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United States District Court, S.D. New York

April 29, 2004.


The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge


On September 26, 2003, James Wagner ("Wagner") pleaded guilty to one count of Credit Card Fraud, in violation of 18 U.S.C. § 1029(a)(5), a class C felony.

The Offense Conduct

  This statement of facts draws on the Presentence Investigation Report prepared by the U.S. Probation Office.

  On January 21, 2003, Wagner entered Saks Fifth Avenue at the Short Hills Mall in Short Hills, New Jersey and purchased two Cartier watches with a total value of $6,950 using a Chase Bank card in the name of another person ("the Cardholder"). In making the purchase, Wagner signed a charge card form in the name of the Cardholder. During the course of processing the transaction, the Saks Fifth Avenue store clerk became suspicious and contacted a store investigator. The investigator called the bank card issuer and spoke with a bank representative. The bank representative reported to the investigator that he had called the Cardholder at home and spoken to him. The Cardholder stated that he had not been at the Short Hills Mall at the time and had not authorized anyone else to use his card.

  Following the call to Chase Bank, the investigator contacted the Millburn, New Jersey Police Department; a detective and another member of the Millburn Police Department responded to the call. The detective then called the victim from a Saks Fifth Avenue security office in the store to confirm that he was not at the Short Hills Mall and had not authorized anyone else to use his card.

  Wagner was then approached by a Saks Fifth Avenue store investigator who identified himself as such. Wagner immediately walked away from the investigator and then began running toward the parking garage. While running, Wagner dropped the two watches he had purchased along with the receipts.

  The detective and his partner approached Wagner in the parking garage and arrested him and read him his Miranda warning. Wagner then stated: "He told me it was good." The case was then referred to United States Postal Inspectors, who reviewed the details of the arrest and subsequently contacted a Chase Bank fraud investigator who informed the postal inspectors that the Cardholder never received the bank card used by Wagner. The fraud investigator then provided a report of all purchases made with the bank card. These purchases, totaling approximately $13,000, were made in the Southern District of New York and elsewhere from January 18, 2003 through January 21, 2003.

  Wagner was arrested on April 23, 2003 in the Southern District of New York. After his arrest, the government determined that Wagner was not responsible for all the fraudulent charges to the credit card but that he is responsible for $7,231.06 in actual loss.

 Victim Impact

  The intended victim of the instant offense is J.P. Morgan Chase, formerly known as Chase Bank. It has suffered an actual loss of $7,231.06.

 Offender Characteristics

  Wagner was reportedly born in 1948 in Peekskill, New York. He was raised in a middle-class household in Westchester County. Wagner reports that he graduated from the State University of New York at Albany in 1971 with a bachelor's degree in biology. Wagner currently resides in a one-bedroom apartment on the Upper East Side of Manhattan.

  In 1994, Wagner developed Lyme disease through a tick bite. In 2000, he was bitten again by a tick and his condition worsened. The disease has manifested itself with neurological complications, a heart condition and a diminished immune system. As a result, Wagner requires a daily regimen of medication. Wagner also reports that he has been diagnosed with Chronic Fatigue Syndrome. He also has frequent liver-function tests to determine the impact of his medication on his liver.

  Wagner has been self-employed since April 2003. He reportedly serves as a consultant for real estate developers where he arranges for financing for land development projects. He reports that he receives a percentage of the deal and that he has earned approximately $75,000 from this venture.

  Wagner also reported that he owned and operated his own "head-hunting" business from 1979 to 1997 in Albany, New York, and that from 1999 to 2001, he owned and operated a men's fashion store in Manhattan. Financial Condition — Ability to Pay

  According to a signed financial affidavit provided by Wagner, he has a net worth of $6,000 and a net monthly cash flow of $3,898.00.

 Adjustment for Acceptance of Responsibility

  On the advice of counsel, Wagner declined to provide a statement regarding his involvement in the instant offense, and chose to rely on his plea allocution. However, Wagner subsequently submitted a letter to the Court in which he apologizes to the Court, the government and his loved ones for his actions, which he says are a source of great shame to him.

 Offense Level Computation

  The November 5, 2003 edition of the Guidelines Manual has been used in this case.

  The guideline for a violation of 18 U.S.C. § 1029(a)(5) is found in § 2B1.1, which provides for a base offense level of 6 pursuant to § 2B1.1(a)(2). Because the instant offense involved a loss of $7,231.06, the offense level is increased two levels, to 8, pursuant to § 2B1.1(b)(1)(B).

  Based on Wagner's plea allocution and his statement of acceptance of responsibility, he has shown recognition of responsibility for his offense. Because of Wagner's timely notification of his intention to plead guilty, thus allowing the government to allocate its resources more efficiently, pursuant to § 3E1.1(a), the offense is reduced two levels, to 6.

 Criminal History

  Available information indicates that the defendant was represented by counsel in all matters resulting in conviction, unless otherwise noted.

  On May 12, 1978, Wagner was arrested and charged with Conspiracy to Possess Cocaine in the United States District Court for the Southern District of Florida. He was sentenced to two years probation. Under § 4A1.2(e)(3), no criminal history points are imposed.

  On January 24, 1996, Wagner was arrested and charged with Forgery in the Second Degree in the Supreme Court, New York County. He was sentenced to five years probation. On April 18, 2000, a violation of probation was filed. Two days later, the warrant was vacated and probation was continued. Under §§ 4A1.1(c) and 4A1.2(e)(2), one criminal history point is imposed.

  On January 21, 2003, Wagner was arrested and charged with a Local Ordinance Violation in Millburn Municipal Court in Millburn, New Jersey. He was sentenced to a $1,030 fine and court costs. Under § 4A1.2(c) (1), no criminal history points are imposed.

 Criminal History Category

  The total of the criminal history points is one. According to the sentencing table at Chapter 5, Part A, one criminal history point establishes a Criminal History Category of I.

 Applicable Guidelines Range

  The provision under which Wagner pleaded guilty provides for a maximum sentence of 15 years pursuant to 18 U.S.C. § 1029(a)(5). Based on a total offense level of 6 and a Criminal History category of I, the guideline range for imprisonment is 0 to 6 months. Because the offense is a felony, from one to five years of probation are authorized under 18 U.S.C. § 3561(c)(1). In addition, one of the following must be imposed as a condition of probation unless extraordinary circumstances exist: a fine, restitution, or community service, pursuant to 18 U.S.C. § 3563(a)(2).

  Wagner is eligible for probation because the applicable guideline range is Zone A of the Sentencing Table, pursuant to § 5B1.1(a)(1). If probation is imposed, the term must be at least one year, but not more than five years because the offense level is six, pursuant to § 5B1.2(a)(1).

  The maximum fine is $250,000, pursuant to 18 U.S.C. § 3571. The fine range for the instant offense is from $500 to $5,000, pursuant to § 5E1.2(c)(3)(A). A special assessment of $100 is mandatory, pursuant to 18 U.S.C. § 3013.

  Subject to the defendant's ability to pay, in imposing a fine, the Court shall consider the expected costs to the government of any imprisonment, probation, or supervised release pursuant to § 5E1.2(d)(7). The most recent advisory from the Administrative Office of the United States Courts suggests a monthly cost of $1,931.97 to be used for imprisonment, a monthly cost of $292.21 for supervision, and a monthly cost of $1,590.66 for community confinement. Full restitution to the victim is required under 18 U.S.C. § 3663A and 3664, and § 5E1.1(a)(1). Restitution in the amount of $7231.06 is owed to J.P. Morgan Chase and should be forwarded to the attention of John Jeter at the Chase BankCard Services, P.O. Box 29022, Phoenix, AZ 85038-8664.

 The Sentence

  In light of the foregoing, Wagner will be sentenced to three years probation. Wagner is also ordered to make full restitution to the victim. A sentence of imprisonment is inappropriate given Wagner's debilitating medical condition, and because Wagner has accepted responsibility for his actions.

  As mandatory conditions of probation, Wagner shall (1) not commit another federal, state or local crime; (2) not illegally possess a controlled substance; and (3) not 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.

  The defendant shall be subjected to the standard conditions of supervision (1-13), with the following special conditions: 1. Wagner shall provide the probation officer with access to any requested financial information.


2. Wagner 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 schedule.
  The defendant 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.

  Wagner shall pay a mandatory special assessment of $100, which shall be due immediately.

  This sentence is subject to further hearing on May 4, 2004, at 10:00 A.M.

  It is so ordered.


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