                                 United States Court of Appeals,

                                        Eleventh Circuit.

                                          No. 95-2914.

                       UNITED STATES of America, Plaintiff-Appellee,

                                                v.

   Susan DABBS, William Paul Dabbs, John E. Floyd, Thomas E. Moorehead, Defendants-
Appellants.

                                          Feb. 6, 1998.

Appeals from the United States District Court for the Middle District of Florida. (No. 94-152-CR-T-
24B), Susan C. Bucklew, Judge.

Before HATCHETT, Chief Judge, BARKETT, Circuit Judge, and PROPST*, Senior District Judge.

       HATCHETT, Chief Judge:

       A jury in the Middle District of Florida convicted Susan Dabbs, William Dabbs, Thomas

Moorehead and John Floyd for a bank fraud scheme involving fraudulent credit card billing. In this

appeal, the appellants challenge their convictions and sentences on various grounds. We affirm.

                                            I. FACTS

       Susan Dabbs, William Dabbs and Moorehead owned and managed P.S.T. Ltd., Inc. (PST).

Susan Dabbs served as president of the enterprise, William Dabbs served as vice-president and

Moorehead served as secretary/treasurer. They shared equal responsibility and decision-making

authority over the operation. PST represented itself as a telemarketing company engaged in the sale

of travel packages and cosmetics. PST mailed certificates at random to prospective customers

declaring that the recipient was eligible to receive one of four allegedly valuable awards. The



   *
     Honorable Robert B. Propst, Senior U.S. District Judge for the Northern District of Alabama,
sitting by designation.
certificate directed the "winner" to call for additional details. A PST representative would

subsequently attempt to coerce the caller into purchasing PST products.1

       As with most telemarketing businesses, PST relied almost exclusively on credit card

purchases and informed callers that it preferred payment via credit card. An accurate recitation of

the underlying facts requires an explanation of retail credit card transactions and the telemarketing

industry.

       In order to conduct credit card sales, a business must first enter into a merchant account

agreement with a bank (merchant bank) pursuant to which the merchant bank agrees to process

future credit card transactions. The business then opens an account (merchant account). In most

retail credit card sale transactions, the business provides the merchant bank with a sales slip (draft)

representing the customer's credit card information and signature authorizing the charge. The

business deposits the draft in its merchant account. The merchant bank subsequently transfers the

balance of the charge into the business's merchant account.2 The business may then draw from that

amount and transfer money to separate commercial accounts. The merchant bank thereafter contacts

the issuer of the customer's credit card (issuing bank), presents the sales draft and requests

reimbursement.

       The card-issuing bank bills the customer for the purchase. If the customer returns the

purchased item or challenges the validity of the charge without a dispute from the merchant bank,

a "charge-back" results and the issuing bank credits the customer's account and asks the merchant

bank for a refund. The merchant bank is only entitled to recoup its loss from the business. If the

business refuses, lacks sufficient funds or is no longer a functioning enterprise, the merchant bank


   1
    These products sold for $397.50, $398.50 or $399.50.
   2
    The merchant bank retains a "discount fee" for processing the transaction.
absorbs the loss.

       The nature of telemarketing companies makes it difficult for those businesses to find

merchant banks willing to accept their credit card transactions. Because these businesses conduct

sales over the telephone, telemarketers cannot provide merchant banks with a signed sales slip or

other documented customer authorization for a sale.          Moreover, studies have shown that

telemarketing companies generate a substantially greater risk of charge-backs. As a result,

VISA-associated banks prohibit telemarketers from directly depositing credit card transactions.

       This policy led to the development of "factoring." The telemarketer uses a third-party,

non-telemarketing business (factoring merchant) as a conduit for depositing credit card sales. The

factoring merchant processes the transaction either through an existing merchant account or through

a separate merchant account created for the telemarketing company. The merchant bank processes

the transaction as a standard credit card sale and deposits the amount of the sale into the factoring

merchant's account. The factoring merchant then retains a fee for the use of the account and

disburses the remainder to the telemarketer. VISA-affiliated banks include a provision in their

merchant account contracts forbidding factoring.

       In 1991, PST began to enlist third parties to establish merchant accounts with First Interstate

Bank of South Dakota (First Interstate) without notifying First Interstate that the accounts would be

used for factoring.3 Cherry Payment Systems (Cherry Systems), an independent sales organization

that First Interstate hired to locate suitable merchant accounts, facilitated the creation of these

accounts. Floyd, an associate of one of PST's suppliers, submitted a fraudulent merchant account

application to First Interstate on behalf of New European Research Laboratories (New European).



   3
    In 1992, First Interstate changed its name to First Premier Bank. We will refer to the bank as
First Interstate throughout this opinion.
PST began to deposit drafts into the account, which First Interstate credited. PST deposited a total

of $148,427.41 into the merchant account, resulting in a loss of $80,289.44 to First Interstate.

       In December 1991, Floyd submitted a second false application to First Interstate in the name

of Discount Furniture Warehouse (Discount Furniture). Upon approving the application, First

Interstate established two merchant accounts for Discount Furniture. From December 18, 1991,

until January 31, 1992, PST used these accounts to factor $559,622.74 in credit card charges. First

Interstate lost $509,427.07 from these merchant accounts.

       In January 1992, First Interstate became suspicious of Floyd's merchant accounts and

reluctant to extend its relationship with him. First Interstate rejected two merchant account

applications, in the names of Safety Marine Products and F & K Laboratory, Inc., which Floyd

submitted. First Interstate subsequently terminated all of Floyd's merchant accounts.

       Floyd thereafter discontinued his relationship with PST. Moorehead, William Dabbs and

Susan Dabbs began to look for additional factoring sources and submitted fraudulent merchant

account applications on their own. In February 1992, William Dabbs applied for a merchant account

with First Interstate under his own name. First Interstate denied the application. William Dabbs

also submitted applications under the business names PST and Cee-Dee. First Interstate opened a

merchant account for Cee-Dee and transferred $29,929.05 into William Dabbs's commercial

account. First Interstate lost $12,140.35 from the Cee-Dee account. In February and March 1992,

Moorehead convinced a friend to submit two merchant account applications, on behalf of CAD, Inc.

and Alyssa Jewelers, to First Interstate. Before the friend changed his mind and closed the accounts,

PST deposited $4,299.21 into the CAD account, later transferring $2,735.95 into a separate

commercial account, and deposited $3,184.00 into the Alyssa Jewelers account, transferring

$1,170.73 into a separate commercial account. First Interstate did not incur any losses from these
accounts.

        In March 1992, Moorehead used Cherry Systems to apply for a merchant account using the

name A. Thomas and Company. PST amassed $36,610 in credit card sales in the account. First

Interstate transferred $29,487.22 into a commercial account and lost $8,528.68. Moorehead also

applied for merchant accounts under the names PST Tours and CD Promotions. First Interstate

accepted the applications, losing $21,095.30 on the PST Tours account and $17,931.51 on the CD

Promotions account. In April 1992, Susan Dabbs induced an acquaintance to open a merchant

account with First Interstate for Nick's Systems, Inc. through Cherry Systems. PST deposited

$60,326.00 into the account, and First Interstate lost $14,044.47.

        In early 1992, the United States Postal Inspection Service (USPIS) initiated an investigation

into factoring. As part of the investigation, USPIS set up an undercover operation. A postal

inspector posed as the owner of J & H Sales (J & H), a company with a merchant account at a

Barnett Bank (Barnett) located in Tampa, Florida. J & H enlisted an informant who had previously

participated in factoring schemes to spread the word that J & H sought to perform factoring services.

A business associate of PST advised the informant to contact the company. Moorehead spoke to the

informant and called J & H.

        The businesses thereafter agreed that J & H would factor PST's telemarketing sales through

J & H's merchant account in exchange for a seventeen percent fee. Each of the principals of PST

demonstrated their knowledge of this factoring scheme through their conversations with the postal

inspector. Moorehead supplied the inspector with the credit card sales for processing and told the

inspector where to send the money. Moorehead also admitted to the inspector that PST could not

obtain a merchant account for its credit card sales, and instructed the inspector to lie to Barnett about

where the sales originated because Barnett would freeze the merchant account if it knew of the
factoring arrangement. Moreover, Moorehead warned the inspector that depositing a substantial

amount of sales in a single day or depositing a significant number of sales using the same dollar

amount would arouse suspicion at Barnett.

        The inspector also engaged in telephone conversations with William Dabbs and Susan Dabbs

about the scheme. William Dabbs identified himself to the inspector as Moorehead's partner,

acknowledged his awareness of the scheme and inquired about money J & H owed PST. The

inspector received a message from Susan Dabbs. When the inspector returned the call, Susan Dabbs

told the inspector that PST had not received a wire transfer from Barnett.4 During a subsequent

conversation, the inspector told Susan Dabbs that Barnett had become suspicious and placed a hold

on the merchant account. Susan Dabbs responded, "You put too much through your account too

quick." As a means of concealing the scheme, she suggested that the inspector falsely inform the

bank that he had started a mail order jewelry business. Finally, when the inspector called a third

time to tell her that Barnett had discovered the scheme and advised him that factoring was illegal,

Susan Dabbs falsely told the inspector that they were not violating the law and instructed the

inspector to "credit out" all of the deposited sales so that PST could refactor them through a different

merchant account. During the undercover investigation, PST transferred $79,362.50 in credit card

sales to J & H for factoring.5

        Moorehead, Susan Dabbs and William Dabbs ceased doing business as PST in June 1992.

A review of First Interstate's records revealed that PST deposited almost $1,000,000 into the various

merchant accounts during this period. In total, PST transferred over $800,000 to separate


   4
    The USPIS did not deposit any sales in the Barnett merchant account or direct Barnett to
transfer money to PST.
   5
    Again, Barnett did not suffer a loss because the USPIS never authorized the transfer of funds
to PST.
commercial accounts. As a result of charge-backs and credits, First Interstate lost $663,456.82.

                                  II. PROCEDURAL HISTORY

       On July 28, 1994, a federal grand jury in the Middle District of Florida indicted Susan

Dabbs, William Dabbs, Moorehead and Floyd (collectively, the appellants) on several counts. Count

1 charged the appellants with conspiracy to commit bank fraud in violation of 18 U.S.C. § 371.

Counts 2 and 3 charged Susan Dabbs, William Dabbs and Moorehead with substantive counts of

bank fraud in violation of 18 U.S.C. §§ 1344 and 2. Count 4 charged Susan Dabbs, William Dabbs

and Moorehead with the fraudulent use of an unauthorized access device, the Barnett merchant

account number, in violation of 18 U.S.C. § 1029(a)(2) and (b)(1). The case proceeded to trial in

the United States District Court for the Middle District of Florida. On April 13, 1995, a jury found

the appellants guilty on all counts charged against them in the indictment.

       At sentencing, the district court adopted the recommendations of the probation officer in the

presentence investigation report (PSR) concerning the applicable offense levels. Regarding the

amount of loss attributable to the appellants, the government presented the testimony of First

Interstate's legal coordinator, Kathy Baatz, who reported the total merchant account activity,

including charges deposited, funds transferred and losses incurred, for each merchant account that

PST used. Rejecting the government's suggestion to use the total deposits to determine the intended

loss, the court chose to employ the total losses incurred as the more appropriate measurement,

holding Susan Dabbs, William Dabbs and Moorehead responsible for $593,456.82, and Floyd

responsible for $519,716.51.6 The court consequently increased each appellant's offense level ten


   6
   The court declined to attribute First Interstate's total incurred loss to Moorehead, Susan
Dabbs and William Dabbs because a PST employee, Jones Calvin Peace, processed
approximately $70,000 in credit card sales for a Sheldon Finklestein, who was not affiliated with
PST. The district court held that those charges occurred outside the scope of the conspiracy
charged in the indictment. The court only attributed to Floyd the losses stemming from the New
points pursuant to section 2F1.1(b)(1)(K) of the United States Sentencing Guidelines for losses of

more than $500,000 but less than $800,000. The court also enhanced each offense level two points

under section 2F1.1(b)(2)(A) of the guidelines because the scheme involved more than minimal

planning. In addition, the court enhanced Floyd's offense level two points under guideline section

3C1.1 for obstruction of justice.

        The court imposed concurrent thirty-month sentences against Susan Dabbs and William

Dabbs on each count and sentenced Floyd to thirty-six months of imprisonment. The court also

imposed joint and several restitution in the amount of $593,456.82 against each appellant, payable

to First Interstate. Because Moorehead did not appear at the original sentencing hearing, the court

subsequently assessed a two-level enhancement for obstruction of justice. The court sentenced

Moorehead to concurrent forty-five month terms of imprisonment and imposed the restitution

amount discussed above.

                                             III. ISSUES

        We discuss the following issues: (1) whether the government properly established venue in

the Middle District of Florida; (2) whether a merchant account constitutes an "access device" for

purposes of 18 U.S.C. § 1029; (3) whether the district court properly calculated the monetary losses

attributable to the appellants for purposes of increasing their base offense levels pursuant to section

2F1.1 of the guidelines; and (4) whether the district court erroneously failed to consider Floyd's

ability to pay in assessing restitution.7



European and Discount Furniture merchant accounts, less the $70,000 that Peace processed.
   7
    In addition to the issues enumerated above, the appellants assert several arguments which
merit only summary disposition: Susan Dabbs contends that the government failed to present
sufficient evidence for the jury to convict her; Floyd argues that the district court erred in
enhancing his sentence for obstruction of justice based on his perjured statements before the
grand jury; Floyd also challenges the court's imposition of an enhancement based on its finding
                                         IV. DISCUSSION

A. Venue

        The first issue we address is whether the government properly established venue in the

Middle District of Florida. William Dabbs, Moorehead and Floyd challenge the placement of venue,

arguing that the majority of the offenses alleged in the indictment did not occur within that district.

See United States v. Burroughs, 830 F.2d 1574, 1580 (11th Cir.1987) (criminal defendants have the

right to trial in the district in which the crime was committed), cert. denied, 485 U.S. 969, 108 S.Ct.

1243, 99 L.Ed.2d 442 (1988). William Dabbs and Moorehead contend that PST only deposited

credit card receipts in merchant accounts with First Interstate, which is based in South Dakota. They

allege that their only contact with the Middle District of Florida arose as a result of the USPIS

investigation—after the postal inspector initiated contact with the appellants. According to William

Dabbs and Moorehead, the government improperly orchestrated this contact for the purpose of

creating venue. Floyd contends that the government should not have brought him to trial in the

Middle District of Florida because he had no contact with that district.

       The government counters that the appellants waived this issue when they failed to contest

venue before the district court. Moreover, the government contends that in an action involving a

conspiracy, venue is proper in any district in which an overt act in furtherance of the conspiracy took

place. The government also argues that it did not initiate contact for the purpose of creating venue.

Rather, the appellants voluntarily accepted J & H's offer to factor credit card transactions through

Barnett. Finally, the government urges us to adopt the position of the Fourth Circuit, which has




that his involvement required more than minimal planning; and Moorehead contends that his
failure to appear at his original sentencing hearing did not warrant an enhancement for
obstruction of justice. We reject these contentions as meritless and affirm pursuant to Eleventh
Circuit Rule 36-1.
expressly rejected the "manufactured venue" or "venue entrapment" argument.

       We hold that the appellants waived their venue challenge when they failed to raise it in the

district court. "Because defendants did not file a motion for a change of venue prior to trial, they

waived any objection to venue and may not raise it for the first time on appeal." United States v.

Bustos-Guzman, 685 F.2d 1278, 1280 (11th Cir.1982); see also United States v. Hankins, 581 F.2d

431, 438 n. 11 (5th Cir.1978) ("It is elementary that venue can be waived if not timely raised."), cert.

denied, 440 U.S. 909, 99 S.Ct. 1218, 59 L.Ed.2d 457 (1979); Kitchen v. United States, 532 F.2d

445, 446 (5th Cir.1976) ("Defects relating to venue are waived unless asserted prior to trial.");

United States v. Dryden, 423 F.2d 1175, 1178 (5th Cir.) (same), cert. denied, 398 U.S. 950, 90 S.Ct.

1869, 26 L.Ed.2d 290 (1970).8

       The appellants rely upon United States v. Bowdach, 414 F.Supp. 1346 (S.D.Fla.1976), aff'd,

561 F.2d 1160 (5th Cir.1977), for the proposition that a general motion for acquittal is sufficient to

preserve a venue challenge unless the district court requires the defendants to particularize their

objections. We reject Bowdach 's suggestion that defendants do not have to specifically articulate

a challenge to venue or that the district court bears responsibility for notifying defendants of their

burden. We read this court's holding in Bustos-Guzman as requiring defendants to clearly articulate

their objection to venue. Bustos-Guzman, 685 F.2d at 1280.9


   8
    We recognize that a panel of this circuit has created an exception to the rule that a failure to
object to venue before trial constitutes a waiver. In United States v. Daniels, 5 F.3d 495, 496
(11th Cir.1993), we held that "when an indictment contains a proper allegation of venue so that a
defendant has no notice of a defect of venue until the Government rests its case, the objection is
timely if made at the close of the evidence." (Internal quotation marks omitted.). This exception
bears no relevance to the case at bar.
   9
    We note that other circuits also require defendants to specifically articulate a venue
challenge. See United States v. Potamitis, 739 F.2d 784, 791 (2d Cir.), cert. denied, 469 U.S.
934, 105 S.Ct. 332, 83 L.Ed.2d 269 (1984); Gilbert v. United States, 359 F.2d 285, 288 (9th
Cir.), cert. denied, 385 U.S. 882, 87 S.Ct. 169, 17 L.Ed.2d 109 (1966).
        On the merits, we note that the substance of the appellants' opposition to venue is without

merit. The appellants voluntarily entered into an illegal factoring arrangement using a merchant

account with a bank in Tampa. "[V]enue is proper in any district where an overt act was committed

in furtherance of the conspiracy." United States v. Smith, 918 F.2d 1551, 1557 (11th Cir.1990); see

also United States v. Long, 866 F.2d 402, 407 (11th Cir.1989). The appellants do not contest that

the USPIS undercover factoring investigation occurred in Tampa, but contend that venue is proper

where the majority of the overt acts occurred. Appellants provide no authority for this proposition,

and we reject it as contrary to this court's precedent. Reviewing the underlying facts in the light

most favorable to the government and in favor of the jury's verdict, we find that the government

proved by a preponderance of the evidence that an overt act of the conspiracy occurred in Tampa.

See Smith, 918 F.2d at 1557. The government therefore properly established venue in the Middle

District of Florida.10

B. Sufficiency of the Indictment

        Moorehead and William Dabbs contend that the district court lacked jurisdiction over Count

4 of the indictment because Count 4 did not assert a violation of federal law. Count 4 charged that

Susan Dabbs, William Dabbs and Moorehead "attempted to traffic in and use an unauthorized access

device, namely, merchant account number 440-222-214 issued by Barnett Bank" in violation of 18

U.S.C. § 1029(a)(2). Section 1029(a)(2) prohibits fraud through the use of one or more "access

devices." Moorehead and William Dabbs assert that a merchant account number is not an access

device as defined under the statute. They thus argue that the indictment was insufficient because



   10
     The appellants fail to show that the government orchestrated the undercover operation in
order to create venue. Accordingly, we decline to address the Fourth Circuit's decision in United
States v. Al-Talib, 55 F.3d 923 (4th Cir.1995), which refused to recognize a theory of
"manufactured venue" or "venue entrapment."
it failed to allege the elements of a crime under the statute. The government contends that the

statutory language supports the inclusion of merchant account numbers within the definition of

"access device."

        We deem an indictment sufficient if it (1) presents the essential elements of the charged

offense, (2) notifies the accused of the charges to be defended against, and (3) enables the accused

to rely upon a judgment under the indictment as a bar against double jeopardy for any subsequent

prosecution for the same offense. See United States v. John, 587 F.2d 683, 688 (5th Cir.), cert.

denied, 441 U.S. 925, 99 S.Ct. 2036, 60 L.Ed.2d 399 (1979); see also United States v. Cole, 755

F.2d 748, 759 (11th Cir.1985); United States v. Kilpatrick, 821 F.2d 1456, 1461 (10th Cir.1987),

aff'd sub nom. Bank of Nova Scotia v. United States, 487 U.S. 250, 108 S.Ct. 2369, 101 L.Ed.2d 228

(1988). A challenge to the sufficiency of an indictment involves a question of law. Rodriguez v.

Ritchey, 556 F.2d 1185, 1191 n. 22 (5th Cir.1977) (en banc), cert. denied, 434 U.S. 1047, 98 S.Ct.

894, 54 L.Ed.2d 799 (1978). We review questions of law under the de novo standard. United States

v. Shenberg, 89 F.3d 1461, 1478 (11th Cir.1996), cert. denied, --- U.S. ----, 117 S.Ct. 961, 136

L.Ed.2d 847 (1997).

       Moorehead and William Dabbs contest only the first prong of our sufficiency standard, on

the ground that a merchant account is not an "access device" for purposes of 18 U.S.C. § 1029. The

rule that an indictment must set forth the essential elements of the charged offense

       serves two functions. First, it puts the defendant on notice of "the nature and cause of the
       accusation as required by the Sixth Amendment of the Constitution. Second, it fulfills the
       Fifth Amendment's indictment requirement, ensuring that a grand jury only return an
       indictment when it finds probable cause to support all the necessary elements of the crime."

United States v. Fern, 117 F.3d 1298, 1305 (11th Cir.1997) (quoting United States v. Gayle, 967

F.2d 483, 485 (11th Cir.1992) (en banc ), cert. denied, 507 U.S. 967, 113 S.Ct. 1402, 122 L.Ed.2d

775 (1993)). Moorehead and William Dabbs appear to concede the notice requirement but challenge
whether the indictment fulfilled the second function in arguing that "[t]he indictment cannot be

construed reasonably to charge a violation of [section] 1029." Based upon our examination of the

statutory language and the legislative history, we hold that a merchant account is an "access device"

within the meaning of the statute, and we therefore find the indictment sufficient to confer

jurisdiction.

        The jury convicted Susan Dabbs, William Dabbs and Moorehead of fraud in connection with

access devices, in violation of 18 U.S.C. 1029. Section 1029(a)(2) states a violation if a person

"knowingly and with intent to defraud traffics in or uses one or more unauthorized access devices

during any one-year period, and by such conduct obtains anything of value aggregating $1,000 or

more during that period." 18 U.S.C. § 1029(a)(2) (1994). Section 1029(e)(1) defines "access

device" as

        any card, plate, code, account number, electronic serial number, mobile identification
        number, personal identification number, or other telecommunications service, equipment,
        or instrument identifier, or other means of account access that can be used, alone or in
        conjunction with another access device, to obtain money, goods, services, or any other thing
        of value, or that can be used to initiate a transfer of funds....

18 U.S.C. § 1029(e)(1) (1994) (emphasis added).11 The statute describes "unauthorized access

device" as "any access device that is lost, stolen, expired, revoked, canceled, or obtained with intent

to defraud." 18 U.S.C. § 1029(e)(3) (1994) (emphasis added).

        Although our research shows that no other circuit has yet addressed this issue, we believe



   11
     Congress inserted the phrase "electronic serial number, mobile identification number,
personal identification number, or other telecommunications service, equipment, or instrument
identifier" in an amendment dated October 25, 1994. See Communications Assistance for Law
Enforcement Act, Pub.L. No. 103-414, 108 Stat. 4279 (1994). While we acknowledge that this
amendment took effect after the grand jury indicted the appellants, we do not rely upon the
inserted language for our ruling. Moreover, this court recently found that the amendment did not
conclusively indicate that the pre-amended version excluded those items. See United States v.
Sepulveda, 115 F.3d 882, 885 n. 5 (11th Cir.1997).
that the plain language of the statute requires a finding that the indictment sufficiently listed the

statutory elements. Section 1029(e)(1) broadly defines "access device" as "any ... account number

... that can be used ... to obtain money ... or to initiate a transfer of funds...." (Emphasis added.) A

merchant account number is a means of account access. The appellants deposited credit card sales

into the account and obtained almost immediate access to those funds. It is thus readily apparent

to this court that such account numbers fall within this inclusive definition of access devices.

        Moorehead and William Dabbs counter that merchant account numbers do not initiate a

transfer of funds but rather can only be used to receive transfers of funds. We find their argument

both misguided and lacking in merit. Congress drafted the definition of "access device" in the

alternative, prohibiting the intended fraudulent use of account numbers that can be used to "obtain

money" as well as those used to initiate a transfer of funds. It is beyond question that merchant

account numbers are able to be used for the purpose of obtaining money. A business must have a

merchant account in order to process credit card transactions. The business uses the merchant

account number to deposit credit card sales drafts and gain immediate access to those funds. Under

the facts at issue, the appellants' scheme provided access to several hundred thousand dollars.12

        Our analysis of the statutory language is also consistent with the legislative history of the

statute. See Massaro v. Mainlands Section 1 & 2 Civic Ass'n, Inc., 3 F.3d 1472, 1477 (11th

Cir.1993) (Courts should "construe statutory language to be true to the meaning of the legislation."),

cert. denied, 513 U.S. 808, 115 S.Ct. 56, 130 L.Ed.2d 15 (1994). "In determining the meaning of



   12
     Moorehead and William Dabbs also assert that the government failed to show that the
merchant account numbers were "unauthorized" access devices under section 1029(e)(3). This
claim is clearly meritless. Section 1029(e)(3) defines unauthorized access devices as those that
are "obtained with intent to defraud." The evidence at trial clearly established that Barnett
prohibits the practice of factoring and that the appellants knew of and intentionally violated this
policy.
the statute, we look not only to the particular statutory language, but to the design of the statute as

a whole and to its object and policy." Anderson v. Singletary, 111 F.3d 801, 803 (11th Cir.1997)

(internal quotations omitted). The legislative history clearly shows Congress's intent to prohibit

innovative means of access device fraud and contradicts the appellants' attempt to narrowly interpret

the statutory definition of "access device." Moorehead and William Dabbs argue that Congress's

focus on credit card fraud in enacting this legislation and silence regarding merchant account

numbers is evidence that we should not read the statute to include merchant account numbers. To

the contrary, Congress enacted this statute in order to prevent the "fraudulent use of [access] devices

in connection with credit transactions...." United States v. Blackmon, 839 F.2d 900, 914 (2d

Cir.1988). Regarding the definition of access devices, Congress stated:

       The definition of this term is broad enough to encompass future technological changes and
       the only limitation ... excludes activities such as passing forged checks. This definition,
       however, includes the invoices, vouchers, sales drafts and other manifestations of access
       devices used between merchants and credit card companies for payment of access device
       transactions.

H.Rep. No. 98-894, at 19 (1984), reprinted in 1984 U.S.C.C.A.N. 3689, 3705 (emphasis added).

Congress sought to enact "broader statutory language in an effort to anticipate future criminal

activities ... and, thereby provide greater protection to all participants in the payment device system,

including those that [honor] payment devices and consumers." S.Rep. No. 98-368, at 5, reprinted

in 1984 U.S.C.C.A.N. 3647, 3651. Accordingly, Congress sought to protect merchant account banks

to the same extent as issuing banks.

       Given the plain language of the statute and Congress's clear intent, we find it appropriate to

broadly construe the statutory language of section 1029 to include the innovative means that parties

use to gain unauthorized information to engage in fraudulent activities. The jury convicted Susan

Dabbs, William Dabbs and Moorehead of using a merchant account number with the intent to
defraud. We hold that 18 U.S.C. § 1029 proscribes this conduct.

C. Calculation of Loss

       All four appellants challenge the district court's calculation of the attributable monetary

losses for purposes of increasing their base offense levels pursuant to section 2F1.1 of the sentencing

guidelines. Susan Dabbs, William Dabbs and Moorehead contend that the district court merely

accepted the amount of loss proposed in the PSR and failed to compel the government to prove that

amount by a preponderance of the evidence. They argue that the government did not specifically

show that all of First Interstate's claimed losses resulted from the conspiracy and that the First

Interstate representative who testified at sentencing merely recited the bank's total calculated losses

without presenting sufficient documentation supporting the bank's figures. Floyd argues that the

court erroneously held him accountable for losses incurred after he abandoned the conspiracy.

Moreover, Floyd asserts that the court should have imputed between $80,000 and $120,000 of the

losses to the actions of PST employee Jones Calvin Peace, whom the court found to have processed

transactions outside the scope of the conspiracy. Floyd argues that he instituted a policy reserving

fifteen percent of all charge-backs to protect dissatisfied customers but Peace used those reserves

for his own purposes and without Floyd's knowledge or authorization. In response, the government

contends that it presented sufficient evidence for the court to reasonably estimate the losses incurred.

         Section 2F1.1 of the sentencing guidelines compels the district court to increase a

defendant's offense level based on the loss attributable to that defendant. United States v. Calhoon,

97 F.3d 518, 530 (11th Cir.1996), cert. denied, --- U.S. ----, 118 S.Ct. 44, 139 L.Ed.2d 11 (1997).

The government must prove the attributable loss by a preponderance of the evidence. United States

v. Sepulveda, 115 F.3d 882, 890 (11th Cir.1997). "This burden must be satisfied with "reliable and

specific evidence.' " Sepulveda, 115 F.3d at 890 (quoting United States v. Lawrence, 47 F.3d 1559,
1566 (11th Cir.1995)).

        We review the district court's determination of monetary loss under the clearly erroneous

standard. 18 U.S.C. § 3742(e) (1994); United States v. Dominguez, 109 F.3d 675, 676 (11th

Cir.1997). The calculation of loss for purposes of section 2F1.1 is not an exact science. "[T]he loss

need not be determined with precision. The court need only make a reasonable estimate of the loss,

given the available information." U.S.S.G. § 2F1.1 cmt., n. 8 (1994). "[A]lthough "the district court

must not speculate concerning the existence of a fact which would permit a more severe sentence

under the guidelines,' its reasonable estimate of the intended loss will be upheld on appeal."

Dominguez, 109 F.3d at 676 (citation omitted) (quoting United States v. Wilson, 993 F.2d 214, 218

(11th Cir.1993)). Moreover, the district court may hold all participants in a conspiracy responsible

for the losses resulting from the reasonably foreseeable acts of co-conspirators in furtherance of the

conspiracy. See United States v. Rayborn, 957 F.2d 841, 844 (11th Cir.1992) ("all losses caused by

fraud or deceit which are governed by ... § 2F1.1 may be imputed to a defendant who was a member

of the conspiracy which caused those losses"); United States v. Fuentes, 991 F.2d 700, 701 and n.

1 (11th Cir.1993) (limiting Rayborn to reasonably foreseeable co-conspirator acts).

        We find that the government carried its burden and proved the attributable losses with

sufficient indicia of reliability. While the commentary to the guidelines sanctions the consideration

of the actual, attempted or intended harm, see U.S.S.G. § 2F1.1, cmt. n. 7, the victim's direct loss

is a primary determining factor for calculation of the appropriate enhancement. Wilson, 993 F.2d

at 217. Each appellant's PSR contains a detailed recitation of the enterprise, including the deposits,

transfers and losses pertaining to each merchant account. Moreover, at the sentencing hearing Kathy

Baatz testified regarding First Interstate's losses resulting from the appellants' factoring scheme.

Baatz presented a documented summary of all losses due to the fraudulent activity on the merchant
accounts which PST manipulated. The government, therefore, presented sufficient evidence to

support a reasonable estimate of the actual losses attributable to each appellant. Dominguez, 109

F.3d at 676.

         We also reject the appellants' contention that the government's calculation of First

Interstate's total losses includes transactions executed outside the scope of the conspiracy.

Moorehead argues that Floyd used the New European and Discount Warehouse merchant accounts

to process credit card sales of non-PST merchandise. Moorehead relies on the assertion that PST

only sold its products at three prices, $397.50, $398.50 and $399.50, while First Interstate's records

show losses derived from transactions involving other amounts. Thus, according to Moorehead, the

district court should have limited the calculated harm to the losses derived from sales in the $397.50

to $399.50 price range.

       We reject this contention for several reasons. First, the jury found Moorehead and Floyd (as

well as the Dabbses) guilty of conspiring together to commit bank fraud. Regardless of whether

Moorehead received profits from each of Floyd's transactions, we are confident that Floyd processed

the transactions in order to illegally factor telemarketing credit card sales and defraud First

Interstate, thus perpetuating the conspiracy. Second, we find Moorehead's assertion that Floyd's

actions occurred outside the cognizance of the other conspirators wanting. At his sentencing

hearing, Moorehead acknowledged that he and the other co-conspirators signed a joint venture

agreement with Floyd. In addition, a business associate of Moorehead's, Nicholas Bertuccio,

testified at trial for the government that Moorehead represented himself as the accountant for Nixsus

Marketing (Nixsus). Nixsus was the predecessor to PST and used Floyd's merchant accounts to

process credit card sales of varying amounts. We thus reject Moorehead's attempt to narrowly

characterize his responsibility for the fraud conspiracy. The facts show that Moorehead played a
pivotal role in the conspiracy. Given his status as Nixsus's accountant and PST's treasurer, we will

not allow Moorehead to plead naivete at this juncture. Floyd's actions were reasonably foreseeable

and in furtherance of the conspiracy, and the district court properly attributed the losses derived from

Floyd's actions to his co-conspirators. Cf. Fuentes, 991 F.2d at 701.

        Floyd also contends that the court held him accountable for losses incurred outside the scope

of his involvement in the conspiracy. Floyd first argues that approximately eighty thousand dollars

in losses transpired after he ended his relationship with PST and thus his participation in the

conspiracy. In support of his withdrawal argument, Floyd cites to the postal inspector's testimony

that Floyd traveled to Michigan between December 15, 1991, and January 15, 1992. Floyd asserts

that the other members of the conspiracy processed a significant number of credit card transactions

through the New European and Discount Furniture merchant accounts during this period.

        "A conspiracy is an ongoing criminal activity for which a participant remains culpable until

the conspiracy ends or the participant withdraws." United States v. Davis, 117 F.3d 459, 462 (11th

Cir.), cert. denied, --- U.S. ----, 118 S.Ct. 355, 139 L.Ed.2d 276 and --- U.S. ----, 118 S.Ct. 395, 139

L.Ed.2d 309 (1997). A mere cessation of participation in the conspiracy is insufficient to prove

withdrawal; the defendant must take affirmative steps to demonstrate his complete repudiation of

the conspiracy's objective. United States v. Young, 39 F.3d 1561, 1571 (11th Cir.1994). "To

establish the affirmative defense of withdrawal from the conspiracy, the defendant has the

substantial burden of proving: (1) that he has taken affirmative steps, inconsistent with the

objectives of the conspiracy, to disavow or to defeat the objectives of the conspiracy; and (2) that

he made a reasonable effort to communicate those acts to his co-conspirators or that he disclosed

the scheme to law enforcement authorities." United States v. Starrett, 55 F.3d 1525, 1550 (11th

Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 1335, 134 L.Ed.2d 485 (1996). Floyd's argument
rests solely on his physical distance from, rather than his repudiation of, the actions of his

co-conspirators. Contrary to the holdings of Young and Starrett, Floyd failed to take any affirmative

steps to withdraw. Moreover, the postal inspector testified that he did not speak with Floyd until

early July 1992. Absent withdrawal, Floyd remained part of the conspiracy and culpable for the

losses First Interstate incurred during his trip to Michigan. The district court thus properly held him

responsible for the losses derived from the New European and Discount Furniture merchant

accounts.

          Floyd also argues that the court should have reduced the attributed losses based on Peace's

authorized charge-backs. Floyd asserts that he developed a policy of keeping a certain percent of

the credit card sales in reserve to cover losses and that Peace independently ran charge-backs

totaling over eighty thousand dollars, emptying this reserve account. The district court properly

rejected Floyd's contention that Peace, a PST employee, acted without authorization. The court

stated,

          I do not think the jury was convinced either that [Floyd] ... was some sort of innocent dupe,
          or was taken advantage of by Mr. Peace, or anything else. And neither do I. I think [Floyd]
          knew exactly what was going on, and knew what was going on was illegal.

Peace testified that Floyd recruited him to locate merchant accounts and prepare a list of suitable

banks. Peace also noted that he "kept Mr. Floyd informed daily on ... what was happening," even

during Floyd's trip to Michigan. The district court properly determined that Peace only exceeded

his authority in processing $70,000 for Sheldon Finklestein. At all other times, Peace acted on

behalf of Floyd and with Floyd's knowledge and approval.13


   13
    Floyd's implied argument that the court erroneously refused to award him a downward
departure lacks merit because Floyd does not show that the district court believed it lacked the
authority to depart. See United States v. Patterson, 15 F.3d 169, 171 (11th Cir.1994) ("[T]his
court has jurisdiction to review [the sentencing court's decision] only if the sentencing court
denied downward departure based upon a misapprehension of its own discretionary authority to
D. Restitution

        Finally, we consider whether the district court properly ordered Floyd to pay $593,456.82

in joint and several restitution. Floyd argues that the district court erroneously failed to consider his

ability to pay.

        Pursuant to the Victim and Witness Protection Act of 1982 (VWPA), 18 U.S.C. §§ 3663-64,

the district court "shall consider ... the financial resources of the defendant, [and] the financial needs

and earning ability of the defendant and the defendant's dependents" before imposing restitution.

18 U.S.C. § 3664(a) (1994); see also United States v. Davis, 117 F.3d 459, 463 (11th Cir.1997).14

The burden rests with the defendant to demonstrate financial resources (or lack thereof) by a

preponderance of the evidence. United States v. Twitty, 107 F.3d 1482, 1494 n. 14 (11th Cir.1997).

"District courts are not obligated to make explicit factual findings of a defendant's ability to pay

restitution if the record provides an adequate basis for review." Twitty, 107 F.3d at 1493. "In order

to warrant a reversal of the restitution order, the challenging party must show that the "record is

devoid of any evidence that the defendant is able to satisfy the restitution order.' " Davis, 117 F.3d

at 463 (quoting United States v. Remillong, 55 F.3d 572, 574 (11th Cir.1995)).

        Ordinarily, we review the factual determinations comprising the district court's restitution

order for an abuse of discretion. Davis, 117 F.3d at 462. The record before us reveals, however, that

Floyd did not raise an objection to the PSR on this issue or contest it in response to the district

court's Jones inquiry. A defendant's failure to challenge a restitution order at sentencing constitutes

a waiver of the objection. United States v. Stinson, 97 F.3d 466, 468 n. 1 (11th Cir.1996), cert.



depart downward.").
   14
    We recognize that Congress recently amended these sections of the VWPA but we do not
apply the revised version because the jury convicted these defendants prior to April 24, 1996.
See 18 U.S.C.A. §§ 3663-64 note (West Supp.1997); see also Davis, 117 F.3d at 462 n. 4.
denied, --- U.S. ----, 117 S.Ct. 1007, 136 L.Ed.2d 885 (1997). This waiver limits this court's inquiry

to a search for plain error. We will only entertain this issue where the failure to address a perceived

error will result in manifest injustice. United States v. Obasohan, 73 F.3d 309, 310-11 (11th

Cir.1996).

        The facts at issue do not lead us to question the integrity of the sentencing process. The

district court's imposition of joint and several restitution in the amount of $593,456.82 was not

manifestly unjust. The record reveals that Floyd, whose net worth is over $120,000 and who as

recently as 1989 earned more than $61,000, is not without the financial means to compensate First

Interstate for its losses resulting from the factoring conspiracy. In short, even though the district

court failed to make the requisite inquiries before imposing restitution, the record is not "devoid of

any evidence that the defendant is able to satisfy the restitution order." Remillong, 55 F.3d at 574.

Consequently, we affirm the restitution order imposed against Floyd. See Davis, 117 F.3d at 463.15

        AFFIRMED.

        BARKETT, Circuit Judge, concurring in part and dissenting in part:

        I concur in the majority opinion except as to the majority's affirmance of the restitution order

imposed against appellant Floyd. I do not believe that the record reflects that the district court

considered Floyd's ability to pay $593,456.82 in restitution, especially where the PSI found that

Floyd did not have the ability to pay a fine within the guideline range of $6,000 to $60,000.

Accordingly, I would remand the case to the district court for consideration of Floyd's ability to pay.




   15
     To the extent that Floyd challenges the restitution amount, we reject this contention because
"[w]here the defendant is convicted of conspiracy to defraud, the district court has the authority
to order restitution for the losses caused by the entire fraud scheme, not merely for the losses
caused by the specific acts of fraud proved by the government at trial." Davis, 117 F.3d at 462
(internal quotations omitted).
