellular telephones ranging from $449.99 for a Blackberry 9650 or HTC Evo, to $549.99 for a Samsung D720. See Receipts from May 15 to May 25, 2011, at 2-3, 21, filed August 16, 2013 (Doc. 204-1)("Receipts"). The Receipts also show a "flat rate activation discount," often in the amount of $350.00, along with details of theservice plan purchased for each telephone. Receipts at 16. The price "paid"1 for the telephones ranges from $149.99 for the Samsung D700 up to $199.99 for the Samsung D720, Blackberry 9650, and HTC Evo. See Receipts at 2-3, 21. Ferdman and Levi negotiated prices for the sale and resale of the telephones through established business outlets, including ICT Global, which was a business that Cohen owned and operated. See PSR ¶ 7, at 5. ICT Global maintained a physical storefront in Van Nuys, California, but also sold various electronic devices through ICELLTECH, an online store that eBay Inc. hosted. See PSR ¶ 7, at 5.
On May 25, 2011, Ferdman entered a Sprint store in Albuquerque, New Mexico, and represented himself as an authorized account holder of a Sprint business account issued to Double Vision Glass and Mirror. See PSR ¶ 8, at 5. Ferdman charged thirteen smartphones to Double Vision Glass and Mirror's account. See PSR ¶ 8, at 5. Ferdman left the store, but contacted a Sprint employee in Albuquerque to request seven additional smartphones on the same account. See PSR ¶¶ 8-9, at 5. The Sprint employee became suspicious and contacted the account holder for Double Vision Glass and Mirror, and confirmed his suspicions that Ferdman was not the authorized account holder. See PRS ¶ 9, at 5. The Sprint employee lured Ferdman back into the store by sending a text message which stated that the order was completed and ready for pick up. See PSR ¶ 10, at 5. The Albuquerque Police Department then arrested Ferdman at the Sprint store for fraud. See PSR ¶ 10, at 5.
Ferdman was originally charged with Fraud (More than $2,500, but Less than $20,000) and Attempt to Commit a Third Degree Felony in the Bernalillo County Metropolitan Court inAlbuquerque. See PSR ¶ 11, at 5. He posted bond and was released from custody. See PSR ¶ 11, at 5. The charges were later bound over to the Bernalillo County Second Judicial District Court in Albuquerque and remain pending. See PSR ¶ 11, at 5. After further investigation revealed the larger scheme in which Ferdman participated, federal arrest warrants were issued for Ferdman, Cohen, Levi, and Contella on February 28, 2012. See PSR ¶ 29, at 9. Department of Homeland Security agents arrested Ferdman on March 6, 2012. See PSR ¶ 43, at 12. He was charged with Access Device Fraud and Aiding and Abetting. See PSR ¶ 1, at 4. Count 1 of the Indictment charged Conspiracy, in violation of 18 U.S.C. § 371; Count 2 charged Access Device Fraud and Aiding and Abetting, in violation of 18 U.S.C. § 1029(a)(2) and 18 U.S.C. § 2. See PSR ¶ 2, at 4. On February 14, 2013, Ferdman pled guilty to the two-count indictment. See PSR ¶ 2, at 4.
In the PSR, the United States Probation Office ("USPO") listed the cellular telephones and accessories that the Defendants fraudulently obtained from Sprint, including the telephone types, quantity, and retail prices. See PSR ¶ 28, at 8-9. According to the PSR, between May 8, 2011, and May 25, 2011, the Defendants obtained 132 pieces of merchandise, with a retail value of $63,035.16. See PSR § 28, at 9 ().
Sprint requests restitution for the losses between May 15, 2011, and May 25, 2011. See PSR ¶ 62, at 15. According to the USPO's calculation, the Defendants obtained $45,035.59 worth of merchandise during that time period. See PSR ¶ 62, at 15. The PSR also recommends an additional $3,680.00 in restitution, including $300.00 in shipping costs to replace the telephones to the Sprint stores, $2,600.00 for Sprint's investigative costs, $750.00 forinvestigative travel to New Mexico, and $30.00 for setting up GPS tracking for law enforcement. See PSR ¶ 65, at 16; Letter from Court S. McGough, Sprint Regional Security Manager, to Amber Kaufman, United States Probation Officer (March 21, 2013)("Sprint Letter"). The PSR recommends that the Court hold all four co-Defendants jointly and severally accountable for $48,715.59 in restitution to Sprint. See PSR ¶ 65, at 16. Based on the amount of loss to Sprint from May 8, 2011, to May 25, 2011, the PSR recommends a six level increase under U.S.S.G. § 2B1.1(b)(1)(D). See PSR ¶ 70, at 16-17.
Ferdman filed the Objections to the PSR on August 2, 2013, and the Amended Objections on August 16, 2013. Ferdman objects to the calculation of loss under the sentencing guidelines and for restitution. See Objections ¶ 19, at 7. He argues that the listed price for the smartphones does not accurately measure damages, because "companies intentionally mark up the price of the smartphones which are rarely purchased at retail price to give the customers a greater illusion of a discount or savings when they purchased other products like the service contract." Objections ¶ 25, at 8. According to Ferdman, "[o]ften the sticker price is inflated to allow for negotiations concerning trade-ins or reduced interest rate packaging." Objections ¶ 26, at 9. He argues that the actual price paid, which is the amount Sprint billed to the account holders as shown on the receipts, is a better estimate of Sprint's losses. See Objections ¶ 31, at 10. According to his calculations, the total loss of merchandise between May 15, 2011, and May 25, 2011, is $17,034.67.2 See Defendant's Amended Objection, Attachment A (listing the price paid for each phone between $149.99 and $199.99). Ferdman also objects to Sprint's claim for shipping andinvestigative costs as part of restitution. See Objections ¶ 33, at 10-11. Because the retail costs "would already have shipping costs built into the pricing, as well as loss prevention and investigation expenses," Sprint's restitution claim is "attempting unjust enrichment and double dipping." Objections ¶ 33, at 10-11. Ferdman agrees to pay the additional shipping and investigative costs if the price paid for the telephones is used for the restitution calculation, totaling $20,715.59.3 See Amended Objections ¶ 3, at 2. Ferdman calculates $25,535.16 as the loss under § 2B1.1, which includes telephones from May 8, 2011, to May 14, 2011. See Amended Objections ¶ 2, at 1. Ferdman's calculation increases the offense level by four rather than six. See U.S.S.G. § 4B1.1(b)(1)(C).
Plaintiff United States of America urges the Court to apply the calculation of loss from the PSR in calculating the sentencing guidelines, stating that the retail price of merchandise fraudulently obtained is the appropriate measure of the pecuniary impact on the victim. See United States' Response to Defendant's Objections to the Presentence Report and Sentencing Memorandum, at 4, filed August 7, 2013 (Doc. 198)("Response"). The United...
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