Date: 03-02-2018

Case Style:

Case Number: 17-1131

Judge: Hamilton

Court: United States Court of Appeals for the Seventh Circuit on appeal from the Northern District of Illinois (Cook County)

Plaintiff's Attorney: Scott Dennis Heffron and Peter S. Salib

Defendant's Attorney: Joshua B. Adams and James A. Graham

Description: Vance White participated in a
wire fraud scheme and pleaded guilty to one count of wire
fraud, 18 U.S.C. § 1343, and one count of aggravated identity
theft, 18 U.S.C. § 1028A(a)(1). The district court calculated
White’s Sentencing Guidelines range based on the amount of
loss caused by the entire scheme over four years. During most
of that time, though, White was in prison. We conclude that
White’s guilty plea did not admit his involvement from the
2 No. 17‐1131
outset of the scheme. No other evidence in the record provides
sufficient support to hold White responsible for the entire
duration. We therefore vacate his sentence and remand
for resentencing.
I. Factual and Procedural Background
White and his co‐schemers bought merchandise in retail
stores with fake checks and then returned the merchandise for
cash. Over about four years, the group targeted 32 stores and
inflicted actual losses of approximately $627,000. Posing as
representatives of a third‐party check‐processing company,
the schemers contacted retail stores and obtained customers’
bank account information from the most recent personal
checks used at the stores. The schemers used the account information
to make counterfeit checks. They then used the
checks to buy merchandise that they would later return for
cash.
In his plea agreement, White admitted to a key paragraph
of the government’s factual basis for the plea:
Beginning no later than in or around the fall of 2009 and
continuing until at least in or around the summer of 2013,
in the Northern District of Illinois, Eastern Division,
and elsewhere, … VANCE WHITE …, together with
other individuals known and unknown to the Grand
Jury (the “co‐schemers”), knowingly devised, intended
to devise, and participated in a scheme to defraud
and to obtain money by means of materially false
and fraudulent pretenses, representations, and promises.
The problem is that White was in prison for most of that
time. He entered state custody on September 18, 2009 and was
No. 17‐1131 3
not released until nearly two years later, on August 19, 2011.
He went back into custody on August 20, 2012, leaving him at
liberty to pursue the fraud for only one year during the fouryear
scheme.1
In calculating a guideline sentencing range, the district
court found that White’s offense level was 22. White’s criminal
history category was VI, already the highest level at age 30,
based on numerous fraud, theft, and forgery convictions. The
guideline range was 84 to 105 months in prison. The court imposed
a total sentence of 59 months, giving White credit for
24 months served on a related Illinois forgery conviction. See
U.S.S.G. §§ 5G1.3(b), 5K2.23. The court structured the sentence
in two parts: 35 months for the wire fraud count, plus a
mandatory, consecutive 24 months for the identity theft count.
The court also ordered that the 59‐month sentence run concurrently
with sentences from two different Illinois cases.
White is due to be released in August 2018.
II. Analysis
A. Loss Amount
White’s principal argument is that the district court used
the wrong guideline offense level, holding him responsible
1 The government argues that White’s presentence report is ambiguous
because it notes that he was “returned to custody” on August 10, 2010.
The government reads this language to suggest that White was released
following his September 2009 arrest. White argues that he was in custody
continuously from September 2009 to August 2011 because he was held
locally pending trial after the September 18, 2009 arrest and then remanded
to the custody of the Illinois Department of Corrections to serve
the remainder of his sentence. Any remaining ambiguity on this point
should be addressed on remand.
4 No. 17‐1131
for losses imposed by co‐schemers while he was in prison before
he joined the scheme. The guideline issue is governed by
U.S.S.G. § 1B1.3(a)(1), which offers guidance for when a particular
defendant should be held responsible for actions of coschemers.
According to White, the district court used an offense
level that was two levels too high. We review de novo
legal interpretations and applications of the Guidelines,
United States v. Sykes, 774 F.3d 1145, 1149 (7th Cir. 2014), citing
United States v. Wright, 651 F.3d 764, 774 (7th Cir. 2011), and
we review findings of loss amounts for clear error. United
States v. Orillo, 733 F.3d 241, 244 (7th Cir. 2013), citing United
States v. Littrice, 666 F.3d 1053, 1060 (7th Cir. 2012).
1. Harmless Error?
Since the Sentencing Guidelines are advisory rather than
binding, Beckles v. United States, 580 U.S. —, —, 137 S. Ct. 886,
894 (2017); United States v. Booker, 543 U.S. 220, 245 (2005), and
since the district court imposed a sentence that was in fact below
the calculated guideline range, we have looked first for
signs as to whether the disputed loss amount actually made a
difference in the defendant’s final sentence.
In federal sentencing, the advisory Guidelines are the
“starting point and … initial benchmark,” and serve to “anchor
… the district court’s discretion.” Molina‐Martinez v.
United States, 578 U.S. —, —, 136 S. Ct. 1338, 1345 (2016), quoting
Gall v. United States, 552 U.S. 38, 49 (2007) (omission in
original), and Peugh v. United States, 569 U.S. 530, 549 (2013)
(omission in original). After calculating an advisory guideline
range, the district court must consider the final sentence under
18 U.S.C. § 3553(a), and it must do so without presuming
that a guideline sentence will be reasonable. Rita v. United
States, 551 U.S. 338, 351 (2007). Still, a judge imposing sentence
No. 17‐1131 5
must calculate the applicable Sentencing Guidelines range
correctly; an error is “a procedural error that we presume influenced
the judge’s choice of sentence, unless the judge said
otherwise.” United States v. Marks, 864 F.3d 575, 582 (7th Cir.
2017); see generally Molina‐Martinez, 578 U.S. at —, 136 S. Ct.
at 1347–48. At the same time, we have often encouraged district
judges facing a tricky guideline issue to ask themselves
whether the answer actually makes a difference to them.
Marks, 864 F.3d at 576 (“when an arcane and arbitrary issue
arises under the Sentencing Guidelines, the sentencing judge
should ask, ‘Why should I care?’”). When a judge explains
that a disputed guideline issue ultimately did not matter for
the exercise of sentencing discretion under § 3553(a), we will
treat an arguable error in the guideline calculation as harmless.
United States v. Snyder, 865 F.3d 490, 500 (7th Cir. 2017).
In this case, we have no signals that might support a finding
that any error was harmless. The district court explained,
quite properly, that White’s sentence was below the calculated
guideline range to give him credit for a state sentence that he
had already served, as provided in U.S.S.G. §§ 5G1.3(b) and
5K2.23, and to account for § 3553(a) factors, like his “tough
life” and the non‐violent nature of his crimes. The judge did
not otherwise signal that the guideline loss calculation did not
affect the final sentence, so we must address the issue on the
merits.
2. Loss Amount Merits
We begin with a roadmap of the applicable guideline provisions
to determine the correct offense level. For fraud
crimes, the most important offense characteristic is often the
amount of the actual or intended loss resulting from the
6 No. 17‐1131
scheme. See U.S.S.G. § 2B1.1(b)(1) and cmt. n.3. Specific offense
characteristics depend on both the offense of conviction
and “relevant conduct,” which is a critical concept in the entire
Sentencing Guidelines structure and which can cover conduct
much broader than the offense of conviction. See
U.S.S.G. § 1B1.3. The loss amount calculation includes losses
based not only on the defendant’s own actions but also the
actions of co‐schemers, if those actions were “within the scope
of,” “in furtherance of,” and “reasonably foreseeable in connection
with” the jointly undertaken criminal activity,
§ 1B1.3(a)(1)(B), and “occurred during the commission of the
offense of conviction, in preparation for that offense, or in the
course of attempting to avoid detection or responsibility for
that offense,” § 1B1.3(a)(1); see also Sykes, 774 F.3d at 1150. The
notes to § 1B1.3 explain that in joint criminal activity, the
scope of different defendants’ relevant conduct may be different.
Relevant conduct “does not include the conduct of members
of a conspiracy prior to the defendant joining the conspiracy,
even if the defendant knows of that conduct.” § 1B1.3
cmt. n.3(B).
When the issue of individual responsibility for conduct of
others is contested, a district court should make a finding on
each element of the relevant conduct test. See, e.g., Sykes, 774
F.3d at 1150 (requiring “two‐step analysis” under previous
version of § 1B1.3(a)(1)(B));2 United States v. Salem, 597 F.3d
877, 886 (7th Cir. 2010) (requiring findings on scope, in‐fur‐
2 White was sentenced using the 2016 version of the Guidelines.
Amendment 790 replaced the two elements (foreseeability and in‐furtherance)
with three (scope, in‐furtherance, and foreseeability). See U.S.S.G.
app. C (Supp. 2016).
No. 17‐1131 7
therance, and foreseeability). The problem here is that the indictment
alleged that White participated in a scheme to defraud
beginning in the fall of 2009 and continuing at least until
the summer of 2013, yet White was in prison for most of that
time, having been out of prison during that range only from
August 19, 2011 until August 20, 2012. It is surely rare for a
defendant’s criminal history to work this way as a potential
mitigating factor, but that is the possible effect here, at least as
to loss amount and offense level.
As a general rule, the government must show an aggravating
offense characteristic under the Guidelines by a preponderance
of the evidence, and this rule applies to the loss
amount in a fraud offense. Orillo, 733 F.3d at 244, citing
Littrice, 666 F.3d at 1060. In this case, both the evidence and
the district court’s findings are insufficient to support the full
loss amount used in White’s sentencing. To meet its burden
on the loss amount, the government relied on the admissions
in the plea agreement and argued that “our information …
indicates that he was involved prior to his incarceration in
2009.” The prosecutor did not elaborate on this information,
which turns out to be critical for this point. The district court
overruled White’s objection: “I will find that the government’s
dollar amount – it seems to me it’s clear that the fact that he’s
involved at the beginning, he leaves, and then he comes back,
I guess you could say so much for the deterrent effect of sentencing
on him.” The district court made no more explicit
finding on the scope of the jointly undertaken criminal activity,
whether others’ actions were in furtherance of that activity,
or whether White could reasonably foresee those actions. See
U.S.S.G. § 1B1.3(a)(1)(B). (Still, we certainly understand the
district court’s “so much for deterrent effect” comment, but
that’s a matter to consider further on remand.)
8 No. 17‐1131
To support the loss amount using the beginning of the
scheme in 2009, the government relies primarily on White’s
plea agreement and his admission of the government’s factual
basis in his guilty plea hearing. The government also relies on
White’s challenge to another part of the factual basis (but not
the dates of the scheme) at the plea hearing, earlier offenses
described in the presentence report, the grand jury testimony
of a co‐schemer, and other information in the presentence report.
None of these items can close the evidentiary gap.
First, White’s guilty plea and his admission in the plea
agreement are insufficient because they are too ambiguous on
the key point. A plea agreement and admissions in a guilty
plea hearing may of course establish a factual foundation for
sentencing. The question here is just what White admitted.
Our broad holdings about the evidentiary force of admissions
in a plea agreement do not hold that a general admission in a
plea agreement to a conspiracy or scheme spanning a certain
time conclusively establishes individual participation during
that entire time. E.g., Sykes, 774 F.3d at 1151–52, 1151 n.7 (admission
to participating in scheme foreclosed argument that
defendant could foresee only loss amounts caused directly by
defendant’s own participation); Orillo, 733 F.3d at 245, 247
(“defendant’s own admission is, of course, evidence enough
of the matter admitted” where defendant did not even try to
argue that other people may have been responsible); United
States v. Krasinski, 545 F.3d 546, 551–53 (7th Cir. 2008) (affirming
estimate of drug quantity calculated using defendant’s admission
to delivering range of pills on range of occasions because
admission established maximum and minimum quantities,
but saying nothing about sentencing consequences of
admission to date range in plea agreement); United States v.
Warneke, 310 F.3d 542, 550 (7th Cir. 2002) (saying nothing
No. 17‐1131 9
about sentencing consequences of agreement to wide date
range and holding that admission “removes all contest from
the case” where defendant attempted to invoke Apprendi because
of his guilty plea).
On this point it is useful to compare White’s argument to
our decision in United States v. Savage, 891 F.2d 145 (7th Cir.
1989). Savage said in his plea agreement that he could have
reasonably foreseen his co‐conspirators’ actions, but he later
argued that he participated in only one drug deal. Like Savage,
White argues that his admissions about his own conduct
and responsibility were narrower than the scheme charged in
the indictment. The problem is one of language and one of
scale. Savage separately admitted the existence of a conspiracy
during a precise date range and conspiring with others
“throughout this period of time,” and his agreement also
listed discrete transactions. Id. at 146–47. Here, White agreed
to a factual basis that tracked almost verbatim the broad language
of the indictment. White’s admission, then, is no better
than a plea to an indictment—which “admits only the essential
elements of the offense.” United States v. Paulette, 858 F.3d
1055, 1059 (7th Cir. 2017), citing United States v. Dean, 705 F.3d
745, 747 (7th Cir. 2013), and citing United States v. Kilcrease, 665
F.3d 924, 929 (7th Cir. 2012); see also United States v. Lawler,
818 F.3d 281, 282–83 (7th Cir. 2016) (plea to single‐count indictment
charging large‐scale conspiracy resulting in five
deaths “did not prove that any particular defendant was responsible
for any particular death”), citing United States v.
Walker, 721 F.3d 828, 836–38 (7th Cir. 2013), judgment vacated
on other grounds, Lawler v. United States, 134 S. Ct. 2287 (2014)
(mem.). The beginning and end dates of a scheme are not essential
elements. See Paulette, 858 F.3d at 1059–60 (distinguishing
United States v. Tolson, 988 F.2d 1494 (7th Cir. 1993)).
10 No. 17‐1131
With respect to the timing of his participation in the
scheme, White’s admission in the agreement tracked the language
of the indictment. He admitted that the scheme existed
for four years, and he admitted that he was a part of the
scheme. He did not admit that he was part of the scheme for
the entire four years, and he was not asked whether he was.
Again, a guilty plea admits only the essential elements of the
offense, and dates are not elements of the offense. Paulette, 858
F.3d at 1059; cf. United States v. Wang, 707 F.3d 911, 916 (7th
Cir. 2013) (affirming foreseeability finding and noting that
“there is no evidence that the court held Wang accountable for
documents that predated his involvement in the conspiracy”);
United States v. Kopshever, 6 F.3d 1218, 1222 (7th Cir. 1993) (rejecting
government’s argument that guilty plea to conspiracy
during date range preceded by “on or about” admitted that
fraudulent conduct continued after end date of range), abrogated
on other grounds, United States v. Vizcarra, 668 F.3d 516
(7th Cir. 2012). The analysis (but not the outcome here, because
of a lack of evidence) would be different if White had
expressly and separately admitted his own participation over
the entire duration of the scheme. See Savage, 891 F.2d at 146
(admission to participation “throughout this period of time”).
A defendant may admit more than just the essential elements
of an offense by stipulating to facts in a plea agreement
or by agreeing with the government’s factual basis. Paulette,
858 F.3d at 1060. White did that: he admitted to specific activities
like contacting stores to get customer information, using
the fraudulently obtained information to create counterfeit
checks, making purchases with the counterfeit checks, and
then returning the fraudulently obtained merchandise for
cash. But none of those admissions speaks to the timing problem.
The defendant’s admission to the general duration of the
No. 17‐1131 11
scheme does not conclusively establish his own participation
in the entirety of the scheme with others, at least where the
defendant was in prison for much of that time. At sentencing,
the judge asked the government specifically whether it was
charging White for any conduct before his release from prison
in August 2009, and the prosecutor said no. While the prosecutor
contradicted that position at other points, we think that
was the correct answer. Still, the confusion on the point underscores
the problem with the scope of White’s admission.
And since the ambiguous admission in the plea agreement is
not sufficient, it makes no difference whether he challenged
other aspects of the factual basis at his change of plea hearing.
3
The government’s remaining three points fare no better.
On this record, a connection between White’s 2007 and 2009
forgery convictions and this scheme is speculative. The
presentence report contains no details relating to the factual
basis for the 2007 conviction. The 2009 conviction involved
fraud but by a different method: White tried to buy merchandise
with a fraudulent traveler’s check and fake identification.
The government offers no other evidence to corroborate any
circumstantial connection to the scheme charged and admitted
here, using checking account information and involving
others. Cf. United States v. Patel, 131 F.3d 1195, 1204 (7th Cir.
1997) (“participation in other drug transactions does not itself
establish the required relationship between those earlier
3 There is no waiver or forfeiture problem here. White argued—both
in writing before the sentencing hearing and orally during the hearing—
that he should not be held accountable for the entire loss amount.
12 No. 17‐1131
transactions and the offense of conviction”). Perhaps the government
can establish the link on remand, but it did not do so
in this record.
As for co‐schemer Ayanna Armstrong’s grand jury testimony,
the records of White’s imprisonment show it was not
accurate. Armstrong testified that White began participating
in 2010, made purchases and returns in 2010, and began making
fake identification cards in 2010. White spent all of 2010 in
state custody.
Other information in the presentence report also falls
short. White’s statement that he learned how to commit check
fraud after being discharged from a group home does not
prove that he participated in the charged scheme before he went
to prison in September 2009. And the statement that White
“relied on funds from the instant offense and from other criminal
activities” from 2007 to 2012 is also too vague to prove
that the scheme of the offense of conviction or its relevant conduct
began in 2007. After all, White had earned a criminal history
category of VI by the time of the offense of conviction,
primarily through a long history of other frauds, thefts, and
forgeries. That history counts toward the criminal history calculation,
but not all of those prior offenses can be treated as
relevant conduct under the Guidelines for this sentence.4
4 Whether White’s own, uncharged conduct counts as relevant conduct
is addressed under U.S.S.G. § 1B1.3(a)(2). The standards under that
Guideline are slightly different than the standards under § 1B1.3(a)(1). Salem,
597 F.3d at 887 n.4; see also United States v. Acosta, 85 F.3d 275, 281 (7th
Cir. 1996) (stating test for when “offenses are part of a common scheme or
plan” for purposes of § 1B1.3(a)(2)).
No. 17‐1131 13
To be sure, the district court might well impose the same
sentence on remand. Perhaps the government can fill in the
evidentiary gaps. The court’s discretion under § 3553(a) is
substantial and may take into account White’s terrible record
of recidivism. And even on White’s own terms, the guideline
issue itself may be very close. The key threshold under
U.S.S.G. § 2B1.1(b)(1)(H) is whether the loss amount exceeds
$550,000. White argues that the first evidence of his involvement
in the charged scheme is a fake check he passed in December
2011. Calculating the loss amount from the date of
that check results in a loss of $453,923.55, which corresponds
to a 12‐level enhancement under § 2B1.1(b)(1)(G), instead of
the 14‐level enhancement White received under
§ 2B1.1(b)(1)(H). That two‐level difference would have reduced
White’s offense level to 20, which would have reduced
his guideline range from 84 to 105 months to 70 to 87 months.
U.S.S.G. ch. 5, pt. A.
But White admitted to participating in the scheme as early
as September 2011 by requesting (and receiving) credit for
time served on an Illinois forgery conviction that stemmed
from an arrest on September 13, 2011. At sentencing, White
argued that offense was “all part of the scheme.” Using the
government’s loss spreadsheet, the earlier date leads to a loss
amount of $548,353.71, just shy of the $550,000 that would require
the same guideline range that the district court used.
White thus narrowly avoids a harmless error finding, see
United States v. Crockett, 82 F.3d 722, 730 (7th Cir. 1996) (mistaken
calculation of drug quantity “harmless” because correct
quantity would result in same base offense level), but sentencing
judges are free to consider where relevant fraud losses (or
robbery losses or drug quantities, etc.) fall in the relevant
ranges under the Guidelines.
14 No. 17‐1131
Without a more specific and supported finding on when
White’s participation in the scheme began, we cannot assume
that his participation began any earlier than the September 13,
2011 arrest.5 We must therefore vacate the sentence and remand.
Compare United States v. Locke, 643 F.3d 235, 244–45
(7th Cir. 2011) (rejecting inclusion of dismissed counts as relevant
conduct where “both the findings and supporting evidence
are deficient,” and collecting cases), with United States
v. Bogdanov, 863 F.3d 630, 634 (7th Cir. 2017) (affirming loss
calculation because “abundant circumstantial evidence” and
“direct evidence” corroborated admissions in plea agreement
and supported finding that defendant stole goods), and Paulette,
858 F.3d at 1060 (admission in plea agreement that conspiracy
involved methamphetamine was “conclusive” proof
that defendant participated in conspiracy before 2013 because
evidence showed that defendant’s only methamphetamine
transactions occurred before 2013).
B. Restitution
White has also objected to the restitution ordered as part
of his sentence. The restitution issue is similar but not identical
to the loss amount issue. The Mandatory Victim Restitution
Act, 18 U.S.C. § 3663A, applies to a victim’s losses from
the offense of conviction, which is narrower than relevant
conduct under the Guidelines. The amount of restitution is
5 At least some evidence supports White’s argument that he joined the
scheme after it began. Armstrong testified that White joined after other
participants had already been obtaining bank account numbers and counterfeiting
checks. (The government’s other grand jury witness never mentioned
White.) And on the government’s spreadsheet documenting every
transaction in the scheme by all participants, White appears for the first
time on December 19, 2011.
No. 17‐1131 15
“limited to the actual losses caused by the specific conduct
underlying the offense, and, like the loss amount, the government
must establish that by a preponderance of the evidence.”
United States v. Orillo, 733 F.3d 241, 244 (7th Cir. 2013),
citing United States v. Kennedy, 726 F.3d 968 (7th Cir. 2013); see
also United States v. Burns, 843 F.3d 679, 689 (7th Cir. 2016)
(“The MVRA has a proximate cause requirement.”); Locke, 643
F.3d at 247 n.7 (noting that “‘relevant conduct’ is not within
the scope of the MVRA”). We ordinarily review restitution
amounts for abuse of discretion, but because White failed to
object to the restitution calculation at the sentencing hearing,
he and the government agree that we should review the restitution
amount for plain error. See Locke, 643 F.3d at 246.
The restitution amount is plainly erroneous. In calculating
restitution, the district court should “‘adequately demarcate
the scheme.’” Id. at 247–48 (vacating restitution order under
plain error review because district court “never discussed its
restitution decision” and made no findings on scope of
scheme or victims harmed), quoting United States v. Smith, 218
F.3d 777, 784 (7th Cir. 2000). In this case, the district court did
not do so. It imposed the restitution without explaining how
White was responsible for that amount and without evidence
to support the full amount. The lack of a finding is not necessarily
fatal, but the lack of evidentiary support that would
have supported a finding is. See, e.g., Burns, 843 F.3d at 689–
90 (finding plain error in restitution amount where defendant
failed to object); id. at 691 (Hamilton, J., dissenting) (“We
should not find ‘plain error’ for the mere lack of a finding that
the judge was not asked to make, at least when the evidence will
support such a finding.” (emphasis added)).
16 No. 17‐1131
We vacate the restitution amount for the same reason as
the loss amount. See Orillo, 733 F.3d at 244 (resolving restitution
and loss amount issues together because defendant
raised “one challenge applicable equally to both determinations”),
citing United States v. Ali, 619 F.3d 713, 720 (7th Cir.
2010). Also, we must remand because the evidence actually
contradicts the restitution award. The restitution amount includes
about $25,000 in losses that predate the “fall of 2009.”
The government argues that the loose language in the plea
agreement (i.e., “no later than in or around” the fall of 2009)
“does not necessarily exclude” pre‐2009 losses. That argument
stretches too far—especially because the prosecutor expressly
stated at sentencing that the government did not
charge White with any conduct before his release from prison
in August 2009. To hold White responsible for a restitution
amount, the government must prove that amount by a preponderance
of the evidence. This record falls short of that
standard.

Outcome: We VACATE White’s sentence and the restitution order
and REMAND for resentencing consistent with this opinion.
Because White is due to be released in August 2018, the district
court should expedite his resentencing. Our mandate
shall issue immediately.

Plaintiff's Experts:

Defendant's Experts:

Comments: