                            In the
 United States Court of Appeals
               For the Seventh Circuit
                         ____________

No. 03-1189
UNITED STATES OF AMERICA,
                                              Plaintiff-Appellee,
                                v.

RONALD T. SCHAEFER
                                          Defendant-Appellant.

                         ____________
        Appeal from the United States District Court for the
        Southern District of Indiana, Indianapolis Division.
       No. IP 99-CR-109 D/F—Sarah Evans Barker, Judge.
                         ____________
   ARGUED JANUARY 5, 2004—DECIDED SEPTEMBER 13, 2004
                         ____________



  Before CUDAHY, POSNER and KANNE, Circuit Judges.
  CUDAHY, Circuit Judge.


                                I.
  This is a successive appeal. The facts underlying Ronald
Schaefer’s conviction are set forth in our prior opinion,
United States v. Schaefer, 291 F.3d 932 (7th Cir. 2002)
(Schaefer I), and since they are not directly relevant to this
appeal, we will not repeat them here. Suffice it to say that
Schaefer was convicted by a jury in April 2000 of five counts
of fraud in connection with the sale of Walt Disney anima-
2                                                    No. 03-1189

tion cels, which are painted drawings of popular animated
characters on clear plastic or acetates. One count of convic-
tion was subsequently vacated by Judge S. Hugh Dillin,
who was presiding over the case at the time, because the
government improperly withheld potentially exculpatory
evidence in violation of Brady v. Maryland, 373 U.S. 83
(1963). (See 11/25/2002 Order at 4.) Judge Dillin sentenced
Schaefer to 37 months’ imprisonment in accordance with his
determination that the total loss stemming from Schaefer’s
fraudulent activities (both charged and uncharged) was
$231,000, resulting in an 8-level enhancement and a total
offense level of 20, with a corresponding 1997 Sentencing
Guidelines range of 33-41 months.
  The $231,000 loss was calculated by applying the govern-
ment’s suggested multiplier of 55% to an estimate of the
value of the artwork purchased by Schaefer’s customers
between 1994 and 1999—$420,000. The 55% multiplier was
derived by determining the percentage of the total value of
animation art Schaefer sold to three representative cus-
tomers1 that was attributable to fraud. In other words, only
$38,500, or 45%, of the $84,249 that these three customers
paid Schaefer was attributable to the actual market value
of the artwork they purchased; the remainder of the price
was attributable to Schaefer’s fraudulent misrepresenta-
tions. (PSR at 33.2) The $420,000 figure is Schaefer’s total
income from the sale of animation art between 1994 and
1999 (id. at 30), which corresponds to the total amount pur-
chasers paid Schaefer for animation artwork during that
time. Judge Dillin, however, did not include specific factual
findings in making his loss determination for sentencing
purposes. On appeal, we held that conduct, to be relevant

1
  Schaefer’s sales to these three customers represented more than
20% of Schaefer’s total income from the sales of animation art.
2
  References to Schaefer’s Presentence Investigation Report will be
designated by “PSR at ___.”
No. 03-1189                                                 3

conduct, had to be unlawful. Schaefer I, 291 F.3d at 939-40.
There were no findings that Schaefer’s conduct had met this
test. Id. at 945. However, we noted that the extrapola-
tion/multiplier methodology was not itself inherently
unreasonable. Id. at 944. We therefore vacated Schaefer’s
sentence and remanded the case, which was reassigned to
Judge Barker,3 for a determination of “how much of
Schaefer’s business was tainted by unlawfulness.” Id. at
945. We suggested that the simplest way for the govern-
ment to justify the $231,000 loss calculation would be by
pointing out “how the specific elements of mail and wire
fraud, which were the crimes specified in the fourteen-count
indictment, were an integral part of Schaefer’s artwork
business from 1994 to 1999.” Id. at 938. Alternatively,
Schaefer’s conduct could be shown to violate other criminal
statutes (e.g., state criminal fraud provisions). Id.
  Judge Barker reviewed the record and the parties’ briefs
and submissions and heard oral argument from the parties.
She then found, by a preponderance of the evidence, that all
of the charged conduct was criminal because it constituted
mail or wire fraud; that all of Schaefer’s uncharged conduct
was equally criminal because Schaefer used the same
methods and means throughout his dealings in animation
art as he did with respect to the conduct charged; and that
Schaefer’s intentions and methods in dealing in animation
art were part of an overall scheme to defraud. But despite
concluding that all of Schaefer’s conduct was unlawful, and
in the face of our suggestion in Schaefer I that the 55%
multiplier and extrapolation were reasonable ways to
estimate the loss stemming from Schaefer’s fraudulent
conduct, Judge Barker found that the 55% multiplier was
too speculative to allow losses to be calculated with particu-
larity. (11/25/2002 Order at 9.) Therefore, she declined to


3
  Judge Dillin had relinquished his docket since imposing
Schaefer’s sentence.
4                                                   No. 03-1189

use it in determining loss for the purpose of sentencing.
(Id.) Instead, Judge Barker determined that the total loss
from sales to the three representative victims that could be
identified with particularity was $81,801. She then used
$81,801 as the relevant conduct amount “because it is the
calculation that the Court can most straightforwardly and
accurately perform and document from the evidence and
about which we have the most confidence in terms of a sum
certain.” (Id. at 8-9.) She then sua sponte added a 3-level
upward departure to Schaefer’s sentencing level because “the
identifiable losses grossly and substantially understate the
actual monetary losses resulting from Defendant’s criminal
behavior”: one level because Schaefer’s overall earnings of
$420,000 during the period 1994-1999 were virtually all
fraudulently generated; one level because of the extent of the
intended loss as evidenced by the seizure of $500,000 in
inventory; and one level because of the loss to purchasers
from unrealized appreciation4 in value. (Id. at 11-12.) The
resulting sentencing range included the sentence of 37
months that Judge Dillin had ordered, and Judge Barker
reimposed that sentence.
  However, Judge Barker’s sentencing methodology also
gives Schaefer a whole new set of issues to appeal. He chips
away at Judge Barker’s determination that his victims
suffered $81,801 in identifiable losses by arguing that that
amount incorrectly includes uncharged transactions (half of
which he alleges involved no fraud, despite the district
court’s conclusion to the contrary) as well as the loss
attributable to Count Two, which had been vacated on


4
  In Schaefer I, we noted that Judge Dillin’s loss calculation may
have been conservative because it “did not include any adjustment
for the appreciation in value that Schaefer told his consumers
they would enjoy because he was selling his artwork at below
market prices under the requirements of his dead mother’s
estate.” 291 F.3d at 945.
No. 03-1189                                                  5

Brady grounds. He also argues that the district court erred
in departing upward three levels given Judge Barker’s
finding that it is “speculative” to claim that Schaefer’s cus-
tomers suffered more than $81,801 in losses, and because
the Guidelines already took into account the circumstances
cited for the departures. In the wake of the Supreme Court’s
decision in Blakely v. Washington, 124 S.Ct. 2531 (2004)
and our application of its principles to the federal sentenc-
ing guidelines in United States v. Booker, 375 F.3d 508 (7th
Cir. 2004), cert. granted 2004 WL 1713654 (U.S. Aug. 2,
2004), Schaefer filed a supplemental brief arguing that
resentencing is required because in calculating his sen-
tence, the district court relied on facts not found by a jury.


                              II.
  These days it should come as no surprise that our discus-
sion commences with the Supreme Court’s recent decision
in Blakely and our reading of Blakely in Booker. As we
recently observed, “the constitutional validity of the
Guidelines is in doubt.” United States v. Shearer, 2004 WL
1795085, at *3 (7th Cir. August 12, 2004). We continued:
    Under Blakely as interpreted in Booker, a defendant has
    the right to have a jury decide factual issues that will
    increase the defendant’s sentence. As Booker holds, the
    Guidelines’ contrary assertion that a district judge may
    make such factual determinations based upon the
    preponderance of the evidence runs afoul of the Sixth
    Amendment.
Id. In accordance with both Booker and Shearer, we must
remand the present case to the district court for resentencing.


                             III.
6                                                No. 03-1189

  Although Blakely and Booker necessitate our remand of
this case to the district court for resentencing, we will none-
theless address Schaefer’s arguments under the Guidelines
relating to the loss calculations and upward departures
employed by the district court. We do so in the interest of
judicial economy in the event that the Supreme Court may
subsequently decide some other fate for the federal Guide-
lines than that indicated in Booker.


A. Loss calculations
   We review the district court’s calculation of loss caused by
a defendant’s fraudulent conduct for clear error. United
States v. Sykes, 357 F.3d 672, 675 (7th Cir. 2004); Schaefer
I, 291 F.3d at 936-37. “To find clear error we must be per-
suaded that the sentencing court made a fundamental error
which resulted in a complete miscarriage of justice.” United
States v. Hatchett, 31 F.3d 1411, 1423-24 (7th Cir. 1994).
“Reversal is warranted only if the district court’s loss
calculation evokes a ‘definite and firm conviction that a
mistake has been made.’ ” Schaefer I, 291 F.3d at 937
(citations omitted).
  On remand, Judge Barker reviewed the record and the
parties’ briefs and submissions and heard oral argument
from the parties. She found, by a preponderance of the evi-
dence, that all of the charged conduct (both counts of con-
viction and counts of acquittal) was criminal because it
constituted mail or wire fraud. (11/25/2002 Order at 6-7.)
She then found that all of Schaefer’s uncharged conduct was
also criminal because Schaefer used the same methods that
he used with respect to the charged conduct. (Id. at 7.) She
concluded that “the whole of Defendant’s art selling busi-
ness activities during the years 1994 through 1999 com-
prised a fraudulent scheme perpetrated by him against
numerous customers/purchasers, virtually all of whom be-
No. 03-1189                                                 7

came victims through Defendant’s acts of mail and wire
fraud.” (Id. at 2.)
  Judge Barker also noted that relevant conduct, to qualify
as such, must be within the scope of the scheme to defraud. In
that regard, she stated that “[t]he record leaves us entirely
convinced that Defendant’s intentions and methods in
dealing in animation art were all of one fraudulent piece,
advanced as part of an over-arching, all-inclusive scheme
that affected every transaction he conducted.” (Id. at 3.) The
evidence supporting this conclusion was said to “evinc[e] a
well-established, on-going, consistent pattern of misrepre-
sentations and deceits told or written to customers that
permeated and influenced virtually every transaction he
conducted.” (Id.) Thus, we find that Judge Barker correctly
determined that all of Schaefer’s conduct, including counts
of conviction, counts of acquittal and uncharged conduct,
was criminal in nature and properly constituted relevant
conduct.
  Judge Barker identified three categories of losses that she
could calculate with particularity: (1) losses stemming from
the counts of conviction; (2) losses stemming from the
counts of acquittal; and (3) losses stemming from uncharged
conduct related to the three representative victims. The
total of these losses amounts to $81,801.


1. Counts of conviction
  The conduct of which Schaefer was convicted generated
$1,875 in loss. Schaefer does not dispute this amount.


2. Counts of acquittal
  With respect to the counts of acquittal, excluding Count
Two, which will be separately discussed, Judge Barker
found that the essential elements of mail fraud and wire
8                                                    No. 03-1189

fraud were satisfied by a preponderance of the evidence,
and that there were no failures of proof as to any of these
counts. (11/25/2002 Order at 7.) Specifically, the only
feature distinguishing the mail fraud counts of conviction
from the mail fraud counts of acquittal was the evidence, in
the counts of conviction, of written misrepresentations
corroborating the three representative victims’ testimony of
oral misrepresentations. (Id. at 7 n.1.) Since oral mis-
representations are sufficient, and since the standard for
sentencing under the Guidelines is a preponderance rather
than beyond a reasonable doubt, Judge Barker’s inclusion
of acquitted conduct was not clearly erroneous. Moreover,
Schaefer does not dispute the inclusion of the counts of
acquittal (except for Count Two). Adding the conduct of
which Schaefer was acquitted (except for Count Two) brings
the total amount of loss up to $37,914.
  Count Two, on which Schaefer was convicted at trial, was
later vacated by Judge Dillin because a description of the
cel at issue had been removed by the Government from the
envelope attached to the back of the cel and was not
supplied to the defense. The purchaser of the cel could not
remember his conversations with Schaefer about the cel but
insisted, based on the price he paid, that the cel must have
been represented as an original production cel.5 The cel,
however, was an original hand-painted cel, which had a
lower value.6 The “Official Description” in the envelope on


5
  An original production cel is a one-of-a-kind cel, the physical
artwork actually used in the animation process, though it may not
appear in the finished film. See http://www.mcguirefinearts.com/
animationdefs.html (last visited August 23, 2004). Each hand-
painted cel represents a slight change in position of the charac-
ters.
6
  A “hand-painted cel” may refer to a limited edition, hand-painted
reproduction of an image from actual production cels used in
                                                      (continued...)
No. 03-1189                                                      9

the back of the cel confirmed that the cel was an “original
hand-painted cel,” not an original production cel. Defense
counsel was unable to impeach the purchaser’s testimony
because the “Official Description” had been removed, so
Judge Dillin vacated the conviction on that count.
  In resentencing Schaefer, Judge Barker nonetheless in-
cluded the loss of $2,700 attributable to Count Two because
she determined that Schaefer’s conduct with respect to
Count Two was fraudulent, being part of his overall fraud-
ulent scheme. Thus, she concluded that, even if Count Two
should not be included with the charged conduct, it would
still qualify on the same grounds as the uncharged conduct.
Also, the Government had characterized Schaefer’s certifi-
cates of authenticity as misleading in themselves, and the
Government’s expert James Lentz testified that he had
never seen a legitimate certificate of authenticity in the
guise of an “Official Description” like the one attached to
the back of the cel in Count Two. There is thus sufficient
evidence in the record to support Judge Barker’s determina-
tion that Schaefer’s conduct with respect to Count Two
was—“Official Description” notwithstanding—fraudulent.
The inclusion of Count Two brings the total up to $40,614.7


6
   (...continued)
animations. See http://www.mcguirefinearts.com/animationdefs.html
(last visited August 23, 2004). Less commonly, a “hand-painted
cel” may be created for publicity purposes, usually depicting a
character in an “ideal” pose. See http://
www.animationartcollecting.com/ collectables7definitions.html (last
visited August 23, 2004).
7
  With respect to Schaefer’s sentence, whether Count Two is in-
cluded or not matters only if we also accept Schaefer’s argument
that the loss stemming from the uncharged conduct was over-
stated and/or unsupported. Otherwise, excluding the relatively
small loss amount attributable to Count II would not affect
                                                    (continued...)
10                                                 No. 03-1189

3. Uncharged conduct related to three representa-
   tive victims
  The final category of loss relates to uncharged conduct
involving the three representative victims, which is dis-
cussed in the Government’s sentencing materials (i.e., the
animation art sales to the three representative victims that
were reviewed by the expert and discussed in detail by FBI
Special Agent Robert Brouwer). Schaefer disputes the
unlawfulness of some of the conduct as well as the loss
calculations made by the government’s expert Lentz and
relied upon by the government and Judge Barker.
  Schaefer argues that the district court erred in finding
that all of his uncharged conduct with respect to these
transactions was criminal, when on approximately half of
the occasions, the government’s expert stated that the art-
work had been correctly described (though in some instances,
the appraised fair market value was lower than the price
paid). Schaefer asserts that “there is nothing fraudulent,
and certainly nothing criminal, about describing a piece
accurately but charging a different price” than that found
by the government’s expert to represent the market value
of the piece. (Schaefer’s Br. at 27 n.12.)
  We first reiterate our finding in Schaefer I, now law of the
case, that both Special Agent Brouwer and the govern-
ment’s expert Lentz were credible witnesses, whose testi-
mony and affidavits we specifically suggested the district
court could rely upon in making its loss calculation. Schaefer I,
291 F.3d at 943, 944. Thus, charging a higher price than
that found by the expert, particularly after misrepresenting
to his victims that he was selling art at below market value


7
  (...continued)
Schaefer’s sentencing range, because the total loss amount would
still be above $70,000, which represents the bottom of the loss
amount range used by Judge Barker in sentencing him.
No. 03-1189                                                 11

from his dead mother’s estate, was criminally fraudulent.
(See 11/25/2002 Order at 3.) Judge Barker moreover found
that “the Defendant utilized the same methods and means
to perpetrate his fraudulent course of conduct as he used in
the counts of conviction” and that his sales to the represen-
tative victims were similar “in terms of subject matter,
content and timing, and were thus part of the common
scheme to defraud.” (Id. at 7-8.) Thus, even if Schaefer’s
victims paid precisely market value (or less than market
value) for a particular piece, the transaction could still have
been criminally fraudulent. To cite an analogy, a fraudulent
misrepresentation that a mutual fund is a “green” fund
with a portfolio of stocks only from environmentally friendly
corporations when the portfolio actually includes known
polluters might induce environmentally conscious investors
to purchase shares of the fund. Even if the fund’s rate of
return turns out to be the same or higher than it would
have been if the composition of the portfolio had actually
been “green,” so that there is no monetary “loss,” the
misrepresentation may still be fraudulent even though the
victims suffered no monetary loss. Thus, the district court did
not err in finding that Schaefer’s uncharged conduct with
respect to the representative victims was fraudulent,
whether or not the fraud resulted in monetary loss. Fur-
ther, the district court correctly characterized any excess
charges above market value (as determined by the govern-
ment’s expert) as monetary losses stemming from Schaefer’s
fraudulent conduct.
  Schaefer also argues that the loss calculations were not
reliable. However, not only could Schaefer have raised this
issue on his first appeal, he also chose not to present alter-
native expert appraisals of his work. Since we already found
in Schaefer’s first appeal that Special Agent Brouwer and
the government’s expert Lentz were credible witnesses upon
whose testimony the district court could rely in making loss
calculations, Schaefer does not get a second bite at this
12                                                 No. 03-1189

particular apple. Moreover, as we also noted in Schaefer I,
the Guidelines require that “[t]he court need only make a
reasonable estimate of the loss” which can be done by
calculating “[t]he approximate number of victims multiplied
by the average loss to each victim” or even more generally,
by basing it on such factors as “the nature and duration of
the fraud and the revenues generated by similar operations.”
U.S.S.G. § 2B1.1, cmt. n.3(C).8 Thus, according to the
Guidelines, in order to pass muster, loss calculations only
need to be a reasonable estimate. We conclude that Judge
Barker did not err in implementing her chosen methodology
for calculating the losses attributable to Schaefer’s fraudu-
lent conduct.


B. Upward departures
  Moreover, although the usual standard of review applica-
ble to a district court’s decision to depart from the presump-
tive sentencing guidelines range is de novo, 18 U.S.C.
§ 3742(e), Schaefer waived his objections to the district
court’s decision to depart upward by failing to raise them
prior to or in conjunction with his resentencing. See United
States v. Marvin, 135 F.3d 1129, 1135 (7th Cir. 1998);
United States v. Heilprin, 910 F.2d 471, 474 (7th Cir. 1990).
Thus, the standard of review applicable to the upward de-
partures here is plain error. United States v. DeAngelo, 167
F.3d 1167, 1168 (7th Cir. 1999). We may reverse the district
court’s decision to depart upward by 3 sentencing levels
only if there were “conspicuous” and “particularly egregious
errors” causing a “miscarriage of justice.” Marvin, 135 F.3d at
1135.


8
  The United States Sentencing Guidelines Manual will be cited
as “U.S.S.G.” The 1997 version of the Guidelines Manual was used
in calculating Schaefer’s sentence, and our citations are to this
version unless otherwise noted.
No. 03-1189                                                 13

  The Sentencing Guidelines allow upward departures if
the court finds “that there exists an aggravating . . . cir-
cumstance of a kind, or to a degree, not adequately taken
into consideration by the Sentencing Commission in formu-
lating the Guidelines that should result in a sentence
different from that described.” 18 U.S.C. § 3553(b). Our
review of upward departures involves a three-step analysis:
(1) the sentencing court must state adequate grounds to
support the departure; (2) the facts cited to support the
departure must exist in the record; and (3) the degree of
departure must be linked to the structure of the Guidelines.
United States v. Peterson, 256 F.3d 612, 614 (7th Cir. 2001).
With respect to the third factor, Schaefer argues that Judge
Barker was required, at minimum, to “draw an analogy
between the defendant’s actions and the conduct discussed
in the Guidelines.” United States v. Raimondi, 159 F.3d
1095, 1102 (7th Cir. 1998). However, although we have
approved of the analogy method, it is not a necessary
recourse in showing that the degree of departure is linked
to the Guidelines’ structure. See, e.g., United States v. Leahy,
169 F.3d 433, 445 (7th Cir. 1999) (finding that “there are no
hard and fast rules for determining the extent of an upward
departure,” but noting that we have approved the analogy
method); United States v. Scott, 145 F.3d 878, 886 (7th Cir.
1998) (“No rigid rule exists for computing an upward
departure.”).
  Although Judge Barker departed upward by one level for
each of three stated reasons, the general grounds support-
ing each departure are the same: that actual losses are
present to a degree substantially in excess of those determi-
nable with specificity, and the unquantifiable losses “fall
outside the ‘heartland’ of conduct” embodied in the loss
tables. (11/25/2002 Order at 10.) She found the present case
to be atypical because the loss was present in an excep-
tional way, citing United States v. King, 150 F.3d 644, 650
(7th Cir. 1998).
14                                                  No. 03-1189

  While it is true that the evidence supports a finding that
losses were substantially greater than the amount Judge
Barker felt able to calculate “with the particularity required
under the loss tables in U.S.S.G. § 2F1.1(b)(1)” (11/25/2002
Order at 11), this does not necessarily translate into
support for using upward departures rather than attempt-
ing to estimate losses, particularly given the deferential
standard under which sentencing judges are allowed to
determine the amount of loss.9 We acknowledge that there
may be circumstances in which the use of an upward
departure in lieu of an estimate of losses attributable to
fraud might be appropriate, and that an inability to esti-
mate the loss caused by the fraud may be one such circum-
stances. For example, the Fifth Circuit has found that in
circumstances where the loss is not capable of determina-
tion, an upward departure is indeed appropriate. See United
States v. Garcia, 900 F.2d 45, 48 (5th Cir. 1990). But Garcia
is factually distinguishable from the situation at bar. In
Garcia, the defendant had taken and destroyed a large
volume of mail, and he made the same arguments that
Schaefer makes here: that the Guidelines accounted for the
amount of the loss—whether it be large or small—in the
loss tables, and that therefore a loss of any amount within
the range of the loss tables is within the contemplation of
the Guidelines. Like Schaefer, “Garcia argue[d] that the
incalculability of the loss resulting from his offense did not
involve a circumstance that the Sentencing Commission
failed to adequately consider, but rather resulted from


9
   The Guidelines allow the amount of an offender’s gain to be
used as an alternative estimate of the harm caused by the fraud
if the loss sustained by victims cannot be readily estimated. See
United States v. Serpico, 320 F.3d 691, 698 (7th Cir. 2003) (quot-
ing U.S.S.G. § 2B1.1, cmt. n.2(B) (2001) (“The court shall use the
gain that resulted from the offense as an alternative measure of
loss only if there is a loss but it reasonably cannot be deter-
mined.’ ”)).
No. 03-1189                                                    15

inaction on the part of the [prosecuting authority].” Id. But
Garcia’s destruction of the stolen mail made it impossible to
quantify the monetary loss resulting from his crime.10 Here,
on the other hand, we approved of a methodology for
making a reasonable estimate of losses in Schaefer
I—namely, the 55% multiplier— and the district court
chose not to use it. While the district court is correct that
the losses caused by Schaefer’s criminal conduct cannot be
determined with particularity, the Guidelines do not
require that the losses be determined with precision, only
that a reasonable estimate be made. See U.S.S.G. § 2B1.1,
cmt. n.8. Judge Barker did not attempt to make such an
estimate. This leaves us in a bit of a bind. For while the law
may support using Judge Barker’s three reasons in making
loss calculations, we have been pointed to no case law
supporting the use of these reasons in making upward
departures. Our analysis of each of these reasons follows.
  Judge Barker departed upward by one level because of
the losses Schaefer intended to cause in the future, which
were not accounted for by her loss calculations. These in-
tended losses were evidenced by Schaefer’s $500,000 inventory
of animation art that was seized by government officials,
thereby preventing him from making additional fraudulent
sales. The size of Schaefer’s art inventory is factually sup-
ported by the record, as we noted in Schaefer I. And as we
also stated in Schaefer I, a defendant’s intended loss to vic-
tims is an appropriate consideration in making loss calcu-
lations. See United States v. Strozier, 981 F.2d 281, 284-85
(7th Cir. 1992). Since Judge Dillin’s loss calculation of
$231,000 “did not include any ‘intended loss’ that might be


10
  United States v. Archambault is distinguishable because the
losses in that case were quantifiable, and they merely could not be
included in the loss calculations due to the timing of the un-
derlying criminal conduct. See Archambault, 62 F.3d 995, 1001
(7th Cir. 1995).
16                                                No. 03-1189

ascribed to Schaefer’s entire $500,000 art inventory that
was seized by government officials,” it could on this basis be
characterized as conservative. Schaefer I, 291 F.3d at 945.
Judge Barker’s loss calculation of $81,801 is likewise
conservative. Although no effort has been made to quantify
the intended loss attributable to this “well of future fraud”
(Gov’t Br. at 38), applying the 55% multiplier to the value
of Schaefer’s inventory (which, as the district court found,
would eventually have been sold, despite Schaefer’s protes-
tations that it was merely being used to decorate his children’s
bedrooms) would indicate intended future losses of
$275,000. This amount is more than enough to justify the
size of the upward departure attributable to intended
losses, since including this amount in the loss calculations
would have brought Schaefer’s Guidelines range up far more
than the one level allocated by Judge Barker. The size of
the departure is thus firmly linked to the Guidelines.
Although attempting to reasonably estimate losses caused
by fraud may be more in the spirit of the Guidelines than is
the use of upward departures, we cannot in these cir-
cumstances say that Judge Barker’s use of intended losses
to justify a one-level upward departure rises to the level of
a “conspicuous” and “particularly egregious” error causing
a “miscarriage of justice.” Marvin, 135 F.3d at 1135.
  Judge Barker’s second one-level upward departure is
based on her finding that the size of the actual losses at-
tributable to Schaefer’s criminally fraudulent conduct was
substantially greater than the amount she felt able to calc-
ulate with particularity, namely $81,801. Schaefer argues
that this upward departure is erroneous, given Judge
Barker’s finding that it is “speculative” to claim that
Schaefer’s customers suffered more than $81,801 in losses.
This argument, however, involves a mischaracterization of
the district court’s findings. Judge Barker merely found
that it would have been speculative to try to come up with
a precise amount based on the multiplier methodology, but
No. 03-1189                                                 17

she knew (and the record supports her finding) that the loss
amount would be much larger than $81,801. In fact, we
would have approved use of the government’s 55% multiplier,
given Judge Barker’s finding that all of Schaefer’s fraudu-
lent conduct was criminal, and this methodology would
have validated Judge Dillin’s loss calculation of $231,000.
Hence, Judge Barker’s use of a one-level upward departure
to account for the difference between $81,801 and $231,000
is more than supported by the Guidelines’ structure. While
an attempt to estimate the amount would again have been
preferable to resorting to an upward departure, we believe,
under the circumstances of this case, that the district
court’s decision to depart upward by one level to account for
the size of the actual losses is not an especially egregious
error, and it does not rise to the level of a miscarriage of
justice.
  Judge Barker’s third one-level departure is based on the
unrealized appreciation promised to Schaefer’s victims. Al-
though, as we noted in Schaefer I, misrepresentations of a
rate of return made in furtherance of a fraudulent scheme
may in some circumstances be included in a loss calcula-
tion, see United States v. Porter, 145 F.3d 897, 901 (7th Cir.
1998), we do not believe that the circumstances here
support the use of this rationale as the underpinning for an
upward departure. We have never allowed unrealized ap-
preciation to be used in a loss calculation without a guar-
anteed rate of return or other indication of a specific degree
of appreciation. See Porter, 145 F.3d at 901 (allowing
“unrealized appreciation” in loss calculation when a spe-
cified rate of return was guaranteed, and the victim was
told in false account statements that his account had
attained specific values); United States v. Allender, 62 F.3d
909, 917 (7th Cir. 1995) (explaining that future appreciation
can be considered where there is “an enforceable agreement to
pay a calculable sum”). This is because the Guidelines indicate
that “loss” refers to “the value of the money, property, or
18                                               No. 03-1189

services unlawfully taken; it does not, for example, include
interest the victim could have earned on such funds had the
offense not occurred.” U.S.S.G. § 2F1.1, cmt. n.7.
  Here, although Schaefer’s victims were admittedly unable
to realize the “appreciation in value Schaefer told his
consumers they would enjoy because he was selling his art-
work at below-market prices,” Schaefer I, 291 F.3d at 945,
neither did Schaefer make specific representations as to the
actual market value of those pieces. Thus, while Schaefer’s
victims may have had some indeterminate expectations of
profit (either immediately or in the future), there was no
enforceable agreement or guaranteed rate of return result-
ing in a determinable amount of loss . The government
argues that because this additional loss amount cannot be
calculated, an upward departure is appropriate to “prevent
the defendant from receiving no punishment for this real
and substantial additional loss.” (Gov’t Br. at 33.) But, un-
like the upward departures for Schaefer’s intended future
losses and for the larger-than-determinable actual losses,
we have no way of determining whether this one-level
upward departure is in any way linked to the structure of
the Guidelines. The government’s assertions that the size
of this loss is “substantial” do not provide us with any means
of determining whether one additional level is appropriate,
or whether the amount of loss represented by “unrealized
appreciation” is already accounted for by the existing loss
calculations and upward departures. For this reason, we
decline to extend our holdings in Porter and Allender with
respect to loss calculations to support an upward departure
based on indeterminate losses that may be attributable to
“unrealized appreciation.” Because the upward departure for
“unrealized appreciation” is not supported under the Guide-
lines as interpreted by our case law, we disallow it.
No. 03-1189                                                     19

                               IV.
  In light of Blakely and Booker, this case is remanded for
resentencing. However, in the event that the Supreme
Court decides that Blakely does not invalidate the federal
sentencing Guidelines, we affirm Judge Barker’s loss
calculation of $81,801 and two of Judge Barker’s three one-
level upward departures, and we reverse with respect to the
third one-level upward departure for unrealized appre-
ciation. Since the Guidelines level Judge Barker arrived at
was 21, whereas Judge Dillin’s was 20, this would place
Schaefer in the same sentencing range as Judge Dillin em-
ployed. Since we believe that Judge Barker would likely
reimpose Schaefer’s sentence of 37 months for the same
reason she (and Judge Dillin) have previously imposed that
sentence, a remand for resentencing in light of the lower
applicable Guidelines range is unnecessary. Cf. United
States v. Emezuo, 357 F.3d 703, 710-11 (7th Cir. 2003);
United States v. Wallace, 32 F.3d 1171, 1174-75 (7th Cir.
1994).11
                 REVERSED and REMANDED for resentencing.




11
   Schaefer has also requested immediate release under bond from
incarceration, since he has already served what would presumably
be his sentence if the Guidelines are invalid. Based on the present
state of the law in this circuit, this seems to be a meritorious
request, but we leave this decision to the district court on remand.
In this regard, the district court might wish to take note of
Schaefer’s earlier positions in this case with respect to unchal-
lenged aspects of his sentence. See Booker, 375 F.3d at 510
(interpreting Blakely to allow sentences to be imposed based on
“what the jury found or the defendant admitted or, as here, did
not contest”) (emphasis added).
20                                        No. 03-1189

A true Copy:
      Teste:

                    ________________________________
                    Clerk of the United States Court of
                      Appeals for the Seventh Circuit




               USCA-02-C-0072—9-13-04
