United States v. Duliga

Opinions of the United

2000 Decisions States Court of Appeals

for the Third Circuit

2-10-2000

USA v. Duliga

Precedential or Non-Precedential:

Docket 99-5251

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Filed February 10, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 99-5251

UNITED STATES OF AMERICA

v.

DANIEL DULIGA

Appellant

Appeal from the United States District Court

For the District of New Jersey

D.C. No.: 96-cr-326

District Judge: Honorable Nicholas H. Politan

Before: GREENBERG, ROTH, and ROSENN,

Circuit Judges.

Submitted Under Third Circuit LAR 34.1(a)

January 25, 2000

(Filed February 10, 2000)

OPINION OF THE COURT

ROSENN, Circuit Judge.

This is an appeal from a judgment of conviction and

sentence in the United States District Court for the District

of New Jersey in connection with telemarketing operations.

The defendant, who was convicted on a multi-count

indictment charging conspiracy to commit mail and wire

frauds, contends that in imposing sentence, the district

court incorrectly determined his base level offense under

the United States Sentencing Guidelines by attributing to

him the entire amount of loss generated by the conspiracy

rather than the amount of loss he generated through his

own telemarketing efforts.

The district court had subject matter jurisdiction

pursuant to 18 U.S.C. S 3231. We have appellate

jurisdiction pursuant to 18 U.S.C. S 3742 and will affirm.

I.

A. The Telemarketing Scam

In December of 1990, Rita Holz, her husband Julius

Schurkman, and a third person, Adie Lipton, set up All-Win

Financial Corporation in Del Rey Beach, Florida. The

company began operations in January of 1991. It then

placed advertisements in newspapers across the nation

advertising personal loans and debt consolidation. No

advertisements, however, were placed locally. All-Win

wished to avoid face-to-face confrontations with disgruntled

clients.

The advertisements offered loans of up to $10,000, even

to those with acute credit problems, and included a toll-free

telephone number. When a prospective applicant called the

toll-free number, a telemarketer would solicit basic

background information from the applicant, including

name, social security number, and any credit problems.

The telemarketer would then ask the applicant to call back

in approximately one hour so the loan could be processed.

When the applicant called back, the telemarketer would

congratulate the applicant and tell him that he had

qualified for the loan. Of course, no processing occurred

during that interval, and the time lapse between calls was

merely pretextual.

After "approving" the applicant on the telephone, the

telemarketer would then give the applicant an express mail

or Federal Express number and tell the applicant to use the

number to send All-Win its $199 application fee. Once All-

Win received the fee, it forwarded the applicant's name,

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along with a $25 fee, to North American Acceptance

Exchange ("NAAE"). NAAE was not a real lender, but was a

"denial mill." NAAE helped create the illusion that the loan

process was legitimate by sending loan application papers

to the applicants. The loan application was sent to the

applicants to string them along and add to the illusion of

legitimacy. Upon completing the application and mailing it

to NAAE, or another denial mill used by All-Win, the

applicant would ultimately receive a rejection letter.

In June of 1991, All-Win experienced "legal problems"

and decided to relocate to Cherry Hill, New Jersey. Holz

undertook the majority of the relocation effort. She rented

space, obtained phone lines, and set up a new company

under the name A-1. By July of 1991, the telemarketing

scam was up and running again and continued to utilize

the same procedures as All-Win, except that the application

fee increased to $249. A-1 remained in business until

November of 1991. By that time, A-1 and All-Win had

defrauded their "clients" of approximately $1.2 million.

B. The Defendant's Role in the Telemarketing Scam

The defendant, Daniel Duliga, joined the All-Win

telemarketing scam in January of 1991, shortly after the

company commenced operations. All-Win generally

employed eight to ten telemarketers at any one time, and

Duliga, like the other telemarketers, worked in a single,

large room using a script provided by All-Win. A daily tally

was kept of the application fees received, and all of the

telemarketers, including Duliga, were aware that All-Win

was not engaged in a legitimate business endeavor. The

telemarketers often spoke freely of the fraudulent nature of

their employment and joked about the gullible people from

whom they received application fees. Duliga even admitted

to a Postal Inspector that within the first week of his

employment at All-Win he realized that All-Win was not

processing any loans and that the individuals requesting

the loans never received them.

Despite his awareness of All-Win's illegitimacy, Duliga

developed into one of All-Win's top telemarketers and the

company frequently called upon him to train newly

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recruited telemarketers. For his efforts, he received both a

salary and commissions. In addition, when All-Win decided

to relocate to New Jersey in June of 1991, Holz and the

other principals requested that Duliga join them in setting

up the new business. Holz testified that she considered the

talents of Duliga, as well as those of two other experienced

telemarketers, crucial to a successful relocation. She even

sought their opinions when determining where to relocate

the business.

Duliga agreed to join the telemarketing operation in

Cherry Hill, New Jersey and continued to work as a

telemarketer for the newly established A-1 until November

1991. During his employment with the two companies,

Duliga earned over $42,000 in salary and commissions and

generated application fees in excess of $150,000.

C. Procedural History

On June 4, 1996, a federal grand jury sitting in New

Jersey returned a twenty-six count indictment against

Duliga and several other individuals. Count I charged

Duliga and the others with conspiracy to commit mail and

wire fraud, contrary to 18 U.S.C. SS 1341 and 1343, in

violation of 18 U.S.C. S 371. Counts II through VI charged

him and the others with mail fraud in violation of 18 U.S.C.

SS 1341 and 1342. Counts VII through XV charged him and

the others with wire fraud in violation of 18 U.S.C. SS 1343

and 1342. Prior to trial, the United States Attorney

dismissed several counts of the indictment and proceeded

against Duliga only on counts I through VIII and counts XI

through XV. The jury found Duliga guilty on all of these

remaining counts.

On March 25, 1999, the court imposed sentence in

accordance with the presentence report recommendation.

Pursuant to U.S.S.G. S2F1.1(a), Duliga received a base

offense level of six. Because the loss generated by the

telemarketing scam was more than $800,000 but less than

$1.5 million, Duliga received an eleven level increase in his

base offense level pursuant to U.S.S.G. S 2F1.1(b)(1)(L). He

also received an additional two level increase under

U.S.S.G. S 2F1.1(b)(2) because the offense involved more

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than minimal planning. Duliga's final offense level was 19

and his criminal history category was II, which resulted in

an imprisonment range of 33 to 41 months. The district

court sentenced him to 33 months' imprisonment, three

years' supervised release, and a special assessment of

$650.

II.

On appeal, Duliga contends that the district court

incorrectly determined his base offense level by attributing

to him the entire amount of loss generated by the

conspiracy (approximately $1.2 million) rather than the

amount of loss he generated through his own telemarketing

efforts (approximately $155,000). "When reviewing the

sentencing decisions of the district courts, `[w]e exercise

plenary review over legal questions about the meaning of

the sentencing guidelines, but apply the deferential clearly

erroneous standard to factual determinations underlying

their application.' " See United States v. Fuentes, 954 F.2d

151, 152-53 (3d Cir. 1992) (quoting United States v. Inigo,

925 F.2d 641, 658 (3d Cir. 1991)).

III.

Under U.S.S.G. S 2F1.1(a), a defendant convicted of a

crime of fraud receives a base offense level of six. This

offense level, however, is subject to increase depending on

the amount of loss generated by the fraud. See U.S.S.G.

S 2F1.1(b); see also United States v. Boatner, 99 F.3d 831,

835 (3d Cir. 1996). In calculating the amount of loss

generated by the fraud, a sentencing court obviously may

include amounts directly attributable to the fraudulent

conduct of the defendant. See U.S.S.G. S 1B1.3(a)(1)(A). In

addition, where, as here, the crime of fraud for which the

defendant has been convicted involves jointly undertaken

criminal activity, the sentencing court may also attribute to

the defendant amounts of loss resulting from the

"reasonably foreseeable acts and omissions of others in

furtherance of the jointly undertaken criminal activity." See

U.S.S.G. 1B1.3(a)(1)(B); see also Boatner, 99 F.3d at 835.

However, to do so, the loss resulting from the acts or

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omissions of others must be: (1) in furtherance of the

jointly undertaken activity; (2) within the scope of the

defendant's agreement; and (3) reasonably foreseeable in

connection with the criminal activity the defendant agreed

to undertake. See United States v. Evans, 155 F.3d 245,

254 (3d Cir. 1998); United States v. Price, 13 F.3d 711, 732

(3d Cir. 1994); United States v. Collado, 975 F.2d 985, 995

(3d Cir. 1992).1

Applying this test, we believe that the district court

correctly included the entire amount of the loss generated

by the telemarketing scam when determining Duliga's

offense level.2

First, all of the losses generated by All-Win and A-1 were

in furtherance of the jointly undertaken activity. The goal of

these two companies, and those who worked for them, was

to produce as many fraudulent application fees as possible.

All of the telemarketers used the same script to accomplish

this goal, and all of the telemarketers were aware of the

companies' fraudulent nature.

Second, all of the losses generated by All-Win and A-1

were within the scope of Duliga's agreement. He learned

during his first week of work at All-Win that All-Win was

_________________________________________________________________

1. As a preliminary matter, Duliga suggests that the Second Circuit's

decision in United States v. Studley, 47 F.3d 569 (2d. Cir. 1995)(holding

that the Guidelines require that a district court make a particularized

finding as to the scope of the criminal activity agreed upon by a

defendant and outlining the factors relevant to such a finding), should

guide our disposition of this case. However, we think the resolution of

this case is governed by this Court's decision in Collado and therefore

adhere to the wisdom of that case.

2. We note that the district court did not necessarily undertake a

searching and individualized inquiry before attributing the entire amount

of loss generated by All-Win and A-1 to Duliga. See Collado, 975 F.2d at

995. However, because we are convinced that the attribution of that loss

is firmly supported by the record, we see no reason to remand this case

only to have the district court reach the same sentencing decision. See

id. at 997 ("The district court made no findings regarding the propriety

of attributing to one brother sales made by the other, but after reviewing

the transcripts of the telephone calls cited in the presentence

investigation report, we are convinced that this instance of accomplice

attribution was justified.").

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not a legitimate venture, yet he continued to defraud

individuals into believing that their application fees would

materialize into loans. He also received a substantial salary

from the companies, not just commissions based on his

own application fees. Therefore, he possessed a stake in the

success of the companies as a whole. Moreover, although

Duliga characterizes himself as merely an employee that

agreed to telemarket for the principals, the evidence plainly

contradicts this characterization. Duliga was one of the top

three telemarketers for the two companies, and when, the

All-Win principals decided to relocate to New Jersey as A-1,

they considered Duliga's assistance in the relocation

crucial. Duliga clearly understood the illegal objectives of

All-Win and A-1 and agreed to use his best efforts to

further those objectives.

Third, all of the losses generated by All-Win and A-1 were

reasonably foreseeable in connection with the criminal

activity Duliga agreed to undertake. All of the

telemarketers, including Duliga, worked side by side in one

large room, and the telemarketers frequently joked about

the naive applicants from whom they received application

fees. Moreover, a daily tally was kept of the application fees

received. Thus, far from being unforeseeable, the losses

generated by All-Win and A-1 were within Duliga's plain

view.

In sum, the evidence readily demonstrates that Duliga

was a key player in the telemarketing scam from its

inception to its conclusion and that the losses generated by

that scam were reasonably foreseeable in connection with

the scope of the criminal activity Duliga agreed to jointly

undertake. He was more than aware of the scope of the

operation and of its fraudulent character. Therefore, the

district court committed no error in attributing them to

Duliga.

IV.

Accordingly, the judgment of conviction and sentence of

the district court will be affirmed.

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A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

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