                               In the

    United States Court of Appeals
                 For the Seventh Circuit
No. 13-2358

UNITED STATES OF AMERICA,
                                                   Plaintiff-Appellee,

                                  v.


GUY STEIN,
                                                Defendant-Appellant.

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
          No. 10 CR 1104 — Rebecca R. Pallmeyer, Judge.


       ARGUED MAY 22, 2014 — DECIDED JUNE 26, 2014


   Before POSNER, FLAUM, and MANION, Circuit Judges.
   MANION, Circuit Judge. Guy Stein pleaded guilty to one
count of wire fraud stemming from a check-kiting scheme that,
along with related conduct, caused a total loss of approxi-
mately $1 million to multiple financial institutions. In this
appeal, Stein argues that approximately $440,000 of that loss
should not have been counted against him because one of the
principals of two of the financial institutions was complicit in
2                                                       No. 13-2358

his scheme. Finding no error with the district court’s resolution
of this issue, we affirm.
                            I. Background
    Guy Stein ran legitimate companies—Big City Tickets and
Advanced Design Consulting—for which he maintained bank
accounts at three different banks. In need of “working capital
financing assistance for [his] construction projects,” he
approached his friend Kevin Wiley. Wiley was a one-third
owner of two currency exchanges, and he proposed that Stein
write checks from his (underfunded) bank accounts to cash at
the exchanges. That way, Stein would have use of the money
to run his business for anywhere between a few to several
days. At the end of that period, if his business had turned the
profit he needed, the checks would clear without any problem.
If not, he could write more checks, cash them, deposit enough
proceeds to ensure the earlier checks cleared, and have more
money to keep running his businesses in the hope of eventu-
ally turning a profit.1 Stein did the latter for about five months,
beginning in May 2010. Stein also used a third exchange, not
related to Wiley, for this purpose. There was, however, a hitch
in this plan. To clear previous checks and obtain the working
capital needed for the next period, he would have to write
larger (or more) checks each cycle. Further, each time a check
was cashed, the exchange charged a fee of approximately 2%.
Accordingly, the balance was spiraling upward while the
annualized percentage rate for “borrowing” this working



1
   We use the term “cash” loosely to include both actually cashing the
checks and purchasing money orders with the checks.
No. 13-2358                                                               3

capital was anywhere from 100% to over 200% “interest”
(depending on whether the period between cashing and
clearing checks, over which the roughly 2% fee was spread,
was several days or only a few days).2 All the time, this
juggling act (a check-kiting scheme) provided only a small
amount of working capital. Needless to say, this was a totally
irrational method of financing his construction projects. We do
not need to know why Stein did not get a traditional loan or
even look ahead to where this scheme would lead. Regardless,
things came to a head when Stein was injured in a car accident
and was not physically able to orchestrate the next round of
checks. At that juncture, the Wiley exchanges suffered a loss of
about $440,000 from checks that the banks did not clear
because Stein’s bank accounts had insufficient funds. The third
exchange, Grand Avenue Currency Exchange, likewise lost
about $250,000. Together with some related conduct not at
issue in this appeal, the total loss to financial institutions as a
result of Stein’s conduct was over a million dollars.
    When his fraud came to light, Stein pleaded guilty to one
count of wire fraud, in violation of 18 U.S.C. § 1343. At his
initial sentencing, the district court calculated his guideline
range as 33–41 months based on his crime of conviction and a
loss amount of about $1,170,000 (which took into account some
money he had paid back). However, the district court noted
that Stein’s scheme was not designed to enrich himself. Rather,
his fraud was orchestrated to keep his businesses afloat and
pay his employees. For these and other relatively sympathetic
factors, the district court sentenced him below the guidelines

2
    The shorter the period, the higher the effective annual “interest.”
4                                                             No. 13-2358

to 24 months’ imprisonment. Stein appealed, arguing that the
district court erred in its loss calculation. While on appeal, we
granted a limited remand so the district court could consider
Stein’s motion for reconsideration of sentence. The district
court granted that motion and revised the loss amount, for
purposes of calculating the guidelines, down to about $960,000.
This resulted in a guideline range of 27–31 months. See U.S.S.G.
§ 2B1.1(b)(1)(H), (b)(1)(I) (offense level increases by two above
a one million dollar threshold). Sticking with its earlier
reasoning, the district court again gave a below-guidelines
sentence of 21 months’ imprisonment. However, the court still
entered a restitution amount of slightly over one million
dollars in the amended judgment.
    In this appeal, Stein argues that the roughly $440,000 loss
he caused to Wiley’s exchanges should not be incorporated
into the restitution judgment because of Wiley’s complicity in
his scheme.3 The government disagrees, but adds that the
amended judgment should be revised because the approxi-
mately one million dollar figure for restitution is a scrivener’s
error and the correct figure is about $960,000.
                               II. Discussion
    “We review the district court’s factual findings for clear
error, reversing only when we are ‘left with the definite and
firm conviction that a mistake has been made.’” United States

3
  Stein does not argue that his guideline range was erroneously calculated
because, even if $440,000 was subtracted from the loss amount, he would
remain in the same loss range under the guidelines. See U.S.S.G.
§ 2B1.1(b)(1)(H), (b)(1)(I) (offense level is constant when the loss is above
$400,000 and below $1,000,000).
No. 13-2358                                                              5

v. White, 737 F.3d 1121, 1142 (7th Cir. 2013) (quoting United
States v. Cruz–Rea, 626 F.3d 929, 938 (7th Cir. 2010)). However,
“[w]e review the calculation of restitution for abuse of discre-
tion.” United States v. Frith, 461 F.3d 914, 919 (7th Cir. 2006).
“[T]he district court need only make ‘a reasonable estimate of
the loss’ in applying the enhancement. … Thus, on appeal, a
defendant must ‘show that the court’s loss calculations were
not only inaccurate but outside the realm of permissible
computations.’” White, 737 F.3d at 1142 (quoting U.S.S.G.
§ 2B1.1, application note 3(C), and United States v. Love, 680
F.3d 994, 999 (7th Cir. 2012)). We will only upset an order of
restitution “if the district court used inappropriate factors or
did not exercise discretion at all.” Frith, 461 F.3d at 919.
    Stein does not dispute that approximately $440,000 worth
of checks he cashed at Wiley’s exchanges were not honored
because of insufficient funds, and this was the evidence the
government offered for the district court to calculate the loss.
Rather, Stein argues that ordering restitution for this amount
was unreasonable because Wiley was complicit in the fraud,
and in fact, “earn[ed] significant profits” from the transaction
fees.4 Appellant’s Reply Br. at 1. The record strongly indicates
that Wiley’s exchanges did not profit in the end.5 But even if


4
  Initially, Stein argued that Wiley’s testimony was not reliable enough to
be used to establish the loss amount, but after the government responded
that Wiley’s testimony was not needed to arrive at the loss amount, Stein
narrowed his argument to Wiley’s complicity in his reply.

5
  During the course of Stein’s check-kiting scheme, he cashed about 1,500
checks for a total value of about $13,000,000. Pre-sentence Investigation
                                                            (continued...)
6                                                             No. 13-2358

the exchanges had profited from the transactions, that alone
does not require reducing the restitution due them. The
exchanges received the fees for services that they rendered,
and so were entitled to those fees in addition to the money
from the checks which they had cashed for Stein. Accordingly,
if there is any merit to Stein’s argument, it must rest in his
assertion that Wiley was complicit in the fraud, such that the
exchanges he part-owned are not really victims. This, however,
was reasonably dealt with by the district court:
      My conclusion with respect to Wiley is this: The
      victims are the currency exchanges. Wiley himself
      may have played an improper role. And to the
      extent that he was recovering, he or the currency
      exchanges hoped to recover some fee or percentage.
      He hasn’t been victimized to that extent.
      But the victim, that is, the currency exchange, a
      business that has a separate existence from Mr.
      Wiley, was victimized by the amount of the dishon-
      ored checks. So that calculation I am satisfied with.
      I don’t think I need to make any adjustments to that.



(...continued)
Report (“PSR”) at 5, ¶ 14. Not all of these checks were cashed at Wiley’s
exchanges and the parties disagree about the transaction fee. But even
assuming all $13,000,000 of checks were cashed at Wiley’s exchanges and
the fee was the 2.25% Stein asserts, that is only an income of about $300,000
for Wiley’s exchanges—still not a “profit” set against the $440,000 loss. The
loss amount is less than the total value of kited checks because earlier-
cashed checks cleared from the proceeds of later-cashed checks; only the
last cycle failed and exposed the accumulated loss.
No. 13-2358                                                                  7

October 31, 2013, Sentencing Tr. (“Sent. Tr.”) at 6–7. The
currency exchanges had their own separate existences. It is
irrelevant that Wiley was a contributing cause. He is not the
victim, the exchanges are. Stein was clearly a but-for and
proximate cause of the losses which the exchanges suffered.
See, e.g., United States v. Robertson, 493 F.3d 1322, 1334 (11th Cir.
2007) (“‘Defendant’s conduct need not be the sole cause of
party’s loss’”) (quoting United States v. Gamma Tech Indus., Inc.,
265 F.3d 917, 928 (9th Cir. 2001)).6
    Further, Wiley’s misconduct while a partial owner does not
change the exchange’s victim status or the propriety of the
calculation. Wiley’s encouraging Stein to undertake the risky
check-kiting scheme may have created multiple transactions
which initially benefitted the exchanges (the victims), and
himself by virtue of his relation to the exchanges. But, again,
the exchanges provided services to Stein to earn their fees and
the exchanges suffered $440,000 in losses when Stein’s checks
were not honored by his banks. Stein may have a civil claim
against Wiley for contribution arising from Wiley’s facilitating
conduct, but that does not relieve Stein of his obligation to
compensate his victims. 18 U.S.C. §§ 3663A (making full
restitution mandatory), 3664(h) (allowing the district court to
apportion liability only among defendants). The district court’s
decision to treat the exchanges as the victims and calculate the


6
  To the extent there is an equitable concern that one-third of the restitution
order would end up in Wiley’s hands, the district court was informed that
he “no longer has an ownership interest.” Sent. Tr. at 6. No contrary
evidence was presented.
8                                                            No. 13-2358

losses based on the dishonored checks was within “the realm
of permissible computations.” White, 737 F.3d at 1142. We will
not disturb the district court’s decision to impose restitution
under 18 U.S.C. § 3663A to make the exchanges whole.
    Finally, the government suggests that we order a limited
remand so the district court can correct what it deems a
“scrivener’s error.” At Stein’s re-sentencing on our earlier
limited remand, the court calculated the loss amount at
approximately $960,000 for the purposes of the guidelines, but
ordered restitution for just over $1,000,000. Normally the loss
amount and restitution award should be the same. However,
after our review of the record, it is clear that this was not a
scrivener’s error, but was rather the result of conflicting factual
findings. At the re-sentencing hearing, the district court agreed
to reduce the loss amount by $209,000 because Stein had repaid
that much to Jay Feldman, the owner of the Grand Avenue
Currency exchange. Subtracting that amount from the previous
total amount of the loss gave the $960,000 figure, which the
district court used to calculate Stein’s guideline range. Sent. Tr.
at 22, 34. However, the district court had previously found that
Feldman was only owed $166,812 in restitution, so the reduc-
tion in the loss amount for money paid to Feldman was more
than what was owed to Feldman.7 Judgment at 5–6. The

7
  The value of all checks cashed at the Grand Avenue exchange that were
dishonored was about $255,000. Before Stein was indicted, he agreed to
repay that exchange. The district court determined that $90,000 in value had
been given, resulting in the $166,812 figure in the first Judgment. At re-
sentencing, the district court recognized about $209,000 more which had
been given to Feldman. In total, the district court recognized almost
                                                            (continued...)
No. 13-2358                                                             9

problem is that the total was not arbitrary—it was the sum of
all restitution which the court had found was owed to various
other financial institutions. Id. Accordingly, to reduce the total
by more than Feldman was owed would result in reducing
some victims’ restitution below what the court had determined
to be their loss. This would be an abuse of discretion. 18 U.S.C.
§ 3663A (“the court shall order … that the defendant make
restitution to the victim of the offense” and “[t]he order of
restitution shall require that such defendant … pay an amount
equal to … the value of the property on the date of the … loss
(emphases added)); 18 U.S.C. § 3664(f)(1)(A) (“In each order of
restitution, the court shall order restitution to each victim in the
full amount of each victim's losses as determined by the court and
without consideration of the economic circumstances of the
defendant” (emphasis added)); see, e.g., United States v. Guy,
335 F. App’x 898, 900 (11th Cir. 2009) (holding that “ordering
[a defendant] to pay an amount of restitution less than the
calculated amount of loss” was error, even where the victim
was negligent (citing United States v. Jones, 289 F.3d 1260, 1265
(11th Cir. 2002)). The Amended Judgment entered by the
district court reflected a correct totaling of the restitution which
the court had found was due to the other financial institutions,
resulting in a figure of $1,001,153. Am. Judgment at 5–6.
Accordingly, in light of the conflicting findings, we will not
disturb the correct calculation in the Amended Judgment to
conform it to the erroneous one relied on to figure Stein’s
guideline range. Indeed, it may well have been clear error for


(...continued)
$300,000 in value given to Feldman for a loss of only about $255,000.
10                                                    No. 13-2358

the district court to calculate the guidelines based on the
incorrect loss amount derived from crediting Stein’s overpay-
ment of Feldman against other victims. But this worked to
Stein’s advantage and the government has not made this
argument, so we leave things where they lie. See, e.g.,
Long-Gang Lin v. Holder, 630 F.3d 536, 543 (7th Cir. 2010) (“The
failure to adequately develop and support [an argument]” or,
in this case, even make it “results in waiver.”). Regardless, we
thank the government for seeking to ensure that Stein received
the credit that the district court seemed to be giving.
                           III. Conclusion
     The district court permissibly calculated the loss to the
currency exchanges and ordered the appropriate amount of
restitution. It was within the district court’s discretion to decide
that Wiley’s misconduct did not relieve Stein of his responsibil-
ity to make the exchanges whole. Accordingly, we AFFIRM the
judgment of the district court.
