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United States v. Wedd

United States District Court, S.D. New York

July 31, 2017

UNITED STATES, Plaintiff,
v.
DARCY WEDD, FRASER THOMPSON, CHRISTOPHER GOFF, MICHAEL PEARSE, YONGCHAO LIU a/k/a “Kevin Liu”, JASON LEE, EUGENI TSVETNENKO a/k/a “Zhenya”, and FRANCIS ASSIFUAH a/k/a/ “Francis Assif”, Defendants.

          OPINION & ORDER

          KATHERINE B. FORREST United States District Judge

         Defendants Darcy Wedd, Fraser Thompson and Christopher Goff have moved to dismiss Count Three and Count Seven of the Third Superseding Indictment, each of which charge defendants with using consumers' telephone numbers without authorization as part of a fraudulent auto-subscribing scheme, in violation of 18 U.S.C. § 1028A. (ECF No. 375 ¶¶ 4, 11 (Third Superseding Indictment); ECF No. 407 (Memorandum in Support of Defendants' Rule 12 Motion).)[1] Defendants argue that the charges are facially deficient because the alleged autosubscribing scheme did not, as a matter of law, involve a proscribed “use” of another's “means of identification” under 18 U.S.C. § 1028(a)(1). (ECF No. 407 at 2.) In the alternative, defendants argue that if autosubscribing does indeed violate 18 U.S.C. § 1028(a)(1), the statute is unconstitutionally vague as applied to defendants. Id. For the reasons set forth below, the defendants' motion is DENIED.[2]

         I. LEGAL STANDARD

         Under the Federal Rules of Criminal Procedure, an indictment “must be a plain, concise, and definite written statement of the essential facts constituting the offense charged” and must include the “statute, rule, regulation, or other provision of law that the defendant is alleged to have violated.” Fed. R. Crim. P. 7(c)(1). To satisfy this requirement, an indictment generally “need do little more than to track the language of the statute charged and state the time and place (in approximate terms) of the alleged crime.” United States v. Stavroulakis, 952 F.2d 686, 693 (2d Cir. 1992) (quoting United States v. Tramunti, 513 F.2d 1087, 1113 (2d Cir. 1975)). “An indictment is sufficient when it charges a crime with sufficient precision to inform the defendant of the charges he must meet and with enough detail that he may plead double jeopardy in a future prosecution based on the same set of events.” United States v. Yannotti, 541 F.3d 112, 127 (2d Cir. 2008) (internal quotation marks and citation omitted).

         A defendant may nevertheless challenge a federal indictment “on the ground that it fails to allege a crime within the terms of the applicable statute.” United States v. Aleynikov, 676 F.3d 71, 75-76 (2d Cir. 2012). Both the sufficiency of the indictment and the interpretation of the applicable statute are matters of law to be decided by the Court. See Alynikov, 676 F.3d at 76. In making such determinations, courts must take all allegations in the indictment as true, Boyce Motor Lines, Inc. v. United States, 342 U.S. 337, 343 n. 16 (1952); United States v. Goldberg, 756 F.2d 949, 950 (2d Cir. 1985), and must read the indictment “to include facts which are necessarily implied by the specific allegations made.” United States v. Budovsky, No. 13CR368 DLC, 2015 WL 5602853, at *3 (S.D.N.Y. Sept. 23, 2015) (quoting United States v. Rigas, 490 F.3d 208, 229 (2d Cir. 2007)).

         When tasked with interpreting a federal statute, courts “must begin with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose.” United States v. Albertini, 472 U.S. 675, 680 (1985) (internal quotation marks and citation omitted); see also Smith v. United States, 508 U.S. 223, 228 (1993) (“When a word is not defined by statute, we normally construe it in accord with its ordinary or natural meaning.”). If the statute's language is “plain, ‘the sole function of the courts is to enforce it according to its terms.”' United States v. Ron Pair Enters., 489 U.S. 235, 241 (1989) (quoting Caminetti v. United States, 242 U.S. 470, 485 (1917)); see also Conn. Nat'l Bank v. Germain, 503 U.S. 249, 253-54 (1992) (“We have stated time and again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there.”). Only where there is ambiguity does a “court [] resort to the canons of statutory interpretation and to the statute's legislative history to resolve the ambiguity.” United States v. Awadallah, 349 F.3d 42, 51 (2d Cir. 2003) (internal quotation marks and citation omitted); see also Castellano v. City of New York, 142 F.3d 58, 67 (2d Cir. 1998) (“Where the language is ambiguous, [courts] focus upon the ‘broader context' and ‘primary purpose' of the statute.”) (citations omitted).

         II. “USE” OF CONSUMERS' “MEANS OF IDENTIFICATION”

         The statute under which defendants were charged in Count Three and Count Seven of the Third Superseding Indictment provides:

Whoever, during and in relation to any felony violation enumerated in subsection (c), knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person shall, in addition to the punishment provided for such felony, be sentenced to a term of imprisonment of 2 years.

18 U.S.C. § 1028A(a)(1). The phrase “means of identification” means “any name or number that may be used, alone or in conjunction with any other information, to identify a specific individual.” 18 U.S.C. § 1028(d)(7). Neither § 1028A nor its neighboring provisions define the term “used.”

         Defendants contend that they did not “use” consumers' telephone numbers within the meaning of § 1028A when they collected consumers' telephone numbers (often through the normal course of business), caused those numbers to be autosubscribed to premium text messaging services and then transmitted those numbers to mobile phone carriers, which in turn billed the consumers for the premium text messaging services. (See ECF No. 415 at 2 (Government's description of the facts it intends to prove at trial); ECF No. 407 at 9-10 (Defendants' argument that their alleged misconduct does not fall within “§ 1028(a)(1)'s ban on unlawful “uses” of others' telephone numbers). Defendants are wrong as a matter of law.

         As “use” is not defined in § 1028A, the Court must “construe it in accord with its ordinary or natural meaning.” Smith v. United States, 508 U.S. 223, 228 (1993). The Supreme Court has repeatedly explained that the “ordinary or natural” meanings of the term “use” include: “‘[t]o convert to one's service, ' ‘to employ, ' ‘to avail oneself of, ' and ‘to carry out a purpose or action by means of.'” Bailey v. United States, 516 U.S. 137, 145 (1995) (quoting Smith, 508 U.S. at 228-29), superseded by statute on other grounds, 18 U.S.C. § 924(c)(1)(A). Such definitions plainly encompass the alleged conduct here, as defendants would have “employed” consumers' phone numbers, “converted” such numbers to their own ends and “availed” themselves of the phone numbers if they are proved to have engaged in the autosubscription scheme described above.

         Admittedly, the term “use” in § 1028A “poses some interpretational difficulties because of the different meanings attributable to it, ” Bailey, 516 U.S. at 143, and thus the Court must consider “not only the bare meaning of the word but also its placement and purpose in the statutory scheme.” Id. at 145 Defendants insist that “use” cannot take on the broad meaning its “ordinary and natural” definitions would suggest because doing so would “endow the statute” with “a ‘surprising scope.'” (ECF No. 407 at 5 (quoting United States v. Spears, 729 F.3d 753, 756 (7th Cir. 2013)).) According to defendants, a person “uses” other persons' means of identification within the meaning of § 1028A only if he impersonates or attempts to pass himself off as one of them, purports to take some action on their behalf or obtains anything of value in one of their names. (See ECF No. 407 at 8-9.) Defendants argue that they are not alleged to have engaged in any of the aforementioned behavior, and therefore they cannot be properly indicted under 18 U.S.C. § 1028A. (See id. at 9.)

         This argument fails on several levels. First, even if the Court were to find that the term “use” were ambiguous as written, § 1028A's legislative history makes clear that § 1028A was “intended to reduce the incidence of identity theft and fraud.” H.R. Rep. No. 108-528, at 9 (2004), reprinted in 2004 U.S.C.C.A.N. 779, 785 (emphasis added). In addition, the House Committee Report further stated that “[t]he terms ‘identity theft' and ‘identity fraud' refer to all types of crimes in which someone wrongfully obtains and uses another person's personal data in some way that involves fraud or deception, typically for economic or other gain.” Id. at 4 (emphasis added). Such language indicates that Congress intended § 1028A to apply more broadly than the narrow set of circumstances proffered by defendants. Indeed, a D.C. Circuit panel decision affirms § 1028A's expansive scope. There, the court held that the chief financial officer of a church had “use[d] [another's means of identification] . . . without lawful authority” in violation of § 1028A when he used his legitimate access to church officers' digital signatures to create a fake corporate ...


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