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United States v. Minhas

United States Court of Appeals, Seventh Circuit

March 10, 2017

United States of America, Plaintiff-Appellee,
v.
Rashid Minhas, Defendant-Appellant.

          Argued October 27, 2016

         Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 14 CR 731, 13 CR 919 - Gary Feinerman, Judge.

          Before Wood, Chief Judge, and Bauer and Manion, Circuit Judges.

          WOOD, CHIEF JUDGE.

         Rashid Minhas used the Chicago-based travel agencies he operated to swindle customers and airlines out of hundreds of thousands of dollars. Minhas was convicted of wire and mail fraud in violation of 18 U.S.C. §§ 1341 and 1343 in two separate cases: one that proceeded to a bench trial in February 2014, and one in which Minhas pleaded guilty in 2015. At a consolidated sentencing hearing, the district court imposed two partially concurrent prison terms totaling 114 months. On appeal from the two judgments, Minhas challenges the district court's application of the Sentencing Guidelines' enhancement for causing "substantial financial hardship" to the two sets of victims. U.S.S.G. § 2B1.1(b)(2). Though we have seen stronger evidence, we are not convinced that the district court committed clear error in its assessment of the record, and so we affirm its judgment.

         I

         The first case (the "City Travel case") arose from Minhas's operation of City Travel & Tours. In 2008 and 2009, Minhas defrauded customers of City Travel and airlines through a scheme in which he collected payment for airline reservations that he canceled without his customers' knowledge. By manipulating the two-tiered online ticket-reservation system, Minhas was able to make reservations for customers paying by cash or check, print paper tickets and itineraries, and then cancel the reservations prior to the airlines' receipt of payment for the tickets. Because the customers had paper tickets in hand, many were not aware the tickets were void until they arrived at the airport. In some instances, customers were forced to purchase last-minute replacement tickets or forego their travel. In others, the airlines allowed the customers to travel on the voided tickets and received no compensation. All told, approximately 372 customers lost money through the City Travel scheme: five lost more than $7, 000 apiece, 14 lost over $5, 000, and 172 lost more than $1, 000.

         Minhas was charged in an indictment in case 13 CR 919 with seven counts of wire and mail fraud for the City Travel scheme. Undeterred by these charges, he swindled at least 50 additional customers while he was on pretrial release; this time, he used another of his travel agencies, Lightstar Hajj. Lightstar Hajj held itself out as specializing in travel packages to Saudi Arabia for the hajj (an Islamic pilgrimage to Mecca). In fact, it could not sell a complete package, because it lacked the ability to provide the necessary visas. Minhas sold over 50 of these fraudulent travel packages, for which he faced mail fraud charges in case 14 CR 731. About 54 victims lost money through the Lightstar Hajj scheme: 18 customers each lost over $10, 000, 30 lost more than $7, 000, and 45 lost more than $5, 000. As we noted earlier, he was eventually convicted on all counts in the City Travel case, and he pleaded guilty to one count in the Lightstar Hajj case.

         When the time came for sentencing, the two cases were consolidated before Judge Feinerman. The probation office prepared a total of five pre-sentencing reports: one in each of the two cases prior to their consolidation, and three supplemental reports thereafter. The district court held a sentencing hearing, at which it heard testimony from five victims: one from the City Travel case, two from Lightstar Hajj, and two from an uncharged fraud scheme. (Ten victims of the City Travel case had testified at trial.) The government also presented charts listing the victims and their loss amounts. Ten victims of the Lightstar Hajj case submitted impact letters to the district court.

         A key topic at the hearing was whether to apply the Guidelines enhancement for causing "substantial financial harm" to victims-a provision that had gone into effect earlier that month. U.S.S.G. § 2B1.1(b)(2). The court noted that it was focusing on the victims' financial losses in both cases as losses to a savings or investment fund, a factor Application Note 4(F)(iii) to the Guidelines directs courts to consider.

         In the City Travel case, the district judge agreed with Minhas that the term "substantial" was relative to a victim. It reasoned that dollar losses in the mid-four figures would represent a substantial loss to a person of modest economic circumstances. It then inferred that Minhas's victims fit this economic profile: they were "working" people "of modest means" who were "not rich." In characterizing the victims this way, the district court explained that it was extrapolating from the evidence before it (i.e., the testimony at trial and sentencing and from victim impact letters) and applying those characteristics to the group. The court then looked to a chart displaying the dollar losses for each victim and found at least 16 losses over $3000. Noting that it believed that losses below $2000 could still be substantial, as this was "a lot of money for a working person, " the court "err[ed] on the side of caution" and excluded from its tally victims who lost less than $2000. It ultimately applied the § 2B1.1(b)(2)(B) four-level increase in the in the City Travel case, finding that between five and 25 victims suffered a substantial financial hardship as a result of Minhas's fraud.

         Similarly, in the Lightstar Hajj case, the district court relied on victim-impact letters and sentencing testimony to generalize about the group of victims, finding that they tended to save for years, that many were not able to make the Hajj because of Minhas's fraud, and that it could also take years to recover the amounts of money they lost. The court then consulted the loss chart and counted at least 32 victims with dollar losses above the mid-four figures. It applied a six-level enhancement pursuant to § 2B1.1(b)(2)(C), finding that the fraud resulted in substantial financial hardship to more than 25 victims.

         II

         Minhas argues that the district court incorrectly applied the § 2B1.1(b)(2) enhancement in both cases by relying on insufficient evidence, extrapolating from the evidence it did have, and aggregating the victims' economic characteristics. Minhas contends that in order to apply the enhancement, the district court should have made individualized determinations and identified the factual basis underlying the finding of substantial financial hardship to each victim. Because Minhas objected to the enhancement in each case at sentencing, we review for clear error the district ...


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