Case: 22-11039 Document: 00517009757 Page: 1 Date Filed: 12/20/2023
United States Court of Appeals
for the Fifth Circuit
____________
United States Court of Appeals
Fifth Circuit
No. 22-11039
____________ FILED
December 20, 2023
United States of America, Lyle W. Cayce
Clerk
Plaintiff—Appellee,
versus
Adam Joseph Schultz,
Defendant—Appellant.
______________________________
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:22-CR-162-1
______________________________
Before Higginbotham, Smith, and Elrod, Circuit Judges.
Jennifer Walker Elrod, Circuit Judge:
After pleading guilty to one count of conspiracy to commit wire fraud
and receiving a 120-month sentence, Defendant Adam Joseph Schultz
challenged his sentence. We REMAND to the district court to conform the
written judgment to the oral pronouncement of his sentence and AFFIRM
in all other respects.
I
From November 2020 through February 2021, Schultz and his co-conspirators, Kevin Michael Davis, Charles Wayland Lanier, and Matthew
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No. 22-11039
Pace Sharp, engaged in a scheme to fraudulently obtain vehicles. They used
the dark web 1 to obtain car dealerships’ log-in credentials for Manheim, an
online vehicle exchange. They used the credentials to purchase and pay for
vehicles with the car dealerships’ money. Once the payment was made,
Schultz and his co-conspirators used the purchase documents to pick up the
vehicles. In total, they purchased or attempted to purchase nineteen vehicles
worth a combined $766,249. They physically obtained eleven of those
vehicles, which were worth a combined $442,213.
Schultz pleaded guilty to one count of conspiracy to commit wire
fraud in violation of 18 U.S.C. § 1349 (
18 U.S.C. § 1343). The PSR
recommended a base offense level of seven. It recommended a fourteen-level
increase based on the loss amount attributable to the nineteen vehicles
Schultz intended to steal ($766,249). The PSR also recommended two-level
enhancements for: (1) using sophisticated means; (2) engaging in a scheme
to steal or receive stolen vehicles; (3) being an organizer or leader in the
criminal activity; and (4) obstructing justice. The PSR subtracted three
levels for acceptance of responsibility, resulting in a total offense level of
twenty-six.
Regarding Schultz’s criminal history, the PSR classified an April 2021
incident in which Schultz was stopped while driving a stolen vehicle as
criminal history, not relevant conduct. 2 During the April 2021 arrest, officers
found debit cards and addresses belonging to other individuals, as well as a
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1
The dark web is an area of the internet accessible only by using an encryption tool.
It provides anonymity and privacy online, and perhaps consequently, frequently attracts
those with criminal intentions. Gareth Owen & Nick Savage, The Tor Dark Net, Global
Commission on Internet Governance, Paper Series No. 20, 1 (2015).
2
Following the arrest, Schultz pleaded guilty to fraudulent possession of
identifying information.
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syringe containing methamphetamine, in the car. Schultz received a
criminal-history score of fifteen, putting him in criminal-history category VI.
With a total offense level of twenty-six and a criminal-history category of VI,
Schultz received an advisory guideline range of 120 to 150 months in prison.
Schultz objected to the PSR on the grounds that it: (1) improperly
classified his April 2021 offense as criminal history, rather than relevant
conduct, resulting in two extra criminal-history points; and (2) failed to give
him a two-level reduction for a partially completed offense under U.S.S.G.
§§ 2B1.1 and 2X1.1. The district court rejected both of Schultz’s objections.
The district court imposed a sentence of 120 months and stated that it would
have imposed the same sentence even if it was wrong about either of
Schultz’s objections. In its oral pronouncement of the sentence, the district
court stated that Schultz’s federal sentence would run concurrently with any
sentence imposed in his state cases. In the court’s written judgment, entered
the same day that the oral pronouncement was made, the court stated that
the federal sentence would run consecutively with any state sentences.
II
Because Schultz preserved his objections to the district court’s
findings, we review the district court’s interpretation of the Sentencing
Guidelines de novo and its factual findings for clear error. United States v.
Sanchez-Rodriguez, 830 F.3d 168, 171 (5th Cir. 2016).
A
Schultz argues that the district court committed reversible error by
treating his state conviction for fraudulent use or possession of identifying
information as criminal history instead of relevant conduct.
To determine whether an offense is part of the same course of conduct
as the offense for which the defendant was convicted, courts look to: (1) the
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similarity of the offenses; (2) the regularity of the offenses; and (3) the time
interval between the offenses. United States v. Lindsey, 969 F.3d 136, 141 (5th
Cir. 2020) (citing U.S.S.G. § 1B1.3, cmt. n.5(B)(ii)). A weak showing as to
any of the factors does not preclude a finding of relevant conduct, but it does
require a stronger showing from one of the other factors to compensate for
the deficiency. United States v. Rhine,
583 F.3d 878, 886 (5th Cir. 2009). To
determine the similarity of the offenses, courts must consider whether “there
are distinctive similarities between the offense of conviction and the remote
conduct,” or whether the offenses are merely “similar in kind.”
Id. at 888
(citations omitted).
The April 2021 offense was appropriately classified as criminal
history. The similarity factor strongly favors the government’s position. The
car in the April 2021 offense was physically stolen, while the vehicles
underlying the wire fraud offense were fraudulently obtained through an
online vehicle exchange. There is no suggestion that the instruments of
identity theft found during the April 2021 arrest were used to obtain the
vehicle. By contrast, when Schultz was arrested in January 2021 for the
conduct for which he ultimately pleaded guilty, he was in a vehicle
fraudulently purchased from the Manheim online vehicle exchange and the
identity theft materials found in the vehicle were used for other Manheim
transactions. These differences show the offenses were at most “similar in
kind.” Rhine, 583 F.3d at 888–89 (finding offenses were merely similar in
kind where one cocaine offense involved a small sale to an individual and the
other involved participation in a major drug-trafficking ring). The April 2021
arrest did not involve any of the same accomplices or victims as the Manheim
scheme, and it occurred after Manheim learned of Schultz’s scheme and shut
it down.
The regularity factor also favors the government’s position because of
the differences in how the cars were obtained. See Lindsey, 969 F.3d at 142
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(explaining that the regularity analysis asks whether there is a repeated
pattern of similar unlawful conduct directly linking the purported relevant
conduct and the offense of conviction). The Manheim vehicles were
fraudulently obtained using identity theft, not physical theft. Therefore,
those vehicles support the proposition that Schultz regularly engaged in
fraud, not that he regularly physically stole vehicles. The record does not
contain any instance in which Schultz physically stole a vehicle other than
the April 2021 incident.
The time-interval factor favors Schultz, but it does not compensate
for the weakness in the other factors. The benchmark for temporal proximity
is generally one year. Rhine, 583 F.3d at 886. The April 2021 arrest occurred
about ten weeks after the last Manheim vehicle was stolen. While ten weeks
is well within the benchmark, it does not make up for the lack of similarity
and regularity between the charged conduct and the April 2021 arrest. 3
Accordingly, the district court did not err by classifying the April 2021 arrest
as criminal history rather than relevant conduct.
B
Schultz argues that he should have received a reduction for a partially
completed offense under U.S.S.G. §§ 2B1.1 and 2X1.1 because his conspiracy
to commit wire fraud was part of a larger theft.
Application Note 19 of U.S.S.G. § 2B1.1 states:
In the case of a partially completed offense (e.g., an offense
involving a completed theft or fraud that is part of a larger,
attempted theft or fraud), the offense level is to be determined
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3
Schultz points to United States v. Ocana, in which this court found subsequent
conduct was relevant conduct despite a lack of similarity with the charged conduct. 204
F.3d 585, 589–92 (5th Cir. 2000). Ocana is distinguishable. In Ocana, the regularity factor
also favored the defendant.
Id. at 591. Here, only temporal proximity favors Schultz.
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in accordance with the provisions of §2X1.1 (Attempt,
Solicitation, or Conspiracy) whether the conviction is for the
substantive offense, the inchoate offense (attempt, solicitation,
or conspiracy), or both.
U.S.S.G. § 2B1.1 cmt. (n.19.)
Application Note 4 of U.S.S.G. § 2X1.1 states:
In certain cases, the participants may have completed (or have
been about to complete but for apprehension or interruption)
all of the acts necessary for the successful completion of part,
but not all, of the intended offense. In such cases, the offense
level for the count (or group of closely related multiple counts)
is whichever of the following is greater: the offense level for the
intended offense minus 3 levels (under §2X1.1(b)(1), (b)(2), or
(b)(3)(A)), or the offense level for the part of the offense for
which the necessary acts were completed (or about to be
completed but for apprehension or interruption). For example,
where the intended offense was the theft of $800,000 but the
participants completed (or were about to complete) only the
acts necessary to steal $30,000, the offense level is the offense
level for the theft of $800,000 minus 3 levels, or the offense
level for the theft of $30,000, whichever is greater.
U.S.S.G. § 2X1.1 cmt. n.4.
No reduction is warranted when the failure to complete the
substantive offense is the result of intervention by the victim or law
enforcement. U.S.S.G. § 2X1.1, cmt. (backg’d.)
Schultz’s argument turns on whether §§ 2B1.1 and 2X1.1 apply only
to situations in which the defendant was charged with the larger offense or
whether they also apply to situations in which the defendant intended a larger
offense for which he was not charged. Though there is some textual basis for
Schultz’s position, it is clearly foreclosed by our precedent.
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While we have not specifically held that a defendant must be charged
with the larger crime to be eligible for a partially completed offense reduction,
we have repeatedly upheld sentences when the charged crime was arguably
part of a larger intended theft, provided the elements of the charged crime
were completed. United States v. Popa, 835 F.3d 506, 508 (5th Cir. 2016)
(explaining that the focus is on the substantive offense, not additional
criminal activity needed to cause the intended loss); United States v. Neal,
294 F. App’x 96, 102 (5th Cir. 2008) (unpublished); United States v. Thomas,
585 F. App’x 869, 870 (5th Cir. 2014) (unpublished). For example, in Popa,
the defendant was charged with attempting to fraudulently possess
unauthorized access devices. Popa,
835 F.3d at 507. He intended to use the
devices to steal $200,000, but he did not obtain any of the money.
Id. We
held it was proper not to apply a § 2X1.1 sentence reduction because the
defendant completed all the elements of the crime for which he was charged.
Id. at 508. It did not matter that he could have been charged with attempted
theft, making the completed crime part of that larger crime.
United States v. John, which Schultz mistakenly contends supports his
position, proves, rather than contradicts, the rule. 597 F.3d 263 (5th Cir.
2010), abrogated on other grounds by Van Buren v. United States,
141 S. Ct. 1648
(2021). In John, the defendant fraudulently accessed 76 bank accounts. Id.
at 269. Because the defendant only made purchases with eight of the
accounts, we held the district court clearly erred by failing to apply a partially
completed offense reduction. Id. at 281–84. As explained in Thomas and
Popa, the uncompleted conduct in John was an element of the crime for which
the defendant was convicted.
585 F. App’x at 870;
835 F.3d at 508. It was
not additional criminal activity needed to cause the loss. John is consistent
with cases such as Popa, which hold that an incomplete offense reduction is
inapplicable where the elements of the charged crime have been completed.
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Here, Schultz completed each of the elements of the charged crime.
Wire fraud requires: (1) a scheme to defraud; (2) use of wire communications
in interstate commerce to further that scheme; and (3) specific intent to
defraud. United States v. Sanders, 952 F.3d 263, 277 (5th Cir. 2020) (citation
omitted) (listing elements of fraud). Wire fraud does not require obtaining
the targeted money or property. E.g., United States v. Tulaner,
512 F.3d 576,
580–81 (9th Cir. 2008). Failure to physically possess eight of the vehicles,
the sole basis for Schultz’s argument, does not implicate any of the fraud
elements. The district court did not err by declining to apply a reduction for
a partially completed offense.
C
When there is a conflict between a written sentence and an oral
pronouncement, the oral pronouncement controls. United States v. Martinez,
250 F.3d 941, 942 (5th Cir. 2001). Here, there is a conflict between the
written sentence and the oral pronouncement. In the oral pronouncement,
the district court stated:
It is the judgment of the Court that the defendant is committed
to the Federal Bureau of Prisons for a period of 120 months.
This sentence shall run concurrent to any future sentence which
may be imposed in Case No. 12573, 46th Judicial District Court
of Wilbarger County; Case Nos. 00683773-2021, and
00683774-2021 out of Collin County Court of Law, No. 6; and
Case No. CM-2021-00154 out of Ryan County District Court,
all of which are unrelated in the case, and concurrent with any
sentence in Case No. 40185020-2021, and 40185021-2021,
which is pending in the 468th Judicial District Court of Collin
County, Texas; and Case No. 00683772-2021 which is in
Collin County, Court No. 6.
In the written judgment, the district court wrote:
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The defendant, ADAM JOSEPH SCHULTZ, is hereby
committed to the custody of the Federal Bureau of Prisons
(BOP) to be imprisoned for a term of ONE HUNDRED
TWENTY (120) MONTHS as to Count One of the
Information filed on June 7, 2022. This sentence shall run
consecutively to any future sentence which may be imposed in
Case No. 12,573 in the 46th Judicial District Court, Wilbarger
County; Case Nos. 006-83773-2021 and 006-83774-2021 in
Collin County Court at Law 6; and Case No. CM-2021-00154
in the Bryan County District Court, all of which are unrelated
to the instant offense. This sentence shall run concurrently with
any future sentence which may be imposed in Case Nos. 401-
85020-2021 and 401-85021-2021, both in the 468th Judicial
District Court, Collin County, and Case No. 006-83772-2021
in Collin County Court at Law 6, which are related to the
instant offense.
Because the written judgment and oral pronouncement conflict, we
REMAND to the district court to amend the written judgment to conform
with the oral announcement. See United States v. Wheeler, 322 F.3d 823, 828
(5th Cir. 2003).
…
For the foregoing reasons, the district court’s sentence is
AFFIRMED in part and REMANDED in part so that the written
judgment can be amended to conform with the court’s oral pronouncement
at sentencing.
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