United States v. Gianina Simon

In the
United States Court of Appeals
For the Seventh Circuit
Nos. 08-2378, 08-3226 & 08-3238
U NITED S TATES OF A MERICA,
Plaintiff-Appellee,
v.
A IDA S ALEM, B OGDAN G ANESCU,
and G IANINA S IMON,
Defendants-Appellants.
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 06 CR 923—John W. Darrah, Judge.
A RGUED N OVEMBER 3, 2009—D ECIDED M ARCH 9, 2010
Before E ASTERBROOK, Chief Judge, and W OOD and
T INDER, Circuit Judges.
T INDER, Circuit Judge. In these appeals we consider
the application of the relevant conduct guideline,
U.S.S.G. § 1B1.3(a)(1)(B), in a case of a jointly undertaken
criminal activity. Aida Salem pled guilty to one count of
wire fraud and was sentenced to 97 months’ imprison-
ment. Bogdan Ganescu and Gianina Simon pled guilty
2 Nos. 08-2378, 08-3226 & 08-3238
to several counts of wire fraud and two counts of receipt
of stolen funds. They were sentenced to 78 months and
52 months, respectively. The defendants appeal their
sentences, challenging the district court’s relevant
conduct findings. For the reasons that follow, we
remand the sentences for further findings concerning
the jointly undertaken criminal activity under U.S.S.G.
§ 1B1.3(a)(1)(B) and, if necessary, for further findings
regarding the amount of the loss and the number of
victims under U.S.S.G. § 2B1.1(b)(1) and (2).
I. Background
A superseding indictment charged that Aida Salem,
Bogdan Ganescu, Gianina Simon, eleven codefendants,
and others in the United States and abroad knowingly
devised and participated in a scheme to defraud. Begin-
ning in approximately November 2003 through at least
August 2006, more than 2000 victims of the scheme
were tricked into believing that they were purchasing
items listed for sale on Internet sites and wired funds to
the defendants and other co-schemers in amounts in
excess of $6 million. The victims never received the items.
As part of the scheme, individuals located outside the
United States, principally in Romania (the “foreign co-
schemers”), posed as sellers of items and lured victims
through fraudulent advertisements on Internet sites,
typically eBay. When a victim agreed to purchase an
item, he or she was instructed to send payment by
wire transfer, typically through Western Union. The
foreign co-schemers believed that victims in the United
Nos. 08-2378, 08-3226 & 08-3238 3
States would be more likely to transmit their money if
the foreign co-schemers posed as sellers in the United
States. Therefore, the foreign co-schemers developed a
network of individuals in the United States, including
all fourteen defendants and other co-schemers, who were
willing to repeatedly pick up the funds/fraud proceeds
from a Western Union agent. After retaining a portion
(typically 20% to 40%) of the fraud proceeds received,
the defendants and other co-schemers transmitted the
balance of the proceeds to Romania.
In order to reduce the risk of apprehension by law
enforcement, the co-schemers obtained and used false
identification documents when picking up the fraud
proceeds from a Western Union agent. This required
ongoing communication between the persons who man-
aged the receipt of fraud proceeds in the United
States—schemers such as Adrian Fechete, Raimondoray
Cerna, and Gabriel Constantin—and the foreign co-
schemers. The co-schemers communicated their changing
aliases to the foreign co-schemers, and the foreign
co-schemers incorporated the alias names into their
Internet communications with potential victims, usually
as the “seller,” “seller’s agent,” or “eBay agent” of the
item offered for sale. Once someone agreed to purchase
an item, he or she was instructed to send the funds
via Western Union to the alias name provided by a defen-
dant to the foreign co-schemers. The victim provided
funds via Western Union in payment for the item.
The foreign co-schemers gave the appropriate co-
schemer the information necessary to complete the
wire transfer that had been provided by the victim. Then
4 Nos. 08-2378, 08-3226 & 08-3238
the co-schemer presented himself or herself, using the
matching alias identification documents at a Western
Union, representing himself or herself as the authorized
payee for the wire transfer of funds and received the funds.
Aida Salem
Salem pled guilty pursuant to a written plea agree-
ment to one count of wire fraud, 18 U.S.C. § 1343. The
agreement described the fraud scheme and stated that
Salem learned about the scheme from codefendant
Raimondoray Cerna in approximately November 2003
and participated in the scheme from then until approxi-
mately January 2006. Salem admitted that as part of the
scheme, he and his co-schemers took and received
money from the victims with no intent of ever giving
them the items they believed they were purchasing.
He admitted that he used alias identification documents
to present himself to Western Union agents and pro-
vided them with the information relayed from the
foreign co-schemers that enabled him to receive the vic-
tims’ funds.
Salem’s plea agreement stated that “[w]hile partici-
pating in the scheme, [Salem] shared a common source of
false identification documents with a number of his co-
defendants.” The agreement provided one example from
late March through late April 2004 involving Salem and
codefendants Cerna, Gabriel Constantin, Adrian Ianc,
Muszka Ladislau, and Radu Rizescu. Then it gave
another example for various occasions in 2005 involving
Salem, Ianc, Ladislau, Simon, and Ganescu. The agree-
Nos. 08-2378, 08-3226 & 08-3238 5
ment stated that Salem also shared with his co-schemers
“information on currency exchanges . . . such as which
to avoid and which were favorable,” “used common
currency exchanges . . . to receive fraud proceeds, and
shared rides to currency exchanges when receiving vic-
tims’ wire transfers.” It gave several examples
involving Salem and Fechete, Mihai Panaitescu,
Constantin, and Ianc. It also stated that Salem and Cerna
were arrested together when officers discovered they
were in possession of counterfeit identification. The
agreement added that for several months Salem and Ianc
resided in the same apartment complex and that they
also “shared a common source of Western Union trans-
action information” and “occasionally traveled together . . .
when receiving fraud proceeds from Western Union
agents.”
Furthermore, Salem admitted in his plea agreement
that on some occasions, he and other co-schemers
provided “common false addresses and phone number[s]
when completing the Western Union . . . form[s].” The
agreement provided several examples involving Salem,
Ianc, Constantin, Cerna, Marian Alexandru, Fechete,
and Ioan Moloman. Cell phone records revealed that
during the time period that Salem participated in the
scheme, he was in frequent contact with co-schemers,
including Panaitescu, Fechete, Constantin, Moloman,
Ianc, and Cerna. Salem admitted that at Cerna’s direc-
tion, he and other co-schemers, including Panaitescu,
Moloman, Stefan Dumitru, Lucian Nanau, Alexandru,
and Mihail Hann, transmitted funds owed to the foreign
co-schemers. Salem further admitted that he personally
6 Nos. 08-2378, 08-3226 & 08-3238
received wire transfers of funds from victims of the
scheme in an amount in excess of $400,000. The
Presentence Investigation Report (“PSR”) indicated that
during the time of Salem’s participation in the
scheme, approximately 2100 victims lost more than
$5.3 million. Salem also admitted in his plea agreement
that he was aware that his codefendants such as
Fechete, Ianc, Constantin, Mihai Bledea, Moloman, Hann,
Alexandru, Panaitescu, Constantin Lucan, Dumitru, and
Nanau were also receiving wire transfers from the
scheme to defraud.
Based on this, the government’s position before sen-
tencing was that Salem was responsible for between
$2.5 million and $7 million in losses and over 250 vic-
tims—numbers that would result in Guidelines enhance-
ments under U.S.S.G. § 2B1.1(b). Salem, however, con-
tended the loss was more than $200,000 but not more
than $400,000, and that the offense involved more than
50 but less than 250 victims. In his Objections to PSR
and Sentencing Memorandum, Salem acknowledged that
“he undertook and participated in criminal activity
with and as directed by co-defendant managers Cerna
and Ianc” and argued that the government failed to
prove that he “should be held responsible for the losses
caused by the other participants beyond Cerna and Ianc.”
And at the sentencing hearing, Salem’s counsel stated
that Salem was accepting responsibility not only for
his own actions but also for “the reasonably foreseeable
actions of co-participants in the scheme, specifically
individuals such as Mr. Cerna, Mr. [Ianc], the
gentlem[e]n who recruited my client, and also managed
Nos. 08-2378, 08-3226 & 08-3238 7
and supervised him.” 1 At the sentencing hearing on
May 22, 2008, the government conceded a total loss
of greater than $1 million but less than $2.5 million.
The district court found by a preponderance of the
evidence that:
Cerna, Fechete, Ianc, Constantin, Moloman, Hann,
Alexandru, Panaitescu, Lucan, Dumitru, and
Nanau participated in the scheme,2 and it was
reasonably foreseeable to [Salem] then that be-
cause of the known conduct or reasonably foresee-
able conduct of these other persons to [him], that
over a thousand victims would suffer losses of
$1 million but less than $2.5 million.
The court found that under U.S.S.G. § 2B1.1(a)(1) Salem’s
base offense level was seven and added sixteen levels
based on the amount of the loss, U.S.S.G. § 2B1.1(b)(1)(I),
and added six levels based on the number of victims,
U.S.S.G. § 2B1.1(b)(2)(c). The resulting Guidelines range
1
The transcript reads “Young,” but we believe it should be
“Ianc,” based on the context, Salem’s sentencing memoran-
dum, and subsequent comments by Salem’s counsel at the
hearing. In addition, we note that Salem acknowledged that he
was recruited, managed, and supervised by both Cerna and
Ianc.
2
The district court did not mention Bledea’s name at this
point, but it had just mentioned him as one of the codefendants
of whom Salem was aware was receiving wire transfers in
the scheme. With the laundry list of names of co-schemers,
this oversight is understandable.
8 Nos. 08-2378, 08-3226 & 08-3238
was 97 to 121 months. The court sentenced Salem to
97 months, at the bottom of the range, and ordered him
to pay $404,091 in restitution.
Bogdan Ganescu and Gianina Simon
On September 4, 2007, Ganescu and Simon pled guilty,
without plea agreements, to several wire fraud counts,
18 U.S.C. § 1343, and two counts of receipt of stolen
funds, 18 U.S.C. § 2315. In their plea declarations, Ganescu
and Simon admitted to participating in a scheme to
defraud users of Internet auction sites such as eBay, and
to obtaining money by means of materially false and
fraudulent pretenses. They admitted that not later than
August 2004, they learned about the scheme and how it
worked from codefendant Gabriel Constantin. They also
admitted that in order to participate in the scheme, they
obtained and used a series of alias identification docu-
ments that falsely identified them as the persons to
whom the victims should send their money and that
they ultimately received the victims’ funds from
Western Union agents.
The Government’s Version of the Offense (“Govern-
ment’s Version”), which was attached to the defendants’
PSRs, indicated that photographs obtained during the
investigation of the scheme demonstrated Ganescu’s
and Simon’s close association with several codefendants,
including Constantin, Ianc, Bledea, and Rizescu. The
photos included pictures of Ganescu and Simon at
Rizescu’s staged wedding, which was part of a fraudulent
application for permanent United States residency. Also
Nos. 08-2378, 08-3226 & 08-3238 9
according to the Government’s Version, phone records
showed frequent call activity between Ganescu’s and
Simon’s cell phones and those of Constantin, Ianc, and
Bledea. The Government’s Version stated that Simon
used the same attorney that Ianc and Bledea used fol-
lowing their arrests on charges arising out of the scheme
to defraud. On appeal, Ganescu and Simon do not
dispute the accuracy of these factual assertions, but
argue about what inferences may reasonably be drawn
from them.
Ganescu admitted in his plea declaration that between
approximately October 2004 and June 2005, he received
wire transfers of fraud proceeds of approximately
$174,000 from at least 90 victims of the scheme. (The
government later learned that his participation con-
tinued into December 2006 and that he received fraud
proceeds from approximately 129 victims.) Simon
admitted in her plea declaration that between approxi-
mately September 2004 and August 2005, she received
wire transfers of fraud proceeds of approximately
$63,000 from at least 29 victims. Ganescu and Simon also
admitted that they retained a portion of the fraud
proceeds for themselves and caused the remainder—
more than $126,000—to be transmitted to the foreign co-
schemers in Romania. Each admitted an awareness that
the other was participating in the scheme and receiving
fraud proceeds from additional victims. They also ad-
mitted to sharing common sources of false identifica-
tion documents between themselves and with several
codefendants: Ianc, Salem, and an individual identified
as “SB.” Ganescu admitted to sharing common sources
with Bledea and Ladislau as well.
10 Nos. 08-2378, 08-3226 & 08-3238
According to the Government’s Version, during the
time that Ganescu and Simon participated in the scheme,
more than 2000 victims suffered losses in excess of $5.4
million. The government asserted that Ganescu received
wire transfers of fraud proceeds in amounts totaling
about $239,000 and that together Ganescu and Simon
received about $313,000 from approximately 163 victims.
The principal issue at Ganescu and Simon’s sen-
tencing hearing was whether the conduct of other
codefendants was reasonably foreseeable to Ganescu and
Simon for purposes of the loss amount and number of
victims for which they should be held accountable as
relevant conduct under U.S.S.G. § 1B1.3(a)(1)(B). The
government argued that much of the conduct of others
involved in the scheme was foreseeable to Ganescu and
Simon based on their close relationship with significant
participants in the scheme such as Ianc and Constantin.
The government asserted that a conservative estimate
of the loss foreseeable to Ganescu and Simon would be
the losses caused during the time they participated in
the scheme and traceable to Ganescu, Simon, and the co-
schemers with whom they were most closely associated,
namely Constantin, Bledea, Ianc, “Individual EM,” and
Cristian Bentan. According to the government’s spread-
sheet detailing Western Union transactions, the transac-
tions received directly by these co-schemers totaled
$1,176,967.81 and represented losses to approximately
500 victims of the scheme.
The district court identified the crux of the matter as
whether the actions of co-schemers Ianc, Constantin,
Nos. 08-2378, 08-3226 & 08-3238 11
Bledea, and EM were reasonably foreseeable to Simon
and Ganescu. The court found by a preponderance of the
evidence that the conduct of Ianc, Constantin, Bledea, and
EM was reasonably foreseeable to Ganescu. It found
that the conduct of Ganescu, Ianc, Constantin, Bledea
and EM was reasonably foreseeable to Simon. These
findings led the court to find a loss amount of $1,176,967.81
and a total number of victims in excess of 250, with a
corresponding sixteen-level increase to Ganescu’s and
Simon’s base offense level under U.S.S.G. § 2B1.1(b)(1)(I)
and a six-level increase under § 2B1.1(b)(2)(C).3
Ganescu and Simon had an identical Guidelines range
of 78 to 97 months. The district court sentenced Ganescu
to a within-Guidelines sentence of 78 months and
ordered him to pay $229,000 in restitution. After con-
sidering the § 3553(a) factors, including Simon’s overall
culpability, and finding that she had been deterred and
recidivism was not a factor in her case, the court sentenced
Simon to a below-Guidelines sentence of 52 months. The
court also ordered her to pay $62,000 in restitution.
3
The loss amount and number of victims was taken from
Government’s Exhibit 018. The exhibit attributes approxi-
mately $9800 of the total loss and four victims to the conduct
of codefendant Cristian Bentan. The district court did not
find that Bentan’s conduct was reasonably foreseeable to
either Ganescu or Simon. If the loss amount were adjusted
accordingly, a $9800 reduction in the loss and subtraction of
four victims would not affect the increase in offense levels
under § 2B1.1(b)(1)(I) (loss more than $1,000,000 but no more
than $2,500,000) and § 2B1.1(b)(2)(C) (more than 250 victims).
12 Nos. 08-2378, 08-3226 & 08-3238
II. Discussion
The defendants contend that the district court erred in
its relevant conduct findings. They argue that under
United States v. Soto-Piedra, 525 F.3d 527, 531 (7th Cir.),
cert. denied, 129 S. Ct. 261 (2008), the evidence must show
that a defendant assisted or agreed to promote a
coconspirator’s conduct for such conduct to be within
the scope of jointly undertaken activity under U.S.S.G.
§ 1B1.3(a)(1)(B). They claim that the evidence failed to
show that they assisted or agreed to promote conduct
of their co-schemers and that the enhancements based
on the amount of loss and number of victims were there-
fore unwarranted. Salem also argues that the acts of his co-
schemers were not acts in which he joined or which
he furthered. Finally, the defendants argue that the
district court erred because it neglected to make a
finding of jointly undertaken criminal activity before
addressing whether their codefendants’ conduct was
foreseeable to them.
Ganescu and Simon acknowledge that when a party
fails to raise an issue in the trial court, we generally
review for plain error. See United States v. Garrett, 528
F.3d 525, 527 (7th Cir. 2008). However, the government
asserts that in this case we review the district court’s
determinations of the amount of the loss and number
of victims for which the defendants should be held ac-
countable for clear error. It therefore has waived its right
to rely on plain error review. See United States v. Murphy,
406 F.3d 857, 860 (7th Cir. 2005) (concluding that the
government “waived waiver” by asserting the plain
Nos. 08-2378, 08-3226 & 08-3238 13
error standard applied); United States v. Cotnam, 88 F.3d
487, 498 n.12 (7th Cir. 1996) (noting that since defense
counsel failed to object at trial, the court would
normally review for plain error, but because the gov-
ernment did not argue for the plain error standard, it
waived the right to invoke that standard). Hence, we
review the district court’s relevant conduct determina-
tions for clear error. United States v. Rollins, 544 F.3d
820, 838 (7th Cir. 2008). Under this standard, we will
uphold the district court’s findings “unless, after con-
sidering all of the evidence, we are left with a definite
and firm conviction” that a mistake has been made.
Id. (quotation omitted). We review the district court’s
application of the Guidelines de novo. Garrett, 528 F.3d
at 527.
As part of its determination of a defendant’s offense
level under the Guidelines, a court determines the base
offense level and applies appropriate specific offense
characteristics. U.S.S.G. § 1B1.1(b). Specific offense charac-
teristics depend not only on the offense of conviction
but also on relevant conduct. United States v. Alldredge,
551 F.3d 645, 646 (7th Cir. 2008); U.S.S.G. § 1B1.3(a). In the
case of a jointly undertaken criminal activity, relevant
conduct is determined on the basis of “ ‘all reasonably
foreseeable acts and omissions of others in furtherance
of the jointly undertaken criminal activity.’ ” Soto-Piedra,
525 F.3d at 531 (quoting U.S.S.G. § 1B1.3(a)(1)(B)).
A criminal scheme “ ‘undertaken by the defendant in
concert with others’ ” is included within the definition of
a “jointly undertaken criminal activity.” Id. (quoting
U.S.S.G. 1B1.3(a)(1)(B)). Thus, a defendant may be held
14 Nos. 08-2378, 08-3226 & 08-3238
accountable for the conduct of others “if that conduct
was in furtherance of a jointly undertaken criminal
activity and reasonably foreseeable in connection with
that criminal activity.” United States v. Fouse, 578 F.3d
643, 653 (7th Cir. 2009).
In addressing a jointly undertaken criminal activity in
Soto-Piedra, we said that the “[a]ctions of coconspirators
that a particular defendant does not assist or agree to
promote are generally not within the scope of that defen-
dant’s jointly undertaken activity.” 525 F.3d at 533 (citing
U.S.S.G. § 1B1.3 cmt. n.2). The defendants seize upon
this language, arguing that it heightened the standard
for determining the scope of a jointly undertaken
criminal activity. We do not read Soto-Piedra in this way.
Instead, the “assist or agree to promote” language is
simply another way of stating the requirement that the
conduct of others for which a defendant is accountable
must be in furtherance of the joint criminal activity that
the defendant in question undertook. This is another
way of saying that the mere foreseeability of another’s
conduct is not sufficient to bring that conduct within
the scope of a defendant’s jointly undertaken criminal
activity. In Soto-Piedra, the defendant objected to the
conclusion that he was responsible for 14 to 15 kilograms
of crack, which affected his base offense level. The defen-
dant had not sold crack to anyone, so we said that in
order to determine his base offense level based on a
substantial amount of crack, the government had to
prove he had reached an agreement to sell powder
cocaine intending that it be converted into crack. Id. at
Nos. 08-2378, 08-3226 & 08-3238 15
531. We said that the defendant agreed to supply his
coconspirator with an unknown grade of powder
cocaine, to be provided to an unknown customer with
an unknown intention. We used the “assist or agree to
promote” language in concluding that the government
offered no evidence to suggest “that converting the
powder cocaine to crack was within the scope of [the
defendant’s] contemplated undertaking.” Id. at 533.
The authorities Soto-Piedra cited for the “assist or agree
to promote” language bolster the conclusion that the
case did not impose a heightened standard. See United
States v. Bustamante, 493 F.3d 879, 887-88 (7th Cir. 2007)
(noting § 1B1.3’s requirement that relevant conduct be
“in furtherance of the jointly undertaken criminal activ-
ity” and concluding that the evidence was insufficient
to prove that the defendant furthered the conspiracy
alleged in the indictment); United States v. Melton, 131
F.3d 1400, 1405 (10th Cir. 1997) (indicating that reason-
able foreseeability is not enough to establish liability
for coconspirators’ acts under § 1B1.3; such acts must
also be in furtherance of jointly undertaken criminal
activity); United States v. Studley, 47 F.3d 569, 576 (2d
Cir. 1995) (remanding where the record supported the
conclusion that the defendant’s agreement to participate
in the fraudulent scheme was limited to his own
fraudulent activity and he did nothing to further the
overall scheme); U.S.S.G. § 1B1.3 cmt. n.2 (illustration
(c)(1)). And this court has not understood Soto-Piedra as
altering the standard for the scope of jointly undertaken
criminal activity. See United States v. Dean, 574 F.3d 836,
844-45 (7th Cir. 2009) (quoting the “assist or agree to
16 Nos. 08-2378, 08-3226 & 08-3238
promote” language when stating the proposition that “a
defendant may be held liable only for those acts or omis-
sions that were both made in furtherance of the con-
spiracy and foreseeable to the defendant”). Therefore, Soto-
Piedra did not impose a heightened standard for deter-
mining the scope of a jointly undertaken criminal activity.
So we consider the sufficiency of the district court’s
findings in this case.
In applying U.S.S.G. § 1B1.3(a)(1)(B), the district court
must make a preliminary determination of the scope of
the criminal activity the defendant agreed to jointly
undertake. United States v. Fox, 548 F.3d 523, 531-32 (7th
Cir. 2008); United States v. Thomas, 199 F.3d 950, 953
(7th Cir. 1999); U.S.S.G. § 1B1.3 cmt. n.2 (“In order to
determine the defendant’s accountability for the conduct
of others under subsection (a)(1)(B), the court must
first determine the scope of the criminal activity the
particular defendant agreed to jointly undertake (i.e., the
scope of the specific conduct and objectives embraced
by the defendant’s agreement).”). Then the court must
make a two-part determination of whether the conduct
of others was both in furtherance of that joint criminal
activity and reasonably foreseeable to the defendant
in connection with the joint criminal activity. Fox,
548 F.3d at 532; Thomas, 199 F.3d at 953; U.S.S.G.
§ 1B1.3(a)(1)(B). “[A]n absence of findings on key
elements of the [relevant conduct] analysis” cannot be
cured by a deferential clear error standard of review. Fox,
548 F.3d at 532; see also Dean, 574 F.3d at 846 (vacating
and remanding sentence for a specific finding as to the
reasonable foreseeability to the defendant of the
quantity of drugs).
Nos. 08-2378, 08-3226 & 08-3238 17
In Fox, for example, two codefendants were convicted
of a crack cocaine conspiracy. One challenged the
drug quantity that the district court found as part of his
relevant conduct under U.S.S.G. § 1B1.3(a)(1)(B). He
argued that the court erred in focusing exclusively on
the foreseeability requirement of relevant conduct, ig-
noring its other requirements. We agreed, finding
several problems with the relevant conduct analysis. Fox,
548 F.3d at 531. First, the district court did not determine
the scope of the defendant’s jointly undertaken criminal
activity. Id. at 531-32. Second, although the district court
considered whether the codefendant’s possession of
crack cocaine was foreseeable to the defendant, it
did not consider whether that possession was foreseeable
in connection with the joint criminal activity. Id. We
therefore concluded that the district court’s relevant
conduct findings were insufficient and vacated and
remanded for resentencing. Id. at 533.
Here, the district court made findings as to the reason-
able foreseeability of the co-schemers’ acts only; it made
no finding as to the scope of the jointly undertaken crimi-
nal activity. The government argues that, given the
record and circumstances of this case, the lack of an
express finding by the district court does not warrant
setting aside the finding that Salem, Ganescu, and Simon
are accountable for the conduct of certain of their co-
schemers that occurred during the time period in which
Salem, Ganescu, and Simon participated in the scheme.
The government asserts that it is clear from the record
that the district court considered the Government’s
Version and the defendants’ PSRs, which contained great
18 Nos. 08-2378, 08-3226 & 08-3238
detail about the nature of the criminal activity that
Salem, Ganescu, and Simon agreed to jointly undertake.
This case is quite different from the cases cited by the
government to support its argument. See United States
v. Wilson, 502 F.3d 718, 722-23 (7th Cir. 2007); United States
v. Acosta, 85 F.3d 275, 279-80 (7th Cir. 1996). In Acosta,
the defendant, who had been convicted of possession
of heroin with the intent to distribute, challenged the
district court’s determination that a series of cocaine
sales he had made to another individual were relevant
conduct. 85 F.3d at 277, 279. The district court did not
find that those cocaine sales were relevant conduct;
however, before sentencing the defendant, the court
expressly adopted the factual findings in the PSR. Facts
recited in the PSR provided the necessary connection
between the cocaine sales and the defendant’s offense
of conviction to treat the sales as relevant conduct under
§ 1B1.3(a)(2). Id. at 279-80. We stated that the court
should “explicitly state and support” its finding that
uncharged conduct had the necessary relationship to
the offense of conviction to support a relevant con-
duct finding. Id. at 280 (quotation omitted). However,
we added:
[W]here it is clear from the record that the district
court considered and adopted the facts recited in the
presentence report, as well as the government’s rea-
soning concerning the significance of those facts in
establishing the defendant’s responsibility for un-
charged conduct, we have upheld the court’s decision
to treat the uncharged activities as relevant conduct
despite the lack of an express finding . . . .
Nos. 08-2378, 08-3226 & 08-3238 19
Id. (citations omitted). Because it was clear that the court
considered the cocaine sales to be relevant conduct, we
upheld its implicit relevant conduct determination
despite the absence of an express finding that the sales
were part of the same course of conduct as the heroin
offense. Id.
Similarly, in Wilson the district court failed to make
an explicit finding that other drug transactions in which
the defendant had participated were part of the same
course of conduct or common scheme as the offense of
conviction. Yet we understood from the court’s specific
findings at sentencing that it clearly believed that the
defendant’s drug trafficking was a common scheme
and part of the same course of conduct as his offense of
conviction. Wilson, 502 F.3d at 723. We therefore held
that the court did not clearly err in finding that the defen-
dant’s prior drug transactions constituted relevant con-
duct. Id. at 724.4
Here, the district court did not adopt the findings in
the PSRs at the sentencings. Thus, the judge’s oral ex-
planation of the reasons for the sentences imposed falls
short of the requirement that “[t]he court, at the time of
4
Acosta and Wilson are also distinguishable because the
courts in those cases considered whether the defendant’s own
conduct was relevant conduct under U.S.S.G. § 1B1.3(a)(2).
Here, the district court considered whether the defendants
should be held accountable not only for their own acts but
also for the acts of others under § 1B1.3(a)(1)(B). Different
standards apply to these subsections of the Guideline.
20 Nos. 08-2378, 08-3226 & 08-3238
sentencing, shall state in open court the reasons for its
imposition of the particular sentence . . . .” 18 U.S.C.
§ 3553(c); see also United States v. Harris, 567 F.3d 846, 854-
55 (7th Cir.) (suggesting court’s explanation was insuf-
ficient where court merely said it considered the infor-
mation in the presentence report, including the
Guideline computations and the sentencing factors, but
failed to state the reasons for its sentence), cert. denied, 130
S. Ct. 1032 (2009); United States v. Molina, 356 F.3d 269, 277
(2d Cir. 2004) (holding that district court did not satisfy
§ 3553(c)’s “open court” requirement with a statement
of reasons in a later written judgment where the court
made no specific factual findings and did not expressly
adopt the PSR at the sentencing hearing).
The district court did adopt the factual findings in the
defendants’ PSRs in its “Statement of Reasons” attachment
to the Judgment in a Criminal Case, AO Form 245B, see
http://w ww .uscourts.gov/form s/uscforms.cfm ?
StartRow=61 (last visited Feb. 19, 2010), but this was
inadequate for several reasons. In some circumstances,
the adoption of a PSR’s findings could constitute
sufficient factual findings. For example, the adoption of
such findings at a sentencing hearing can be sufficient.
See, e.g., Acosta, 85 F.3d at 279-80 (upholding district
court’s relevant conduct finding where at sentencing the
court adopted the facts recited in the presentence report
as well as the government’s argument about the signifi-
cance of those facts). And a district court is authorized
and even encouraged to file a later written memorandum
explaining its reasoning for the sentence imposed, pro-
vided the memorandum does not change the ultimate
Nos. 08-2378, 08-3226 & 08-3238 21
judgment. United States v. Burton, 543 F.3d 950, 953 (7th Cir.
2008); United States v. Duarte, 950 F.2d 1255, 1263 (7th Cir.
1991).
But in this case, the court’s adoption of the PSRs’ find-
ings was only a pro forma checking of a box on a pre-
printed form. And the judge signed the “Statements of
Reasons” a few days after he imposed the sentences.
Although the adoption of a PSR’s findings in this
manner may suffice under a plain error standard of
review, it is inadequate when reviewed for clear error.
Compare United States v. Panaigua-Verdugo, 537 F.3d 722,
726-27 (7th Cir. 2008) (holding court did not plainly err
in finding that other drug transactions were relevant
conduct in absence of an explicit finding at sentencing
where court in its written statement of reasons adopted
the PSR and noted that the other acts were part of the
same conduct as the convicted offense), and United States
v. Arroyo, 406 F.3d 881, 889-90 (7th Cir. 2005) (finding
no plain error in court’s failure to make specific findings
connecting uncharged drug transactions with offense
of conviction where record could support the conclusion
that offenses were related), with United States v. Ortiz,
431 F.3d 1035, 1042-43 (7th Cir. 2005) (holding court
clearly erred when it failed to make specific findings
on whether additional cocaine involved relevant con-
duct), and United States v. Bacallao, 149 F.3d 717, 720-21
(7th Cir. 1998) (holding court clearly erred in not
making independent relevant conduct finding and
instead relying entirely on the presentence report which
failed to establish necessary relationship between offense
of conviction and other drug transactions). The clear
22 Nos. 08-2378, 08-3226 & 08-3238
error standard of review demands more of sentencing
courts in terms of factual findings. See Wilson, 502 F.3d
at 723 (relevant conduct finding not clearly erroneous
where court found at sentencing that defendant had
been regularly dealing cocaine and was part of an ongoing
circle of dealers).
Moreover, even if the court had adopted the findings
in the PSRs in this case at the time of sentencing, the
court’s factual findings would still be deficient on a key
element of the relevant conduct analysis: the scope of the
jointly undertaken criminal activity. If the court relies
entirely on the PSR to make a finding as to the scope of
the jointly undertaken criminal activity, the PSR must
define the scope of that activity. Cf. United States v. Single-
ton, 548 F.3d 589, 590-93 (7th Cir. 2008) (upholding
implicit relevant conduct finding under clear error
review where court adopted the PSR’s findings that
detailed the defendant’s regular history of drug sales
over a six-year span); Bacallao, 149 F.3d at 720-21 (finding
clear error where court failed to make independent rele-
vant conduct finding and relied entirely on presentence
report that contained insufficient factual findings). Al-
though the PSRs in this case contain a wealth of infor-
mation, their focus on the foreseeability of the conduct
of others virtually ignored the scope of the joint criminal
activity undertaken by each of these defendants. As
stated earlier, a district court must first determine the
scope of the criminal activity the defendant agreed to
jointly undertake, and then determine whether the
conduct of others was in furtherance of, and reasonably
foreseeable to the defendant in connection with, that
Nos. 08-2378, 08-3226 & 08-3238 23
activity. Fox, 548 F.3d at 531-32; Thomas, 199 F.3d at 953.
Neither the PSRs nor the judge’s statements at sen-
tencing define the scope of each defendant’s jointly under-
taken criminal activity with sufficient clarity and specific-
ity. A district judge may draw reasonable inferences
from information in a PSR to make a finding as to the
scope of the joint criminal activity undertaken by a defen-
dant. But unstated inferences do not provide an
adequate relevant conduct analysis so as to allow for
meaningful appellate review. See Harris, 567 F.3d at 853-
54 (“An appellate court’s review of a sentence is for
reasonableness, and the more explanation we have, the
better equipped we are to assess whether an imposed
sentence meets that standard.”).
The government argues that the district court’s findings
that a group of co-schemers participated in the scheme
and that their conduct was reasonably foreseeable to
Salem and thus attributable to him were sufficient
findings as to the scope of Salem’s agreement to
participate in the fraud scheme. Given the standard of
review—clear rather than plain error—we cannot
agree. The scope of the jointly undertaken criminal activity
“is not necessarily the same as the scope of the entire
[scheme].” U.S.S.G. § 1B1.3 cmt. n.2; see also Fox, 548 F.3d
at 531-32 & n.7; Soto-Piedra, 525 F.3d at 531-32. The
district court did not clearly define the scope of “the
scheme” in which that group of co-schemers participated.
The entire Internet fraud scheme was wide-ranging, with
international dimensions, and it occurred over the
course of several years and resulted in total losses to
victims of approximately $6 million. The superseding
24 Nos. 08-2378, 08-3226 & 08-3238
indictment alleged that the scheme involved not only
the foreign co-schemers and the fourteen defendants in
this case, but also “other co-schemers” who played a
role like that of the defendants. The district court did not
hold the defendants accountable for the full $6 million,
presumably based in part on a limitation of jointly under-
taken criminal activity. The finding that co-schemers
participated in “the scheme” and that their conduct was
reasonably foreseeable to Salem does not equate with
a finding that Salem agreed to a joint undertaking that
embraced the entire fraud scheme. And it is unclear
whether the court’s reference to “the scheme” meant
the entire fraud scheme or some subset of that scheme.
The government seems to equate awareness with crimi-
nal accountability. Knowledge is not sufficient to
establish the scope of the jointly undertaken criminal
activity. “Even if the defendant was perfectly aware of
the breadth of the scheme, if he was not part of all of it,
his sentence could not be based on more than the part
to which he had agreed.” Thomas, 199 F.3d at 953. It does
not necessarily follow from the fact that a co-schemer’s
criminal activity was reasonably foreseeable to a
defendant that the defendant joined in that co-schemer’s
criminal activity.
We take this opportunity to remind the district courts
that even where, as here, the focus at sentencing is on the
reasonable foreseeability of the conduct of others, the
district court still must make the necessary preliminary
finding of the scope of the criminal activity that the
defendant agreed to jointly undertake. The district court
Nos. 08-2378, 08-3226 & 08-3238 25
neglected to make that finding in this case. And if a
district court omits a finding on a key element during
the § 1B1.3(a)(1)(B) analysis, the effort of an appeal could
be avoided if counsel would bring such an omission to
the sentencing judge’s attention before the analysis is
completed.
Accordingly, on remand, the district court must first
determine the scope of the criminal activity that Salem,
Ganescu, and Simon agreed to jointly undertake. Then,
with respect to Salem, the court must determine whether
the acts of Fechete, Constantin, Moloman, Hann,
Alexandru, Panaitescu, Lucan, Dumitru, and Nanau
were in furtherance of that jointly undertaken criminal
activity. Salem has not challenged the district court’s
finding that these co-schemers’ acts were reasonably
foreseeable to him. So, if the district court finds
that the acts of these co-schemers were in furtherance
of Salem’s jointly undertaken criminal activity, then the
relevant conduct findings and Salem’s sentence shall
stand, provided appropriate findings are made with
respect to Bledea. Otherwise, the district court must re-
assess its relevant conduct findings and Salem’s sentence.
The government asserts that Salem waived any objec-
tion to being held accountable for the conduct of Cerna
and Ianc because Salem conceded in the district court
that he should be held responsible for their conduct.
Salem’s attorney stated at Salem’s sentencing hearing
that Salem was “accepting responsibility for all of the
actions that he personally took part in and also [for] . . . the
reasonably foreseeable actions of co-participants in the
26 Nos. 08-2378, 08-3226 & 08-3238
scheme, specifically individuals such as Mr. Cerna,
Mr. [Ianc]” When directly asked whether he conceded
that “reasonably foreseeable conduct of others would
reach to Mr. Cerna and Mr. Ianc,” Salem’s attorney said,
“Yes.” Salem cannot undo these concessions.
So, Salem argues this wasn’t waiver, but forfeiture,
claiming there was no strategic reason for his attorney
to concede that Salem could be held accountable for
Cerna’s and Ianc’s acts and the losses they caused. This
argument is not persuasive. In United States v. Garcia, 580
F.3d 528, 541 (7th Cir. 2009), cert. denied, No. 09-8459, 2010
WL 85929 (U.S. Feb. 22, 2010), we reiterated: “Waiver is the
intentional relinquishment of a known right, and it pre-
cludes appellate review altogether.” “Forfeiture . . . is the
failure to timely assert a right,” which is reviewed for plain
error. Id. We draw a distinction between waiver and
forfeiture by considering whether the defendant made
a strategic choice not to present an argument. Id. In Garcia
we found waiver where defense counsel did not merely
fail to object to the PSR’s drug quantity calculation, but
affirmatively stated that he knew the defendant could
be sentenced for drugs trafficked by the whole con-
spiracy and he was not challenging drug quantity for a
strategic reason. Id. at 542. This, we said, was “precisely
what the waiver doctrine contemplates.” Id.Salem’s counsel did not merely fail to object to the
inclusion of Cerna’s and Ianc’s acts as relevant conduct.
Instead, his counsel specifically stated that Salem was
accepting responsibility for their actions. And Salem’s
decision to make such a concession appears to have been
Nos. 08-2378, 08-3226 & 08-3238 27
strategic. See, e.g., United States v. Rosenberg, 585 F.3d 355,
358 (7th Cir. 2009) (concluding that the defendant waived
any challenge to inclusion of certain acts as relevant
conduct where she chose not to object to the district court
for the strategic reason that she sought a reduction for
acceptance of responsibility). Salem was anticipating a
reduction in his offense level for acceptance of responsi-
bility. Had he disputed his accountability for Cerna’s
and Ianc’s conduct, that reduction may have been in
jeopardy. Thus, Salem waived the right to challenge
the district court’s decision to hold him accountable for
the acts of Cerna and Ianc.
And after determining the scope of the criminal activity
jointly undertaken by Ganescu and Simon, the district
court must determine whether the acts of Ianc, Constantin,
Bledea, and EM (Emanuel Matula) were in furtherance of
Ganescu’s and Simon’s jointly undertaken criminal activ-
ity. Like Salem, Ganescu and Simon do not contest the
district court’s findings regarding the reasonable
foreseeability to them of the acts of these co-schemers.
Therefore, if the court finds that the acts of these co-
schemers were in furtherance of Ganescu’s and Simon’s
jointly undertaken criminal activity, then Ganescu’s and
Simon’s sentences shall stand. Otherwise, the district
court must reevaluate its relevant conduct findings and
their sentences, with one qualification. The qualification
is this: Ganescu conceded in his reply brief that he is liable
“for Simon’s conduct, Emanuel Matula’s conduct and
for whatever amounts were obtained from the currency
exchanges of which Ganescu advised his co-conspirators.”
The district court need not reevaluate Ganescu’s account-
ability for Simon’s and Matula’s conduct, but it is
28 Nos. 08-2378, 08-3226 & 08-3238
unclear just what conduct is encompassed by the last
phrase.
III. Conclusion
For the foregoing reasons, we REMAND Salem’s,
Ganescu’s, and Simon’s sentences for further findings
concerning the jointly undertaken criminal activity
under U.S.S.G. § 1B1.3(a)(1)(B) and, if necessary, for
further findings regarding the amount of the loss and the
number of victims under U.S.S.G. § 2B1.1(b)(1) and (2).
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