Filed: Jan. 14, 2021
Latest Update: Jan. 15, 2021
USCA11 Case: 19-12348 Date Filed: 01/14/2021 Page: 1 of 19
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 19-12348
________________________
D.C. Docket No. 8:18-cr-414-SCB-TGW-2
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
DOMULEST DANZEY,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(January 14, 2021)
Before MARTIN, LUCK, and BRASHER, Circuit Judges.
BRASHER, Circuit Judge:
Domulest Danzey appeals his 48-month sentence for conspiracy to commit
access-device fraud and aggravated identity theft, access-device fraud, and
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aggravated identity theft. At his sentencing, the district court concluded that Danzey
was accountable for a total intended loss of over $600,000. Just over $100,000 of
that amount came from fraudulently obtained tax refunds for which Danzey claims
he played no role in obtaining, knew nothing about, and could not have reasonably
foreseen. He argues that the tax return losses were not a reasonably foreseeable
consequence of the broader identity-theft conspiracy in which he participated and
should not be considered relevant conduct for sentencing. After careful
consideration of the record, we cannot say that the district court clearly erred in
determining that the tax return losses were reasonably foreseeable to Danzey.
Accordingly, we affirm.
I. BACKGROUND
Danzey admitted to participating in an identity theft and credit card fraud
scheme as part of his membership in the Manche Boy Mafia, a criminal gang based
in Tampa, Florida. Danzey and other gang members purchased stolen personal
identification information as well as stolen credit and debit card account numbers
from various websites on the “dark web.” Using the stolen information, Danzey and
other gang members created counterfeit credit cards by embossing the stolen credit
and debit card account information onto prepaid, reloadable gift cards. They would
then purposefully damage the magnetic strips on the backs of those cards to ensure
that the cards could not be read by a merchant’s point-of-sale card reader. Instead,
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the unknowing cashier would manually enter the stolen account numbers. Danzey
and his co-conspirators used these counterfeit credit cards to purchase more gift
cards and other items from various retail establishments in the Tampa area. Other
members of the conspiracy used that stolen personal identification information to
file fraudulent tax refund applications with the Internal Revenue Service.
The identity-theft conspiracy was run out of a small outbuilding at a property
in Tampa, Florida. The outbuilding was occupied by John Render, who embossed
many of the counterfeit credit cards. The outbuilding also served as a “hangout” for
Render’s co-conspirators. John’s sister, Whitney Render, had her residence in the
main building at that address.
Eventually, law enforcement officers executed a search of both the
outbuilding and Whitney Render’s residence. In the main room of the outbuilding,
they found Danzey and other gang members surrounded by counterfeit credit cards,
gift cards, stolen credit card numbers, stolen personal identification information, and
other evidence. Danzey was found lying on the ground near the couch in the main
room. On top of the couch, officers found a printed list of names, birthdates, and
social security numbers. Beneath the couch, they found Danzey’s phone and
counterfeit credit cards bearing Danzey’s name. Investigators discovered 186 credit
card and social security numbers stored on Danzey’s phone. In John Render’s
bedroom, police found more printed lists of names, birthdates, and social security
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numbers, along with at least two credit cards bearing Danzey’s name. After
contacting the IRS, investigators determined that the personal identification
information found in John Render’s bedroom had been used to file fraudulent tax
returns seeking refunds totaling $109,244.
In Whitney Render’s house, police found more counterfeit credit cards, and
several cellphones belonging to co-conspirators. One of the cell phones belonged to
Whitney Render and contained text messages in which she and Danzey had
exchanged stolen credit card information. Another phone belonged to co-conspirator
Derek Walden. Walden’s phone also contained stolen credit card information.
Investigators later determined that Walden’s phone had been used to access multiple
tax websites.
A federal grand jury indicted Danzey under 18 U.S.C. § 371 for one count of
conspiracy to commit access-device fraud in violation of 18 U.S.C. § 1029(a)(1) and
to commit aggravated identity theft in violation of 18 U.S.C. § 1028A, three counts
of access-device fraud, and four counts of aggravated identity theft. The government
proposed a plea agreement that Danzey rejected because it contained additional facts
not needed to prove the elements of the charged crimes, including facts regarding
the tax return losses of which Danzey claimed to be unaware. His attorney explained
that “as far as . . . having indirect knowledge or direct knowledge as to what the co-
conspirators were doing . . . he may have had an idea, but he has no specific
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knowledge of that.” Instead, he opted for an open plea, at which point he pleaded
guilty to all charges without a written agreement.
In the Presentence Investigation Report, the probation officer held Danzey
accountable for a total loss of more than $600,000, using that amount to determine
his total offense level. That amount included both a loss of over $500,000 from the
fake credit cards and a loss of over $100,000 from tax refunds that Danzey’s co-
conspirators fraudulently claimed using stolen personal identification information.
Danzey objected in writing and at the sentencing hearing to the court’s inclusion of
those refunds in its total loss calculation. He argued that he lacked knowledge of the
tax return fraud and that it was not reasonably foreseeable to him. The district court
overruled his objection, however, determining that the tax return fraud was relevant
conduct for sentencing purposes and that the tax return losses were a reasonably
foreseeable consequence of the identity-theft conspiracy. The court explained:
[Y]ou seem to be involved in [the identity theft] scheme based on what
the testimony was, and based on what you’ve admitted to . . . not only
by participating in it and attempting to use the cards, but by being
present at the place where many of them were obviously being collected
or manufactured, . . . where the list of personal identifying information
were just lying out in the open. And, you know, what I have to decide
is it reasonably foreseeable to you as a member of this conspiracy as far
as the loss in all of these categories, and the amount of the loss and I
think it is.
The inclusion of the tax return losses did not affect Danzey’s aggravated-
identity-theft sentence. U.S.S.G. § 2B1.6 (“If the defendant was convicted of
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violating 18 U.S.C. § 1028A, the guideline sentence is the term of imprisonment
required by statute.”). But it did raise his total offense level for the other counts from
19 to 21, which in turn increased his advisory sentencing range from 30 to 37 months
to 37 to 46 months. Compare U.S.S.G. § 2B1.1(b)(1)(G) (directing a court to
increase a defendant’s base offense level by 12 for losses of more than $250,000 but
less than $550,000), with U.S.S.G. § 2B1.1(b)(1)(H) (providing for an increase in a
defendant’s base offense level of 14 for losses of more than $550,000 but less than
$1,500,000). On these other counts, the district court varied downward, sentencing
Danzey to 24 months’ imprisonment. The district court then imposed the aggravated-
identity-theft’s mandatory consecutive sentence of 24 months, for a total sentence
of 48 months. This appeal followed.
II. STANDARD OF REVIEW
This Court reviews a district court’s interpretation and application of the
sentencing guidelines de novo but accepts its factual findings unless they are clearly
erroneous. United States v. Tejas, 868 F.3d 1242, 1244 (11th Cir. 2017). Whether a
co-conspirator’s act was reasonably foreseeable to the defendant so that it qualifies
as relevant conduct for sentencing is a question of fact reviewed for clear error.
United States v. Valarezo-Orobio,
635 F.3d 1261, 1264 (11th Cir. 2011). We reject
a factual finding as clearly erroneous only if we are “left with a definite and firm
conviction that a mistake has been committed.” United States v. Pierre,
825 F.3d
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1183, 1191 (11th Cir. 2016) (quoting United States v. Rothenberg,
610 F.3d 621,
624 (11th Cir. 2010)). We will affirm the district court’s finding if it is “plausible in
light of the record viewed in its entirety.” United States v. Siegelman,
786 F.3d 1322,
1333 (11th Cir. 2015) (quoting Anderson v. City of Bessemer City,
470 U.S. 564,
574 (1985)).
III. DISCUSSION
Danzey appeals the district court’s decision to include over $100,000 of
fraudulently applied-for tax refunds in the total loss amount for which he was
sentenced. He argues that the district court clearly erred by finding that losses
attributable to the tax return fraud were reasonably foreseeable to him. He contends
that evidence supporting the court’s finding was “nonexistent” and that any
inference that he knew or should have known about the tax return fraud “would be
pure speculation.” He also notes that the government failed to produce any evidence
that he was directly involved in the tax return fraud. The government responds with
undisputed evidence showing that the tax return fraud was conducted in close
physical proximity to Danzey—in the same outbuilding where he carried out the
credit card scheme—and relied on the same personal identification information that
Danzey and his co-conspirators obtained on the dark web. The government contends
that the record supports the district court’s determination that the losses inflicted by
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the tax return fraud were reasonably foreseeable to Danzey. For the reasons that
follow, we agree.
To begin, we must clarify the question presented on appeal. The relevant
question before us is not whether Danzey was actually involved in the tax return
fraud or whether he had actual knowledge that others were engaged in tax return
fraud. Instead, we must decide whether the district court clearly erred when it
determined that the tax return losses were a reasonably foreseeable consequence of
the ongoing identity-theft conspiracy. U.S.S.G. § 1B1.3(a)(1)(B) (providing that, in
the case of jointly undertaken criminal activity, all reasonably foreseeable acts and
omissions of others in furtherance of the criminal activity can count towards offense
characteristics); see Pierre, 825 F.3d at 1198 (a sentencing court “may hold
participants in a conspiracy responsible for the losses resulting from the reasonably
foreseeable acts of co-conspirators”) (quoting United States v. Mateos,
623 F.3d
1350, 1370 (11th Cir. 2010)). Danzey’s arguments that he did not know of or
participate in the tax return fraud therefore miss the point. The question is whether
Danzey—after purchasing stolen personal identification information for use in
opening fraudulent credit and debit card accounts—ought to have foreseen that the
conspiracy would use personal identification information to commit other types of
financial fraud as well. We have held that members of a criminal conspiracy need
not be involved in—or even aware of—losses inflicted by other members of the
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conspiracy for those losses to be reasonably foreseeable. See Mateos, 623 F.3d at
1371 (holding that it was “reasonably foreseeable that a clinic engaged in
fraudulently diluting doses of medicine [to bill Medicare] might also be in the
practice of billing Medicare when no treatment was provided whatsoever”).
Nor is this a case in which the district court engaged in improper speculation
regarding the total loss amount. Danzey cites several of our precedents for the
proposition that “courts ‘must not speculate concerning the existence of a fact which
would permit a more severe sentence under the guidelines.’” United States v.
Sepulveda, 115 F.3d 882, 890 (11th Cir. 1997) (quoting United States v. Wilson,
993
F.2d 214, 218 (11th Cir. 1993)). But Sepulveda and Wilson involved speculation
regarding the calculation of the loss amount itself, with the government unable to
provide a “reasonable estimate of the loss.”
Sepulveda, 115 F.3d at 891;
Wilson, 993
F.2d at 218. That is not the case here, where the loss attributable to the tax return
fraud has been calculated with precision. Nor is this a case like United States v.
Isaacson,
752 F.3d 1291, 1306 (11th Cir. 2014), where we declined to attribute
losses from one conspiracy to defraud a pool of investors to a defendant involved in
a separate conspiracy to defraud a group of auditors. Here, the tax return fraud and
the credit card fraud were components of the same overarching identity-theft
conspiracy. Both frauds were run out of the same small outbuilding and targeted the
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same class of victims—individuals whose personal information Danzey and his co-
conspirators purchased online.
On this record, we cannot say that the district court clearly erred. The district
court’s determination that the tax return losses were a reasonably foreseeable
consequence of the identity-theft conspiracy was a plausible reading of the record.
The district court’s decision was supported by several key pieces of evidence.
First, at the sentencing hearing, the district court heard testimony from a
detective about Danzey’s role in the identity-theft conspiracy. The detective testified
that Danzey was present in John Render’s outbuilding in the early morning when the
search warrant was executed, along with many counterfeit credit cards, gift cards,
stolen account numbers, stolen personal identification information, and other
evidence. Critically, she testified that pieces of paper containing the names, birth
dates, and social security numbers used to commit tax return fraud were found “out
in the open” in John Render’s bedroom—the same room where police found several
credit cards embossed with Danzey’s name. She also testified that police recovered
Danzey’s phone from the outbuilding. On it, they discovered “approximately 186
card numbers and Social Security numbers”—more than they found on the phone of
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any other conspirator and a majority of the approximately 261 recovered from all
cell phones seized in the search. Danzey disputes none of this testimony.
Second, Danzey never disputed—and is thus “deemed to have admitted,” see
United States v. Corbett, 921 F.3d 1032, 1042 (11th Cir. 2019) (quoting United
States v. Aguilar-Ibarra,
740 F.3d 587, 592 (11th Cir. 2014))—the following facts
contained in the PSR: that he and his co-conspirators purchased stolen personal
identification information over the internet; that the same personal identification
information that Danzey and his co-conspirators used to apply for unauthorized
credit and debit card accounts was used by his co-conspirators to file fraudulent tax
returns; and that at least eight of the counterfeit credit cards recovered from the
outbuilding—including the bedroom where tax documents were lying out in the
open—were embossed with his own name.
This evidence shows that Danzey was deeply involved in procuring the
personal identification information that he and his co-conspirators used to open lines
of credit in other individuals’ names and that his co-conspirators used to file
fraudulent tax returns. Because he did not use social security numbers and birthdates
to commit credit card fraud, which required only names and account numbers, the
social security numbers on his phone would have been useful only to commit some
other kind of fraud, such as the tax fraud committed by his co-conspirators. And with
much of the conspiracy being run out of a single small outbuilding, it would be
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reasonable for a factfinder to infer that Danzey knew what his co-conspirators were
up to. At his change of plea hearing, Danzey’s attorney nearly admitted as much,
explaining that, although Danzey “may have had an idea” of what his co-
conspirators were doing with the stolen information, he lacked “specific knowledge
of that.”
But specific or actual knowledge is not required, only reasonable
foreseeability. On this point, Danzey asks us to hold that the district court was
constrained to find that the tax return fraud was tightly sealed within John Render’s
bedroom and that he was unable to know or even foresee what was occurring there—
despite the fact that the information he stole and credit cards embossed with his name
were scattered throughout the entire house, including that bedroom. But we are not
bound by Danzey’s description of his involvement in a criminal conspiracy to which
he pleaded guilty. We are bound by law to affirm the district court’s factual
determination unless it is clearly erroneous.
Our dissenting colleague sees things differently and makes three points that
warrant a response. First, she correctly explains that Danzey disputed portions of the
PSR. But we believe those disputes are beside the point: the undisputed portions of
the PSR (along with the officer’s testimony) provide sufficient evidence for a
factfinder to find that the tax fraud was reasonably foreseeable. Second, our
dissenting colleague suggests that the tax fraud may have been temporally or
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physically distant from Danzey’s participation in the conspiracy. But the record
establishes that eight of Danzey’s fake credit cards were discovered in the
outbuilding along with personal information that his co-conspirators used to commit
the tax fraud. The police found these two sets of documents—fake credit cards with
Danzey’s name and the information used to commit the tax fraud—at the same time,
in the same place, when Danzey was present. A reasonable factfinder could conclude
that the tax fraud and credit card fraud were carried out simultaneously. Third, she
suggests that our decision is inconsistent with a “workable rule” for gauging whether
a person is responsible for his co-conspirator’s actions. But we have held that the
district court’s ruling on this question is a factual determination that we review for
clear error. See Valarezo-Orobio, 635 F.3d at 1264. Accordingly, our decision means
merely that there was sufficient evidence in this record to affirm the district court’s
finding in this case.
The evidence presented to the district court established a sufficient basis to
find by a preponderance of the evidence that Danzey ought to have reasonably
foreseen the tax losses related to the identity-theft conspiracy. At minimum, there is
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enough evidence in the record “viewed in its entirety” to hold that the district court’s
finding was “plausible.” Siegelman, 786 F.3d at 1333.
IV. CONCLUSION
Because the record contains sufficient evidence to support the district court’s
determination that Danzey ought to have reasonably foreseen the tax return losses,
the court did not clearly err in its calculation of total loss.
AFFIRMED.
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MARTIN, Circuit Judge, dissenting:
Because I believe the District Court committed clear error in attributing the
loss amounts from the tax fraud scheme to Mr. Danzey, I respectfully dissent.
Mr. Danzey pled guilty to a conspiracy to commit (1) access-device fraud and
(2) aggravated identity theft. Thus his case raises the question of whether the District
Court clearly erred in finding the tax fraud committed by his co-conspirator was
reasonably foreseeable to him. Because this record does not support a finding that
the tax fraud was reasonably foreseeable to Mr. Danzey, I would reverse the District
Court on this point.
To begin, the paper with the personal identification information used to file
the fraudulent tax returns resulting in the $109,244 tax loss was found in the bedroom
of another MBM member, and not in Mr. Danzey’s immediate physical proximity.
As Mr. Danzey points out, there is no evidence to show that the personal
identification information found in his physical proximity was used to file fraudulent
tax returns. Nor was there any evidence that the Social Security numbers on Mr.
Danzey’s phone were used in the tax fraud. The government cannot be heard to say
otherwise.
The majority opinion says Mr. Danzey “never disputed” the fact that “the
same personal identification information that Danzey and his co-conspirators used
to apply for unauthorized credit and debit card accounts was used by his co-
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conspirators to file fraudulent tax returns.” Maj. Op. at 11 (emphasis added). The
majority relies on two paragraphs of Mr. Danzey’s Presentence Investigation Report
(PSR) as support. But I don’t read the PSR to state that the “same” personal
identification information that Mr. Danzey used in the credit card fraud scheme was
used in the tax fraud scheme. See PSR ¶¶ 22, 24. Rather, what the PSR contains in
paragraph 22 is a summary of the conduct the probation office attributed to Mr.
Danzey. Then in paragraph 24, the PSR contains a calculation of the loss amounts
from the tax fraud scheme. And though the majority says Mr. Danzey “never
disputed” the facts the majority recounts, Mr. Danzey did object to paragraphs 22
and 24, and other sections of the PSR as well. See PSR Amended Addendum at 1–2
(Defendant’s Objections). Mr. Danzey lodged both written and oral objections to the
PSR, and now continues to dispute the “[r]elevant [c]onduct” that may properly be
attributed to him on appeal. Id. at 1.
I believe the majority’s reliance on United States v. Mateos,
623 F.3d 1350
(11th Cir. 2010) is misplaced. See Maj. Op. at 8–9. That case addressed Ms.
Mateos’s argument that she could be held responsible only for fraudulent Medicare
billings for patients “actually injected with unnecessary medicine; not to billing
Medicare when no treatment was provided at all.”
Mateos, 623 F.3d at 1371. That
obvious attempt to exclude this fraudulent conduct from the definition of fraud was
rejected by the panel. The opinion said it was “reasonably foreseeable that a clinic
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engaged in fraudulently diluting doses of medicine [to bill Medicare] might also be
in the practice of billing Medicare when no treatment was provided whatsoever.” Id.
At the end of the day, the panel observed, Ms. Mateos “knew that [the hospital] was
purchasing far less [medicine] than it was billing Medicare for, and that was the
essence of the fraud.”
Id.
We are, however, on quite different terrain here. In urging affirmance of the
District Court’s finding, the government chiefly argues that Mr. Danzey was
believed to be a member of MBM and that the gang engaged in tax fraud generally.
The government argues as well that the personal identification information was left
in the open in an area where Mr. Danzey was present, and generally, he was
communicating with other MBM members who committed tax fraud. The
government says this made it reasonably foreseeable to Mr. Danzey that others
committed tax fraud simply “because it’s something [the others] were engaging in.”
But there are several problems with the government’s reading of the record,
which the majority nevertheless adopts. See Maj. Op. at 7–10. First, there’s the
problem of timing. Although MBM may have engaged in tax fraud “early on,” the
parties do not specify what time period this refers to. I do not believe the majority
can properly assume that any tax fraud scheme necessarily overlapped with Mr.
Danzey’s involvement in MBM. This record is simply devoid of evidence about
either when the tax fraud was committed or when Mr. Danzey joined MBM. Second,
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there’s the matter of MBM’s group coherence. The government’s chief witness at
sentencing, Detective Sharla Canfield, testified about the MBM gang, saying, “As
for hierarchy, we haven’t been able to identify any type of hierarchy. It’s more of
the guys that like to hang out together and live in that geographical area.” That Mr.
Danzey was known to “hang out” with or lived nearby people who were committing
tax fraud is not enough to show that Mr. Danzey would have reasonably foreseen
this type of criminal activity by other MBM members. And third, as previously
mentioned, there is nothing in the record to support the inference that the personal
identification information near Mr. Danzey was also used for fraudulent tax returns.
The government’s witness simply never testified to this fact.
Finally, I also note that the facts of Mr. Danzey’s case are different from those
in which courts have affirmed loss calculations based on conduct actually reasonably
foreseeable to the criminal defendant. To take one example, in United States v.
Rodriguez, 751 F.3d 1244 (11th Cir. 2014), this Court held that the district court did
not clearly err in attributing losses to a defendant convicted of a mortgage scheme.
Id. at 1256. The scheme involving Ms. Rodriguez included a number of fraudulent
loan applications submitted to lenders across the United States seeking loans on
various properties.
Id. at 1248. Ms. Rodriguez contested including the loss amounts
associated with the fraudulent use of her post office boxes, arguing that the use of
her post office boxes was too tenuous a connection to the fraud.
Id. at 1256. Ms.
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Rodriguez argued that she had not worked for her co-conspirator during the entire
length of the conspiracy. Id. Nevertheless, our Court ruled that such loss amounts
were reasonably foreseeable because “rerouting the mail was essential to the success
of the fraudulent scheme,” and Ms. Rodriguez “participated in the conspiracy and
did not withdraw from it.”
Id. at 1256–57. In contrast here, the government has
shoehorned separate criminal activity, of a different kind and nature, into the ambit
of Mr. Danzey’s offenses of conviction. But to punish Mr. Danzey for this conduct,
the government was required to prove, by a preponderance of the evidence, that the
separate activity was foreseeable to him. It simply did not do so.1
On this record, I believe the District Court lacked any viable basis for
attributing the $109,244 from the tax fraud activity to Mr. Danzey in its loss
calculation. I would vacate Mr. Danzey’s sentence and remand for resentencing.
Therefore I respectfully dissent.
1
The majority’s approach is also hard to square with any workable rule defining what
constitutes reasonably foreseeable co-conspirator conduct. As the government noted at sentencing,
even though Mr. Danzey was in communication with a co-conspirator, Reggie Black, about credit
card fraud, it conceded that “we aren’t hoping that the Court will hold him accountable for
everything that Reggie [Black] did, only the limited portion on the phone where he was
communicating with him about credit card fraud.” The same limitation should apply to the
fraudulent tax activities engaged in by Mr. Danzey’s co-conspirators. Yet the majority’s reasoning
punishes Mr. Danzey for more conduct than even the government—rightfully, in this example—
recognizes was reasonably foreseeable to him.
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