United States District Court, Southern District of New York
April 24, 2003
UNITED STATES OF AMERICA, AGAINST GARY AU YEUNG, DEFENDANT.
The opinion of the court was delivered by: Robert W. Sweet, United States District Judge.
On October 1, 2002, Gary Au Yeung ("Yeung") pled guilty to one count of access device fraud in violation of 18 U.S.C. § 1029 (a) and one count of wire fraud in violation of 18 U.S.C. § 1343.
The Offense Conduct
The following is based on an investigation conducted by a special agent (SA) of the Federal Bureau of Investigation ("FBI").
The SA made contact with an investigator employed by The Home Depot, a nationwide chain of retail home improvement stores, who informed the SA that several customers of Home Depot had reported to Home Depot that their Home Depot brand of credit cards had been fraudulently used to make unauthorized purchases from Home Depot. For example, the investigator informed that one such customer-victim ("V-1") discovered approximately twenty-six (26) separate unauthorized charges on V-1's Home Depot credit card account ("Account 1") between March 7, 2002 and April 1, 2002, totaling approximately $19,000. The investigator further informed that Home Depot records reflect that several of the unauthorized purchases made in these instances were purchases of store credits for useable later purchases, in the form of Home Depot "Gift Cards." Specifically, for example, Account 1 was used to make purchases of at least four gift cards, totaling approximately $1,000 in late March 2002 at a Home Depot location in Jericho, New York, which purchases are reflected in Home Depot records reviewed by the SA.
Other Home Depot records reviewed showed that the gift cards purchased with Account 1 were subsequently used on April 3, 2002 to make purchases of merchandise from Home Depot with a total value of approximately $916. Approximately three days later, that merchandise was returned to Home Depot and a single gift card containing store credit in the amount of approximately $916 ("Gift Card 5") was issued by Home Depot.
The SA spoke with an individual ("CW-1") who informed that CW-1 made purchases in the secondary market of Home Depot gift cards on several occasions from a single seller, to whom CW-1 was initially introduced through the Internet auction website known as eBay. CW-1 advised that CW-1 participated in the auction via a computer Internet connection in a state other than New York State.
eBay is a website on which users may buy and sell virtually any type of item, including collectibles and artwork, but also as in this case, retail store gift cards and credits. eBay acts as a venue for sellers to list items and buyers to bid on items. Prior to buying or selling on the site, users are required to register with eBay by providing a name, e-mail address, postal address, telephone number and, in the case of sellers, a credit card number. eBay can also identify users by their Internet Protocol address, or IP address, which is a unique numeric address used by computers on the Internet. As part of the registration process, eBay also permits a user to select an identity (known as a User ID) that identifies the user to other eBay users during an auction. Under eBay rules, the highest bidder at the end of an auction is obligated to complete the transaction with the seller, provided the bidder had met any minimum or reserve price set by the seller. Once an auction has been won, the seller and buyer generally determine between them the method and timing of shipping and payment, and in that context, communicate directly with each other.
CW-1 advised that CW-1 had been the winning bidder for two Home Depot gift cards sold over eBay by a seller using the User ID "EASTERNSTAND" in March 2002. Subsequently, according to CW-1, after having completed these transactions, CW-1 continued to communicated via Internet e-mail from CW-1's home state with the individual using User ID EASTERNSTAND and an e-mail address, "EASTERNSTAND@aol.com." CW-1 made additional purchases of approximately three more Home Depot gift cards from EASTERNSTAND. One was Gift Card 5. According to CW-1 the total value of all gift cards purchased from EASTERNSTAND was approximately $4,000.
CW-1 informed that CW-1 was instructed by EASTERNSTAND to send payment for those Gift Cards to a United States Post Office box located in Flushing, New York. The SA reviewed the postal records for that P.O. box that reflect that it was assigned to an individual using the name "Gary A. Yeung," who provided a New York driver's license number when registering for the P.O. box. The SA reviewed New York Department of Motor Vehicle records for that license number, which is assigned to the defendant, Yeung, as well as several photographs associated with that license.
The SA reviewed employment records of the Home Depot, which reflect that an individual named "Gary Au Yeung" with an address at 94-09 71st Avenue, Forest Hills, New York, was employed by Home Depot at its Glendale, New York store, first as a cashier and later as an assistant manager, between about 1998 up to December 2001. Those employment records reflect that Yeung received substantial training and experience in conducting credit card transactions, merchandise returns, and spotting of and reporting of fraudulent access device activity as part of his training at Home Depot. Those employment records also include a photograph of "Gary Au Yeung" which appeared to match the DMV photographs of defendant Yeung.
Subsequent to CW-1's purchases of gift cards from EASTERNSTAND described above, the SA bid for and "won" an auction over eBay on June 2, 2002, of a Home Depot gift card with a value of approximately $390 ("Gift Card 6"), the eBay seller of which identified himself as EASTERNSTAND. The SA then communicated with the seller further, via e-mail as late as June 11, 2002 to arrange for payment and shipment. The seller used the e-mail address EASTERNSTAND@aol.com. The seller shipped Gift Card 6, per the SA's instructions, to a private mail box located in New York, New York. Gift Card 6 was sent by the United States Postal Service, Priority Mail, and was postmarked as having come from Flushing, New York. The return address printed on the packaging in which Gift Card 6 was sent to the SA was the same P.O. box as that to which CW-1 was instructed to, and did, send payment for Gift Card 5 and the other gift cards CW-1 purchased from EASTERNSTAND. In one of the e-mail communications with the seller, the SA inquired as to whom payment should be made should the SA decide to pay by money order, and the seller wrote back that it should be sent to "P. Yeung" at that same P.O. box.
Upon receipt of Gift Card 6, the SA provided to the Home Depot investigator the identifying multi-digit number printed upon it, from which the investigator was able to glean its transaction history. According to the investigator, Gift Card 6 was the end result of several transactions similar to the transactions described above that resulted in Gift Card 5 that were initiated by fraudulent and unauthorized purchases made on April 27, 2002 on two separate Home Depot credit card accounts ("Account 2" and "Account 3").
As described above, several customers of Home Depot experienced their Home Depot brand credit cards and/or credit card accounts to have been fraudulently used to make unauthorized purchases from The Home Depot. The Home Depot investigator informed that the true account holders of Accounts 1, 2 and 3 had each shopped and made legitimate purchases of merchandise at Home Depot stores at which Yeung was employed at or around the relevant time period.
Based on Home Depot transaction records, The Home Depot investigator was able to pinpoint the date, March 15, 2002, time and location of one of the unauthorized and fraudulent purchases made in Account 1 at a store in Charlotte, North Carolina, and based on that information obtained a video tape from an in-store surveillance camera as it was conducted at the cash register checkout. The SA reviewed a copy of the tape and observed that the individual making the purchase in question appeared to resemble the photographs of Yeung.
At 1:45 p.m. on July 9, 2002, the SA visited the eBay website and, using the site's search engine, executed a search for all auctions being conducted by seller EASTERNSTAND. That search revealed approximately 15 separate items being auctioned by EASTERNSTAND at that time, each of which was for a retail store gift or store credit card (8 for Home Depot, 2 for Target stores, 3 for The Gap, 1 for Blockbuster Video and 1 for Toys R Us), the value of which, in total, exceeded $4,500.
The SA reviewed law enforcement records that reflected that Yeung was previously arrested and convicted on multiple occasions for fraud offenses of various types, including a conviction in May 1989 in Federal Court, Brooklyn, New York, for access device fraud, for which he was sentenced to a term of imprisonment of 18 months.
The May 25, 2003 United States Sentencing Commission Guidelines Manual has been used in this case. Counts I and II are grouped together pursuant to § 3D1.2 (d) as the offense level is determined largely on the basis of the total amount of harm of loss, and the offense behavior is ongoing and continuous in nature.
The guideline for a violation of 18 U.S.C. § 1343 is found in § 2B1.1, which provides for a base offense level of 6 pursuant to § 2B1.1(a).
Because the victim(s)' loss exceeded $200,000, but was less than $400,000, a twelve-level increase to 18 is warranted pursuant to § 2B1.1(b)(1)(G).
Because the offense involved more than 10 but less than 50 victims, a two-level increase to 20 is warranted pursuant to § 2B1.1 (b)(2)(A)(i).
Because the offense involved sophisticated means, a two-level increase to 22 is warranted pursuant to § 2B1.1(b)(8)(C).
Because the offense involved the possession and use of device-making equipment, the unauthorized use of means of identification to produce or obtain other means of identification, and the possession of five or more means of identification that unlawfully were produced from or obtained by the use of another means of identification, the offense level is increased by two levels to 24 pursuant to § 2B.1(b)(9)(A) and (C).
Due to Yeung's timely notification of his intention to plead guilty and his acceptance of responsibility, and since the offense level is 16 or greater, he qualifies for a 3-level reduction pursuant to § 3E1.1(a) and (b). The offense is reduced three levels to 21.
Adjusted Offense Level
Yeung's adjusted offense level is 21 under the Guidelines.
Criminal History Category
Available information indicates that Yeung was represented by counsel in all matters resulting in conviction.
On February 25, 1981, Yeung was arrested for possession of stolen property. He was sentenced on July 10, 1981 to a $500 fine. That qualifies for 0 criminal history points pursuant to § 4A1.2 (e)(3).
On December 19, 1981, Yeung was arrested for grand larceny, second degree. On August 2, 1983, he was sentenced to five years' probation. That qualifies for 0 criminal history points pursuant to § 4A1.2 (e)(3).
On March 3, 1982, Yeung was arrested for forgery in the second degree after he and one other stole property and money using stolen credit cards and forging the names of others. On August 2, 1983, he was sentenced to five years' probation. That qualifies for 0 criminal history points pursuant to § 4A1.2 (e)(3).
On November 18, 1982, Yeung was arrested for forgery in the second degree after Yeung was observed using a stolen credit card to purchase merchandise in an Abraham & Strauss department store. On August 2, 1983, he was sentenced to five years' probation. That qualifies for 0 criminal history points pursuant to § 4A1.2 (e)(3).
On September 6, 1983, Yeung was arrested for assault in the third degree after Yeung refused to leave the complainant's backyard when told to and struck the complainant about the head and body with a metal rod causing injury to the complainant. On November 28, 1983, he was sentenced to three years' probation. That qualifies for 0 criminal history points pursuant to § 4A1.2 (e)(3).
On August 25, 1984, Yeung was arrested for mail fraud. On August 28, 1985, he was sentenced to three years' imprisonment. That qualifies for 3 criminal history points pursuant to § 4A1.1 (a) and § 4A1.2 (e)(1).
On September 4, 1988, Yeung was arrested for burglary in the third degree, criminal possession of stolen property and attempted possession of a forged instrument. On December 22, 1989, Yeung was sentenced to a total of four to eight years' imprisonment. That qualifies for 3 criminal history points pursuant to § 4A1.1 (a) and § 4A1.2 (e)(1).
On January 25, 1989, Yeung was arrested for access device fraud and felon in possession of a weapon. On December 22, 1989, he was sentenced to 18 months' imprisonment. That qualifies for 3 criminal history points pursuant to § 4A1.1(a) and § 4A1.2 (e)(1).
On March 19, 1997, Yeung was arrested for conspiracy to commit fraud. On January 21, 1998, he was sentenced to time served (1 month). That qualifies for 1 criminal history point pursuant to § 4A1.1 (c) and § 4A1.2 (e)(2).
The total of criminal history points is 10. According to the sentencing table at Chapter 5, Part A, 10 criminal history points establish a Criminal History Category of V.
Applicable Guidelines Range
The statutes under which Yeung was convicted provide for a maximum sentence of fifteen years' imprisonment under Count I pursuant to 18 U.S.C. § 1029 (a)(5) and a maximum sentence of five years' imprisonment under Count II pursuant to 18 U.S.C. § 1343. The Guidelines range for an offender with a base offense level of 21 and a Criminal History Category of V is 70 to 87 months.
In light of the foregoing, Yeung shall be sentenced to 70 months' imprisonment on Count I and 60 months' imprisonment on Count II, to run concurrently with Count I. Yeung is sentenced at the bottom of the guidelines range in light of the Court's understanding that he will face deportation at the end of his imprisonment. His imprisonment shall be followed by three years' supervised release on each count, to run concurrently. Yeung will also pay a mandatory special assessment of $200.
Yeung will also be required to make restitution to the victims identified by the government, in an amount to be provided by the government. The order shall be delayed, pursuant to 18 U.S.C. § 3554 (d)(5), for 90 days after sentence in anticipation of receiving the necessary identifying information from the government.
Upon the issuance of such an order, the restitution shall be paid in monthly installments of 10% of the gross monthly income over a period of supervision to commence 30 days after the date of the judgment or the release from custody if imprisonment is imposed, and shall be made payable to the Clerk, U.S. District Court, for disbursement to the victims. If the defendant is engaged in a BOP non-UNICOR work program, he shall pay $25 per quarter toward the criminal financial penalties. If the defendant participates in the COP's UNICOR program as a grade 1 through 4, the defendant shall pay 50% of his monthly UNICOR earnings toward the criminal financial penalties, consistent with BOP regulations at 28 C.F.R. § 545.11. Any payment that is not payment in full shall be divided proportionally among the persons named. The defendant shall notify the United States Attorney for this district within 30 days of any change of mailing or residence address that occurs while any portion of the restitution remains unpaid. The factors in 18 U.S.C. § 3664 were considered.
The following conditions of supervised release are mandatory: Yeung shall not (1) commit another federal, state or local crime; (2) illegally possess a controlled substance; or (3) possess a firearm or destructive device. The mandatory drug testing condition is suspended based on the Court's determination that the defendant poses a low risk of future substance abuse.
Yeung will be subjected to the standard conditions of supervision (1-13). In addition, he shall provide the probation officer with access to any requested financial information. He shall not incur new credit charges or open additional lines of credit without the approval of the probation officer unless the defendant is in compliance with the installment payment schedule. He shall comply with the directives of the Immigration and Naturalization Service and the immigration laws. He is to report to the nearest probation office within 72 hours of release from custody and is to be supervised by the district of residence.
This sentence is subject to further hearing on April 28, 2003.
It is so ordered.
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