Opinion
No. 04 Cr. 369 (WHP).
December 9, 2004
E. Danya Perry, Assistant United States Attorney, Southern District of New York, New York, NY,
Michael Young, Esq., New York, NY, Attorney for defendant.
MEMORANDUM AND ORDER
The Indictment dated April 19, 2004 charges Defendant Veronica Harrison ("Harrison") with one count of identity theft in violation of 18 U.S.C. § 1028(a)(7) and 18 U.S.C. § 2. Specifically, the Indictment charges Harrison with providing "the names, Social Security numbers, and other identifying information" of unknowing individuals to others who used that information to file false tax returns with the Internal Revenue Service ("IRS"), in violation of 18 U.S.C. § 641.
By stipulation dated September 28, 2004 (the "Stipulation"), Harrison waived her right to a jury trial and stipulated to the facts and evidence on which this Court would try her. (Court Ex. 1: Stipulation ("Stip.").) On November 9, 2004, this Court received the Stipulation and exhibits into evidence and heard oral argument. Although Harrison and the Government agree on the material facts, they disagree as to whether those facts are sufficient to convict Harrison for the charged crime. For the reasons set forth below, this Court finds Harrison guilty of identity theft.
BACKGROUND
The following facts are drawn from the Stipulation and the evidence in the record.From 1998 through 2003, Lovelace Adusei Kontoh ("Kontoh") was involved in a massive conspiracy through which he and his co-conspirators obtained confidential information belonging to more than 35,000 individuals without their knowledge or permission. (Stip. ¶¶ 9, 13a.) The conspirators used this information fraudulently to file tax returns under the names of the individuals whose information they had obtained, and collected refund checks from the IRS. (Stip. ¶¶ 9, 13a.) Over the life of this scheme, Kontoh and his co-conspirators defrauded the United States out of at least $7 million. (Stip. ¶ 9.)
For approximately thirteen years, Harrison was employed as a clerk at the New York City Human Resources Administration ("HRA"), where "she was responsible for helping to locate child support sources for children and mothers on public assistance." (Stip. ¶ 11b.) In the course of her duties at HRA, Harrison regularly came across individuals' names, Social Security numbers and other identifying information. (Stip. ¶ 11b.) In 1999, Harrison was introduced to Kontoh because of her access to such information. (Stip. ¶ 13b.)
After that 1999 meeting and until her arrest in January 2004, Harrison supplied Kontoh with at least 16,000 individuals' personal information, including their names and Social Security numbers. (Stip. ¶¶ 10, 11a-b.) Kontoh would telephone Harrison periodically between December and April, and the two would meet near Harrison's HRA office in Manhattan. (Stip. ¶ 13c; Govt. Ex. 1T: Transcript of January 8, 2004 telephone conversation between Harrison and Kontoh.) Harrison and Kontoh had approximately 25 to 30 such meetings. (Stip. ¶ 11b.) Kontoh paid her between $50 and $60 on each occasion. (Stip. ¶ 11b.) For the 2000 through 2003 tax years, Kontoh and his co-conspirators used information provided by Harrison to obtain refund checks totaling "well in excess of $1,000" a year. (Stip. ¶ 10.)
Harrison furnished the identifying information without the individuals' knowledge or consent, and in violation of her employer's regulations. (Stip. ¶¶ 14-15.) Law enforcement officers present when Harrison was arrested would testify that Harrison, after waiving her Miranda rights, stated that she provided Kontoh with the identifying information "knowingly . . . in order for Kontoh to use these identities to file fraudulent federal income tax returns." (Stip. ¶¶ 11b, 12.)
DISCUSSION
A trial on stipulated facts does not relieve the Government of its burden to prove the elements of the crime charged beyond a reasonable doubt. See United States v. Baldwin, 186 F.3d 99, 101 (2d Cir. 1999) (citing In re Winship, 397 U.S. 358, 364 (1970)).
The Identity Theft and Assumption Deterrence Act of 1998 seeks to "criminaliz[e] the theft and misuse of personal information and provid[e] legal recognition of individual victims." S. Rep. No. 105-274, at 9 (1998). The Act makes it a crime, inter alia, to "knowingly transfer or use, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of Federal law, or that constitutes a felony under any applicable State or local law." 18 U.S.C. § 1028(a)(7). Thus, to convict Harrison under § 1028(a)(7), the Government must prove the following elements beyond a reasonable doubt: (1) that Harrison knowingly transferred or used a means of identification of another person; (2) that such transfer was performed without lawful authority; (3) that such transfer was performed with the intent to commit, or aid or abet, any Federal crime or any felony under State or local law; and (4) that the transfer was in or affected interstate or foreign commerce. See 18 U.S.C. § 1028(a)(7), (c). Because there is no allegation that Harrison herself committed or intended to commit tax fraud, her conduct may be punishable under § 1028(a)(7) only if she acted with the intent to aid or abet Kontoh's illegal activity.
To convict Harrison of aiding and abetting Kontoh under 18 U.S.C. § 2, the Government must prove (1) commission of the underlying crime; (2) by a person other than the defendant; (3) a voluntary act or omission by the defendant; and (4) that the defendant acted "with the specific purpose of bringing about the underlying crime." United States v. Labat, 905 F.2d 18, 23 (2d Cir. 1990). Both parties assume, and this Court agrees, that the "intent to aide or abet" required by § 1028(a)(7) is the same as the intent required under § 2.
The Stipulation plainly satisfies all but one of the elements for each charged offense. Harrison does not dispute that she voluntarily provided Social Security numbers and other information to Kontoh without the knowledge or authorization of the individuals to whom the information belonged. (Stip. ¶¶ 10, 11b, 14.) Harrison also concedes that doing so violated HRA regulations (Stip. ¶ 15), and that Kontoh used the information to commit a federal crime (Stip. ¶ 10). The parties have stipulated to the requisite interstate commerce nexus. (Stip. ¶ 17.)
Harrison argues, however, that the evidence is insufficient to establish the final element of each crime charged: Harrison's intent to aid or abet.
I. Intent to Aid or Abet
The intent to aid or abet includes both "the mere knowledge that the defendant's action would tend to advance some nefarious purpose of the principal" and, critically, "the specific intent of facilitating or advancing the principal's commission of the underlying crime." United States v. Frampton, 382 F.3d 213, 223 (2d Cir. 2004). In other words, the Government "must prove the defendant knew of the proposed crime . . . and had an interest in furthering it." United States v. Pipola, 83 F.3d 556, 562 (2d Cir. 1996); see United States v. Wiley, 846 F.2d 150, 154 (2d Cir. 1988) (holding that aiding and abetting requires the "specific intent that [the defendant's] act or omission bring about the underlying crime").
Harrison concedes that she knew Kontoh was using Social Security numbers and other information for an illegal purpose. (Stip. ¶¶ 11b, 12.) However, Harrison argues that the evidence does not establish that she had the requisite intent to facilitate or further Kontoh's crime. In support, Harrison relies primarily on the Supreme Court's decision inDirect Sales Co. v. United States, 319 U.S. 703 (1943). In Direct Sales, the defendant corporation repeatedly sold large quantities of morphine by mail to a doctor in another state and was charged with conspiracy to distribute drugs. 319 U.S. at 704-05. The Court held that when a defendant sells goods to another for use in illegal activity, a conspiracy conviction requires both knowledge of "the buyer's intended illegal use . . . [and] that by the sale [the defendant] intends to further, promote and cooperate in it." Direct Sales, 319 U.S. at 711.
In affirming the defendant's conviction, the Supreme Court held that the circumstantial evidence sufficient to establish specific intent for a conspiracy charge in this context depends, in part, on whether the goods at issue are legal or not. Direct Sales, 319 U.S. at 710-11. Where the goods are illegal and knowledge of the purchaser's illegal activity is proven, the Court held, "single or casual transactions" do not establish the requisite intent when performed with "indifference to the buyer's illegal purpose and passive acquiescence in his desire to purchase."Direct Sales, 319 U.S. at 712 n. 8; see United States v. Zambrano, 776 F.2d 1091, 1095 (2d Cir. 1985). The Court added that a similar conclusion may be appropriate even when there is "a more continuous course of sales, made either with strong suspicion of the buyer's wrongful use or with knowledge, but without stimulation or active incitement to purchase." Direct Sales, 319 U.S. at 712 n. 8. Harrison argues that the evidence here does not rise above the circumstances described in Direct Sales, and that Harrison's knowledge of Kontoh's illegal purpose does not, by itself, reflect her intent to facilitate it.
The Government contends that Direct Sales is neither controlling nor relevant because that case involved a charge of conspiracy, whereas the Indictment here charges Harrison with aiding and abetting. The Court of Appeals has noted that the specific intent required for a crime of aiding and abetting — that a defendant intended "that his act or omission bring about the underlying crime — is similar, though not identical, to the requirement for finding intent to participate in a conspiracy."Zambrano, 776 F.2d at 1097.
This Court need not decide what relevance, if any, Direct Sales has in this context. Even under the well-settled law regarding aiding and abetting, the evidence establishes beyond a reasonable doubt that Harrison acted with the specific intent to further Kontoh's tax scheme.
"The intent necessary to support a conviction for aiding and abetting goes beyond the mere knowledge that the defendant's action would tend to advance some nefarious purpose of the principal." Frampton, 382 F.3d at 223. The evidence must demonstrate that Harrison associated herself with Kontoh's venture, that she "participate[d] in it as in something that [s]he wishe[d] to bring about," and that she sought to make the venture successful. United States v. Tyler, 758 F.2d 66, 70 (2d Cir. 1985) (quoting United States v. DeFiore, 720 F.2d 757, 764 (2d Cir. 1983)).
The Government argues that such intent is manifest here because: Harrison was introduced to Kontoh to provide him identifying information, Kontoh only contacted Harrison around tax season, Harrison knew she was prohibited from using identifying information outside her job, and Harrison and Kontoh met secretly. (Government's Letter Brief, dated Nov. 1, 2004, at 2.) However, this evidence demonstrates only that Harrison knew of Kontoh's illegal activities — a fact she does not dispute, and that she feared retribution from her employer.
Similarly, Harrison's financial interest, by itself, does not establish the requisite intent to help Kontoh succeed. Kontoh paid Harrison between $50 and $60 each time she gave him individuals' identifying information. (Stip. ¶ 11b; Govt. Ex. 5.) In January 2004, Harrison told Kontoh that she needed money because she hoped to move to a new residence. (Govt. Exs. 1, 1T.) The fact that Harrison desired to profit personally from selling identifying information to Kontoh does not mean that she necessarily intended that he succeed. See Wiley, 846 F.2d at 155 (reversing a jury's aiding and abetting conviction where the primary evidence of intent was three checks the principal wrote to the defendant).
Nonetheless, Harrison's post-arrest statements provide direct evidence of her intent to further Kontoh's tax fraud scheme. After waiving herMiranda rights, Harrison stated that she provided Kontoh with the information "knowingly . . . in order for Kontoh to use these identities to file fraudulent federal income tax returns." (Stip. ¶¶ 11b, 12 (emphasis added).) Harrison contends that this statement establishes only her knowledge of Kontoh's tax fraud. (Transcript of Hearing dated Nov. 9, 2004, at 8-9.) However, in its role as fact finder, this Court construes the quoted language to mean that Harrison sold Kontoh information she had obtained at HRA with the intent that he use this information to commit tax fraud. Thus, Harrison's post-arrest statement is a clear reflection both of her knowledge of Kontoh's illegal purpose and her desire to advance it.
Moreover, in gathering Social Security numbers and other data for Kontoh, Harrison tried to secure information for as many individuals as she could. (Govt. Ex. 4T: Transcript of January 12, 2004 telephone conversation between Harrison and Kontoh (Kontoh: "So how much do you think you can get me? A lot?" Harrison: ". . . as many as I can, 'cause I'm going to start right now.").) Yet there is no indication that the amount Kontoh paid Harrison varied with the quantity of information she supplied him. Viewed in light of Harrison's post-arrest statements, the only reasonable inference to be drawn from such activity is that she did not passively acquiesce to Kontoh's ultimate purpose. Rather, Harrison intended to further the underlying tax fraud by maximizing the number of false tax returns Kontoh could file.
CONCLUSION
For the foregoing reasons, this Court finds Defendant Veronica Harrison guilty of identity theft in violation of 18 U.S.C. § 1028(a)(7) and 18 U.S.C. § 2.
SO ORDERED.