United States v. Thomas Balsiger

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 17-1708
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
THOMAS C. BALSIGER,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Eastern District of Wisconsin.
No. 2:07-cr-57 — Charles N. Clevert, Jr., Judge.
____________________
ARGUED SEPTEMBER 5, 2018 — DECIDED DECEMBER 10, 2018
____________________
Before EASTERBROOK, HAMILTON, and SCUDDER, Circuit
Judges.
SCUDDER, Circuit Judge. For his role in designing and im-
plementing a scheme to defraud manufacturers that issue
coupons for consumer products, a grand jury charged El Paso
businessman Thomas Balsiger with 25 counts of wire fraud
and conspiracy both to commit wire fraud and obstruct jus-
tice. A decade of litigation followed, culminating in a bench
trial at which Balsiger represented himself with the assistance
2 No. 17-1708
of stand-by counsel. The district court convicted Balsiger on
12 counts and sentenced him to 120 months’ imprisonment.
On appeal Balsiger argues the district court deprived him
of his Sixth Amendment right to retain the counsel of his
choice by failing to grant an 18-month continuance and by
refusing to order the government to remove a so-called lis
pendens on his home—a notice to potential buyers that title to
the property might be impaired by the outcome of his
criminal prosecution. He also contends the district court erred
when, following the death of his attorney, it concluded he
waived his right to counsel and required him, over his
objection, to proceed pro se. Finally, Balsiger challenges the
sufficiency of the evidence, venue, and several of the district
court’s sentencing determinations. With the limited exception
of the district court’s calculation of forfeiture, we affirm.
I
In 2000 Thomas Balsiger took the helm of International
Outsourcing Services or IOS, one of the nation’s largest
coupon processing companies. When a consumer uses a
coupon at a supermarket, the retailer becomes entitled to
reimbursement from the manufacturer. IOS served as an
intermediary in this process. It contracted with retailers,
including large retail chains as well as small, independently
owned stores (known as Rapid Pay clients), to collect and sort
coupons redeemed at the retailers’ stores and then to submit
invoices for reimbursement either directly to the
manufacturer or indirectly to the manufacturer’s agent.
During the period at issue, the two main agents for
manufacturers were NCH Promotional Services and Carolina
Manufacturer’s Services.
No. 17-1708 3
While manufacturers reimbursed nearly all coupons in-
voiced on behalf of IOS’s large retail clients, they typically re-
jected more than 60% of coupons submitted on behalf of
smaller, Rapid Pay clients due to fraud concerns. Seeking to
maximize reimbursements, Balsiger developed a scheme to
deceive manufacturers by falsely invoicing Rapid Pay cou-
pons as if they had been redeemed at IOS’s larger retail cli-
ents. This ploy—known within IOS as “alternative invoic-
ing”—included invoicing unused coupons as if shoppers had
legitimately redeemed them. To avoid detection, Balsiger di-
rected employees at IOS’s plants in Mexico to make new cou-
pons look as if they had been used by causing them to become
wrinkled and tattered.
Despite efforts to conceal the scheme, in March 2007, IOS,
Balsiger, and ten other defendants were indicted for wire
fraud. A superseding indictment alleged losses to manufac-
turers exceeding $250 million and detailed Balsiger’s efforts
to thwart the investigation into IOS’s invoicing practices by,
for example, destroying records and coaching employees to
lie to authorities.
Ten years of litigation followed. Balsiger’s retained
counsel died in July 2014. The district court conducted
multiple hearings over several months to address Balsiger’s
representation, ultimately concluding that he waived his right
to counsel by repeatedly refusing to retain an attorney despite
having the means to do so. While each of Balsiger’s co-
defendants either had their cases dismissed or pleaded guilty,
Balsiger proceeded to trial in the fall of 2016. He represented
himself during a five-week bench trial, at which the court
heard testimony from 32 witnesses, including nine IOS
employees who identified Balsiger as the mastermind behind
4 No. 17-1708
the fraudulent scheme to deceive manufacturers. The court
also heard testimony from manufacturers impacted by
Balsiger’s scheme. For his part, Balsiger admitted diverting
coupons from smaller stores and invoicing them as if they had
been redeemed at IOS’s larger retail clients, but insisted this
practice was limited to manufacturers represented by NCH
Promotional Services (counts 1–15) and was permissible
under IOS’s contract with NCH.
On December 5, 2016—ten years to the day of the original
indictment—the district court rendered its verdict. The court
found Balsiger not guilty of the wire fraud alleged in counts
1–15, involving NCH clients, and guilty of counts 16–25,
involving Carolina Manufacturer’s Services clients. The court
also convicted Balsiger of conspiracy to not only commit wire
fraud but also obstruct justice. The court sentenced Balsiger
to 120 months’ imprisonment, ordered restitution of
$65 million and entered a forfeiture judgment totaling
$21.2 million.
II
A
On appeal Balsiger raises several Sixth Amendment
claims. He first argues that the district court, in the wake of
his counsel’s death, violated his right to hire his new counsel
of choice by denying him an 18-month continuance to
accommodate his desired attorney and refusing to order the
government to release the lis pendens on his residence so he
could sell his home and use the funds to retain counsel. He
also contends the district court violated the Sixth Amendment
by requiring him to represent himself even though he stated
he was not waiving his right to counsel, and further, by failing
No. 17-1708 5
to warn him of the dangers of self-representation. In short,
Balsiger argues that he did not voluntarily waive his right to
counsel and any deemed waiver was neither knowing nor
intelligent.
We begin with the facts surrounding Balsiger’s
representation. In 2007 Balsiger retained Joseph Abraham, Jr.
as his counsel. Abraham represented Balsiger until his death
on July 4, 2014. More than a month later, on August 20, 2014,
the district court received notice of Abraham’s death and
assurances that Balsiger was “diligently searching to find a
qualified replacement,” and expected to retain new counsel
within 30 days. Yet, during a scheduling conference on
December 10, 2014—more than five months after Abraham’s
death—the court learned Balsiger had not retained counsel
and purportedly could not afford to do so for 120 days. The
court set trial for October 26, 2015.
A few weeks later, during a status conference on January
6, 2015, Balsiger said he planned to retain El Paso-based attor-
ney Richard Esper, but noted he did not believe Esper’s
schedule would permit him to try the case in October 2015.
Balsiger requested until April 1, 2015, to secure the money
necessary to retain Esper, explaining he paid his former attor-
ney a significant retainer but had yet to receive a refund. He
also argued the government made obtaining the funds neces-
sary to retain new counsel all but impossible by filing a lis pen-
dens on his home.
The district court denied Balsiger’s request for a continu-
ance until April 1, 2015, to hire Esper, emphasizing the uncer-
tainties surrounding Esper’s schedule and the impact of the
delay on Balsiger’s remaining co-defendants. In doing so, the
court underscored the importance of Balsiger retaining an
6 No. 17-1708
attorney who would be available to try the case as scheduled.
Balsiger responded by asking the court to order the govern-
ment to lift the lis pendens on his home. The court did not rule
on this request, instead directing Balsiger to provide addi-
tional financial information showing that, absent a lifting of
the lis pendens, he could not afford counsel.
On January 27, 2015, after reviewing Balsiger’s financial
information and learning that Esper could not be ready for
trial until 2017, the district court issued an order requiring
Balsiger to retain substitute counsel by February 17, 2015. The
order emphasized Balsiger’s lack of diligence in retaining re-
placement counsel despite having the resources to do so and
warned Balsiger that his failure to comply may be deemed a
waiver of his right to counsel. The following day, during a
status hearing, the court again stressed that Balsiger should
be represented by counsel. When Balsiger reiterated his desire
to retain Esper, the court carefully weighed his arguments
against competing concerns, explaining:
You are not being denied counsel of your choice
generally. You’re merely being denied your
choice of Mr. Esper in particular because he has
made it crystal clear, and through you, that he
cannot devote to this case the necessary time in
order to prepare for trial in October; and he has
indicated that he would not be able to proceed
to trial until 2017.
***
So only a specific attorney will not be allowed to
represent you in this case in light of his indica-
tion that he cannot be available within the time
No. 17-1708 7
frame necessary for this case to proceed with
greater dispatch.
Balsiger objected by requesting a continuance until 2017
and again asking the district court to lift the lis pendens. The
court denied the latter request, finding anew that Balsiger had
sufficient income and assets to retain another attorney.
On March 4, 2015—a full eight months after his counsel’s
death—Balsiger attended another status conference. Seeing
that Balsiger remained unrepresented despite the court’s or-
der to retain counsel by February 17, 2015, the district court
reiterated its desire that he retain counsel: “The first step with
regard to pursing your objectives in this case, Mr. Balsiger,
and that is, defending against the government’s charges, is
getting an attorney.” The court also found that Balsiger’s de-
cision to restrict his search for new counsel to the El Paso area
reflected a lack of a genuine effort to secure counsel. The court
nonetheless expressed its willingness to accommodate new
counsel, explaining it would “entertain appropriate motions
and appropriate claims that may be raised by [his] lawyer”
and the court offered assurances that it “[was] not taking any
issues off the table” with regard to Balsiger’s representation.
Finally, the court underscored its concern that Balsiger
was engaging in intentional delay and attempting to manu-
facture a Sixth Amendment claim. The court emphasized that,
because Balsiger had the means to retain an attorney, his on-
going failure to do so would be construed as a waiver. On this
score—the consequences of Balsiger’s continued noncompli-
ance—the court left no ambiguity: “If an attorney has not ap-
peared on your behalf in one week, this case will go forward
and you will be called upon to argue any issue that you wish
8 No. 17-1708
to raise with respect to your defense. And this case will there-
after proceed to trial with you acting pro se.”
Balsiger responded by maintaining that he was not
waiving his right to counsel and contending that the court
was engaged in “clear cut coercion.” He also expressed his
belief that he would be better off appealing as quickly as
possible: “[T]his is a clear-cut case of coercion. Let’s proceed
and let’s just go ahead and get this to the Seventh [Circuit] as
quick as we can.” Balsiger likewise made plain his
unwillingness to comport with the court’s deadline: “There
will not be an attorney by one week because you will not
release the lis pendens. You have put restrictions on me that
make it impossible. Everyone knows it … So let’s proceed
with it.”
Based on Balsiger’s course of conduct, including his state-
ment that he had no intention of retaining a new attorney, the
district court concluded Balsiger waived his right to counsel.
The court then designated standby counsel to assist Balsiger
at trial.
The district court returned to the issue of Balsiger’s
representation at a pre-trial hearing in May 2015, observing
that aside from standby counsel, no attorney had filed a notice
of appearance in the case, despite encouragement from the
court that Balsiger retain counsel. Given the amount of time
that had passed since the death of Balsiger’s counsel, the court
reiterated that the case needed to move forward: “[T]his
matter has to proceed. And if that means Mr. Balsiger will
have to present his defense with the help of standby counsel
or with the help of a new attorney who might be retained,
Mr. Balsiger should be given every opportunity to protect his
constitutional rights.”
No. 17-1708 9
Balsiger persisted in his prior course, explaining that as a
“businessman,” hiring counsel did not make financial sense
and he would rather “play the odds” and not jeopardize any
appeal.
B
Balsiger contends he was denied his Sixth Amendment
right to retain the counsel of his choice because the district
court refused to continue the case for 18 months to accommo-
date his counsel of choice, Richard Esper. Because “trial
courts have broad discretion to grant or deny a request for a
continuance to substitute new counsel,” our review of the dis-
trict court’s decision is highly deferential. United States v.
Sellers, 645 F.3d 830, 834 (7th Cir. 2011).
For a defendant who does not require appointed counsel,
the Sixth Amendment guarantees the right “to choose who
will represent him.” United States v. Gonzalez-Lopez, 548 U.S.
140, 144 (2006). Defendants must be afforded a fair oppor-
tunity to secure the counsel of their choice, but this right is not
absolute. Sellers, 645 F.3d at 834. While a court may not “arbi-
trarily or unreasonably deny a defendant the right to retain
chosen counsel,” it is well-established that a trial judge “re-
tains wide latitude to balance the right to choice of counsel
against the needs of fairness to the litigants and against the
demands of its calendar.” Id. (citing Gonzalez-Lopez, 548 U.S.
at 152). Indeed, “only an unreasoning and arbitrary insistence
upon expeditiousness in the face of a justifiable request for
delay violates the right to the assistance of counsel.” United
States v. Carrera, 259 F.3d 818, 825 (7th Cir. 2001) (citing Morris
v. Slappy, 461 U.S. 1, 11–12 (1983)). To make this determina-
tion, we consider the circumstances of the ruling and the
10 No. 17-1708
reasons articulated by the district court. See United States v.
Santos, 201 F.3d 953, 958 (7th Cir. 2000).
At the time Balsiger requested the continuance, his case
had been pending for more than seven years, and his remain-
ing co-defendants had asserted speedy trial claims. While the
district court left open the possibility of granting a shorter
continuance if Balsiger ever retained counsel, his preferred at-
torney, Richard Esper, never appeared to request a continu-
ance—“a significant factor weighing against granting a con-
tinuance.” United States v. Sinclair, 770 F.3d 1148, 1156 (7th Cir.
2014).
We are not confronted with a situation where the district
court failed to understand Balsiger’s right to retain the coun-
sel of his choice. See United States v. Smith, 618 F.3d 657, 666
(7th Cir. 2010). Quite the opposite: the district court con-
ducted multiple hearings to address Balsiger’s representation
and desire to retain Esper to represent him. After weighing
Balsiger’s arguments against competing concerns, the court
explained that, in reaching its decision, it considered the
rights of the other parties involved, including Balsiger’s co-
defendants who wished to proceed to trial. The court ob-
served that the government, too, had the right to proceed to
trial without further delay. While expressing a preference to
proceed on the scheduled trial date, the court further noted
that if a lawyer filed a notice of appearance, it would consider
a motion for a shorter continuance. Cf. Sellers, 645 F.3d at 835
(explaining that “a [trial judge’s] myopic insistence on pro-
ceeding with a scheduled trial date in the face of a valid re-
quest for a continuance is arbitrary and unreasonable”).
The district court’s decision to deny the continuance was
neither unreasonable nor arbitrary. The court gave Balsiger
No. 17-1708 11
ample time and opportunity to retain Esper or make a specific
showing of why he needed more time to recruit and hire a
different attorney. The court conducted four hearings and
issued multiple orders to address Balsiger’s representation
and his desire to retain Esper. And the court weighed the
pertinent factors and articulated valid reasons for denying the
request, including the co-defendants’ speedy trial claims and
the government’s interest in moving the case forward. The
denial of the 18-month continuance did not violate the Sixth
Amendment.
Pointing to Luis v. United States, 136 S. Ct. 1083 (2016),
Balsiger further contends that the district court violated his
Sixth Amendment right to choice of counsel by declining to
remove the lis pendens on his home. In Luis, the Supreme
Court held that the “pretrial restraint of legitimate, untainted
assets needed to retain counsel of choice violates the Sixth
Amendment.” Id. at 1088. The holding gives effect to the pre-
cept that the Sixth Amendment protects the right of a criminal
defendant to use “innocent property to pay a reasonable fee
for the assistance of counsel.” Id. at 1096. Balsiger argues that
his home was an untainted asset, and to retain the counsel of
his choice by the court’s initial February 17, 2015 deadline, he
needed to sell or mortgage the home, which could only hap-
pen with the removal of the lis pendens. Based upon our own
fresh look at the record, we cannot agree.
The parties do not dispute Balsiger’s home was an un-
tainted asset. Yet the government contends that Balsiger’s
home was not restrained within the meaning of Luis because
a lis pendens is not a lien and does not reflect any sort of sei-
zure, but rather is only a notice that the government has
claimed an interest in a property.
12 No. 17-1708
While we cannot foreclose a circumstance where a lis
pendens operates to infringe on a defendant’s right to choice
of counsel, that is not the case here. The record shows that
Balsiger sold his home for $1.5 million in February 2016—a
full eight months before his trial began. This fact belies
Balsiger’s suggestion that the lis pendens presented a barrier to
selling his home and retaining an attorney. While it may be
true that the lis pendens delayed this process, the district court
repeatedly left open the possibility for Balsiger to retain
counsel at any point. And though his trial initially started on
February 22, 2016, a day later it was reset to October 2016. In
light of this timeline, it is unclear why, once he sold his home,
Balsiger failed to alert the court or use the proceeds to retain
an attorney. He had access to these and other significant assets
eight months before his trial started. On these facts, the
district court did not violate Balsiger’s Sixth Amendment
rights by denying his request to order the government to lift
the lis pendens.
C
Balsiger’s next and most substantial claim is that the dis-
trict court violated his Sixth Amendment right to counsel by
forcing him to proceed pro se. He challenges the district
court’s conclusion that he waived his right to counsel by fail-
ing to retain replacement counsel, while arguing further that
any deemed waiver was neither knowing nor voluntary.
The parties disagree on the appropriate standard for re-
viewing a district court’s finding of a waiver of the right to
counsel. Balsiger invites de novo review, while the government
urges abuse of discretion review. These competing perspec-
tives mirror the differences in some of our prior cases. On oc-
casion we have reviewed a district court’s finding of waiver
No. 17-1708 13
for abuse of discretion. See United States v. Eads, 729 F.3d 769,
775 (7th Cir. 2013); United States v. Todd, 424 F.3d 525, 530 (7th
Cir. 2005). Other times we have conducted de novo review. See
United States v. James, 487 F.3d 518, 527 (7th Cir. 2007); United
States v. Hoskins, 243 F.3d 407, 410 (7th Cir. 2001). We have
previously recognized but declined to resolve this discrep-
ancy. See United States v. Thomas, 833 F.3d 785, 792 (7th Cir.
2016); United States v. Clark, 774 F.3d 1108, 1112 (7th Cir. 2014).
We take this opportunity to select a unifying course going
forward. And before issuing this opinion, we circulated it to
the full court under Circuit Rule 40(e). No judge in active ser-
vice requested to hear this case en banc.
As a general matter constitutional issues receive de novo
review. See United States v. Jones, 844 F.3d 636, 639 (7th Cir.
2016). The Supreme Court reinforced this principle just last
term, explaining that the role of appellate courts in the consti-
tutional realm “favors de novo review even when answering a
mixed question primarily involves plunging into a factual rec-
ord.” U.S. Bank Nat. Ass'n ex rel. CWCapital Asset Mgmt. LLC
v. Vill. at Lakeridge, LLC, 138 S. Ct. 960, 967 n.4 (2018).
Whether a defendant comported himself in a manner that
amounted to a waiver of his Sixth Amendment right to coun-
sel is a mixed question entitled to de novo review. All other
circuits to have considered this question have likewise en-
dorsed de novo review, oftentimes without much discussion
beyond observing that the question presented is of a constitu-
tional dimension. See United States v. Turner, 897 F.3d 1084,
1102 (9th Cir. 2018); United States v. Mesquiti, 854 F.3d 267, 271
(5th Cir. 2017); United States v. Conklin, 835 F.3d 800, 801–02
(8th Cir. 2016); United States v. Kosow, 400 F. App'x 698, 700 (3d
Cir. 2010); United States v. Garey, 540 F.3d 1253, 1268 (11th Cir.
14 No. 17-1708
2008); United States v. Owen, 407 F.3d 222, 225 (4th Cir. 2005);
United States v. Hughes, 191 F.3d 1317, 1323 (10th Cir. 1999).
Observing that the constitutional question presented here
receives de novo review too simplifies the proper analysis. An-
swering whether a defendant has engaged in conduct that
amounts to a waiver of his right to counsel often requires as-
sessments of the defendant’s candor, credibility, and resolve
to pursue a certain course of action—assessments that benefit
from the district judge having a front-row seat.
No better example than this case. The district court
concluded that Balsiger waived his right to counsel after
conducting multiple hearings, listening to Balsiger’s plans to
retain new counsel and purported challenges in doing so, and
ultimately concluding that Balsiger had engaged in deliberate
delay and manipulation tactics. Sitting ringside uniquely
positioned the district judge to gauge the genuineness of
Balsiger’s efforts and ability to retain counsel, and we are not
quick to displace the credibility findings underlying those
determinations.
Our review can account for this reality while also taking a
fresh look at the district court’s ultimate conclusion that a de-
fendant waived his right to counsel. We do this by reviewing
the district court’s findings of fact, including assessments of a
defendant’s credibility, for clear error, and then determining
whether those findings support as a legal matter the court’s
conclusion that a defendant waived his right to counsel. This
approach aligns closely with the course we chart in other ar-
eas of criminal procedure implicating a defendant’s constitu-
tional rights. See, e.g., Ornelas v. United States, 517 U.S. 690, 699
(1996) (holding that whether reasonable suspicion exists for
an investigatory stop or whether probable cause exists for a
No. 17-1708 15
warrantless search are questions entitled to de novo review, yet
underlying “findings of historical fact [are reviewed] only for
clear error” while also affording “due weight to inferences
drawn from those facts by resident judges and local law en-
forcement officers”); see also United States v. Shabaz, 579 F.3d
815, 819–20 (7th Cir. 2009) (explaining that the ultimate con-
clusion of whether a Miranda waiver was knowing and volun-
tary is reviewed de novo, but the district court’s findings of fact
and credibility determinations are reviewed for clear error).
With the standard of review in place, the question here is
whether Balsiger waived his right to counsel. A waiver must
be knowing and intelligent as well as voluntary and unequiv-
ocal. See Clark, 774 F.3d at 1112. In assessing voluntariness,
we have recognized that a defendant is not offered a volun-
tary choice if the decision put to him is to proceed with in-
competent counsel or no counsel at all. Wilks v. Israel, 627 F.2d
32, 36 (7th Cir. 1980). Indeed, “a choice between proceeding
with incompetent counsel or no counsel is in essence no
choice at all.” Id. In Wilks we characterized such a circum-
stance as “constitutionally offensive.” Id.
Clinging to this language in Wilks, Balsiger insists that the
district court presented him with a constitutionally offensive
choice when, on January 27, 2015, it ordered him to either re-
tain an attorney ready to proceed to trial on the scheduled
trial date or go forward without an attorney. As Balsiger sees
the facts, the district court forced his hand and left him with
“no real choice” because eight months was not enough time
for any attorney to prepare adequately for trial.
Once again the record undermines Balsiger’s position. In
directing Balsiger to retain counsel by February 17, 2015, the
court expressed a preference to proceed on the scheduled trial
16 No. 17-1708
date of October 26, 2015. In doing so, however, the court ex-
pressly remained open to granting a continuance or a sever-
ance if Balsiger ever retained counsel. Specifically, the court
stressed that it was “not taking any issues off the table with
regard to [Balsiger’s] representation” and would consider any
appropriate motions raised if Esper (or any other attorney)
ever entered an appearance. Finally, the record shows that
Balsiger’s case proceeded to trial in October 2016—more than
two years after the death of his attorney, and more than 18
months after the court ordered Balsiger to retain replacement
counsel.
Even assuming Balsiger’s new lawyer would only have
had eight months to prepare, we cannot conclude in these cir-
cumstances that such a period was insufficient time to prepare
for trial. Nor can we conclude that the district court presented
Balsiger with a constitutionally offensive choice when it or-
dered him to retain replacement counsel without granting a
continuance or lifting the lis pendens.
Begging to differ and, in a final effort to save his Sixth
Amendment claim, Balsiger contends that even if his conduct
amounted to a voluntary waiver of his right to counsel, his
waiver was neither knowing nor intelligent because the dis-
trict court failed to ensure he understood “the dangers and
disadvantages of self-representation.” Faretta v. California, 422
U.S. 806, 835 (1975). While “stress[ing] the need for a thor-
ough and formal inquiry as a matter of prudence and as a
means of deterring unfounded claims on appeal,” we have
also recognized situations where a waiver may be valid absent
a formal inquiry by the district court. United States v. Moya-
Gomez, 860 F.2d 706, 733 (7th Cir. 1988). So, too, have we un-
derscored that “a knowing and intelligent waiver … need not
No. 17-1708 17
be explicit,” Thomas, 833 F.3d at 792, and a defendant may
waive his right to counsel where, as here, he is able to retain
counsel but refuses to do so. See United States v. Bauer, 956
F.2d 693, 695 (7th Cir. 1992).
In evaluating whether a waiver was knowing and intelli-
gent, we consider not only the background and experience of
the defendant as well as the context of his decision, but also
whether the district court conducted a formal hearing and
what other evidence establishes the defendant understood the
dangers and disadvantages of proceeding pro se. See Moya-
Gomez, 860 F.2d at 736.
Conceding that the district court did not conduct a formal
hearing to ensure Balsiger was fully advised of the risks of
proceeding pro se, the government argues this failure is not
dispositive because all other factors point to a knowing and
intelligent waiver by Balsiger. The operative inquiry is
whether the record as a whole “demonstrates that the defend-
ant knowingly and intelligently waived his right to counsel.”
Id.
Here the record shows Balsiger sufficiently understood
the risks of proceeding pro se, as he repeatedly asserted he was
not waiving his right to counsel and relied on standby counsel
during trial, reflecting “an appreciation for the difficulties of
self-representation.” Todd, 424 F.3d at 533. Balsiger’s back-
ground and experience also point in the direction of a know-
ing waiver: he was a CEO with a MBA, who touted his prior
litigation experience, referring to himself as a “litigious indi-
vidual.” See id. (explaining that, “[i]n this context, back-
ground and experience includes educational achievements”
and “prior experience with the legal system”).
18 No. 17-1708
Balsiger’s own conduct shows that he sufficiently
appreciated the risks of going it alone. The case began in
December 2007, and Balsiger’s attorney died in July 2014.
Balsiger was still unrepresented six months later. Over the
course of multiple hearings over several months, the district
court repeatedly urged him to retain counsel. When his
desired attorney was unavailable, and the court refused to
permit a delay of 18 months to accommodate Balsiger’s
choice, Balsiger made a calculated decision to proceed
without counsel so he could appeal on Sixth Amendment
grounds. This is not guesswork on our part. To the contrary,
Balsiger vocalized his desire to “get this [case] to the Seventh
[Circuit]” and expressly told the district judge that he
preferred not to hire an attorney, but instead to proceed pro se
and “play the odds”:
[M]y concern is I just looked at all of your rul-
ings and they never go in favor of the defense.
So my concern, and still is my concern, is I have
to evaluate based on a businessman. And the
last thing that I want to do is spend good money
for a good attorney, have him submit a motion,
and then have that motion denied and some-
how, in my mind [indiscernible] the appeals
that I feel I have. No offense to you, but I’ve got
to play – businessmen play the odds.
We have held “a defendant who waives his right to coun-
sel for strategic reasons tends to do so knowingly.” Todd, 424
F.3d at 533. We have likewise warned that a defendant “may
not manipulate his right to counsel to undermine the orderly
procedure of the courts or subvert the administration of jus-
tice.” United States v. Thibodeaux, 758 F.2d 199, 201 (7th Cir.
No. 17-1708 19
1985). Here Balsiger made deliberate decisions regarding his
representation and knowingly and intelligently chose to pro-
ceed without counsel. The district court rightly concluded
that he waived his right to counsel.
III
Balsiger next challenges his conviction, arguing there was
insufficient evidence to establish wire fraud and conspiracy to
commit wire fraud.
Ordinarily we will not upset a conviction if “after viewing
the evidence in the light most favorable to the prosecution,
any rational trier of fact could have found the essential
elements of the crime beyond a reasonable doubt.” Jackson v.
Virginia, 443 U.S. 307, 319 (1979). Here, however, the even
more stringent plain error standard applies because Balsiger
failed to move for a judgment of acquittal. See United States v.
Sheneman, 682 F.3d 623, 628 (7th Cir. 2012). To demonstrate
plain error, Balsiger “must show that a manifest miscarriage
of justice will occur if his conviction is not reversed.” Id.
Balsiger’s argument largely focuses on the district court’s
split verdict on the wire fraud counts: an acquittal on counts
1–15 (involving coupons issued by manufacturers
represented by NCH Promotional Services) and a conviction
on counts 16–25 (involving coupons issued by manufacturers
represented by Carolina Manufacturer’s Services). Balsiger
sees the verdict as so at odds with itself that it warrants
reversing his conviction on the fraud committed against
Carolina Manufacturer’s Services’ clients. He roots his
contention in the terms and conditions of IOS’s contracts for
processing retail coupons, insisting that the district court
acquitted him on counts 1–15 because the coupon scheme did
20 No. 17-1708
not violate IOS’s contract with NCH. On the other hand, he
posits the court convicted him on counts 16–25 because this
practice did violate the terms of IOS’s contract with Carolina
Manufacturer’s Services. But the district court’s conclusion
was wrong, Balsiger continues, because it was premised on a
contract that was not in effect during the period at issue.
Balsiger also asserts that the alternative invoicing scheme the
government’s evidence focused on at trial was limited to
NCH clients and was expressly authorized by contract.
Balsiger is right to observe that the different IOS contracts
received meaningful attention at sentencing. The district court
asked the government to retrieve the contracts, reviewed and
contrasted their terms, and relied on them to determine loss
amounts. But the record is silent as to what role, if any, the
respective contracts played during the guilt phase. More sig-
nificantly, regardless of what contract was in effect, there was
sufficient evidence to support Balsiger’s conviction on counts
16–25, which involved ten instances of wire fraud perpetrated
against two manufacturers, LeSaffre Yeast (counts 16–20) and
S.C. Johnson (counts 21–25), both represented by Carolina
Manufacturer’s Services.
The evidence showed that IOS sought payment for
coupons issued by LeSaffre and S.C. Johnson by lying about
where the coupons had been redeemed. The district court also
heard testimony that IOS submitted coupons that were clearly
“gang cut,” meaning Balsiger requested reimbursement for
coupons he knew had never been used to purchase a product.
The court had ample evidence upon which to conclude that
IOS submitted false invoices to Carolina Manufacturer’s
Services as part of a scheme to cause manufacturers to pay for
coupons they otherwise would have rejected.
No. 17-1708 21
Likewise, the government presented sufficient evidence to
convict Balsiger of conspiracy to commit wire fraud. Nine IOS
employees testified that Balsiger designed the fraudulent
scheme to cause manufacturers to pay for coupons that they
would otherwise reject by lying about where or whether they
had been redeemed. For example, one IOS employee testified
that Balsiger instructed him on a plan to make Rapid Pay
(small store) coupons look as if they had come from some
other sources. Other witnesses testified that the scheme in-
cluded submitting coupons Balsiger knew had never been le-
gitimately redeemed in connection with the purchase of a
product by instructing employees to alter the appearance of
the coupons to avoid detection.
On plain error review, the trial evidence was more than
sufficient to support Balsiger’s convictions.
IV
Beyond his challenge to the sufficiency of the evidence,
Balsiger contends the Eastern District of Wisconsin was not a
proper venue for the wire fraud and conspiracy counts be-
cause no “criminal acts” or “essential conduct” took place
there, and no coconspirator carried out an overt act in the dis-
trict. Because the wire fraud statute does not contain a specific
venue provision, we consider “the nature of the crime alleged
and the location of the act or acts constituting it.” United States
v. Muhammad, 502 F.3d 646, 652 (7th Cir. 2007). While there is
no “mechanical test to determine constitutional venue,” we
consider “the site of the defendant's acts, the elements and na-
ture of the crime, the locus and effect of the criminal conduct,
and the suitability of each district for suitable fact-finding.”
Id.
22 No. 17-1708
Based on these factors, venue was proper in the Eastern
District of Wisconsin. Balsiger and his codefendants
knowingly devised and participated in a scheme to defraud
manufacturers, some of which were located within the
district. The defendants also caused wire transfers in and out
of the district in furtherance of the fraudulent scheme. The
law requires no more.
V
Finally, Balsiger challenges his sentence, arguing the dis-
trict court erred in calculating loss, awarding restitution, and
calculating forfeiture.
We review loss calculations for clear error and will only
reverse if we are “left with a definite and firm conviction that
a mistake has been made.” United States v. Radziszewski, 474
F.3d 480, 486 (7th Cir. 2007). No such error occurred here. To
the contrary, the district court calculated a loss amount that
was quite favorable to Balsiger. The government contended
the loss amount was $185 million. While the Probation Office
agreed, the court found the loss was a third of this amount—
$65 million. To arrive at this amount, the court first deter-
mined that between April 2000 and December 2003, Balsiger
directed IOS to falsely invoice more than $265 million in
Rapid Pay coupons. The court then deducted the portion re-
lated to counts of acquittal ($164.3 million), which left
$100.7 million in diverted coupons. The court next took ac-
count of the fact that manufacturers typically reject between
60–90% of Rapid Pay (small retailer) submissions. Or, put an-
other way, the court estimated that manufacturers would
have reimbursed at least 40% of the coupons in the absence of
the deception orchestrated by Balsiger. The district court ap-
plied this percentage to reach a loss amount of $60.4 million
No. 17-1708 23
From this amount, the court estimated actual loss of over
$65 million, relying on the fact that the high range of the per-
centage went up to 90%, and the scheme continued for two
years after 2003. We cannot say this approach was unreason-
able.
Balsiger further challenges the district court’s order of res-
titution, asserting that because the government did not prove
any loss, no restitution should have been ordered. We “will
disturb a restitution order 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. Middlebrook, 553
F.3d 572, 579 (7th Cir 2009). Here the restitution order was
premised on the court’s approximation of the loss caused by
Balsiger’s offense conduct. Because there was no error with
the court’s loss approximation, the court’s order of restitution
was also appropriate. See United States v. Durham, 766 F.3d
672, 687 (7th Cir. 2014).
What remains is Balsiger’s challenge to the court’s forfei-
ture calculation. We review the district court's findings of fact
for clear error and its interpretation of the forfeiture statute
de novo. See United States v. Baker, 227 F.3d 955, 967 (7th Cir.
2000).
Balsiger’s commission of wire fraud and the accompany-
ing conspiracy offense (both under 18 U.S.C. § 1343) subjected
him to an order of forfeiture. The criminal forfeiture statute,
18 U.S.C. § 982, only authorizes forfeiture in a wire fraud case
when the offense conduct affects a financial institution. See 18
U.S.C. § 982(a)(3)(F). The government, therefore, sought—and
the district court ordered—forfeiture under the civil forfeiture
statute, 18 U.S.C. § 981, which (through some internal cross-
referencing) authorizes the forfeiture of proceeds traceable to
24 No. 17-1708
wire fraud. See 18 U.S.C. § 981(a)(1)(C) (referencing 18 U.S.C.
§ 1956(c)(7), which, in turn, references offenses listed in
§ 1961(1), which include § 1343, the wire fraud statute). Civil
forfeiture applies by virtue of the bridging provision in 28
U.S.C. § 2461(c), which Congress added to the U.S. Code
through the enactment of the Civil Asset Forfeiture Reform
Act of 2000. (Congress amended § 2461 in 2006, but those
amendments are of no moment to this appeal.)
Having navigated this statutory maze, we come to the
question presented: how to define the “proceeds” subject to
forfeiture as a result of Balsiger’s criminal conduct. The par-
ties extend two competing invitations based upon two defini-
tions of “proceeds” in 18 U.S.C. § 981(a)(2). The district court
adopted the government’s view that proceeds should be de-
fined under subsection (A), which applies to cases “involving
illegal goods, illegal services, unlawful activities, and telemar-
keting and health care fraud schemes” and states that the for-
feited amount is the gross profit realized from the offense con-
duct. 18 U.S.C. § 981(a)(2)(A)
Balsiger, on the other hand, contends that the district court
should have selected the definition of “proceeds” in subsec-
tion (B), which applies in “cases involving lawful goods or
lawful services that are sold or provided in an illegal man-
ner.” 18 U.S.C. § 981(a)(2)(B). This definition limits forfeiture
to the “amount of money acquired through the illegal trans-
actions resulting in the forfeiture, less the direct costs incurred
in providing the goods or services.” Id.
Balsiger’s construction of the two competing definitions of
proceeds is correct on the facts presented here. His fraud
involved acts of deception through the redemption of retail
coupons—“lawful goods” within the meaning of
No. 17-1708 25
§ 981(a)(2)(B)—which, when fraudulently submitted for
reimbursement, were provided in an “illegal manner.”
The government’s contrary preference for the broader def-
inition of proceeds in § 981(a)(2)(A) misreads the statute and
overextends its reach. Classifying retail coupons as “illegal
goods” is strained, and calling Balsiger’s wire fraud “unlaw-
ful activity” within the meaning of § 981(a)(2)(A) risks render-
ing § 981(a)(2)(B) superfluous and thus meaningless. If all un-
lawful conduct falls within subsection (A), it is far from clear
what is left to fit within subsection (B). We cannot conclude
Congress intended this result given the differences in lan-
guage employed in subparts (A) and (B) of § 981(a)(2).
For these reasons, we AFFIRM Balsiger’s conviction and
sentence with the limited exception of the district court’s or-
der of forfeiture, which we REVERSE. We REMAND for the
limited purpose of allowing the district court to determine the
proper amount of forfeiture.