Sentencing guidelines enhancement prohibited for trafficking in access device identity theft

In U.S. v. Charles the defendant was found in possession of prepaid debit cards that were loaded with tax-refund monies sent by the I.R.S. in response to fraudulent tax returns. Charles pleaded guilty to the federal crimes of trafficking in access devices and aggravated identity theft. The identity theft count carries an additional two-year sentence that runs consecutively to another other predicate crime involving the unauthorized transfer, possession, or use of the identity of another. The applicable sentencing guidelines provision for the access device count, section 2B1(b)(11)(B), has a two-level increase for the production or trafficking of unauthorized devices The district court found that the enhancement was warranted because the Charles transferred one of the prepaid debit cards to his codefendant and thereby “trafficked” an unauthorized access device.

On appeal, Charles challenged the two point enhancement arguing the district court erred in refusing to submit the applicability of the enhancement to a jury pursuant to Alleyne v. U. S. The court rejected his Alleyne argument because the two level increase only affected Charles’ guidelines calculation and not his statutory mandatory minimum or maximum sentence. Alleyne holds that a court cannot make a judicial finding of a fact at sentencing where the fact is an element of a crime that increases the maximum sentence. Alleyne preserved a sentencing court’s fact finding authority concerning facts that impact the statutory punishment.

However, the court of appeals did find that the two level increase for trafficking was error. U.S.C. § 1028A(a)(1). The guidelines applicable to U.S.C. § 1028A is USSG 2B1.6 which specifically provides that the sentencing guideline for the identity theft offense is the two year consecutive sentence mandated by statute. The Application Notes of the guidelines explain that if a sentence under section 2B1.6 is imposed in conjunction with a sentence for an underlying offense, the court should not apply any specific offense characteristic for the “transfer, possession, or use of a means of identification when determining the sentence for the underlying offense.” Because Charles already received the mandated two-year consecutive for aggravated identity theft, the Application Note to section 2B1.6 precluded the two level increase for transferring the debit card to the codefendant.

The government’s alternative argument was that the court should affirm the two-level increase because the record supported a finding that Charles “produced” unauthorized access devices. Section 2B1.1(b)(11)(B) also applies a two level increase in the guidelines offense level when the offense involves “the production of any unauthorized access device.” Section 2B1.6 does not prohibit the two level enhancement based on the production of the unauthorized access device. At sentencing, the government argued that there was production and asked the district court for a ruling on that ground, but the district court ruled solely on the “trafficking” ground and declined to rule on the government’s “production” argument. Because the court of appeals did not have the benefit of fact finding on this issue, the court remanded to the district court to address the issue of production.