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United States v. Stokes

United States Court of Appeals, First Circuit

July 13, 2016

UNITED STATES OF AMERICA, Appellee,
v.
DARREN STOKES, Defendant, Appellee.

         APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Richard G. Stearns, U.S. District Judge]

          James B. Krasnoo, with whom Krasnoo, Klehm & Falkner LLP was on brief, for appellant.

          Mark J. Balthazard, Assistant United States Attorney, with whom Carmen M. Ortiz, United States Attorney, and Doreen M. Rachal, Assistant United States Attorney, were on brief, for appellee.

          Before Torruella, Lynch, and Barron, Circuit Judges.

          TORRUELLA, Circuit Judge.

         From 2008 to 2012, defendant-appellant Darren Stokes sent fraudulent invoices to thousands of businesses. Each invoice appeared to be sent by a legitimate trade association and directed the business to send membership dues to one of three addresses in Massachusetts where, unbeknownst to the business, Stokes received mail. Postal inspectors intercepted mailings to these addresses. After criminal charges were leveled against Stokes in the United States District Court for the District of Massachusetts, he moved to suppress the mailings as the product of an unreasonable search under the Fourth Amendment. The district court denied the motion to suppress, and Stokes pled guilty to 8 counts of wire fraud under 18 U.S.C. § 1343 and 7 counts of mail fraud under 18 U.S.C. § 1341. During the sentencing, the district court determined that Stokes's scheme had an intended loss between $400, 000 and $1, 000, 000 and 250 or more victims, findings that increased his sentencing range under the United States Sentencing Guidelines, and sentenced Stokes to 48 months' imprisonment. Stokes reserved the right to appeal the district court's denial of his motion to suppress and its sentencing determination; he appeals those decisions here. We affirm.

         I.

         "Because this appeal follows a guilty plea, we draw the relevant facts from the change-of-plea colloquy, the unchallenged portions of the presentence investigation report (PSI Report), and the transcript of the disposition hearing." United States v. Mateo-Espejo, 426 F.3d 508, 509 (1st Cir. 2005). Where necessary, we supplement the facts with materials submitted to the district court for purposes of the motion to suppress. See United States v. Pacheco, 489 F.3d 40, 42 (1st Cir. 2007).

         From 2008 to 2012, Stokes sent fraudulent invoices to businesses. The invoices purported to be from legitimate trade associations, including the American Dental Association (the "ADA"), the National Association of Manufacturers (the "NAM"), the American Trucking Association (the "ATA"), and the American Hospital Association (the "AHA"). Each invoice requested that the recipient send annual membership dues to the trade association at a Massachusetts address where Stokes received mail. Stokes was listed as neither a recipient nor a sender on any of these mailings.

         Stokes identified target businesses by purchasing lists of business fax numbers and then hiring a company, Profax, to send invoices to those numbers. For example, in January 2012, Stokes used Profax to send invoices purporting to come from the ADA and requesting $575 in membership dues to more than 13, 000 dental offices. That same month, Stokes had Profax send invoices bearing the NAM[1] acronym and requesting $575 in membership dues to 1, 100 manufacturing businesses. He cashed the checks using United Check Cashing, a business where customers could cash checks instantly without needing to establish a bank account.

         From 2008 onward, Stokes received cease and desist letters from various trade associations and faced two civil actions, as well as an administrative complaint from the United States Postal Inspection Service, for his involvement in this scheme. In 2012, postal inspectors seized 443 envelopes addressed to the ADA that were mailed to a P.O. Box in Brockton, Massachusetts, in response to Stokes's fraudulent invoices. The PSI assumed that each of these envelopes contained a check for $575. Postal inspectors withheld from delivery 32 envelopes assumed to contain checks for $575 addressed to the NAM at a Willard Street address in Quincy, Massachusetts, 10 envelopes assumed to contain checks for $585 addressed to the Automotive Parts Remanufacturers Association (the "APRA") at a Blaine Street address in Brockton, and 14 envelopes assumed to contain checks for $685 addressed to the ATA at the same Blaine Street address. At oral argument, the Government explained that it had sought the consent of the senders to open 7 of these items and that those 7 opened envelopes[2] formed the basis of mail fraud counts. Although postal inspectors seized 8 envelopes personally addressed to Stokes at his P.O. Box, the Government avows that they were never opened.

         Stokes was charged with 8 counts of wire fraud under 18 U.S.C. § 1343, based on calls that Stokes made to Profax in January and February 2012, and 7 counts of mail fraud under 18 U.S.C. § 1341. He sought to suppress the seized mail before the district court. The district court denied the motion in a written memorandum and order, explaining that "no mail addressed to Stokes personally ha[d] ever been opened" and that he lacked "standing to challenge the seizure of letters addressed to someone else altogether." Stokes pled guilty, reserving the right to appeal the suppression issue.

         At the sentencing hearing, the district court adopted the probation office's recommendation for a base offense level of 7, with a 14-level increase for an intended loss between $400, 000 and $1, 000, 000, [3] a 6-level increase for 250 or more victims, and a 2-level decrease for acceptance of responsibility. With a total offense level of 25 and a Criminal History Category of III, Stokes had a sentencing range of 70 to 87 months' imprisonment. Stokes received a below-guidelines sentence of 48 months' imprisonment and 3 years' supervised release.[4]

         Stokes now appeals the denial of his motion to suppress and the district court's loss calculation.

         II.

         A. Unreasonable ...


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