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United States v. Shephard

United States Court of Appeals, Fourth Circuit

June 15, 2018

UNITED STATES OF AMERICA, Plaintiff - Appellee,
v.
DARRA LEE SHEPHARD, a/k/a Nora Southerland, a/k/a Donna Ramirez, Defendant-Appellant.

          Argued: March 22, 2018

          Appeal from the United States District Court for the Western District of North Carolina, at Charlotte. Robert J. Conrad, Jr., District Judge. (3:13-cr-00021-RJC-DCK-3)

         ARGUED:

          Chiege Ojugo Kalu Okwara, LAW OFFICE OF CHIEGE O. KALU OKWARA, Charlotte, North Carolina, for Appellant.

          Joanna Katherine Wood Bowman, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

         ON BRIEF:

          Kenneth A. Blanco, Acting Assistant Attorney General, Trevor N. McFadden, Deputy Assistant Attorney General, Ellen R. Meltzer, William H. Bowne, Gustav W. Eyler, Fraud Section, Criminal Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Jill Westmoreland Rose, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Charlotte, North Carolina, for Appellee.

          Before NIEMEYER, WYNN, and DIAZ, Circuit Judges.

          DIAZ, CIRCUIT JUDGE.

         Darra Lee Shephard conspired to defraud U.S. residents through a telemarketing sweepstakes scheme. From a call center in Costa Rica, Shephard and others would tell their unwitting victims that they had won a sweepstakes prize. The catch? Winners could receive their prize money only after paying a "refundable insurance fee." Victims of the scheme wired thousands of dollars to the call center, but of course, no fees were refunded and no prize money was ever paid.

         Shephard pleaded guilty to conspiracy to commit wire and mail fraud, conspiracy to commit money laundering, eight substantive counts of wire fraud and aiding and abetting, and four substantive counts of money laundering and aiding and abetting. She was sentenced to ninety-six months in prison and ordered to pay $7, 215, 695.20 in restitution. On appeal, she challenges (1) the district court's application of the vulnerable victim sentencing enhancement and (2) its calculation of the actual loss amount. We affirm.

         I.

         A.

         From 2007 through February 2015, Shephard "participated in, and otherwise facilitated, " a sweepstakes telemarketing call center in Costa Rica for the purpose of defrauding U.S. residents by convincing them to pay money in order to claim a fake sweepstakes prize. J.A. 158.

         The call center required "openers" to call residents in the United States and inform them that they had won second prize in a sweepstakes in the amount of $350, 000 to $450, 000. The "openers"-often falsely representing themselves as U.S. government employees-would explain that in order to receive the prize money, the U.S. resident must pay a "refundable insurance fee" by wiring money via Western Union, MoneyGram or an international bank. Victims then wired money to a "runner, " who would collect wire transfers at banks in Costa Rica, or a "bridge, " who would receive the funds in the United States and forward them along to the call center in Costa Rica.

         Once someone fell prey to the scam and made an initial payment, a "loader" would call again and convince the victim to send more money. The "loader" would tell the victim that a mistake had been made and he had actually won first prize, which was more than $3, 000, 000. Of course, the victim would first need to pay thousands of additional dollars in increased insurance fees to claim this larger prize. If the victim fell for the scheme again and made another payment, the "loader" would continuously raise the sweepstakes prize and ask for more money from the same victim. This process is known as "reloading." At various times throughout her tenure, Shephard worked in the call center as an "opener, " a "runner, " and a "loader."

         B.

         Shephard was arrested in Costa Rica in July 2015 and then extradited to the United States. She pleaded guilty to all fourteen counts of her indictment without the benefit of a plea agreement. Shephard also agreed to a written factual basis for her plea, which described the sweepstakes scheme and her involvement. Shephard reserved her right to object to two proposed findings at sentencing: (1) that the loss amount was over $3, 500, 000 and (2) that she knew that many of the victims were over the age of fifty-five and vulnerable.

         Shephard's presentence report ("PSR") relied on the factual basis, as well as two written statements from Shephard, to calculate the appropriate Guidelines range. The PSR applied a base offense level of 7 for wire fraud, a number of enhancements, and a three-level downward adjustment for acceptance of responsibility. For our purposes, only two of the enhancements matter: First, the PSR applied a two-level enhancement because the offense involved vulnerable victims. U.S.S.G. § 3A1.1(b)(1). Second, it applied an eighteen-level increase for a loss amount of more than $3, 500, 000 but less than or equal to $9, 500, 000. U.S.S.G. § 2B1.1(b)(1)(J). The PSR relied on the financial analysis prepared by the government, which explained that during Shephard's involvement the loss amount collected from victims via Western Union was $5, 876, 814.27 and the loss amount collected via MoneyGram was $1, 338, 880.93, resulting in a total loss amount of $7, 215, 695.20.

         Shephard objected to the vulnerable victim enhancement and the loss amount calculation. She argued there was no evidence that the scheme targeted unusually vulnerable victims or that Shephard knew it targeted such victims. As for the loss amount, she claimed it should be less than $3, 500, 000 because the victims' losses were not adequately documented and her involvement in the call center was sporadic. The court overruled the objection to the vulnerable victim enhancement "based on responses from the government, consistent with my other rulings in other [related] call center cases that . . . vulnerable victim enhancements were appropriate in the nature of how this fraud activity worked." J.A. 71. And it affirmed the loss amount as a "conservative estimate" based on "solid methodology." J.A. 70. The court further explained that Shephard was responsible for the criminal activity of her coconspirators even after her personal participation ended because she never affirmatively withdrew from the conspiracy.

         The district court adopted the PSR's Guidelines calculation, which applied a total offense level of 34 and a criminal history of I for a Guidelines range of 151 to 188 months' imprisonment. The court then departed and varied downward to arrive at a sentence of ninety-six months' imprisonment and $7, 215, 695.20 in restitution.

         Shephard filed a timely appeal.

         II.

         We review criminal sentences for reasonableness using an abuse of discretion standard. Gall v. United States, 552 U.S. 38, 51 (2007). A sentence based on an improperly calculated Guidelines range is procedurally unreasonable. United States v. Davis, 679 F.3d 177, 182 (4th Cir. 2012). In reviewing whether a sentencing court properly calculated the Guidelines ...


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