UNITED STATES of America, Plaintiff-Appellee, v. Robert A. LOFFREDI, Defendant-Appellant.
No. 12-1124
United States Court of Appeals, Seventh Circuit.
Decided June 18, 2013.
Rehearing and Rehearing En Banc Denied July 26, 2013.
718 F.3d 991
Jonathan E. Hawley, Federal Public Defender, Office of the Federal Public Defender, Peoria, IL, A. Brian Threlkeld, Office of the Federal Public Defender, Urbana, IL, for Defendant-Appellant.
Before BAUER, WILLIAMS, and SYKES, Circuit Judges.
PER CURIAM.
Robert Loffredi appeals his sentence of 78 months’ imprisonment for mail fraud,
Loffredi owned and operated a securitiеs brokerage firm that offered its customers investments in certificates of deposit, mutual funds, and Treasury bills. Instead of purchasing the investments requested by his custоmers, however, Loffredi diverted their money toward his own personal expenses and business debts. Over four years he fraudulently misappropriated аpproximately $2.8 million from his brokerage customers. One customer alerted the Securities and Exchange Commission to some irregularities in his financial statements, and the ensuing investigation led to an indictment charging Loffredi with five counts of mail fraud. See
At issue here is the two-level upward adjustment Loffredi received under
On appeal Loffredi argues that we should side with the other circuits that, he believes, have interpreted the guidelines in a way that would exclude his defrauded customers from the victim tally. The guidelines define “victim” in
Loffredi argues that we should overturn Panice because, he says, other circuits give better effect to the plain meaning of the language in the guidelines. He points in particular to United States v. Yagar, 404 F.3d 967, 970-72 (6th Cir. 2005), which involved bank-account holders who temporarily lost funds due to the defendant‘s fraudulent withdrawals but were reimbursed by the bank; the Sixth Circuit held that because their losses were “short-lived and immediately covered by a third-party,” the account holders did not sustаin any “actual loss,” id. at 970-72. Other circuits encountering similar circumstances have adopted the same reasoning. See United States v. Kennedy, 554 F.3d 415, 419-22 (3d Cir. 2009); United States v. Conner, 537 F.3d 480, 489-91 (5th Cir. 2008); United States v. Armstead, 552 F.3d 769, 782 (9th Cir. 2008). Loffredi draws two princiрles from these cases: (1) the word “sustained” implies some definite duration of loss, and (2) individuals whose losses were reimbursed—and who therefore are nоt owed restitution in the “actual loss” calculation under
We reject Loffredi‘s argument that a plain reading of the word “sustained” compеls the conclusion that a victim‘s losses must be endured for some minimum period of time. See Stepanian, 570 F.3d at 55 (relying on Black‘s Law Dictionary defining “sustain” to mean “‘undergo’ or ‘suffer‘“); United States v. Pham, 545 F.3d 712, 718 (9th Cir. 2008) (“[A]n individual who ‘sustained bodily injury as a result of the offense’ would still be considered a victim under part B of the definition found in application note 1 to U.S.S.G. § 2B1.1 even if he subsequently recovered from that injury.“). We stated in Panice that the guidelines’ definition of “victim” contains no inherent temporal baseline and does not require that the loss persist through the time of sentencing. 598 F.3d at 433. We are not persuaded by the reasoning of other circuits that infer such a limitation from the text of thе guidelines.
Likewise, nothing about the plain meaning of “actual loss” prohibits “double counting.” One can sustain “part of” an overall loss even though the finаncial burden of the loss has shifted to someone else by the time the defendant goes to court for sentencing because both parties—the initial target of the offense and the party who reimbursed the initial loss—have suffered pecuniary harm that resulted from the of-
Loffredi protests that this logic could lead to an endless chain of victims where one victim‘s loss is continually reimbursed by someone else down the line, creating a gross mismatch between the number of “victims” and the amount of actual loss calculated under
Finally, contrary to Loffredi‘s assertions, Panice did not foreclose the possibility that some individuals who suffer an initial, negligible loss before reimbursement may be excluded as victims because their reimbursement was so swift or—perhaps owing to contractual obligations—so certain and complete that they suffered no actual pecuniary harm. See Stepanian, 570 F.3d at 55 n. 5 (declining to аddress the “situation where unauthorized charges made on credit cards are reversed before targets actually pay for the charges“); Kennedy, 554 F.3d at 419 (еxcluding account holders from victim tally where government had not shown “that the account holders even knew that their funds had been stolen before thеy were completely reimbursed“); United States v. Erpenbeck, 532 F.3d 423, 442 (6th Cir. 2008) (distinguishing situation in which putative victim had immediate coverage from fraud due to contractual relationship from situаtion in which victims “eventually had to undertake a class-action lawsuit to seek relief“). We need not explore that threshold in this case, howevеr, because Loffredi‘s customers’ losses were neither short-lived nor minuscule. Loffredi‘s fraudulent misappropriations went on for years before his сustomers caught on, and the scheme‘s success depended on misleading them repeatedly into believing that their funds were secure. Loffredi nevеr asserted that his fraud was painless with respect to his customers; he relied instead on an all-or-nothing defense that the customers cannot be victims because they were reimbursed. For the reasons stated, we reject that contention.