USA v. Derrick Gadsden

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 14-15487
Non-Argument Calendar
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D.C. Docket No. 2:13-cr-00159-WKW-WC-2
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
DERRICK GADSDEN,
Defendant-Appellant.
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Appeal from the United States District Court
for the Middle District of Alabama
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(March 4, 2016)
Before WILSON, MARTIN and ROSENBAUM, Circuit Judges.
PER CURIAM:
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Derrick Gadsden appeals his 240-month sentence for conspiracy to commit
wire fraud under 18 U.S.C. §§ 1343 and 1349. Gadsden pleaded guilty to opening
or causing others to open checking accounts with minimum deposit amounts and
then using bad checks from those accounts to make purchases. He now challenges
how his sentence was calculated. First, Gadsden argues that the district court’s
loss calculation was not supported by sufficient evidence. Second, he argues that
the district court improperly counted victims and losses from times during the
conspiracy when he was incarcerated. Third, Gadsden argues that he was not a
leader or organizer of the conspiracy. Finally, he argues that the conspiracy did
not involve sophisticated means. After careful review, we affirm.
I.
First, Gadsden argues that the district court’s loss calculation was not
supported by sufficient evidence. We review a district court’s loss calculation for
clear error. United States v. Barrington, 648 F.3d 1178, 1197 (11th Cir. 2011).
The sentencing court “need only make a reasonable estimate of the loss, given the
available information,” though its calculation must be supported by “reliable and
specific evidence.” Id. (quotations omitted). If the loss amount is greater than
$400,000 but not more than $1,000,000, the defendant’s offense level increases by
14. USSG § 2B1.1(b)(1) (2013). If the loss amount is greater than $1,000,000 but
not more than $2,500,000, the offense level increases by 16. Id.
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The district court did not clearly err in calculating the loss amount. The
court relied on the testimony of Secret Service Agent Leighton Greenlee, who used
a multifactor analysis to trace bad checks to the conspiracy. A bad check was
included in the loss amount only if it satisfied specific criteria, such as being: from
a local bank account opened with a minimum deposit; overnighted to the account
holder; written just after the account was opened; mailed to an address linked to
the conspirators; used for a high-cost purchase; or used at a frequently victimized
store.1 Agent Greenlee created a spreadsheet listing checks that fit this pattern and
excluded any that did not. He arrived at a total loss amount of $1,418,264.50. The
district court considered this testimony and established the loss amount as
$1,000,000. Neither party objected to the court’s calculation.
The evidence at sentencing was sufficient to support the district court’s
reasonable estimate of the loss amount. Agent Greenlee calculated a loss amount
based on a variety of factors as well as his investigation of the conspiracy. The
district court reduced the amount calculated by Agent Greenlee by almost 30
percent, adding a margin of error for any checks that Agent Greenlee may have
mistakenly attributed to the conspiracy. The district court’s calculation triggered a
lower enhancement level for Gadsden. We cannot say that the district court clearly
erred in determining the loss amount.
1 Agent Greenlee confirmed the reliability of this analysis by interviewing 35 to 40 of the
nearly 200 suspected members of the conspiracy and investigating their methods.
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II.
Second, Gadsden argues that the district court improperly counted victims
and losses from portions of the conspiracy that occurred while he was incarcerated
on other charges. We review a district court’s findings of fact for clear error and
its application of those facts to justify a sentencing enhancement de novo. United
States v. Creel, 783 F.3d 1357, 1359 (11th Cir. 2015). The base offense level for a
defendant involved in a conspiracy is determined on the basis of “all reasonably
foreseeable acts and omissions of others in furtherance of the [conspiracy] that
occurred during the commission of the offense of conviction, in preparation for
that offense, or in the course of attempting to avoid detection or responsibility for
that offense.” USSG § 1B1.3(a)(1)(B) (2013). The Guidelines provide a four-
level enhancement for offenses that involved 50 or more victims. Id.
§ 2B1.1(b)(2)(B).
“A conspirator’s participation in a conspiracy is presumed to continue until
all activity related to the conspiracy ceases.” United States v. Odom, 252 F.3d
1289, 1299 (11th Cir. 2001). “Since conspiracy is a continuing offense, a
defendant who has joined a conspiracy continues to violate the law through every
moment of [the conspiracy’s] existence, and he becomes responsible for the acts of
his co-conspirators in pursuit of their common plot.” Smith v. United States, 568
U.S. __, __, 133 S. Ct. 714, 719 (2013) (alteration in original) (quotation and
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citations omitted). A defendant may avoid such liability only by withdrawing from
the conspiracy, which requires him to prove that he: (1) took affirmative acts
inconsistent with the object of the conspiracy, and (2) either communicated those
acts or his desire to withdraw to his co-conspirators, or disclosed the scheme to law
enforcement. Odom, 252 F.3d at 1299. “Mere cessation of participation is not
sufficient to establish withdrawal.” United States v. Arias, 431 F.3d 1327, 1341
(11th Cir. 2005).
The district court did not clearly err by counting the losses and victims from
portions of the conspiracy that occurred while Gadsden was incarcerated. Gadsden
presented no evidence showing that he withdrew from the conspiracy while
incarcerated. To the extent he argues that his imprisonment was tantamount to
withdrawal, we have rejected this argument. See United States v. Gonzalez, 940
F.2d 1413, 1427 (11th Cir. 1991). Thus, Gadsden’s continued participation in the
conspiracy was presumed. See Odom, 252 F.3d at 1299. Because his co-
conspirators’ perpetuation of the scheme was reasonably foreseeable, Gadsden
remained responsible for the associated losses and victims.2
2 Gadsden also argues that, even if he failed to withdraw, he should not have been
responsible for smaller, separate check fraud conspiracies that “may” have been operating within
the larger conspiracy he helped create. But this theory is speculative and unsupported—he has
presented no evidence that any smaller conspiracies actually existed.
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III.
Third, Gadsden argues that he was not a leader or organizer of the
conspiracy. Whether a defendant had a leadership role is a finding of fact that we
review for clear error. Barrington, 648 F.3d at 1200. The Guidelines provide a
four-level enhancement “[i]f the defendant was an organizer or leader of a criminal
activity that involved five or more participants or was otherwise extensive.” USSG
§ 3B1.1(a) (2013). Courts should consider the following factors when weighing
the defendant’s role:
the exercise of decision making authority, the nature of participation
in the commission of the offense, the recruitment of accomplices, the
claimed right to a larger share of the fruits of the crime, the degree of
participation in planning or organizing the offense, the nature and
scope of the illegal activity, and the degree of control and authority
exercised over others.
Id. § 3B1.1, cmt. n.4 (2013). All these factors need not be present—they “are
merely considerations for the sentencing judge,” though “the exercise of some
authority in the organization” is required. United States v. Martinez, 584 F.3d
1022, 1026 (11th Cir. 2009) (quotation omitted). Recruiting and directing
conspirators generally shows the necessary degree of leadership. See United States
v. Caraballo, 595 F.3d 1214, 1231–32 (11th Cir. 2010).
The district court did not clearly err in concluding that Gadsden was a leader
or organizer of the conspiracy. All of the 35 to 40 participants interviewed by
Agent Greenlee identified Gadsden or his brother, David, as being involved in the
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conspiracy. Gadsden recruited and directed at least five people in furtherance of
the conspiracy, one of whom made ten trips around Alabama on his behalf.
Gadsden also arranged truck rentals to pick up fraudulently purchased
merchandise, directed people who he said “worked for him” to buy certain goods
for resale to regular customers, and used “recruiters” to find more participants.
The district court did not clearly err by imposing a leadership-role enhancement on
Gadsden.3
IV.
Finally, Gadsden argues that the conspiracy could not have involved
sophisticated means because the process of passing bad checks is inherently
simple. We review a district court’s finding that the defendant used sophisticated
means for clear error. Barrington, 648 F.3d at 1199. The Guidelines provide a
two-level enhancement for offenses involving sophisticated means. USSG
§ 2B1.1(b)(10) (Nov. 2013). “Sophisticated means” are defined as “especially
complex or especially intricate offense conduct pertaining to the execution or
concealment of an offense,” which may include actions like hiding assets or
transactions via fictitious entities, corporate shells, or offshore accounts. Id.
§ 2B1.1, cmt. n.9(B). This enhancement applies when the defendant engaged in
3 Gadsden also argues that he could not have been a leader of the conspiracy because it
continued in his absence while he was incarcerated. We have already rejected Gadsden’s
argument that he is absolved of responsibility for the conspiracy during his periods of
incarceration. See supra Part II.
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“repetitive, coordinated conduct designed to allow him to execute his fraud and
evade detection.” United States v. Bane, 720 F.3d 818, 827 (11th Cir. 2013). Each
action during the conspiracy need not be sophisticated; it is enough for the scheme
to be sophisticated in its totality. United States v. Ghertler, 605 F.3d 1256, 1267
(11th Cir. 2010).
The district court did not clearly err in concluding that the conspiracy
involved sophisticated means. The conspiracy lasted for several years, involved
around 200 participants, and targeted businesses in four states. The district court
identified other factors that suggested sophistication: (1) Gadsden’s use of third
parties to open checking accounts, which effectively concealed his identity; (2) the
highly specific nature of the products Gadsden fraudulently purchased for his
customers; (3) the technique Gadsden used to telephonically “push[] through” bad
checks with check-processing companies if they were initially refused by a
merchant; and (4) the large number of individual transactions involved. Although
Gadsden argues that the scheme could not have been sophisticated given that it did
not involve fictitious entities, corporate shells, or offshore accounts, these are not
the only types of transactions that may be sophisticated. See Ghertler, 605 F.3d at
1268 (upholding a sophisticated-means enhancement even though the defendant
“sometimes made little or no effort to conceal either the fact of his fraud or his
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identity”). The totality of the conspiracy was sufficiently sophisticated to support
the district court’s finding here.
AFFIRMED.
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