Petition for Writ of Certiorari — Keith Wayne Carver, Jr., Petitioner v. United States

No.

IN THE

Supreme Court of the Anited States

KEITH WAYNE CARVER,

Petitioner,

v.

UNITED STATES OF AMERICA,

Respondent.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

PETITION FOR WRIT OF CERTIORARI

PARKS NOLAN SMALL

Federal Public Defender

for the District of South Carolina

EMILY DECK HARRILL

Counsel of Record

Assistant Federal Public Defender

1901 Assembly Street

Suite 200

Columbia, South Carolina 29201

803.765.5079

Emily_Harrill@fd.org

Counsel for Petitioner

June 24, 2019

QUESTION PRESENTED

Whether the statutory phrase “can be used” contained in the definition

of “access device” at 29 U.S.C. § 1029(e)(1) requires the Government prove

usability of the device in order for that access device to be included in the

loss amount calculation for sentencing guidelines purposes.

PARTIES TO THE PROCEEDINGS -

All parties appear in the caption of the case on the cover page.

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TABLE OF CONTENTS

QUESTIONS PRESENTED 1.0... cee en eee eas I

PARTIES TO THE PROCEEDINGS .... 0... ec eens ii

TABLE OF AUTHORITIES ... 0.0... ee cece ence een ee vi

PETITION FOR WRIT OF CERTIORARI ........ 0.00. ccc eee es 1

OPINION BELOW 2.0. ee tenet eee eens 1

JURISDICTION 2. ne ener ee ees 1

STATUTORY and GUIDELINES PROVISIONS INVOLVED ................, 2

STATEMENT OF THE CASE 20... ce ee eee eens 3

REASONS FOR GRANTING THE WRIT 1.0... 0. ec eee 5

I. The Circuit Courts are divided on this important statutory

interpretation question ©. 6.0.0.0... ee cece eee eee 5

IL. The legislative history of 18 U.S.C. § 1029 establishes the

phrase “can be used” includes a usability requirement. ........... 8

lI. This case presents an ideal vehicle to establish the proper

interpretation of the statutory definition ......... 00.0... 0000 eee 10

CONCLUSION 2.0... ee nee eens li

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APPENDICES

Appendix A:

Opinion of the United States Court of Appeals

for the Fourth Circuit, 916 F.3d 398 (4th Cir, 2019)

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TABLE OF AUTHORITIES

Cases Page(s)

United States v. Blackmon, 839 F.2d 900 (2d Cir. 1988) .............. 000005 8

United States v. Carver, 916 F.3d 398 (4th Cir. 2019) .......0.......0..00.0. 4,5

United States v. Goodchild, 25 F.3d 55 (1st Cir. 1994) 00.0... eee 9

United States v. Hughey, 147 F.3d 423 (5th Cir, 1998) 2.0.0.0... 0. eee 10

United States v. Jones, 557 F. Supp. 2d 630 (E.D. Pa. 2008) ...........000005, 6

United States v. McNutt, 908 F.2d 561 (10th Cir, 1990) ..........0000 0000 ee 8

United States v. Moon, 808 F.3d 1085 (6th Cir. 2015) ................0000% 5, 6

United States v. Nguyen, 81 F.3d 912 (9th Cir. 1996) oo... eee eee 6

United States v. Onyesoh, 674 F.3d 1157 (9th Cir. 2012)... eee, 6

United States v. Popovski, 872 F.3d 552 (7th Cir. 2017) 2.0.0.0... 0c cee eee 7

United States v. Rueda, First Cir. Case No. 1871962 ........ 0.0.00... cee 7

United States v. Thomas, 841 F.3d 760 (8th Cir, 2016) .............. 000s eee vi

Statutes

15 USC. § 164400) ooo eeeeeeeeeees beret eet eee tenner ees 8

IBUS.C.§2 occcccccceceeee eves bebe beet et et bet veeteenen ens a

18 U.S.C. § 1028 oi cee ne tt eee ee ee 8

18 U.S.C. § 1028A 2. ccc nent eee ees 3

18 U.S.C. § 1029 (Lo ec eee teens ii, 1, 5, 8

18 U.S.C. § 1029(a)(8) occ cere enn n eee n tense bee ennas 3

18 U.S.C. § L029 MA) occ cece eee een e teens 3

18 U.S.C. § L0298(e) 00 eee netbeans 8

18 U.S.C. § L029) oe eee nen eae 11, 3,5

18 U.S.C. § L029()(2) ccc eee ence nnn e bees 1, 2,8

18 U.S.C. § 1L029(€)(8) ence e cee eens 2,3, 4,7

98 U.S.C. § 12541) oe eee Sree Eeeaeeee 1

USS.G.§ 2B cc eee eens 2, 3,5

US.S.G. § 2BLLDMDC) ener nett 3

ULS.S.G. § 2BL.1 comment. 1.8... tere tates 2

U.S.S.G. § 2B1.1 comment. n.B0P)Q) .. 0. eet es 2

U.S.S.G. § 2B1.1 comment. n.10(A) o 0. cece teenies 2

Other Authorities

H.R. Rep. 98-894 (1984), as reprinted in

1984 U.S. Code Cong. & Ad. News 8689 2... 0... eee ee 9, 10

S. Rep. No. 98-368 (1984), as reprinted in

1984 U.S. Code Cong. & Ad. News 8647 . 2.0.0.0... cece ee 9, 10

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PETITION FOR WRIT OF CERTIORARI

Petitioner respectfully petitions for a writ of certiorari issue to review the

judgment of the United States Court of Appeals for the Fourth Circuit.

OPINIONS BELOW

The published decision of the court of appeals appears at pages la — 7a of the

appendix to this petition and is reported at 916 F.3d 398.

JURISDICTION

The judgment of the court of appeals was entered on February 26, 2019.

Petitioner did not seek rehearing.

On May 21, 2019, Chief Justice Roberts extended the time within which to file

a petition for writ of certiorari to and including June 28, 2019. Jurisdiction of this

Court is pursuant to 28 U.S.C. § 1254(1).

STATUTORY and GUIDELINE PROVISIONS INVOLVED

18 U.S.C. § 1029(e)

(e) As used in this section—

(1) the term “access device” means any card, ... account number, . . .

personal identification number, . .. or other means of account access'that

can be used, alone or in conjunction with another access device, to obtain

money, goods, services, or any other thing of value, or that can be used to

initiate a transfer of funds...

(2) the term “counterfeit access device” means any access device that is

counterfeit, fictitious, altered, or forged, or an identifiable component of

an access device or a counterfeit access device;

(8) the term “unauthorized access device” means any access device that

is lost, stolen, expired, revoked, canceled, or obtained with intent to

defraud....

United States Sentencing Guidelines § 2B1.1:

U.S.8.G. § 2B1.1 Commentary Note 3:

Loss Under Subsection [§ 2B1.1] (b)(1).--This application note applies to

the determination of loss under subsection (b)(1).

(A) General Rule.--Subject to the exclusions in subdivision (D), loss is the

greater of actual loss or intended loss.

(D Actual Loss.--“Actual loss” means the reasonably foreseeable pecuniary

harm that resulted from the offense.

(ii) Intended Loss,--“Intended loss” (I) means the pecuniary harm that the

defendant purposely sought to inflict; and (II) includes intended

pecuniary harm that would have been impossible or unlikely to occur

(e.g., as in a government sting operation, or an insurance fraud in which

the claim exceeded the insured value).

U.S.8.G. § 2B1.1 Commentary Note 3(F)(D:

Stolen or Counterfeit Credit Cards and Access Devices; Purloined

Numbers and Codes.--In a case involving any counterfeit access device or

unauthorized access device, loss includes any unauthorized charges made

with the counterfeit access device or unauthorized access device and shall

be not less than $500 per access device... . For purposes of this

subdivision, “counterfeit access device” and “unauthorized access device”

have the meaning given those terms in Application Note 10(A).

U.S.S.G. § 2B1.1, Commentary Note 10(A):

“Counterfeit access device” (I) has the meaning given that term in 18

U.S.C. § 1029(e){2); ...

“Unauthorized access device” has the meaning given that term in 18

U.S.C. § 1029(e)(3).

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STATEMENT OF THE CASE

There is a significant division among the circuit courts regarding the

interpretation of the statutory definition of “access device” found in 18 U.S.C. §

1029(e)(1). Some circuit courts do not require the Government to prove the illicit access

device to be usable; the Ninth Circuit imposes a usability requirement. This split

needs to be addressed by this Court to ensure the lower courts’ proper interpretation

of the statutory terms “access device,” “counterfeit access device,” (18 U.S.C. §

1029(e)(2)) and “unauthorized access device” (18 U.S.C. § 1029(e)(3)), as well as those

terms’ incorporation into the Sentencing Guidelines at § 2B1.1.

Petitioner Keith Wayne Carver pleaded guilty to possession of at least fifteen

counterfeit or unauthorized access devices with intent to defraud and aid and abet, in

violation of 18 U.S.C. §§ 1029(a)(3) and 2 (Count 1); possession of device making

equipment with intent to defraud and aid and abet, in violation of 18 U.S.C. §§

1029(a)(4) and 2 (Count 2); and aggravated identity theft and aid and abet, in violation

of 18 U.S.C. §§ 1028A and 2 (a separate felony Information).

A Presentence Report (PSR) was prepared for sentencing. The probation officer

added a four-level enhancement under U.S.S.G. § 2B1.1(b)()(C) for a loss amount

greater than $15,000 but less than $40,000 based on the number of “cards” found

during a search of Petitioner’s hotel room. Pursuant to the commentary of U.S.S.G. §

2B1.1 of the Guidelines, the total intended loss figure associated with these “cards” was

determined to be $28,382.02. Petitioner objected to the loss amount, arguing that

many of the cards were not usable due to incomplete coding or other errors.

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The district court ultimately overruled in part Petitioner's objection, implicitly

finding usability was not required for the “loss” sentencing enhancement to apply. The

district court sentenced Petitioner to 33 months’ imprisonment as to Counts 1 and 2,

with the terms to be served concurrently with each other, and 24 months’

imprisonment as to the felony Information, to be served consecutively to the sentences

on Counts 1 and 2, as required by statute. The district court also imposed three years’

supervised release and a $300 special assessment fee.

Petitioner appealed to the Fourth Circuit Court of Appeals, which affirmed the

district court. The court rejected Petitioner’s argument that the phrase “can be used”

in the statute’s definition of “access device” requires proof of usability. The Court of

Appeals found that the definition of “unauthorized access device” at 18 U.S.C. §

1029(e)(3) “refutes” Petitioner's argument, and that Congress, “mindful of the need to

encompass future technological changes, ... wrote broadly to include any device of the

general sort that people can use to get money.” United States v. Carver, 916 F.3d 398,

402, 403 (4th Cir. 2019) (internal citation omitted). “The general words ‘can be used’

signify an intent to expand the reach of the definition lof access device].” Jd. at 403.

REASONS FOR GRANTING THE PETITION

The definition of “access device” located at 18 U.S.C. § 1029(e)(1) requires that

an access device be a device that “can be used... to obtain” money, goods, or other

items of value. There is a disagreement among the circuit courts as to whether the

phrase “can be used” means that an access device be currently usable or whether, as

found by the appellate court in Petitioner’s case, “can be used” simply refers to “the sort

of thing that people use to obtain money (like a credit card or bank number).” Carver,

916 F.8d at 403. The Ninth Circuit holds that unauthorized access devices must be

usable. The Fourth, Sixth, and Seventh Circuits hold the opposite.’

Clarification by this Court is needed on this issue not only is the term “access

device” incorporated into two other statutory definitions, but also because (as is

relevant to this case), this definition is incorporated into the federal Sentencing

Guidelines in calculating “loss” under U.S.S.G. § 2B1.1. The improper application of

this term not only impacts the calculation of the Sentencing Guidelines, but also may,

in some instances, impact a defendant’s liability under 18 U.S.C. § 1029.

I. The Circuit Courts are divided on thisimportant statutory

interpretation question.

The Circuit Courts are divided on the interpretation of the phrase “can be used”

as that phrase is used in the definition of “access device” contained in 18 U.S.C. §

1029(e)(1). The Ninth Circuit holds that in calculating loss under the Guidelines, some

' Petitioner respectfully takes the position that the Sixth Circuit's decision on

this issue is dicta, as the court found defendant had waived his right to appeal. See

United States v. Moon, 808 F.3d 1085 (6th Cir, 2015).

5.

proof of usability is required to count an “unauthorized access device whose usability

is not readily apparent, such as an expired credit card number.” United States v.

Onyesoh, 674, F.3d 1157, 1160 (th Cir. 2012). In Onyesoh, the Ninth Circuit

considered whether 500 expired credit card numbers could be used as part of the

loss-amount calculation under the Guidelines. 674 F.3d at 1158. The court examined

the language of the statute, which requires that in order for something to qualify as

an access device, it must be “capable of obtaining ‘money, goods, services, or any other

thing of value.” /d. at 1160. The court then observed that while the statute was clearly

“intended to target major fraud operations instead of individual use of an expired or

revoked card ,... the kind of devices potentially covered by the statute says nothing

about the quantum of proof necessary to establish usability. The legislative history

simply does not address that issue.” Jd. (quotation marks omitted).

The Ninth Circuit surveyed prior court precedent and found that “[nlo court, in

this or any other circuit, has read usability out of the statute.” /d. In its survey of the

law, the court found at least two prior decisions—one by the Ninth Circuit itself and

the other by a district court in Pennsylvania—which had analyzed the issue and

determined that the statute required the Government to prove that any allegedly

stolen credit cards could have been used to obtain goods or services in order to qualify

as an “access device” within the meaning of the statute. See id. (citing United States

v. Nguyen, 81 F.3d 912, 914 (9th Cir. 1996), and United States v. Jones, 557 F. Supp.

2d 630 (E.D. Pa. 2008)). Consequently, based on the language and history of the

statute and prior courts’ application of the statute, the Ninth Circuit held proof of

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usability is required for a card to qualify as an access device for sentencing purposes.

See id. at 1159.

The Sixth Circuit rejected this usability requirement, albeit in lengthy dicta.

See United States v. Moon, 808 F.3d 1085, 1090 (6th Cir. 2015) (holding that defendant

had waived his right to appeal in his plea agreement), In Moon, the circuit court

pointed out “unauthorized access device” means, inter alia, any access device that is

“lost, stolen, expired, revoked, canceled, or obtained with intent to defraud.” Moon, 808

F.3d at 1092 (citing 18 U.S.C. § 1029(e)(3)). The court reasoned that because cards

that are expired, revoked, or canceled are necessarily not usable, the statute does not

require usability of access devices in general. /d. The court also noted that even if such

cards could not be used to make purchases, they could still be used for other unlawful

purposes such as creating fake identities. Ja. See also United States v. Popovski, 872

F.3d 552 (7th Cir. 2017) (same).

In United States v. Thomas, 841 F.3d 760, 765 (8th Cir. 2016), the Eighth

Circuit declined to rule on the issue and found no plain error by the district court

“because neither the Supreme Court nor our court has addressed whether USSG §

2B1.1 contains a usability requirement, and other circuit courts are divided on the

issue.” Thomas, 841 F.3d at 765.

At the time of the filing of this petition, this same issue is before the First

Circuit Court of Appeals in United States v. Rueda, No. 18-1962. The Rueda case was

argued before a three-judge panel of the First Circuit on June 3, 2019.

Il. The legislative history of 18 U.S.C. § 1029 establishes the

phrase “can be used” includes a usability requirement.

An examination of the legislative history of 18 U.S.C. § 1029 confirms that

Congress meant the statutory phrase “can be used” to mean currently usable. Contrary

to the positions taken by the Fourth, Sixth, and Seventh Circuits, Congress was not

concerned in this statute with devices which might be used to create false identities,

as “neither the statutory language nor the legislative history anywhere mentions the

use of credit cards as false identification.” United States v. Blackmon, 839 F.2d 900, 914

(2d Cir. 1988); see also United States v. McNutt, 908 F.2d 561 (10th Cir. 1990) (same).

That concern is covered by 18 U.S.C. § 1028 (“Fraud and related activity in connection

with identification documents, authentication features, and information”).

Before 1984, fraudulent use of credit cards was federally prosecuted under a

section that made it unlawful to

knowingly in a transaction affecting interstate or foreign commerce, use

[] or attemptl ] or conspire[ ] to use any counterfeit, fictitious, altered,

forged, lost, stolen, or fraudulently obtained credit card to obtain money,

goods, services, or anything else of value which within any one-year

period has a value aggregating $1,000 or more.

15 U.S.C. § 1644(a) (1982). In response to a skyrocketing number of crimes relating

to the fraudulent use of credit cards in the early 1980s, Congress enacted 18 U.S.C. §

1029, which significantly broadened the federal government’s ability to prosecute these

types of crimes.

The original versions of both the House and Senate bills contained language

prohibiting the fraudulent production, transfer, or possession of the defined cards

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and/or account numbers if they “existled] for the purpose of obtaining’ things of value

or ‘for the purpose of initiating’ fund transfers.” S. Rep. 98-368 (“Senate Report”), at

11, reprinted in 1984 U.S. Code Cong. & Ad. News (“USCCAN”) 3647, 3657. See also

H.R. Rep. 98-894 (“House Report”), at 14, 1984 USSCAN 3689, 3700. “Because of

concern that a specific ‘purpose’ would be unnecessarily difficult for the prosecution to

prove beyond a reasonable doubt, the bill reported by the [Senate] committee refers to

devices that ‘can be used’ for those purposes, which establishes a more objective test.”

Senate Report at 11, 1984 USCCAN at 3657. It was the phrase “alone or in

conjunction with another access device” which was “intended to cover any account

access elements or means of identification currently available or that may become

technologically available, which may be used in connection with accounts but which

themselves may not be ‘access devices.” House Report at 19, 1984 USCCAN at 3705.

The phrase “expired, revoked, or canceled” in the definition of “unauthorized

access device” was added by the Senate to prohibit the illicit use of those covered access

devices where, “for instance, expired cards [] had been altered to appear valid.” Senate

Report at 11, USSCAN at 3657. See also United States v. Goodchild, 25 F.3d 55 (1st

Cir. 1994) (prosecution for use of unauthorized access devices which had been obtained

after previous credit cards had expired upon death of legitimate user). Therefore,

contrary to the positions of the Sixth, Seventh, and Fourth Circuits, the fact that the

definition of “unauthorized access device” includes devices that are “expired, revoked,

[or] canceled” does not mean that these cards “cannot be used” to obtain money or other

items of value. Carver, 916 F.3d at 402.

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Congress was focused upon the fraudulent use of such devices in connection with

credit transactions. See House Report at 14, 1984 USSCAN at 8700 “unauthorized”

access device described as “genuine access devices being used without authority”

(emphasis added); id. at 17, 1984 USCCAN at 3703 (“genuine but being misused

(unauthorized)” (emphasis added); id. at 19, 1984 USCCAN at 3705 (section 1029(e)(1)

encompasses “manifestationsof access devices usedbetween merchants and credit card

companies for payment for access device transactions”) (emphases added). See also

United States v. Hughey, 147 F.3d 423, 484 (5th Cir. 1998) (noting that Congress

“drafted the statute broadly to include any fraud arising from unauthorized use or

counterfeiting of... devices capable of affording account access... .”) (citing Senate

Report at 10) (emphasis added). To read a usability requirement out of the statute

mean defendants can be prosecuted for having in their possession vandom sets of

numbers that appear to be account numbers or credit card numbers and, as in

Petitioner's case, have an inflated amount of loss attributed to their offense under the

Sentencing Guidelines. If it cannot be used to obtain goods, money, or other items of

value, it is not an access device under the statute.

III. This case presents an ideal vehicle to establish the proper

interpretation of the statutory definition.

This case presents this Court with the opportunity to address this significant

issue of statutory interpretation. Not only was the issue preserved in the district court,

but it was fully briefed and argued before the appellate court. As the circuit courts are

divided over this statutory interpretation issue which impacts not only the calculation

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of loss under the Guidelines but also may impact a defendant’s liability under the

statute.

CONCLUSION

For the reasons given above, the petition for a writ of certiorari should be

granted.

Respectfully submitted,

PARKS NOLAN SMALL

Federal Public Defender

for the District of South Carolina

L-——

EXaLY DECK HARRILL

Counsel of Record

Assistant Federal Public Defender

1901 Assembly Street.

Suite 200

Columbia, South Carolina 29201

808.765.5079

Emily_Harrill@fd.org

Counsel for Petitioner

June 24, 2019

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