United States v. Smith

79 F.4th 790

UNITED STATES of America, Plaintiff-Appellee, v. Daja Don-Kevia SMITH (22-1506);Davonte Rayshad Hoskins (22-1552), Defendants-Appellants.

No. 22-1506

No. 22-1552

United States Court of Appeals, Sixth Circuit

Decided and Filed: August 23, 2023

Appeal from the United States District Court for the Western District of Michigan at Grand Rapids. No. 1:21-cr-00020—Paul Lewis Maloney, District Judge.

ON BRIEF: Kevin M. Schad, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Cincinnati, Ohio, for Appellant IN 22-1506. Julia A. Kelly, WILLEY & CHAMBERLAIN LLP, Grand Rapids, Michigan, for Appellant in 22-1552. Timothy

P. VerHey, Andrew Byerly Birge, UNITED STATES ATTORNEY'S OFFICE, Grand Rapids, Michigan, for Appellee.

Before: BATCHELDER, COLE, and NALBANDIAN, Circuit Judges.

BATCHELDER, J., delivered the opinion of the court in which COLE and NALBANDIAN, JJ., joined. NALBANDIAN, J. (pp. 799-800), delivered a separate concurring opinion.

OPINION

ALICE M. BATCHELDER, Circuit Judge.

Daja Smith and Davonte Hoskins were co-conspirators in a large bank-fraud scheme, in which they called the victims, pretending to be from their bank, gained access to the victims' accounts, and stole their money. Both pleaded guilty to conspiracy to commit bank fraud and aggravated identity theft, and both appealed, arguing that their sentences are procedurally unreasonable. We affirm.

I.

a. Background

Between April 1, 2019, and April 1, 2020, Cedric Smith,¹ Daja Smith ("Smith"), and Davonte Hoskins defrauded banks and their customers of over a million dollars by using the account holders' personal identifying information without authorization. Twenty different banks were subjected to the scheme. The three conspirators would purchase, via online "dump sites," identification information that hackers stole from financial institutions. This information included the customers' names, bank usernames, phone numbers, social security numbers, and which banks held the accounts.

After obtaining this information, the conspirators would access the victim's bank online, type in the username, and be prepared to select "forgot my password." The conspirator would call the victim and "spoof" the phone number to make it appear that the conspirator was calling from the bank. When the victim answered, the conspirator pretended to be a bank employee who was concerned about suspicious activity associated with the account. He or she would tell the victim that the victim needed to give the bank an identification code to verify the victim's identity. The co-conspirator would then trigger the "forgot my password" function on the website, which sends a one-time code to the victim's email or phone number. The victim would provide that code to the conspirator, who would put the code in to change the password. This gave the conspirator full access to the victim's account. The conspirator would withdraw funds and send them to bank accounts or debit cards of other people, which helped hide his or her identity as the spoofer.

On February 2, 2021, a federal grand jury indicted Daja Smith and Cedric Smith for bank fraud conspiracy and aggravated identity theft in violation of 18 U.S.C. § 1349 and 18 U.S.C. § 1028A. On May 4, 2021, Hoskins was added to the indictment and charged with the same crimes. Smith and Hoskins pleaded guilty to both charges and admitted to their knowing participation in the conspiracy. Hoskins had a written plea agreement, but Smith did not.

Daja Smith was heavily involved in the scheme. She made spoofing calls, sent stolen funds to her bank account, solicited others to participate by depositing some of the money into their debit-card accounts, wrote the spoofing script, and saved stolen bank information. She was directly involved with six of the twelve banks that were subject to the fraud; the other six are connected to her via the activity of her co-conspirators. On May 29, 2019, Smith told Hoskins that she did not want to work for him anymore.

Davonte Hoskins communicated on social media about the fraud, which included sharing the victims' stolen information, sharing the websites where this type of stolen information can be purchased, telling others how to purchase this information, and sharing debit card numbers that could receive the fraudulent proceeds. Hoskins also received money from the fraudulent transfers. He was directly involved with four, possibly five, of twelve banks; his connections with seven of the banks were indirectly connected to him through his co-conspirators. Hoskins was not held liable for the very first bank the conspiracy defrauded—People's United Bank—because he did not join the conspiracy until afterwards. Hoskins' involvement with American Savings Bank is disputed, as a video shows him bragging about receiving $30,000 in fraudulent transfers from this bank, but then in the same video he said he claimed to not know anything about fraudulent activity at this bank.

The defendants' Presentence Investigation Reports ("PSRs") determined the total loss amount based on both actual loss and intended loss. Actual loss, the amount of money stolen, was $1,171,673.97. Intended loss includes the actual loss plus the funds the conspirators tried to steal but were unsuccessful at obtaining, which totaled $2,158,297.80. The PSR recommended that Hoskins and Smith each receive a 16-level enhancement to their Guidelines score because they each intended over $1.5 million in losses. See U.S.S.G. § 2B1.1(b)(1). Both defendants objected to this enhancement on the grounds that other conspirators' conduct should not be attributed to them because they were not directly involved with all the banks listed.

b. Sentencing Hearings

i. Smith's Sentencing Hearing

At Smith's sentencing hearing, the district court overruled her objection that some of the relevant conduct included in her offense level should not be included because she was not directly involved with several of the banks. The court found that it was "clear" that Smith knew "exactly what she was doing, knew exactly who she was dealing with, and she's out looking for other" potential victims' information. The court explained that even though including intended loss results in a greater enhancement, the court only had to come up with a reasonable estimate of loss and Smith should not be rewarded for the banks' doing their job and catching the fraud. Because Smith knew and regularly dealt with the main conspirators, Cedric Smith and Hoskins, whatever they did was jointly undertaken activity. Further, the district court concluded, the purpose of the scheme was to hide money, so calculating the loss as intended loss was appropriate.

The court sentenced Smith to 36 months in prison for the conspiracy charge, which included a downward variance for low likelihood of recidivism. The court also sentenced her to a consecutive 24 months for the aggravated-identity-theft charge. Smith was held accountable for the full amount of the intended losses and was ordered to pay restitution in the full amount of the actual loss, which was $1,171,673.97.

ii. Hoskins's Sentencing Hearing

At his sentencing hearing, the district court overruled Hoskins's objections. Hoskins objected to including the conduct of others in his offense level and the use of intended loss, not actual loss, to calculate his Guidelines score. Although the court recognized that the Guidelines and its commentary are not binding, the court "believe[d] under the circumstances of this case, [that intended loss is] the accurate measure of the totality of the criminality of Mr. Hoskins and his co-conspirators." As for the relevant conduct objection, the court found that Hoskins was "clearly . . . jointly undertaking activity with his co-conspirators" and that the actions of the Smiths were "reasonably foreseeable within the meaning of the relevant conduct guideline" because Hoskins "knew precisely what [they] were doing." The court also found that it was "clear" that information about the elements of the fraud was going back and forth among the co-conspirators, which was relevant to the loss amount.

The court sentenced Hoskins to 48 months in prison for the conspiracy charge, which was within the Guidelines range, as well as 24 months for the aggravated-identity-theft charge, consecutive to the conspiracy sentence. The court attributed the full amount of the intended loss to Hoskins, minus the intended amount at Peoples United Bank because Hoskins was not part of the conspiracy at that time. The total loss attributed to him for purposes of scoring the Guidelines was $1,846,932.65, but he was only ordered to pay restitution in the amount of the actual loss, which was $966,922.97.

The defendants timely appealed.

II.

Both defendants argue that the district court erred when it attributed to them the conduct of others involved in the conspiracy. Hoskins also argues that the district court erred when it included intended-loss amounts in his offense level. And Smith argues that the district court should not have ordered her to pay all the restitution in full.

Because the defendants preserved their arguments that their sentences are procedurally unreasonable, we review for an abuse of discretion. United States v. Nunley, 29 F.4th 824, 830 (6th Cir. 2022). Preserved objections to factfindings and the district court's determination of the amount of loss we review under a deferential clear-error standard. United States v. Thomas, 933 F.3d 605, 608 (6th Cir. 2019); United States v. Riccardi, 989 F.3d 476, 481 (6th Cir. 2021). Legal questions, such as the interpretation of the Guidelines, we review de novo. Riccardi, 989 F.3d at 481.

a. Attribution of Relevant Conduct

Both defendants argue that the district court erred when it attributed to each of them all the loss from the conspiracy instead of attributing only loss they were directly involved with. Both argue that their co-conspirators' separate fraud at the other banks was not within the scope of their agreements, nor...