United States v. Kynard

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED

________________________ U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

No. 10-15389 MAY 24, 2011

JOHN LEY

Non-Argument Calendar CLERK

________________________

D.C. Docket No. 2:10-cr-00133-CG-B-2

UNITED STATES OF AMERICA,

llllllllllllllllllllllllllllllllllllllll Plaintiff-Appellee,

versus

SHONTAE KYNARD,

llllllllllllllllllllllllllllllllllllllll Defendant-Appellant.

________________________

Appeal from the United States District Court

for the Southern District of Alabama

________________________

(May 24, 2011)

Before WILSON, MARTIN and BLACK, Circuit Judges.

PER CURIAM:

Shontae Kynard appeals her sentence of 32 months’ imprisonment and an

order to pay $14,800 in restitution, which was imposed after she pleaded guilty to

one count of bank fraud, in violation of 18 U.S.C. § 1344, and one count of

aggravated identity theft, in violation of 18 U.S.C. § 1028A. After thorough

review, we reverse Kynard’s sentence and remand for re-sentencing.

I.

In June 2010, a grand jury sitting in the Southern District of Alabama

returned a two-count indictment charging Kynard and a co-defendant, Tashara

Evans, with bank fraud and aggravated identity theft. At Kynard’s change of plea

hearing, the government asserted that it would be able to prove the following facts

if the case proceeded to trial. In January 2009, Greg Hodges, a special agent with

the United States Secret Service, received information from local law enforcement

that illegal activities were taking place at the local branch of H&R Block Bank.

Special Agent Hodges contacted the bank’s manager and was informed that, while

Kynard and Evans were employed at the bank, “Emerald Advance” debit cards had

been fraudulently obtained.1 The manager provided Hodges with police reports

and still photographs of two unknown females using fraudulently obtained

1

H&R Block issues Emerald Advance debit cards to qualifying taxpayers who have their

tax returns prepared at H&R Block. The card contains the taxpayer’s anticipated tax refund and

can be used to make ATM withdrawals and other purchases.

2

Emerald Advance cards at a local retailer. The manager also gave Hodges video

footage from a local bank showing Kynard withdrawing $550 using a fraudulently

obtained card issued in the name of Eric Wagner.

Kynard was interviewed and initially denied engaging in any criminal

activity. She also denied having any knowledge of Evans’ illegal activities. After

being shown the video footage, however, Kynard admitted to making the

withdrawal and explained that after Evans completed the application, she added

Wagner’s name and social security number. Kynard also admitted to inflating the

income of friends in exchange for $25 so that they could qualify for an Emerald

Advance debit card. The district court concluded that Kynard’s guilty plea was

supported by a sufficient evidentiary basis and accepted her guilty plea.

Kynard’s presentence investigation report (“PSI”) assigned a base offense

level of 7, pursuant to U.S.S.G. § 2B1.1(a)(1). The PSI determined that the

amount of loss suffered by the victim of the offense, H&R Block Bank, was

$14,800 and increased the base offense level by four levels. See U.S.S.G. §

2B1.1(b)(1)(C). The PSI also applied a two-level enhancment for “[a]buse of a

position of trust,” but reduced it by two levels for acceptance of responsibility, for

a total offense level of 11. Based on a total offense level of 11 and a criminal

3

history category of I, Kynard’s advisory guidelines range was 8 to 14 months’

imprisonment.2

Kynard objected to certain factual allegations in the PSI. Specifically,

Kynard denied telling her co-defendant, Evans, that “she was going to show [her]

how to make money.” She also denied picking names from H&R Block’s

computer system in which to issue the fraudulent Emerald Advance cards.

However, Kynard did not object to the factual allegation that Evans approached

her in the middle of December 2008 and stated that she needed “some cash.”

When Kynard asked Evans how she was going to get the money, Evans replied:

“You know how.” Kynard also did not object to the allegation that in late

December 2008, Evans went to Kynard’s home and asked for the key to the

manger’s office, telling Kynard that a client was coming to the bank to sign an

application. Kynard gave Evans the key, which she returned within about 20

minutes.

Kynard also objected to the loss amount calculated in the PSI, maintaining

that the loss attributable to her conduct was only $550—the amount withdrawn

from the Emerald Advance card in Wagner’s name.

2

Aggravated identity theft, which was charged in Count 2 of the indictment, carries a

statutory mandatory consecutive two-year sentence. See 18 U.S.C. § 1028A(a)(1).

4

At sentencing, Kynard renewed her objection to the loss calculation in the

PSI, again taking the position that the loss attributable to her conduct was only

$550. In response, the government argued that Kynard was responsible for

$14,800, the total amount of loss resulting from Kynard and Evans’ combined

conduct. The government argued that Kynard should be held responsible for any

loss attributable to Evans because Kynard had knowledge that Evans was

engaging in criminal conduct in December 2008 and provided Evans with a key to

the manager’s office, where client information was stored. The government also

noted that Kynard admitted to providing assistance to Evans with respect to the

Wagner card and conceded that there might be other video footage of her using

another Emerald Advance debit card obtained from Evans.

With respect to the amount of loss attributable to Kynard, the district court

observed:

[T]he problem I have here is that I’ve got from the presentence

report, and I’m assuming these were taken from the investigative agents’

work, that Ms. Kynard said Ms. Evans said she was going to steal the

money or get money and yet Ms. Evans says that Ms. Kynard was the

one whose idea this was and who showed her how to do it.

And in terms of coming up with a restitution amount, you know,

I have no way to know which of these women or either of them are

being truthful in this regard. And under the circumstances, I don’t think

that I can do anything but to hold both of them fully responsible for

restitution of the amount of loss. Because clearly they each were

5

responsible for at least some of it, and it appears that each of them

blames the other for the scheme.

Accordingly, the district court concluded that the amount of loss was $14,800 and

applied the four level enhancement in U.S.S.G. § 2B1.1(b)(1)(C). After overruling

the rest of Kynard’s objections to the PSI, the district court sentenced Kynard to 8

months’ imprisonment on the bank fraud count and 24 months’ imprisonment on

the aggravated identity theft count, with the sentences to run consecutively. The

district court also ordered Kynard to pay restitution in the amount of $14,800 to

H&R Block Bank. On appeal, Kynard challenges her sentence and the district

court’s restitution order.

II.

Kynard contends that the district court erred in determining that the amount

of loss attributable to her is $14,800. “We review the calculation of losses by the

district court for clear error.” United States v. Naranjo, 634 F.3d 1198, 1206 (11th

Cir. 2011). For certain crimes, such as fraud, the Sentencing Guidelines require an

increased offense level based on the amount of the loss. See U.S.S.G. § 2B1.1(b).

Offenses involving more than $10,000 but less than $30,000 result in an offense

level increase of 4 points, while offenses resulting in a loss of $5,000 or less

6

receive no increase. Id. § 2B1.1(b)(1)(A), (C). Under the Guidelines, the loss

amount is “the greater of actual loss or intended loss.” Id. § 2B1.1, cmt. n.3(a).

“In calculating the amount of loss, the district court need only make a

reasonable estimate of the loss.” United States v. Grant, 431 F.3d 760, 762 (11th

Cir. 2005) (quotation marks omitted). However, “the district court must not

speculate concerning the existence of a fact which would permit a more severe

sentence under the guidelines.” United States v. Dominquez, 109 F.3d 675, 676

(11th Cir. 1997) (quotation marks omitted). The district court has an obligation to

“make factual findings sufficient to support the government’s claim of loss based

on a preponderance of the evidence, when the defendant challenges that claim.”

United States v. Patterson, 595 F.3d 1324, 1327 (11th Cir. 2010); see also United

States v. Hamaker, 455 F.3d 1316, 1338 (11th Cir. 2006) (“The district court’s

factual findings for purposes of sentencing may be based on, among other things,

evidence heard during trial, undisputed statements in the PSI, or evidence

presented during the sentencing hearing.” (quotation marks omitted)); United

States v. Sepulveda, 115 F.3d 882, 890 (11th Cir. 1997) (explaining that factual

findings must be supported by “reliable and specific evidence.” (quotation marks

omitted)).

7

Kynard argues that the loss amount should have been limited to $550—the

amount of money that she fraudulently obtained using an Emerald Advance debit

card issued in Eric Wagner’s name. She maintains that the government failed to

present “reliable and specific evidence” establishing, by a preponderance of the

evidence, that she was responsible for $14,800, the total amount of loss resulting

from Kynard and Evans’ combined conduct. Moreover, Kynard argues that the

district court failed to make sufficient factual findings regarding the scope of her

criminal conduct to support the government’s claim of loss.

The district court clearly erred in its finding regarding Kynard’s amount of

loss. At sentencing, Kynard challenged the loss amount in the PSI, triggering the

government’s obligation to present “reliable and specific evidence” in support of

the loss calculation as well as the district court’s obligation to make appropriate

findings of fact. See Patterson, 595 F.3d at 1327; Sepulveda, 115 F.3d at 890.

The government presented no evidence, instead making its own proffer regarding

statements made by Kynard and Evans to Special Agent Hodges. See United

States v. Bernardine, 73 F.3d 1078, 1081–82 (11th Cir. 1996) (concluding that

government failed to carry its burden of presenting “reliable and specific”

evidence where the government proffered that it could produce witnesses to

establish facts necessary to support a sentencing enhancement, but never produced

8

those witnesses); United States v. Jacoby, 955 F.2d 1527, 1541 (11th Cir. 1992)

(recognizing that “statements of counsel are not evidence”). The government

failed to carry its burden.

Moreover, “in calculating the amount of loss, the Guidelines require a

district court to take into account ‘not merely the charged conduct, but rather all

‘relevant conduct’, in calculating a defendant’s offense level.’” United States v.

Foley, 508 F.3d 627, 633 (11th Cir. 2007) (quoting Hamaker, 455 F.3d at 1336).

Relevant conduct includes “all reasonably foreseeable acts and omissions of others

in furtherance of [a] jointly undertaken criminal activity.” U.S.S.G. §

1B1.3(a)(1)(B). However, before a district court may hold a defendant liable for

the acts of others, “the district court must first make individualized findings

concerning the scope of criminal activity undertaken by a particular defendant.”

United States v. Hunter, 323 F.3d 1314, 1319 (11th Cir. 2003). In this case, the

district court did not make particularized findings as to the scope of any agreement

between Kynard and Evans to fraudulently obtain Emerald Advance debit cards.

Rather, the district court noted only that each of them was responsible for at least

part of the loss and that there were competing accounts of the facts. Under these

circumstances, we conclude that the district court clearly erred in calculating the

loss amount. See United States v. Medina, 485 F.3d 1291, 1304–05 (11th Cir.

9

2007) (finding clear error where district court failed to make specific factual

findings upon which to base the loss amounts attributable to each individual

defendant); United States v. Cabrera, 172 F.3d 1287, 1294 (11th Cir. 1999)

(concluding that insufficient evidence supported the amount of loss attributed to

the defendant).

III.

Kynard also challenges the district court’s restitution order. We review de

novo the legality of a restitution order, but review factual findings underlying a

restitution order for clear error. United States v. Hasson, 333 F.3d 1264, 1275

(11th Cir. 2003). Under the Mandatory Victims Restitution Act, a person

convicted of any crime against property, including any offense committed by fraud

or deceit, is required to make full restitution to the identifible victim of her

offense. 18 U.S.C. § 3663A(c)(1)(A)(ii), (c)(1)(B). The restitution order must

“compensate the full amount of [the] victim’s losses.” Patterson, 595 F.3d at

1327; see also United States v. Huff, 609 F.3d 1240, 1247 (explaining that “the

amount of loss [used for sentencing] does not necessarily equal the amount of

restitution to be paid because a defendant’s culpability will not always equal the

victim’s injury” (quotation marks omitted)); United States v. Liss, 265 F.3d 1220,

1231 (11th Cir. 2001) (“An award of restitution must be based on the amount of

10

loss actually caused by the defendant’s conduct”). “Disputes over the amount of

restitution are to be resolved by a preponderance of the evidence.” United States

v. Valladares, 544 F.3d 1257, 1269 (11th Cir. 2008) (quotation marks omitted).

The government has “[t]he burden of demonstrating the amount of loss sustained

by a victim as a result of the offense.” Haason, 333 F.3d at 1276 n.14 (quotation

marks omitted); see also Liss, 265 F.3d at 1231–32.

The district court ordered Kynard to pay $14,800 in restitution—the same

amount as the loss amount the district court calculated for purposes of Kynard’s

offense level. The district court explained that it was holding Kynard responsible

for the full amount of H&R Block Bank’s loss because she was responsible for at

least some of it and Kynard and Evans blamed each other for the scheme. “A

restitution award must be based on the amount of loss actually caused by the

defendant’s conduct.” Huff, 609 F.3d at 1247 (quotation marks omitted). While

the government established that H&R Block Bank, the victim of the offense,

suffered a total loss of $14,800, the government failed to prove that Kynard’s

conduct caused that loss. As explained above, the government did not present

specific and reliable evidence establishing the existence of an agreement between

Kynard and Evans to defraud the bank. Without that showing, the district court’s

restitution order was clearly erroneous.

11

For these reasons, we reverse Kynard’s sentence and remand for re-

sentencing.

REVERSED AND REMANDED.

12