United States District Court, D. Arizona
ORDER
DOUGLAS L. RAYES, UNITED STATES DISTRICT JUDGE
Before
the Court are Defendants' motions to dismiss counts 3
through 17, which are fully briefed. (Docs. 55, 57, 58, 62,
63.) For the following reasons, the Court will deny the
motions.
I.
Background
On
April 23, 2019, the grand jury issued an indictment charging
Defendants with one count of wire fraud conspiracy, one count
of wire fraud, one count of identity theft conspiracy, seven
counts of misuse of personal information with a telemarketing
sentencing enhancement, seven counts of aggravated identity
theft with a telemarketing sentencing enhancement, and two
counts of forfeiture. (Doc. 3 at 2.) The indictment alleges
that Defendants operated Hybar Media in Phoenix, Arizona, as
lead brokers, purchasing leads[1] from a lead generator, and
subsequently selling leads to end-service providers.
(Id.) It further alleges that from July 2013 through
April 2016, Defendants purchased databases of personal
identifying information from Supplier-1, which obtained its
information from people voluntarily responding to direct mail
campaigns. (Id. at 3.) Defendants allegedly used
this information to create counterfeit hard copy sweepstakes
leads, [2] which they then sold for a higher value as
authentic hard copy sweepstakes leads[3] to their clients.
(Id.) On November 4, 2019, Defendants moved to
dismiss counts 3-17 of the indictment. (Docs. 55, 57.) The
Court held oral argument on the motions on December 12, 2019
(Doc. 68) and took the matter under advisement.
II.
Legal Standard
A
defendant may move to dismiss an indictment for failure to
state an offense. Fed. R. Crim. P. 12(b)(3)(B)(v). When
addressing a motion to dismiss, the Court is required to
“accept the truth of the allegations in the indictment
in analyzing whether a cognizable offense has been
charged.” United States v. Boren, 278 F.3d
911, 914 (9th Cir. 2002) (citation omitted). “A
pretrial motion is generally capable of determination before
trial if it involves questions of law rather than
fact.” United States v. Shortt Accountancy
Corp., 785 F.2d 1448, 1452 (9th Cir. 1986) (quotation
and citation omitted). “Generally, an indictment is
sufficient if it sets forth the elements of the charged
offense so as to ensure the right of the defendant not to be
placed in double jeopardy and to be informed of the offense
charged.” United States v. Rodriguez, 360 F.3d
949, 958 (9th Cir. 2004) (quoting United States v.
Woodruff, 50 F.3d 673, 676 (9th Cir. 1995)).
III.
Discussion
Defendants
contend that dismissal of counts 3-17[4] is appropriate because the
indictment fails to allege a crime of identity theft pursuant
to 18 U.S.C. § 1028(a)(7). (Docs. 55, 57 at 8.) Under
§ 1028(a)(7), whoever (1) knowingly transfers, possesses
or uses, (2) without lawful authority, (3) a means of
identification of another person, (4) with the intent to
commit, or to aid or abet, or in connection with, any
unlawful activity that constitutes a violation of Federal
law, or that constitutes a felony under any applicable State
or local law shall be punished as provided in subsection (b).
Defendants' motions challenge the sufficiency of the
allegations in the indictment pertaining to the second and
fourth elements. The Court finds that the indictment has
sufficiently alleged the elements of the charged offenses to
survive a motion to dismiss.
The
indictment alleges that Defendants knowingly possessed
respondents' information and created counterfeit hard
copy sweepstakes leads, which they transferred to purchasing
clients, and that the sweepstakes leads contained the names,
addresses, and/or forged signatures of individuals-all of
which constitute means of identification of another person.
(Doc. 3 at 3.) See U.S. v. Blixt, 548 F.3d 882,
886-87 (9th Cir. 2008).
Defendants
argue that, as a matter of law, the indictment cannot allege
that they transferred, possessed, or used the means of
identification of another without lawful authority because
they had “lawful authority” to sell the
information contained in the leads. Particularly, Defendants
contend that they could use the information in any manner
they choose because the individuals whose information was
involved had voluntarily provided data to
Supplier-1.[5]
To the
contrary, even if permission to use identifying information
is given, “permission to use another's identity in
an unlawful scheme is not ‘lawful authority' under
section 1028A.”[6] United States v. Hong, 938 F.3d
1040, 1050 (9th Cir. 2019) (citing Osuna-Alvarez,
788 F.3d 1183, 1185 (9th Cir. 2015)). See also U.S. v.
Mahmood, 820 F.3d 177, 187-88 (5th Cir. 2016) (citation
omitted) (“[T]he statute plainly criminalizes
situations where a defendant gains lawful possession of a
person's means of identification but proceeds to use that
identification unlawfully and beyond the scope of the
permission granted.”); United States v.
Morehead, 676 Fed.Appx. 695, 697 (9th Cir. 2017)
(“[E]ven if a defendant obtains the means of
identification lawfully, he can still be convicted so long as
he uses the means of identification
unlawfully.”).[7] In other words, because the indictment
asserts that Defendants possessed and transferred the means
of identification in a manner to defraud their clients, the
indictment asserts that Defendants did so without lawful
authority. United States v. Musa, 742 Fed.Appx. 265,
267 (9th Cir. 2018).
Defendants
also argue that the indictment fails to state the offense of
identity theft because their possession and transfer of the
relevant information was not in furtherance of another
qualifying crime. (Doc. 55 at 10-11; Doc. 57 at 3.) However,
the indictment asserts that Defendants possessed and
transferred these forged hard copy sweepstakes leads with the
intent to defraud their clients by inducing them to believe
that the counterfeit leads were authentic hard copy
sweepstake leads. (Doc. 3 at 3.) In other words, Defendants
possessed and transferred the pertinent information in
connection with their scheme to commit fraud. Fraud is the
basis for the various state felonies identified in the
indictment. Accordingly, the fourth element has been
adequately alleged.
Because
the indictment sufficiently alleges the elements of identity
theft under § 1028(a)(7).
IT
IS ORDERED that Defendants' motions to dismiss
...