September 14, 2017
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 15-CR-175-1 -
Charles R. Norgle, Judge.
Chief Judge, and Ripple and Hamilton, Circuit Judges.
Hamilton, Circuit Judge.
a plea agreement, defendant Carl Moose pleaded guilty to
defrauding investors in violation of the federal wire fraud
statute, 18 U.S.C. § 1343. The district court gave him a
below-guideline sentence of two years in prison and an
additional two years of supervised release. Moose has
appealed, challenging both his prison sentence and the length
and several specific conditions of his supervised release. We
affirm the prison sentence and the length of the supervised
release term, but remand for the limited purpose of
considering several conditions of supervised release. We
address in turn Moose's challenges to: (1) the loss
amount the district court used in calculating his guideline
sentencing range; (2) the fraud guideline's treatment of
loss amounts more generally; and (3) the supervised release
portion of Moose's sentence, including the duration and
conditions of the supervised release sentence.
review de novo the district court's legal
interpretations of the Sentencing Guidelines, but we review
factual findings as to loss amount for clear error.
United States v. White, 883 F.3d 983, 986 (7th Cir.
2018). The district court found under U.S.S.G. §
2B1.1(b) (2015) that the applicable loss amount for
Moose's offense was about $480, 000, which added 12
offense levels to his guideline calculation. Moose argues the
correct amount was only about $70, 000. If that were
correct, six levels would need to be subtracted from the
court's calculation of the offense level. See U.S.S.G.
§ 2B1.1(b)(1) (six-level increase for loss amount of
$40, 000-$95, 000, and twelve-level increase for loss amount
of $250, 000-$550, 000). To explain the issue, we must
explain Moose's fraud.
early 2007, Moose began soliciting investors with a stock
tip: a company called California Energy & Power (CEP) was
developing vertical-axis wind turbines. He advised investors
to act before an investment window closed and CEP began
paying its first dividends. Rather than broker sales of CEP
stock to the investors, though, Moose formed his own company,
Infiniti Wind Technology, to serve as the investment vehicle
for purchasing CEP stock. He persuaded his investors to buy
shares of Infiniti, which he controlled, by saying that
Infiniti would in turn buy shares of CEP.
told investors that he planned to raise $250, 000 through
Infiniti to purchase four percent of CEP. He said that
ownership of Infiniti would be divided into 20 units
distributed to individuals based on their investments in that
company. He did not tell the investors that he would reserve
for himself a portion of the invested funds as either a
finder's fee or management fees for Infiniti. In July
2008, Moose surpassed his goal of raising $250, 000. Based on
his representations to his original investors, Moore should
have stopped raising money under the Infiniti name at that
point and invested Infiniti's cash in CEP stock.
broke the promises he made to investors in three ways. He
continued to raise money from investors in exchange for
ownership units of Infiniti after he reached his goal,
raising a total of $680, 000. He bought only three percent of
CEP stock despite a promise to buy four percent. Most
important, instead of investing all the $680, 000 he received
from 16 investors under this investment scheme or even the
$250, 000 in his statements to investors, Moose invested only
$200, 000 in CEP. The remaining $480, 000 he just took for
himself. In July 2011, facing pressure from angry investors,
he stepped down as manager of Infiniti and relinquished his
control of the company.
eventually pleaded guilty to one count of wire fraud in
violation of 18 U.S.C. § 1343. The district judge
determined that the Sentencing Guidelines recommended a
prison term of 41 to 51 months. In reaching this figure, the
judge concluded that the intended loss resulting from the
fraud was $480, 000 and the actual loss was $406, 000. The
judge sentenced Moose to 24 months in prison and 24 months of
Sentencing Guidelines for fraud and similar crimes give
substantial weight to the relevant loss amount. See U.S.S.G.
§ 2B1.1. The relevant amount is the greater of the
actual loss or the intended loss. Id., cmt. 3(A).
Actual loss is "the reasonably foreseeable pecuniary
harm that resulted from the offense," and intended loss
is the "pecuniary harm that the defendant purposely
sought to inflict." Id.
Moose invested only $200, 000 as promised of the $680, 000 he
persuaded investors to entrust to him and pocketed the other
$480, 000, the district court's loss finding of $480, 000
is easy to understand. Moose argues, however, that he should
have benefited from a guideline feature that calls for a
measure of leniency on the loss calculation, at least in
limited circumstances. If a defendant returned money or
property to a victim before an offense was detected, the
value of the returned money or property is deducted from the
loss amount. Id., cmt. 3(E)(i). The time of
detection is the earlier of either the time of actual
discovery or the time when the "defendant knew or
reasonably should have known that the offense was detected or
about to be detected by a victim or government agency."
Moose admits that he pocketed the $480, 000, he argues for a
loss figure of just $70, 000. To reach that amount, Moose
begins with the $680, 000 that his victims gave him to invest
in CEP. He points out that he initially invested $200, 000 of
that money before fraud was detected. So far, so good. Moose
then muddies the water with internally inconsistent
arguments. To qualify for the discount based on returning
stolen property before the crime was detected, he contends
that he returned this property before the fraud detection in
July 2011. His theory is that the investors always had
ultimate control over Infiniti through their ownership
shares, despite his day-to-day stewardship. Moose reasons,
then, that he "returned" the investors'
property on the days he purchased the CEP stock in 2007 and
2008. But if that were correct, the property had, at the time
of the supposed return, a value of only $200, 000, which
would not help him avoid the loss amount of $480, 000. To
maximize the value of that property ...