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United States v. Bond

United States District Court, W.D. North Carolina, Bryson City Division

April 16, 2015

UNITED STATES OF AMERICA, Plaintiff,
v.
NINIAN ULYSSES BOND II, Defendant.

ORDER

MARTIN REIDINGER, District Judge.

THIS MATTER is before the Court for the determination of certain issues related to the Defendant's sentencing, including the Government's request for the entry of a forfeiture money judgment. [Doc. 18].

I. PROCEDURAL BACKGROUND

On April 18, 2013, Defendant was charged in a Bill of Indictment [Doc. 1] with mail and wire fraud related to his scheme to retransmit DIRECTV satellite television signals to customers of a cable television company operated by him. The Indictment contained a finding by the Grand Jury that there was probable cause for a "forfeiture money judgment in the amount of at least $6, 028, 000, such amount constituting the proceeds of the violations set forth in [the] bill of indictment...." [Doc. 1 at 6]. On July 31, 2013, the Defendant pled guilty without a plea agreement to Count One and Count Two of the Indictment. [Doc. 12].

A draft Presentence Report (PSR) was prepared and filed on May 22, 2014. [Doc. 14]. The Defendant submitted objections to the PSR, primarily regarding the loss amount used in the calculation of the Defendant's offense level. [Doc. 15]. A final PSR was prepared and filed on June 23, 2014 [Doc. 16], and the Defendant was scheduled for sentencing on October 9, 2014.

On August 28, 2014, the Government filed a motion for the entry of a forfeiture money judgment in the amount of $531, 676.94 against the Defendant. [Doc. 18]. Thereafter, the Defendant moved to continue the sentencing hearing [Doc. 19], which the Court granted [Doc. 20]. The sentencing hearing was rescheduled for December 16, 2014.

On December 12, 2014, four days prior to sentencing, the Defendant submitted an addendum to his PSR objections, including an economist's report analyzing the question of the loss amount. [Doc. 21]. That same day, the Government submitted a Supplemental Memorandum in support of its motion for a forfeiture money judgment, reducing the amount of the requested judgment from $531, 167.66 to $438, 059.44 in order to give the Defendant credit for expenses paid to DIRECTV and 4COM, a DIRECTV dealer. [Doc. 22]. The parties also filed sentencing memoranda prior to the hearing. [Docs. 23, 24].

The Court proceeded with the sentencing hearing on December 16, 2014, and both sides presented evidence concerning loss amount, restitution, and forfeiture. The hearing was not concluded, however, and the parties were given the opportunity to submit additional briefs to the Court regarding the calculations attendant to these three issues. The parties filed their supplemental briefs on January 2, 2015. [Docs. 25, 26, 27]. In its supplemental briefing, the Government contends that the applicable estimate loss for sentencing purposes is not less than $385, 676.94, and not more than $4, 563, 601.56. [Doc. 26 at 1].[1] The Government further revised its forfeiture calculation, reducing its request for a forfeiture money judgment to $385, 676.94. [Id. at 8].

On April 12, 2015, the Defendant a Supplement to Memorandum Regarding Loss Amount Calculations [Doc. 28], which was supported by an Affidavit of the Defendant [Doc. 29].

The Defendant's sentencing is set to be concluded on April 16, 2015. The issues regarding restitution, loss amount, and forfeiture, however, have been fully briefed and argued and are therefore now ripe for determination

II. FACTUAL BACKGROUND

From in or about July 2002, through on or about December 13, 2011, the Defendant effectuated a scheme to retransmit television programming signals he had purchased from satellite television programming provider DIRECTV to customers of Highlands Cable Group ("HCG"), a cable TV business operated by the Defendant.[2] In order to effectuate this scheme, the Defendant established and used multiple DIRECTV residential subscriber accounts and commercial lodging subscriber accounts ("Satellite Master Antenna Television accounts" or "SMATV accounts") to acquire thirty DIRECTV integrated satellite receivers and access cards necessary to decode DIRECTV's encrypted satellite programming signals. The Defendant then used the equipment to decode 30 channels of DIRECTV programming and rebroadcast these channels - along with other legitimately-obtained channels - to HCG cable subscribers in exchange for a monthly service fee.

Law enforcement ultimately identified a total of 93 functional television receivers at HCG's "head-end" - that is, the master distribution center of the cable TV system where incoming television signals were received from providers and retransmitted to HCG's subscribers. Of those receivers, law enforcement identified that thirty of the receivers (32.26%) were DIRECTV receivers.[3] It is undisputed that the Defendant paid DIRECTV the monthly residential/SMATV subscription fees for the 30 receivers at issue, but that his usage of the receivers in this matter violated the user agreements for these receivers.

With respect to the issue of forfeiture, the Government relies on the profit and loss records seized from HCG, which identified total gross revenue of $1, 484, 144.94 from 2003 through 2011. In order to establish what amount of these gross receipts was derived from the fraud related to DIRECTV, the Government calculated 32.26% of $1, 484, 144.94, to arrive at $478, 785.16 in revenue related to the 30 connected DIRECTV receivers. After deducting $93, 108.22 in payments made by HCG to DIRECTV and 4COM, the Government calculates the total net revenue connected to the Defendant's fraud to be $385, 676.94. With respect to the issues of loss amount and restitution, the Government contends that the law and evidence ...


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