United States v. Sensmeier, Kevin P. ( 2004 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 02-3548 & 02-3549
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
KEVIN P. SENSMEIER and NEIL E. SENSMEIER,
Defendants-Appellants.
____________
Appeals from the United States District Court
for the Southern District of Indiana, Evansville Division.
No. 01 CR 22—Richard L. Young, Judge.
____________
ARGUED OCTOBER 20, 2003—DECIDED MARCH 22, 2004
____________
Before POSNER, KANNE, and WILLIAMS, Circuit Judges.
KANNE, Circuit Judge.
I. History
Jasper Engine Exchange, Inc., located in Jasper, Indiana,
specializes in the remanufacturing and resale of various
automotive parts, including drive-train components,
2 Nos. 02-3548 & 02-3549
engines, transmissions, and differentials.1 One of the two
defendants, Kevin Sensmeier, began working for Jasper as
a customer-service representative in the warranty depart-
ment in November of 1996. Defendant Neil Sensmeier
worked in the quality control analysis department from
February of 1998 until June of 1999, when he transferred
into the warranty department and worked, along with his
brother Kevin, as a customer-service representative. Both
defendants were supervised by Randall Bauer and were
terminated in February of 2000, after the discovery of the
fraudulent scheme described below.
Early during his term of employment, Kevin Sensmeier
began to sell “cores,” which include defective transmissions,
engines, and differentials, to Jasper. These sales were
wholly independent of his duties and salary as a customer-
service representative. Jasper paid Kevin for these cores,
which could be refurbished and then resold by the company
for a profit. At some point, a disagreement arose between
Alan Hinky, Jasper’s core purchaser, and Kevin. As a
result, Jasper refused to purchase any additional cores from
Kevin. In 1998, perhaps partly due to this falling out, but
1
The record for each defendant is distinct and separate. How-
ever, the facts of the conspiracy are, in general, mutually ap-
plicable. Hence, in laying out the relevant facts in this appeal, we
need not differentiate between the two records. Where a citation
is used to emphasize support for factual findings, items from
Kevin Sensmeier’s record on appeal will be noted as (“KR”), while
items from Neil Sensmeier’s record will be noted as (“NR”).
Furthermore, to the extent that the defendants implicitly dis-
pute the facts determined by the district court—a surprising
implication given that the defendants both pled guilty and that
the district court based much of its factual findings at sentencing
upon the defendants’ own statements—we find that the district
court’s factual determinations, which we summarize herein, had
ample support in the record and are therefore not clear error.
Nos. 02-3548 & 02-3549 3
admittedly due to greed, (KR. 31 at 48-49, 56-57; NR. 28 at
47), the defendants developed a complex scheme of fraud,
whereby they, along with the unwitting or knowing assis-
tance of at least four other persons, were able to steal
approximately $80,000 from their employer.
Between 1998 and 2000, Jasper customers with malfunc-
tioning products contacted field representatives or directly
phoned customer-service representatives, like Kevin or
Neil, in the warranty department. Once the customer was
in contact with a customer-service representative, the
representative would then diagnose the problem, recom-
mend that the part be repaired or replaced, and advise the
customer about how to execute the repair, when appropri-
ate. In either case, Jasper would refund the cost of the part
and, if defective, the customer was also instructed to return
the part. Last, the customer-service representative assigned
a case number to the complaint. These claims, whether
resulting in the return of a part or a repair, were docu-
mented and “processed” by a customer-service representa-
tive, including the entry of the claim into a computer
database. Once processed, a check was then issued to the
complaining customer. All such claims included the initials
of the processing customer-service representative. (KR. 13
at 19; NR. 28 at 23-26.)
Beginning on or about June 19, 1998 and continuing
through February of 2000, the defendants falsified customer
complaints using third-party names, causing refund checks
to be issued to these third parties. (KR. 13 at 21-33; NR. 13
at 21-33.) Although it is undisputed that many of the
fraudulent claims submitted by the defendants were never
tied to any actual Jasper parts, (KR. 13 at 39-40; NR. 13 at
39-40), the defendants claim that in some instances they
did purchase defective Jasper parts still under warranty,
and sent those real parts in to Jasper under a third-party
name. However, the record contains no evidence whatsoever
of any such parts. And even if such parts were sent in to
4 Nos. 02-3548 & 02-3549
support the warranty claim, defendants admit that the
claim itself was nonetheless fraudulent as there never were
any actual customers who called in with any true com-
plaints about any Jasper parts. (NR. 28 at 31-33.)
As aforementioned, the defendants used fictional and real
third-party names as the complaining consumers to conceal
their fraud, none of whom ever had legitimate warranty
claims with Jasper Engine. To receive the refund checks,
the defendants caused fifty-six post-office boxes to be
opened. And to further obfuscate their fraud, the post- office
boxes were opened in a six-state area, including Indiana,
Illinois, Kentucky, Ohio, Tennessee, and Missouri. Either
Kevin or Neil personally negotiated the refund checks, or
instructed third parties to negotiate the checks on their
behalf and turn the proceeds over. The brothers also opened
several checking accounts to deposit the proceeds of the
fraud.
Both brothers were actively involved in the fraudulent
scheme from the beginning. While true that only Kevin
physically created the paperwork to support the false
warranty claims, (NR. 13 at 31), Kevin also stated, “Neil
and I came up with [the] idea on how to work around the
warranty system and receive money.” (KR. 31 at 47.) Neil
personally opened at least six post-office boxes, including
the very first box opened to facilitate the fraud, on June 19,
1998. Kevin opened at least seven post-office boxes, the first
of which on June 27, 1998. Each post-office box included the
name of at least one person other than the defendants as an
authorized recipient of mail at the box.
Both brothers enjoyed the profits of the fraud. Neil
personally negotiated at least one check (KR. 31 at 29-30;
NR. 13 at 32, 45), directed his girlfriend, Jill Heck, and his
roommate, Michael Knapp, to negotiate at least two checks,
each on his behalf, and to turn the proceeds over to him
and/or his brother. (KR. 31 at 29-30; NR. 13 at 32-33.)
Nos. 02-3548 & 02-3549 5
These three checks totalled approximately $2000. Neil
admitted he was aware that this $2000 he directly received
as a result of this scheme was obtained fraudulently. (NR.
13 at 45-46.) Kevin negotiated numerous checks, recruited
his girlfriend Rebecca Goldmann and others to participate
in the fraud, and generally oversaw the operation. (KR. 13
at 16-20; KR. 31 at 32-33, 37.) Furthermore, the defendants
“split” or shared the funds received from Jasper based upon
“how much work each of us had done on it,” regardless of
who specifically negotiated the check. (KR. 31 at 47; NR. 28
at 13, 17.) Lastly, Neil’s initials, “N.S.”, appeared on a
number of the fraudulent claims, indicating that he was the
customer-service representative who processed those
claims.
In total, the defendants caused Jasper to issue 178 war-
ranty checks in the amount of $100,254.88. (KR. 31 at 9;
NR. 28 at 8-9.) The defendants successfully negotiated 157
checks in the amount of $88,456.74. (KR. 13 at 32; KR. 31
at 9-10; NR. 13 at 32.) Approximately $3,760.00 was
recovered by the Indiana State Police, thus reducing the
total amount obtained by the defendants to $84,696.74.
(KR. 31 at 15; NR. 28 at 9.)
On January 28, 2002, both defendants pled guilty to a
conspiracy, 18 U.S.C. § 371 (2001), to commit mail fraud, 18
U.S.C. § 1341 (2001). Following the preparation of pre-
sentence investigation reports (“PSR”), the district court
judge sentenced the defendants on September 4, 2002. The
base level for the offense was six, U.S.S.G. §§ 2B1.1(a),
2X1.1 (2001). Eight levels were added under U.S.S.G.
§ 2B1.1(b)(1)(E) because the intended loss was between
$70,000 and $120,000. Kevin was given an additional four-
level enhancement under U.S.S.G. § 3B1.1 for his role as an
organizer or leader in the conspiracy. Kevin and Neil were
both granted a two-level downward adjustment for accep-
tance of responsibility under U.S.S.G. § 3E1.1(a). And Kevin
was given an additional one-level downward adjustment
6 Nos. 02-3548 & 02-3549
also for acceptance of responsibility under U.S.S.G. §
3E1.1.(b). No other adjustments were made, and the judge
noted that neither defendant had any other criminal
history.
The total offense level for Kevin was fifteen, with a
corresponding U.S.S.G. suggested range of incarceration
between eighteen and twenty-four months. The total offense
level for Neil was twelve, with a U.S.S.G. range between ten
and sixteen months. And for both defendants the statutory
maximum period of imprisonment was five years with a
U.S.S.G. range for supervised release of two- to-three years.
Restitution was required under U.S.S.G. § 5E1.1. The
district court judge sentenced Kevin to twenty-three
months’ imprisonment; sentenced Neil to six months’
imprisonment (four months less than the lowest end of
recommended U.S.S.G. suggested range), followed by six
months’ home detention; and ordered restitution in the
amount of $84,696.74, owed by the defendants jointly and
severally.
The Sensmeiers now challenge the district court’s offense-
level calculation and the restitution ordered under 18
U.S.C. § 3663A. For the reasons set forth below, we affirm
the Sensmeiers’ sentences and restitution orders.
II. Analysis
The defendants’ basic argument is that the district court
failed to offset the amount of loss to Jasper by the value the
defendants claim the victim gained through the resale of
defective parts which the defendants allegedly sent to
Jasper to facilitate their fraud. They assert that had the
court offset the amount of Jasper’s loss by its alleged “gain,”
then the eight-level enhancement under U.S.S.G. § 2B1.1
would have been inappropriate and the amount of restitu-
tion ordered would have been less. Neil also objects to the
joint and several nature of the restitution order and
Nos. 02-3548 & 02-3549 7
correspondingly, to the district court’s failure to apportion
the restitution order to more closely comport with Neil’s
perception of his own culpability. We find these arguments
unpersuasive.
A. Calculation of loss
Defendants challenge the district court’s determination of
the amount of loss caused by their crime under § 2B1.1(b)(1)
of the Sentencing Guidelines. Section 2B1.1(b)(1) applies to
crimes of fraud and deceit. If the crime caused victims loss
over $5000, the sentence is enhanced according to the
amount of loss caused. The district court found that the
defendants had intended to cause loss totaling approxi-
mately $100,254.88, resulting in an eight-level enhance-
ment for each defendant. Both Neil and Kevin now assert
that the court’s calculation of loss relied upon an incorrect
definition of loss, which did not account for the value of
parts allegedly received by Jasper. The definition of the
term “loss” under the Guidelines is a question of law
reviewed de novo, while the calculation of loss is a finding
of fact, which we review for clear error. United States v.
Vivit, 214 F.3d 908, 914 (7th Cir. 2000); United States v.
Jackson, 95 F.3d 500, 505 (7th Cir. 1996). Had the value of
parts received by Jasper been correctly considered, the
defendants allege, then the net loss to the victim would
have been less than $70,000.2 This argument fails for two
primary reasons.
First, both Kevin and Neil waived this issue. Waiver is
the “intentional relinquishment or abandonment of a known
right,” United States v. Woods, 301 F.3d 556, 560 (7th Cir.
2002) (citations omitted), representing “the manifestation
2
Under U.S.S.G. § 2B1.1(b)(1) loss greater than $70,000 but less
than $120,000 results in an eight-level enhancement, while loss
between $30,000 and $70,000 results in a six-level enhancement.
8 Nos. 02-3548 & 02-3549
of an intentional choice,” United States v. Johnson, 289 F.3d
1034, 1041 (7th Cir. 2002). Here, both Kevin and Neil,
through counsel, objected to the calculation of the intended
loss, and then explicitly withdrew those objections to the
extent that they were based upon the argument the defen-
dants now advance—intended loss, as calculated by the
district court, should be reduced by any value gained by
Jasper. The following exchange occurred between Kevin’s
counsel and the court during his sentencing hearing:
THE COURT: The next objection . . . is objection to [ ]
the amount of intended loss.
MR. KEATING (Kevin Sensmeier’s counsel):
Your Honor, we intend to, I think, ad-
dress that, both parties as it concerns
restitution. It will not make any differ-
ence in the guideline determination be-
cause even our best case will not show
intended loss below the next level to drop
that particular point total down, so we
could reserve that argument until—
THE COURT: So this objection basically goes to restitu-
tion amount, not intended loss?
MR. KEATING: More so than intended loss. Even if I
could convince you of our position on that,
it wouldn’t make any difference.
THE COURT: Okay. All right. So would you say you’re
withdrawing that?
MR. KEATING: I will withdraw that objection as it con-
cerns the intended loss.
(KR. 31 at 14-15.) This constitutes clear waiver and hence,
there is no error for us to review now on appeal.
Neil’s counsel also objected to the intended loss calcula-
tion at Neil’s sentencing hearing, but then stated, “The
intended loss, and I think that was—was that reduced in
Nos. 02-3548 & 02-3549 9
Kevin’s case to 86? I guess it makes no difference if it’s
between 70 and 120, the amount of loss is the same, except
for I think it’s limited by his relevant conduct, what he
knew, what he participated in, which I think is the real
question.” (NR. 28 at 12-13.) Neil’s counsel went on to argue
not that Neil’s enhancement under Section 2B1.1(b)(1)
should only be six levels because the amount of intended
loss was $70,000 or less due to the value gained by Jasper
offsetting a part of its loss, the issue Neil raises before this
court, but rather that Neil’s enhancement should be less
than eight levels since he directly received only $2000—an
issue not raised by Neil on appeal.3 (NR. 28 at 13-18.)
Furthermore, Neil’s counsel later stated that the value of
parts obtained by Jasper from the defendants is a “factor
that plays into—not the intended loss, but [ ] restitution.”
(NR. 28 at 34.) The objection, considered along with these
statements, constitutes waiver. Since both Kevin and Neil
explicitly withdrew any objection to the court’s calculation
of intended loss based upon a failure to offset such loss with
alleged value gained by Jasper, there is no error for us to
review now. See, e.g., United States v. Olano, 507 U.S. 725,
732-34 (1993); Johnson, 289 F.3d at 1040-41; United States
v. Mantas, 274 F.3d 1127, 1130-31 (7th Cir. 2001); United
States v. Richardson, 238 F.3d 837, 841 (7th Cir. 2001).
Second, notwithstanding the Sensmeiers’ waivers of this
issue, their argument fails on the merits. “Loss” under
§ 2B1.1(b)(1) cmt. 2(A) is “the greater of actual loss or
intended loss.” Intended loss is defined as “the pecuniary
harm that was intended to result from the offense . . . in-
clud[ing] intended pecuniary harm that would have been
impossible or unlikely to occur . . . .” Evidence presented at
the sentencing hearings demonstrated that 178 checks were
3
Wisely, Neil’s counsel decided not to raise this argument on
appeal because it is an incorrect statement of the law, see U.S.S.G.
§ 1B1.3; (NR. 28 at 14-17).
10 Nos. 02-3548 & 02-3549
issued by Jasper to third parties, based upon fraudulent
claims, for an aggregate amount of $100,254.88. (KR. 13 at
32; KR. 31 at 9-10; NR. 13 at 32; NR. 28 at 15.) Thus, the
government had demonstrated by a preponderance of the
evidence, United States v. Ramirez, 94 F.3d 1095, 1101 (7th
Cir. 1996), that an upward sentencing adjustment, based
upon an intended loss of $100,254.88, was appropriate.
Assuming, arguendo, that (1) intended loss amounts
should be reduced by any value received by the victim;4 and
(2) the defendants had put forth some credible evidence
with respect to the alleged value gained by Jasper, then the
district court should have reduced the $100,254.88 by that
amount. But tellingly enough, nowhere in this appellate
record, nor in either of the defendant’s appellate briefs to
this court, can we find any mention of a specific dollar
amount of value allegedly received by Jasper in conjunction
with the defendants’ scheme of fraud. This court had to look
to the government’s brief, (U.S. Br. at 6, 9), to discover the
specific amount of value, $17,000, the defendants previously
alleged (in their respective PSRs) Jasper received. Subtract-
ing $17,000 from $100,254.88 leaves us well above the
$70,000 mark. Therefore, the district court’s eight-level
enhancement under U.S.S.G. § 2B1.1(b)(1)(E) is easily
affirmed.
B. The restitution order
The defendants challenge the restitution order entered
under 18 U.S.C. § 3663A (2001), known as the Mandatory
Victim Restitution Act (“MVRA”), and 18 U.S.C. § 3664
(2001). Because the defendants pled guilty to a conspiracy
to commit mail fraud and the victim suffered a pecuniary
4
We need not, and explicitly decline to, accept or reject this legal
proposition.
Nos. 02-3548 & 02-3549 11
loss, the MVRA applies. § 3663A(c)(1)(B). Thus, a court
must order that the defendants pay restitution to the victim
in an amount equal to:
(i) the greater of (I) the value of the property on the
date of the damage, loss, or de-
struction; or
(II) the value of the property on the
date of sentencing, less
(ii) the value (as of the date the property is returned) of
any part of the property that is returned.
18 U.S.C. § 3663A(b)(1)(B). The court ordered restitution in
the amount of $84,696.74, owed jointly and severally by
both defendants.
1. The amount of restitution
The Sensmeiers now request that this court order a new
hearing regarding restitution in which the amount of
Jasper’s loss would be reevaluated and reduced by the value
of the items Jasper received in the fraudulent transactions.
We review the district court’s calculation of the amount of
restitution for an abuse of discretion. United States v.
Newman, 144 F.3d 531, 542 (7th Cir. 1998). A restitution
order will be disturbed only if the district court relied upon
inappropriate factors when it exercised its discretion or
failed to use any discretion at all. United States v. Chay,
281 F.3d 682, 686 (7th Cir. 2002). The economic circum-
stances of a defendant cannot be considered by the court
when fixing the amount of the restitution.5 18 U.S.C. §
3664(f)(1)(A); see United States v. Szarwark, 168 F.3d 993,
5
The economic circumstances of a defendant may only be con-
sidered regarding the manner and schedule for payment of the
restitution amount. 18 U.S.C. § 3664(f)(2).
12 Nos. 02-3548 & 02-3549
997 (7th Cir. 1999); Newman, 144 F.3d at 537 n.5. And the
government bears the burden of demonstrating the amount
of the loss, with any dispute as to the amount resolved by
a preponderance of the evidence. 18 U.S.C. § 3664(e);
United States v. McIntosh, 198 F.3d 995, 1003 (7th Cir.
2000). Kevin clearly waived this issue at sentencing. And
while Neil did not waive the issue, the district court did not
abuse its discretion.
A bit of background is necessary regarding the various
loss amounts discussed during the brothers’ sentencing.
According to the PSR, the defendants successfully negoti-
ated 157 checks in the amount of $88,456.74 as a result of
the fraud. (KR. 13 at 32; KR. 31 at 9-10; NR. 13 at 32.) But
at the sentencing hearing, the Sensmeiers objected to this
determination and Kevin produced evidence that approxi-
mately $3,760.00 was recovered by state police. Thus, the
court held and the prosecution—to defense counsels’ sur-
prise—agreed that the total amount obtained by the
defendants was $84,696.74. (KR. 31 at 14-15, 61; NR. 28 at
9.)
In addition, in response to the defendants’ argument that
the loss to Jasper, and hence any restitution, should be
reduced by the value obtained as a result of the fraudulent
transactions, (KR. 31 at 15, 61-62; NR. 28 at 34-35), the
prosecution prepared to put on evidence of additional
checks negotiated for a total of approximately $5000—
$6000 over and above the $84,696.74, (KR. 31 at 28, 54, 61;
NR. 28 at 35), but discovered after the preparation of the
PSR. Apparently, the government’s intent was to present
such evidence only if defendants persisted in objecting to
the $84,696.74 restitution amount based upon their argu-
ment that the loss should be reduced by some alleged value
gained by Jasper.
During Kevin’s sentencing hearing, he objected to the
amount of loss when first discussed with respect to en-
Nos. 02-3548 & 02-3549 13
hancements under the U.S.S.G. His objection was waived
and reserved only as it pertained to restitution. (KR. 31 at
14-15.) This issue was broached again later in the hearing,
after the judge ordered $84,696.74 in restitution:
THE COURT: Do you have any questions, sir, about
anything?
MR. KEATING: Your Honor, regarding restitution, we
initially, I think, contemplated the pre-
sentation of evidence because there was
dispute with the government over that,
but if Mr. Warden [the prosecution] tells
me they are—you are acquiescing on the
$84,000 net figure—
MR. WARDEN (counsel for the government):
The reason I am, the other information
the government had was obtained after it
had been provided to Mr. DeCarli [the
probation officer preparing the PSR].
THE COURT: How much difference is there?
MR. WARDEN: It’s about a $6000 difference, Your Honor.
So Mr. Keating, I didn’t see him object to
the number that is now before the Court
[$84,696.74]. If there is no objection to
that, we’re not going to pursue the differ-
ent figure.
MR. KEATING: I’d like a minute to talk to my client. I
think we will also at this point call it
even, but I need to talk to him. I wasn’t
aware that this was going to happen as
far as their agreeing to the lower amount.
THE COURT: Okay.
MR. KEATING: Other than that, I have no other com-
ment.
14 Nos. 02-3548 & 02-3549
THE COURT: Okay. Anything further?
MR. KEATING: No sir. . . .
(KR. 31 at 61-62.) This is an acceptance of the $84,696.74
restitution figure and thus, clearly constitutes waiver. See,
e.g., Johnson, 289 F.3d at 1040-41; Richardson, 238 F.3d at
841; Mantas, 274 F.3d at 1130-31; Olano, 507 U.S. at 732-
34.
In contrast, Neil objected to the restitution amount and
then failed to expressly renew his objection following the
prosecutor’s suggestion that he would prove loss equal to
$93,000 and the court’s implicit rejection of the argument
Neil proffers here. (NR. 28 at 34-36, 48-51.) This does not
amount to an “intentional relinquishment or abandonment
of a known right,” representing the manifestation of an
intentional choice. Woods, 301 F.3d at 560.
Regardless, the government met its burden of demon-
strating loss equal to $84,696.74. (KR. 13 at 32; KR. 31 at
9-10, 14-15, 61; NR. 13 at 32; NR. 28 at 9.) The Sensmeiers
had an opportunity, at their sentencing hearing, to present
evidence of the alleged value of cores they claim Jasper
received as a result of the fraudulent scheme. After a
thorough review of the record and as alluded to in the
previous section, this court is certain that the Sensmeiers
presented no such evidence. The defendants merely stated
that they believed Jasper received some value in the form
of some unknown number of actual cores allegedly returned
to Jasper as part of the fraud. And while we acknowledge
that the burden is on the government to prove loss, the
defendants’ wholly unsubstantiated statements are not
enough to undermine, nor even question, the court’s
acceptance of the government’s proof of loss. See Newman,
144 F.3d at 543; United States v. Purchess, 107 F.3d 1261,
1268 (7th Cir. 1997). Generously assuming that the defen-
dants did in fact raise a factual dispute as to the amount of
Nos. 02-3548 & 02-3549 15
loss, the preponderance—indeed all—of the evidence in the
record supports the court’s finding that the loss to Jasper
equaled $84,696.74, and hence, the court did not abuse its
discretion.
2. The joint and several nature of the restitution
order
Finally, Neil requests that this court order a new res-
titution hearing and direct the district court to reapportion
the restitution award to comport with Neil’s perception of
his relative contribution to the loss, general culpability, and
economic circumstances. When there is more than one
defendant that has contributed to the loss of a victim, dis-
trict courts enjoy the option of either imposing full liability
on each defendant or apportioning the liability among the
defendants to reflect the culpability and economic cir-
cumstances of each. 18 U.S.C. § 3664(h); United States v.
Booth, 309 F.3d 566, 576 (9th Cir. 2002) (“The court had the
discretion to apportion the [restitution] total, but was not
required to do so.”). We review a court’s exercise of such
discretion for abuse. See Chay, 281 F.3d at 686.
Neil makes the following contentions to support his
argument that the district court abused its discretion when
it ordered him to pay the full amount of restitution: (1) the
district court thought it must order Neil pay the full amount
of restitution; (2) the district court incorrectly considered
the foreseeability of the victim’s losses to Neil; (3) it was
inconsistent for the court to decline to order interest or a
fine based upon the defendant’s economic circumstances
and yet order the full amount of restitution with payment
to begin immediately; and (4) the government demonstrated
that the defendant directly received only approximately
$2000.
16 Nos. 02-3548 & 02-3549
There is nothing in the record to support the first con-
tention, and it is summarily dismissed.6 With respect to the
second and fourth contentions, both are thinly veiled chal-
lenges to the district court’s finding that Neil, while not the
organizer or leader of the fraud, was equally culpable for its
perpetration. Hence, both are rejected in that the record, as
summarized above, amply supports the determinations
regarding Neil’s relative guilt. In fact, the district court’s
exercise of its discretion can find enough support in a few
sentences of Kevin’s testimony:
Neil and I came up with an idea on how to work around
the warranty system and receive money. Neil opened
P.O. boxes in Kentucky, and I started to issue warranty
claims and cashed the money. Neil and I split the
money per claim depending on how much work each of
us had done on it. On occasion we had our own individ-
ual claim that the other one didn’t know about.
(KR. 31 at 47-48.) Neil was involved in this fraud from its
inception and may have taken part in its development. He
personally opened six post-office boxes, including the very
first box opened in order to execute the fraud. He processed
some of the fraudulent claims himself. He directly oversaw
or personally negotiated at least three checks. He directly
received approximately $2000 of the fraudulent proceeds
and most likely, indirectly received much more. And most
importantly, Neil pled guilty to this offense. He cannot
proclaim, for all intents and purposes, his innocence on
appeal in an effort to avoid a restitution order based firmly
in the record.
6
In fact, the record reflects that the district court was well aware
of its option of apportioning the restitution amount in that it
heard extensive arguments about Neil’s relative blameworthiness
(NR. 28 at 7, 9, 12-18, 40, 48, 52), and apportionment (Neil
Sensmeier’s App. Br. Appendix at 31).
Nos. 02-3548 & 02-3549 17
Lastly, Neil’s challenge to the district court’s decision to
hold him responsible for the entire restitution amount with
payment to begin immediately, while forgoing an order of
fees or interest, is rejected. Just as the district court need
not apportion the restitution amount, it is under no obliga-
tion to set up a payment schedule. 18 U.S.C. § 3664(f)(3)(B).
Furthermore, simply because a court opted not to order the
payment of interest or fees, does not, in and of itself,
establish that the court abused its discretion in ordering
full restitution. The record is rife with evidence that Neil
should be able to make immediate payments of some
amount toward restitution. He is young, in good physical
condition, denied any use of illegal drugs, completed high
school and has some college credit, has a stable employment
history, was gainfully employed as a mechanic at the time
the charges were brought, and has a supportive family.
(NR. 28 at 5, 6, 37, 53.) Furthermore, Neil was sentenced to
only six months’ incarceration, after which his employer at
the time indicated he could return to work. (NR. 28 at 48-
50.) As this court has made clear, “immediate payment”
does not mean “immediate payment in full,” but rather
“payment to the extent that the defendant can make in good
faith, beginning immediately.” United States v. Burke, 125
F.3d 401, 407 (7th Cir. 1997) (quotation omitted). There is
a good policy reason behind a district court’s ability to order
immediate payment: after a defendant is released, if he fails
to continue to make payments in good faith, the court may
send him back to prison. See United States v. Trigg, 119
F.3d 493, 500 (7th Cir. 1997). This provides a powerful
incentive for the continued repayment of restitution. In
sum, the district court did not abuse its discretion when it
ordered that both Kevin and Neil Sensmeier be held jointly
and severally responsible for the payment of restitution.
III. Conclusion
For the foregoing reasons, we AFFIRM the district court’s
sentences and restitution orders.
18 Nos. 02-3548 & 02-3549
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—3-22-04