United States v. Steven Salutric , 775 F.3d 948 ( 2015 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 13-3308
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
STEVEN SALUTRIC,
Defendant-Appellant.
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 11 CR 916— John W. Darrah, Judge.
ARGUED NOVEMBER 5, 2014 — DECIDED JANUARY 8, 2015
Before BAUER, ROVNER, and TINDER, Circuit Judges.
ROVNER, Circuit Judge. Steven Salutric pleaded guilty to
committing wire fraud in violation of 18 U.S.C. § 1343 and was
ordered to serve a below-Guidelines sentence of 96 months. In
this appeal, Salutric contends that the district court committed
procedural error at sentencing when it took into consideration
two victim impact statements submitted by an individual and
organization who were not victims of the charged offense. We
2 No. 13-3308
conclude that the district court did not plainly err in consider-
ing these statements and therefore affirm the sentence.
I.
Salutric was an investment adviser whose firm, Results One
Financial, LLC (“Results One”), had more than 1,000 clients
and managed approximately $160 million in assets. Salutric
himself had approximately 100 clients, most of them individu-
als and small businesses. Charles Schwab & Co. (“Schwab”)
served as custodian of the client assets managed by Results
One.
From approximately December 2002 through January 2010,
Salutric defrauded a number of his clients by covertly diverting
assets from their accounts at Schwab and placing them in
unapproved, high-risk investments. These included restau-
rants, car dealerships, real estate developments, and an
entertainment investment company. Salutric had an interest in
some of these investments; others were enterprises in which his
personal associates had a stake. Salutric’s clients were wholly
unaware that their funds were being invested in these ven-
tures; they believed that their money was placed in low-risk
mutual funds and bonds.
Salutric represented via falsified paperwork—including
forged signatures—that he had his clients’ permission to make
the withdrawals from the accounts at Schwab. In some
instances, he transferred funds among client accounts at
Schwab in order to conceal the diversion of assets; he also used
a corporate bank account to provide cover for some of the
transfers.
No. 13-3308 3
Not surprisingly, the diversion of assets resulted in sub-
stantial losses to the clients involved, among them six individu-
als and retirement plans covering some 72 employees em-
ployed by three small businesses. The losses to these victims
totaled $3,898,818.
After the scheme came to light, Salutric pleaded guilty to a
one-count information charging him with committing wire
fraud. Prior to sentencing, the probation officer received three
victim impact statements regarding Salutric’s misdeeds. One
of the statements was written by the daughter of someone who
was a named victim of the scheme to which Salutric had
pleaded guilty. The other two—one written by Joyce Vassil and
the other by a past president of the Carol Stream, Illinois
Rotary Club which had invested funds with Salutric—were not
written by or submitted on behalf of named victims of the
charged offense. Both statements described wrongdoing by
Salutric similar to that suffered by the victims of the charged
wire fraud offense. Vassil’s statement did not fully describe
Salutric’s alleged wrongdoing. The statement indicated that
Salutric had served as a bookkeeper and financial advisor to
herself and her restaurateur husband for eighteen years; that
they (apparently) had opened a second restaurant in reliance
on Salutric’s promise of financial support from a fictitious
investment group; that Salutric had further deceived and
harmed them through “bogus paperwork, forged documents,
and manipulated bank accounts,” R. 18 at 5; and that Salutric’s
misdeeds had forced them to close the second restaurant and
resort to a declaration of bankruptcy. The Rotary Club state-
ment averred that Salutric, while serving as treasurer of the
club in 2009, had stolen $20,000 from club coffers, funds that
4 No. 13-3308
were meant for scholarships and other charitable endeavors.
R. 19. The probation officer circulated each of the statements to
the parties in advance of sentencing by way of supplements to
the presentence report (“PSR”). The body of the PSR made no
mention of the Vassil or Rotary Club statements.
At the outset of the sentencing hearing, the district judge
inquired of the parties whether they had any objection to the
PSR. The government offered a correction to the loss amount
and the defense clarified one point regarding the status of a
pending civil suit against Salutric. The court proceeded to
adopt the PSR, including its Guidelines calculations, which
produced an advisory sentencing range of 151 to 188 months
in prison. The court also noted the victim impact statements
which had been distributed by way of supplements to the PSR
(including the Vassil and Rotary Club statements) and indi-
cated it had read and taken them into consideration. Neither
party raised any objection with respect to these statements.
Vassil was present at the sentencing hearing, and her
written submission indicated that she wished to read her
statement to the court. When the court inquired of the parties
whether they had an objection to Vassil speaking, defense
counsel did object, pointing out that because she was not a
victim of the charged offense, she did not have a right of
allocution. See Fed. R. Crim. P. 32(i)(4)(B). The prosecutor
concurred, noting that the conduct described in Vassil’s
letter/statement was “beyond the scope of this [information].”
R. 48 at 6. In view of the objection, the court informed Vassil
that she would not be permitted to address the court, but the
court assured her that it had read her statement and would
No. 13-3308 5
consider it in sentencing Salutric. Neither party objected to the
court’s declaration that it would consider Vassil’s statement.
Before allowing counsel to argue and Salutric to allocute,
the court proceeded to summarize in some detail the parties’
sentencing memoranda along with the other materials before
it. The court again acknowledged the statements from Vassil
and the Rotary Club, although it did not refer to the substance
of either statement. By contrast, the court discussed in signifi-
cantly greater detail many of the forty-eight letters which had
been submitted on behalf of Salutric by family members,
friends, and community figures detailing his long history of
community service and otherwise praising his character.
The parties proceeded to make their respective cases to the
court regarding a sentence. The defense argued for a below-
Guidelines sentence of 44 months, whereas the government
urged a sentence at the low end of the Guidelines range.
On evaluation of the section 3553(a) factors, the court
concluded that a substantial sentence was warranted. The court
acknowledged that Salutric had an “exemplary” record of
community service, R. 48 at 41, that Salutric was genuinely
remorseful and highly unlikely to commit another crime, that
he had cooperated with the government, and that he and his
family had already suffered significant hardship stemming
from the disclosure of his offense. Moreover, the advisory
Guidelines range, in the court’s view, somewhat overstated the
appropriate range of punishment for Salutric’s criminal
offense. On the other side of the ledger, the court noted that
Salutric’s offense had victimized both small businesses and
individuals, a number of whom lost their life savings. The
6 No. 13-3308
court was also convinced that a significant punishment was
warranted, not to deter Salutric specifically, but rather to deter
others who might otherwise be tempted to engage in a similar
offense that offered a potentially large payoff for the offender
with a low risk of detection. The court ordered Salutric to serve
a prison term of 96 months, a sentence roughly thirty percent
below the low end of the Guidelines range.
II.
Salutric contends that it was erroneous in two respects for
the court to consider the statements from Vassil and Rotary
Club. Because neither was a victim of the charged offense, he
asserts that the court was categorically prohibited from taking
their statements into account in arriving at an appropriate
sentence. Secondarily, he contends that he was denied the
opportunity to respond to the two statements and to demon-
strate that they were not relevant to the court’s sentencing
decision. In particular, he asserts that he was prevented from
showing that he did not commit the misdeeds with which he
was charged in Vassil’s statement.
Because both arguments are assertions of procedural error,
they present questions of law as to which our review would
ordinarily be de novo. E.g., United States v. Anaya-Aguirre,
704 F.3d 514, 516 (7th Cir. 2013). However, Salutric did not
raise these points below and therefore forfeited them.1 A
1
The government contends that Salutric did not merely forfeit, but waived,
these arguments. There is, perhaps, a case to be made for waiver. By virtue
of the probation officer’s distribution of the victim impact statements to the
parties, Salutric and his counsel knew that the two statements had been
(continued...)
No. 13-3308 7
forfeited argument will merit reversal only if the district court
committed plain error. Fed. R. Crim. P. 52(b); e.g., United States
v. Adigun, 703 F.3d 1014, 1021 (7th Cir. 2012). An error rises to
that level only if it amounts to “a clear error that affects a
substantial right,” and one that also implicates “the fairness,
integrity, or public reputation of judicial proceedings.” United
States v. Allen, 529 F.3d 390, 395 (7th Cir. 2008) (internal
quotation marks and citation omitted); see United States v.
Olano, 507 U.S. 725, 732-37, 113 S. Ct. 1700, 1777-79 (1993).
It was not plain error for the court to take into consider-
ation statements from an individual or group that was not a
named victim of the charged offense. In arriving at an appro-
priate sentence, a sentencing judge necessarily must consider
not only the offense of conviction but the defendant’s broader
criminal record and history. See § 3553(a)(1) & (2); United
1
(...continued)
submitted to the court. The defense had multiple opportunities, both before
and during sentencing, to make an objection, whether to the court
considering the statements at all or to an inadequate opportunity to
respond to the substance of the statements; yet no such objection was
voiced. More to the point, defense counsel did specifically object to the
prospect of Vassil addressing the court at sentencing but not to the court’s
declaration that it would consider her written statement along with that of
the Rotary Club. The context might therefore suggest that Salutric’s counsel
made a considered decision to object only to allocution by Vassil but not to
the court’s consideration of the two written statements; and that scenario
could be viewed as being consistent with a waiver rather than a forfeiture
of any objection to the written statements. See generally United States v.
Jaimes-Jaimes, 406 F.3d 845, 848 (7th Cir. 2005). But the waiver argument has
been perfunctorily presented, and in order to give Salutric the benefit of the
doubt, we will treat the issues as forfeited rather than waived.
8 No. 13-3308
States v. Hankton, 432 F.3d 779, 789-90 (7th Cir. 2005) (quoting
United States v. Hardamon, 188 F.3d 843, 849-50 (7th Cir. 1999)).
Uncharged criminal acts (and the injuries inflicted upon the
victims of those acts) have a bearing on whether the offense of
conviction was an aberration or part of a larger pattern of
criminal behavior, the likelihood of the defendant re-offending,
and the need for specific deterrence. See, e.g., United States v.
Laraneta, 700 F.3d 983, 987 (7th Cir. 2012). The Criminal Code
makes clear that “[n]o limitation shall be placed on the infor-
mation concerning the background, character, and conduct of
a person convicted of an offense, which a court of the United
States may receive and consider for the purpose of imposing an
appropriate sentence,” 18 U.S.C. § 3661, and the Sentencing
Guidelines likewise provide that the court has broad authority
to consider any information about the defendant unless
specifically proscribed by law, see U.S.S.G. § 1B1.4. See also
United States v. Tucker, 404 U.S. 443, 446-47, 92 S. Ct. 589, 591
(1972). Consequently, the district court was not precluded from
taking into consideration statements from victims of criminal
acts other than those with which the defendant has been
charged and convicted.
Of course, as the parties agree, due process requires that the
defendant be sentenced on the basis of reliable information,
e.g., United States v. Corona-Gonzalez, 628 F.3d 336, 342-43
(7th Cir. 2010), which in turn entitles him to a reasonable
opportunity to rebut any presentence information that he
believes to be inaccurate, e.g., United States v. Johnson, 997 F.2d
248, 254 (7th Cir. 1993). Salutric, as we have noted, contends
that he was deprived of this opportunity, and in particular of
No. 13-3308 9
the chance to demonstrate that he did not commit the misdeeds
of which Vassil’s letter accused him.
But the record belies the notion that there was any due
process violation here. The defense was placed on notice of
Vassil’s statement far in advance of sentencing: the record
indicates that the probation officer supplemented the Presen-
tence Report with a copy of Vassil’s statement more than ten
months before the sentencing hearing. R. 18. Moreover, it was
clear at the outset of the sentencing hearing that the district
court intended to consider Vassil’s statement. Yet, as we have
noted, the sole objection raised by the defense was to Vassil
addressing the court in person; nothing was said about the
content of her written statement, nor was there any request to
rebut the averments of the statement or any contention that the
defense needed additional time in order to make such a
rebuttal. If, as Salutric now argues, Vassil’s statement was
inaccurate, it was Salutric’s obligation to speak up. Cf. United
States v. Williams-Ogletree, 752 F.3d 658, 664 (7th Cir. 2014)
(defendant has obligation to make and support objection to
any information in presentence report he believes to be
inaccurate).
For the sake of completeness, we note that it is highly
unlikely that consideration of Vassil’s letter altered the district
court’s sentencing decision to Salutric’s detriment. Vassil’s
statement alludes in general terms to criminal misconduct
(including forged documents, manipulated bank accounts, and
a fictitious investment group) that is similar to the offense with
which Salutric was charged in this case—misconduct that
apparently resulted in the loss of the Vassils’ savings (although
the amount is unspecified) and one of their two restaurants. At
10 No. 13-3308
worst, the court would have inferred from Vassil’s statement
that Salutric had harmed two people in addition to those
named as victims of the charged offense. But we have no
reason to assume that the experienced and able judge would
have somehow been swayed by Vassil’s statement, when the
record before the court was much more developed as to what
Salutric had done to the victims of the charged offense. Indeed,
although the court indicated that it had read and considered
both the Vassil and the Rotary Club statements, it did not
dwell on the contents of either at sentencing, in contrast to the
many letters submitted by Salutric’s family, friends, and
supporters, which it summarized in some detail. Moreover, in
focusing on the magnitude of Salutric’s criminal conduct, the
court mentioned only the charged offense. Finally, the court, as
we have noted, observed both that the Guidelines slightly
overstated the appropriate punishment for Salutric’s offense
and that there was no need to specifically deter Salutric from
committing another offense, observations which suggest that
the additional wrongdoing charged in the Rotary Club and
Vassil statements did not persuade the court that Salutric had
a record of misdeeds that was unaccounted for in the charged
offense.
III.
For the reasons discussed, we find no plain error in the
district court’s decision to accept and consider the two state-
ments submitted by an individual and organization who were
not victims of the offense to which Salutric pleaded guilty. We
therefore AFFIRM Salutric’s sentence.