United States v. Gordon, Scott L. ( 2007 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-2080
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
SCOTT L. GORDON,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Western District of Wisconsin
No. 05-CR-0139—Barbara B. Crabb, Chief Judge.
____________
ARGUED OCTOBER 19, 2006—DECIDED JULY 23, 2007
____________
Before RIPPLE, MANION, and ROVNER, Circuit Judges.
ROVNER, Circuit Judge. Through a complex series of
transactions, Scott Gordon embezzled between $117,000
and $189,000 from his former employer, Anchorbank,
beginning in June 1995 and ending when he left the
bank’s employ (voluntarily) in May 2003. Anchorbank
first uncovered parts of the scheme in September 2003,
and initiated a detailed six-month investigation into
Gordon’s activities. The bank documented its investigation
and the amount of loss in hundreds of pages of documents,
receipts, and ledgers tracing the fraudulent transactions.
As one example of fraud, the government’s witness de-
scribed a scheme in which Gordon would target a certifi-
2 No. 06-2080
cate account that had been closed legitimately and as-
sessed an early withdrawal penalty. Then, using a high
level security access, Gordon would reopen the certificate
and then re-close it without the penalty, leaving a remain-
ing balance from which he embezzled funds.
By March 30, 2004, Anchorbank had documented
approximately $134,883.44 in losses. In 2004, as part of
the investigation, two FBI agents visited Gordon’s home in
St. Paul. Gordon immediately confessed to his crime and
provided the FBI with a letter to that effect. Shortly
thereafter, Gordon’s counsel sent a letter to the FBI on
Gordon’s behalf expressing Gordon’s desire to accept
responsibility for his crime. Gordon also took out a home
equity loan to secure the funds to reimburse the bank for
its losses, and signed an agreement turning over to the
bank the $50,000 he had accumulated in his retirement
accounts. By June 9, 2004, the bank had discovered an
additional fraudulent loan in the amount of $54,000, and
accordingly, the government adjusted the loss amount to
$188,883.44. On September 15, 2005, the government
filed a one count information charging Gordon with em-
bezzling in excess of $117,000 in violation of 18 U.S.C.
§ 656. Gordon entered a guilty plea on November 8, 2005.
Gordon cooperated with investigators from the pretrial
services office who arrived at a total offense level calcula-
tion of fifteen, including a recommended two-level reduc-
tion for acceptance of responsibility. Coupled with
Gordon’s criminal history category of I, his guideline
imprisonment range was eighteen to twenty-four months.
On December 28, 2005, Gordon filed a written objection
to the presentence investigation report in which he
raised three key objections: first, that the bank had
inadvertently double counted some funds thus inflating
the loss amount; second, that the district court should
have used the 1997 sentencing guidelines; and third, that
No. 06-2080 3
he should not have received a two-level enhancement
under U.S.S.G. § 3B1.3 for those who abuse a position of
trust. Gordon filed two subsequent motions arguing in the
first that, pursuant to U.S. v. Booker, 543 U.S. 220 (2005),
he was entitled to have a sentencing jury determine the
loss amount and whether he held a position of trust, and,
in the second, requesting that the court hold a hearing to
determine the correct amount of loss.
In an addendum dated January 5, 2006, pretrial services
stood by its original conclusions. A few days later, Gordon
moved for a continuance and asked the court to issue a
subpoena requiring Anchorbank to turn over more docu-
ments.
On March 17, 2006, pretrial services issued a second
addendum lowering the loss figure from $188,883.44 to
$168,735.85 based on Gordon’s report of double counting,
with which Anchorbank agreed. Despite these changes,
Gordon filed an amended sentencing statement renewing
the same objections he had made before, including addi-
tional arguments relating to the loss amount.
Gordon appeared for his sentencing hearing on March
28, 2006, and reiterated his objections to the loss calcula-
tion of $168,735, noting that he had found what he re-
ferred to as minor discrepancies amounting to between
$5,000 and $6,000. In response, the government, after
consulting with Anchorbank’s representative, agreed to
forgo $6000 of restitution in an effort to resolve the loss
issue and proceed with sentencing without a hearing on
the loss amount. Gordon conferred with his lawyer and
rejected the government’s offer, claiming that he was “just
very concerned that because of the amounts here and the
shifting sands, that even if they did go through this
whole accounting, that it’s going to change again.” (Tr.
3/28/06 at11). The district court then rescheduled the
sentencing hearing for April 5, 2006.
4 No. 06-2080
At that hearing, Anchorbank’s representative described
the investigation and introduced the hundreds of pages
of documents it had accumulated detailing the embezzle-
ment scheme. Gordon testified that he wished to “take full
responsibility for what I’ve done” but that he was con-
cerned about the amounts and making certain that he was
“responsible for the correct amount,” and “sentenced
appropriately according to the correct amount.” (Tr.
3/28/06 at 37). Gordon also testified that he had reviewed
the Anchorbank documents daily for a year and half and
had found several errors. Specifically, he documented one
error amounting to $2,552.73, another amounting to
$272.80, and a third amounting to $2173.12. (Tr. 4/5/06 at
42-44). He also testified that he found discrepancies
between the debits and credits listed in the Anchorbank
documentation, and between the numbers of “cases” of
theft reported in the government’s recap and those Gordon
found by going through the box of documents. (Id. at 39-
45). In closing, Gordon’s counsel argued that the govern-
ment had not met its burden of proving by a preponder-
ance of the evidence that Anchorbank had lost anything
more than the $117,000 to which Gordon pled.
At the close of evidence, the district court denied
Gordon’s request for a sentencing jury, and concluded that
the government had proved, by a preponderance of the
evidence, that the relevant conduct resulted in an actual
loss of $168,735.85. After expressing concern about
Gordon’s challenges to minor discrepancies in the account-
ing, the district court denied Gordon a reduction in offense
level for acceptance of responsibility, and sentenced him to
twenty-seven months’ imprisonment.1 Gordon appeals
1
The district court also determined that Gordon abused a
position of trust and that the 2002 Sentencing Guidelines apply,
(continued...)
No. 06-2080 5
first, the district court’s refusal to empanel a jury to
determine the amount of loss and whether he held a
position of trust, and second, the district court’s decision
not to reduce Gordon’s sentencing range for acceptance of
responsibility.
I.
Gordon believes that pursuant to the Supreme Court’s
decision in United States v. Booker, 543 U.S. 220 (2005), he
is entitled to have a sentencing jury determine first, the
correct amount of loss, and second, whether Gordon held
a position of trust for which he could receive an additional
enhancement under U.S.S.G. § 3B1.3 (2002).2 Gordon is
not the first, nor will he be the last to argue unsuccessfully
that Booker demands that any fact that enhances a
sentence must be proven to a jury beyond a reasonable
doubt. The guidelines, however, are advisory and not
mandatory and therefore the presence or absence of a
particular fact will determine only where within the
guidelines a sentence falls, but will not necessarily deter-
mine the actual sentence. United States v. Dean, 414 F.3d
725, 730 (2005). If the factual determinations require a
particular sentence, or result in a sentence exceeding the
statutory maximum, then a jury must find those facts
beyond a reasonable doubt. United States v. Bryant, 420
F.3d 652, 656 (7th Cir. 2005); Dean, 414 F.3d at 730.
Sentencing factors that do not increase a sentence beyond
the statutory maximum need not be proven to a jury
1
(...continued)
although Gordon does not challenge either of these holdings on
appeal.
2
All references to the U.S. Sentencing Guidelines Manual are to
the 2002 edition used at sentencing.
6 No. 06-2080
beyond a reasonable doubt—a proposition we have re-
peated numerous times explicitly and implicitly since the
decision in Booker. See, e.g., United States v. James, No.
05-3070, 2007 WL 1583994 at *9 (7th Cir. June 4, 2007);
U.S. v. Swanson, 483 F.3d 509, 514-15 (7th Cir. 2007);
U.S. v. McCaffrey, 437 F.3d 684, 689 (7th Cir. 2006); U.S.
v. Owens, 441 F.3d 486, 490 (7th Cir. 2006); U.S. v.
Robinson, 435 F.3d 699, 701 (7th Cir. 2006); United States
v. White, 472 F.3d 458, 464 (7th Cir. 2006); Bryant, 420
F.3d at 656; Dean, 414 F.3d at 730; U.S. v. LaShay, 417
F.3d 715, 719 (7th Cir. 2005). Gordon was not entitled to
have the amount of loss or his role in a position of trust
proven to a jury beyond a reasonable doubt.
Before the district court, Gordon objected not only to the
choice of fact-finder for the loss calculation, but also to the
amount of loss the government presented. Gordon never
offered a concrete counter-proposal, arguing instead that
the burden was on the government to prove the amount of
loss, and objecting in a general fashion to the fact that the
government’s loss calculations had changed repeatedly. See
(Tr. 4/5/06 at 37) (“There’s been so much change. And in
going through all the documentation that I’ve been pre-
sented with, a number if things did not make sense to me,
and so my concern grew. And I’m just concerned that [sic]
the correct amount I’m held responsible for.”). See also
(Tr. 3/28/06 at 11) (“[h]e’s just very concerned that because
of the amounts here and the shifting sands, that even if
they did go through this whole accounting, that it’s going
to change again.”). The court, however, expressed “grave
doubt” about whether Gordon had accepted responsibility
in light of the “nitpicking over Anchor’s inability to find
every penny that he manipulated.” (Tr. 4/5/06 at 61-63).
Consequently, the district court declined to give Gordon
any reduction for acceptance of responsibility. (Tr.
4/5/06 at 75).
No. 06-2080 7
This court reviews the sentencing court’s acceptance of
responsibility determination for clear error. United States
v. Davis, 442 F.3d 1003, 1009 (7th Cir. 2006). In doing so,
we give great deference to the district court’s assessment
of whether a defendant has accepted responsibility. United
States v. Hicks, 368 F.3d 801, 808 (7th Cir. 2004). A
district court judge, face to face with a defendant, can
listen to his voice, watch his actions, and better assess
credibility and genuineness. See United States v. Williams,
202 F.3d 959, 961-62 (7th Cir. 2000). It was this type of
assessment that led Judge Crabb to determine that
Gordon had not accepted responsibility, noting, “I heard
him on the stand, and that’s what worries me. I heard
somebody who doesn’t want to pay out a penny. He really
doesn’t want to.” (Tr. 4/5/06 at 64).
A defendant who enters a guilty plea prior to trial is not
entitled to an adjustment for acceptance as a matter of
right. U.S.S.G. § 3E1.1 cmt. n.3. The burden rests on the
defendant to demonstrate entitlement to the reduction.
United States v. Akindele, 84 F.3d 948, 956 (7th Cir. 1996).
A defendant who falsely denies, or frivolously contests,
relevant conduct in the face of convincing evidence to the
contrary does not merit a reduction in sentence for accep-
tance of responsibility. U.S. v. Romero, 469 F.3d 1139,
1149 (7th Cir. 2006); U.S. v. Zehm, 217 F.3d 506, 515-16
(7th Cir. 2000); U.S.S.G. § 3E1.1, cmt. n.1(a). Although
a sentencing court cannot condition a defendant’s reduc-
tion for acceptance of responsibility on his admission of
details related to crimes other than the offense of convic-
tion, a sentencing court can require that the defendant
provide a “candid and full unraveling” of the methods used
by the defendant to commit his crime. U.S. v. Larkin, 171
F.3d 556, 558 (7th Cir. 1999). In this case, the district
court correctly determined that Gordon had frivolously
contested the amount of loss and had not been completely
candid with the court.
8 No. 06-2080
The government presented more than sufficient and
convincing evidence of its loss calculation in the form of
hundreds of pages of documents tracing Gordon’s many
and complex thefts. It took the victim bank six months of
continuous work to compile the research of the crime. A
court need only make a reasonable estimate of the loss, not
one rendered with scientific precision. United States v.
Swanson, 483 F.3d 509, 513 (7th Cir. 2007); U.S.S.G.
§ 2B1.1 cmt. n.2(C). The district court correctly pro-
nounced this theme noting that, “[a]ll the government has
to prove is a reliable, reasonable estimate of what was
taken; and this accounting has gone far beyond anything
that I’ve ever seen before.” (Tr. 4/5/60 at 66). The district
court judge is in the best position to assess the evidence
and estimate the loss based on that evidence and thus
this court must defer to the district court’s determination
of loss—and of course, its determination that the govern-
ment has met its burden of providing a reasonable esti-
mate of loss. U.S.S.G. § 2B1.1 app. n.2(C).
Gordon’s non-specific objections to the loss amount in
the face of overwhelming evidence can be nothing other
than frivolous. Although the burden is on the govern-
ment to determine the amount of loss, once the govern-
ment has met its burden of proving loss, the defendant’s
wholly unsubstantiated statements are not enough to
counter or even question the court’s acceptance of the
government’s proof of loss. United States v. Swanson, 394
F.3d 520, 527 (7th Cir. 2005). Despite the government’s
overwhelming display of evidence of loss, other than the
evidence of double-counting that the government subse-
quently corrected, Gordon’s sole complaint is a generalized
concern that the government may not have been right.
(Tr. 4/5/06 at 37). That concern stems from the fluctua-
tions that occurred as the bank studied the records and
zeroed in on the amount of loss. Gordon’s counsel’s descrip-
tion of the loss amount as a “moving target” (Tr. 4/5/06 at
No. 06-2080 9
61) or a “sequence here of revision after revision,” (id. at
57), however, far overstates the amount of change. The
bank first estimated $134,883.44 in loss.3 Three months
later, after discovering yet one more fraudulent loan, the
government raised that number to $188,883.44. The
government altered its loss amount a second time—in
Gordon’s favor—after accepting his allegation of a few
instances of double counting. Two revisions, in the course
of investigating five years of fraudulent activity involving
approximately eighty-nine cases of fraud, does not consti-
3
The information in this case charged Gordon with embezzling
in excess of $117,000, but neither the government nor the victim
bank ever asserted a loss amount of exactly or approximately
$117,000. The bank’s security officer testified as follows:
Q: Now, the first number that you provided to the govern-
ment was $117,000; is that right?
A: I’ve heard that number raised, but I don’t have anything
that shows that number.
At oral argument, the U.S. Attorney explained that he had a
conversation with counsel in which he noted that he could not
use the language “approximately $117,000” as opposed to “in
excess of $117,000,” in the information because the bank had
informed the U.S. Attorney’s office that the number was higher
than $117,000. (oral argument at 13min:25sec-14min:12sec).
According to the government, the $117,000 was the lowest
number to which the parties could agree at the time, but both the
government and the defendant’s counsel understood that the
bank was asserting a greater loss. Id. The U.S. Attorney stated
at oral argument that this conversation was memorialized in a
letter to the court below. Id. That letter could not be located in
the record, but in any case, the language of the information and
the bank security officer’s testimony both reveal that, from the
get-go, the loss amount was in excess of $117,000 and not
approximately $117,000. Consequently, the loss amount was
revised only two times (from $134,883 to $188,883 and then from
$188,883 to $168,735).
10 No. 06-2080
tute a “moving target.” Furthermore, Gordon’s gut feeling
that the government may not have gotten it right is far
afield from the type of substantiated evidence that a
defendant must present to counter the government’s
explicit proof of loss. See United States v. Swanson, 394
F.3d 520, 527 (7th Cir. 2005); United States v. Sensmeir,
361 F.3d 982, 989 (7th Cir. 2004); United States v. New-
man, 144 F.3d 531, 543 (7th Cir. 1998). A defendant must
do more than simply deny the findings presented in a pre-
sentence investigation report; he must present evidence.
U.S. v. Lister, 432 F.3d 754, 760 (7th Cir. 2005).
As the district court pointed out, “Mr. Gordon can make
his embezzlement as complex as possible. That doesn’t
shift the burden to the government to do a perfect account-
ing of everything that Mr. Gordon embezzled . . . . when
you create the mess, you can’t blame the person left to
clean it up for not doing it as perfectly as you would have
wanted that person to do.” (Tr. 4/5/06 at 62, 74). In fact,
Gordon himself stated that he reviewed the documents
daily for a year-and-half. If neither the victim bank, after
six months of review, nor the embezzler himself, after
a year-and-a-half review, were able to decipher the precise
amount, then further precision is unlikely, and the gov-
ernment has presented as close to a perfect accounting
as is possible in this case.
Of course a court cannot deny a reduction for acceptance
of responsibility when a defendant makes a good faith
challenge to a calculation of loss or drug quantity or the
like. United States v. Eschman, 227 F.3d 886, 891 (7th Cir.
2000). In Eschman, the defendant objected to the district
court’s method of calculating drug quantity. The appellate
court noted that Eschman “had good reason” to challenge
the calculation as the district court had erred in relying
on faulty methodology when determining the drug quan-
tity. Id. at 890-91. Ample evidence supports the district
No. 06-2080 11
court’s determination that Gordon’s objections, unlike
Eschman’s, were not in good faith. A defendant acting
in good faith would have identified any errors, provided a
full and candid unraveling to the best of his ability, and
then accepted the loss amount calculated using the
information he provided. In this case, the defendant
identified several instances of double-counting which the
bank readily corrected. He also identified between $5,000
and $6,000 worth of errors. Yet when the government
offered to reduce the loss amount by $6,000 (without even
viewing Gordon’s proof of the errors) in order to avoid a
hearing on the amount of loss, Gordon dug in his heels and
insisted on a hearing based on a generalized “concern[ ]
that because of the amounts here and the shifting sands.”
(Tr. 3/28/06 at 11). The district court was well within its
right to determine that this was not the action of a defen-
dant ready to accept responsibility. We cannot ignore,
furthermore, the fact that the defendant is quibbling
about an amount that would place him just below the
guidelines cut-off for crimes involving more than $120,000.
See U.S.S.G. § 2B1.1(b).
At oral argument Gordon asserted that the Western
District of Wisconsin, as a matter of course, would deny
acceptance of responsibility to any defendant who chal-
lenged a loss amount. Were that assertion correct, we
would be troubled, of course, that a court might have a per
se rule of denying acceptance of responsibility any time a
defendant challenges a loss amount. In this case, however,
there is ample evidence that Gordon frivolously contested
the amount. A court that denies acceptance of responsibil-
ity to a defendant who frivolously contests relevant
conduct is following both the Guidelines and the clear
authority from this circuit. U.S.S.G. § 3E1.1, cmt. n.1(a).
Lister, 432 F.3d at 759-60; Romero, 469 F.3d at 1149; U.S.
v. Leahy, 464 F.3d 773, 791-92 (7th Cir. 2006); U.S. v.
Sharp, 436 F.3d 730, 735 (7th Cir. 2006); U.S. v.
12 No. 06-2080
Berthiaume, 233 F.3d 1000, 1004 (7th Cir. 2000); Zehm,
217 F.3d at 516. The district court did not err by finding
that Gordon did not qualify for a reduced sentence for
acceptance of responsibility.
The decision of the district court is AFFIRMED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—7-23-07