Argued October 8, 2014
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 11 CR 792 -- Samuel Der-Yeghiayan, Judge.
For United States of America, Plaintiff - Appellee: Kaarina Salovaara, Attorney, Office of The United States Attorney, Chicago, IL.
For Robert G. Nelson, Defendant - Appellant: Adam Stevenson, Attorney, University of Wisconsin, Law School, Madison, WI.
Before POSNER, FLAUM, and SYKES, Circuit Judges.
Robert Nelson was convicted of mail fraud, 18 U.S.C. § 1341, sentenced within the guidelines range to 66 months' imprisonment, and ordered to pay about $2.6 million in restitution. Although the number of victims exceeds 30, more than $1 million of the $2.6 million total loss found by the district court was attributed to just three of them. Those victims and their individual losses are at the center of this appeal, in which Nelson argues that the district court significantly overstated the total loss by crediting unreliable evidence and failing to resolve discrepancies between the parties' positions on the victims' losses. We conclude that the record adequately supports the district court's findings, and thus we affirm the judgment.
Nelson entered into a plea agreement admitting that he masterminded a Ponzi scheme in which he falsely promised investors that he would put their money into real estate and promptly earn them a significant return, sometimes as high as 45%. According to the presentence investigation report, Nelson's investors lost approximately $2.597 million. Because that figure exceeds $2.5 million, the probation officer recommended an 18-level increase to Nelson's offense level, resulting in a guidelines imprisonment range of 63 to 78 months. See U.S.S.G. § 2B1.1(b)(1)(J). Nelson conceded that the loss was at least $1 million but disagreed that it had reached $2.5 million. If, as Nelson asserted, the loss was more than $1 million but shy of $2.5 million, then the increase in offense level would have been 16 instead of 18, see id. § 2B1.1(b)(1)(I), and the imprisonment range would have dropped to 51 to 63 months.
The government and Nelson agreed about who was on the list of victims. For all but three of the victims on that list,
they also agreed on amount of loss, which totaled approximately $1.5 million. So the district court's choice between an increase of 16 or 18 offense levels came down to three victims: 3G Developments, DKW Investments, and JNL Financial. According to the government, 3G lost $507,000; DKW lost $372,000; and JNL lost $235,000. Nelson's position was that 3G lost $73,500; DKW lost $34,000; and JNL lost nothing.
For guidelines purposes the loss attributable to mail fraud excludes money obtained by deception but then returned before the crime was detected. Id. § 2B1.1 cmt. n.3(E); United States v. Peugh, 675 F.3d 736, 741 (7th Cir. 2012), rev'd on other grounds, 133 S.Ct. 2072, 186 L.Ed.2d 84 (2013); United States v. Brownell, 495 F.3d 459, 463-64 (7th Cir. 2007); United States v. Snelling, 768 F.3d 509, 513-14 (6th Cir. 2014). The parties agreed that Nelson had repaid $348,000 to 3G, but they disagreed about the size of 3G's investment. The government asserted that 3G invested $855,000; Nelson maintained that the figure was $421,500. Nelson's bank statements indeed documented $421,500 in transfers from 3G, but the government asserted that the balance was paid in currency.
In support of that assertion, the government submitted two receipts bearing the signatures of both Nelson and Steve Galvin, 3G's principal. The first receipt states, " I, Robert Nelson, have received a total loan amount of $805,000 over the past few years in various installments from 3G Developments and Steve Galvin." The second receipt states, " I, Robert Nelson, received a loan in the amount of $50,000 from Steve Galvin." The government also called Galvin as a witness. Galvin testified that 3G had given Nelson approximately $855,000--in principal investments, excluding purported earnings that 3G allowed Nelson to retain and reinvest--through " bank ...