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

No. 01-4084
UNITED STATES OF AMERICA,
                                                    Plaintiff-Appellee,
                                  v.

VINCENT LANE,
                                                Defendant-Appellant.
                          ____________
             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
            No. 00 CR 657—Charles R. Norgle, Sr., Judge.
                          ____________
    ARGUED APRIL 10, 2002—DECIDED MARCH 24, 2003
                     ____________


 Before RIPPLE, MANION, and ROVNER, Circuit Judges.
  MANION, Circuit Judge. Vincent Lane was charged with
one count of bank fraud in violation of 18 U.S.C. § 1344
and eight counts of making false statements to a bank in
violation of 18 U.S.C. § 1014. The district court dismissed
the charge of bank fraud on the government’s motion and
subsequently a jury found Lane guilty on five counts of
making false statements to a bank. The jury was unable to
reach a verdict on the remaining three counts, which were
then dismissed. Lane was sentenced to 30 months in pris-
on. Lane now appeals the conviction as well as his sen-
tence. He claims that the district court erred in admitting
2                                              No. 01-4084

evidence of his outstanding debts and prohibiting him
from introducing evidence of his lack of intent to defraud
the banks in question. He also claims that the district
court erred in determining the loss suffered by the victims
of his fraud in calculating his sentence under the sentenc-
ing guidelines. For the reasons stated herein, we affirm.


                      I. Background
   Vincent Lane is a real estate developer who participated
in several ventures during the 1980s and 1990s in both
Illinois and in Texas. From 1988 through 1995 he was also
the chairman of the Chicago Housing Authority (CHA).
Lane’s conviction is based on fraudulent statements con-
cerning his financial stability made to bank officials at
American National Bank (“ANB”) and the South Shore
Bank (“South Shore”). The fraudulent statements to ANB
were made in 1993 in connection with the refinancing
of loans that were initially made for the acquisition and
construction of the Continental Plaza Shopping Center in
Chicago, Illinois. The fraudulent statements to South
Shore were made in connection with the refinancing of
three loans in 1994. In both cases, Lane failed to disclose
to the banks an outstanding debt of $2.4 million that was
owed to the National Investment Reality Trust (“NIRT”)
due to a failed real estate venture in Texas—the Casita
Bonita venture.


A. Casita Bonita Venture
  Lane participated in the Casita Bonita real estate venture
through LSM Venture Associates (“LSM”), a general
partnership comprised of Lane, Frank Swain and Bettye
Mitchell Vance. LSM was the general partner of an apart-
No. 01-4084                                               3

ment complex in Texas called the Casa Bonita Apartments,
which was also owned by Casa Bonita Apartments, Limited
and Casa Bonita Investors, Limited (“Casa Bonita entities”).
In 1982, the Casa Bonita entities borrowed a large sum
of money from NIRT. Lane signed a $1 million note on
behalf of the Casa Bonita entities, and he and his partners
also personally guaranteed the note. When the note be-
came due in 1988, the Casa Bonita entities defaulted
and failed to pay the money due on the note. In Septem-
ber 1991, the lender, NIRT, gave written notice of demand
to LSM to cure the default and pay the amount due. LSM
did not cure the default, and on January 24, 1992, NIRT
sued LSM in state court in Texas seeking $1,500,000 in
unpaid principal and $300,000 in interest. Lane was person-
ally served civil process in April 1992.
  In 1993, NIRT moved for summary judgment against
LSM in the Texas lawsuit. On February 25, 1994, the Texas
state court entered judgment against LSM in the amount
of approximately $2,400,000 which represented $1,500,000
in unpaid principal and $900,000 in unpaid interest. Lane
and NIRT were in negotiations to resolve this debt and,
as part of those talks, Lane proposed that all cash flow
from Lane’s interest in an office park in Springfield, Illi-
nois known as Springfield Office Partnership (“SOP”)
would go to NIRT. SOP had a value of approximately
$500,000. These negotiations eventually fell through and
in July 1994, NIRT registered this judgment in Illinois.


B. Continental Plaza Venture
  Lane first became involved with the Continental Plaza
Shopping Center property in the mid-1980s when the
property was purchased by Continental Commercial Part-
ners (“Continental Partners”) from Loyola University of
4                                              No. 01-4084

Chicago (“Loyola”). Continental Partners was a limited
partnership with general partners Full Life Inc., a corpora-
tion controlled by the Lake Regional Conference of Sev-
enth Day Adventists (“Seventh Day Adventists”), and
LSM Venture Associates. LSM and the Seventh Day Adven-
tists each owned 49.5% of Continental Partners, while
Lane, in his individual capacity, owned a 1% limited
partnership. Lane handled all of the issues relating to the
financing of Continental Plaza on behalf of Continental
Partners.
  In order to secure the original financing for the purchase
and development of the Continental Plaza property, Con-
tinental Partners obtained loans from several lenders,
secured by mortgages on the property as well as personal
guarantees from a combination of Lane, the Seventh Day
Adventists and Loyola. The first lien on the property was
held by Lloyds Bank International, Limited, whose agent
in the United States was Daiwa Bank, Limited (collec-
tively “Daiwa”). The second lien on the property was held
by the City of Chicago, who lent Continental Partners
$4,000,000 in federal and state money. Drovers Bank of
Chicago, which later became Cole Taylor Bank (hereinafter
“Cole Taylor”) also lent money in connection with the
property.
   Continental Plaza Shopping Center opened for business
in 1988 but quickly began to experience financial trouble.
In order for Continental Plaza to be financially viable, it
was necessary that the anchor tenant space be leased. At
first a grocery store owned by Lane, named “Shopper’s
Lane,” occupied more than 40% of the center and acted
as the anchor tenant. But in late 1992 “Shopper’s Lane”
closed, and the anchor space became vacant. Eventually,
Continental Partners defaulted on its loan obligations on
Continental Plaza.
No. 01-4084                                               5

   In 1992 litigation began concerning Continental Part-
ners’s debt obligations with respect to Continental Plaza.
At that time Continental Partners owed approximately
$3,500,000 to Daiwa Bank, secured by the first lien on
the property as well as the personal guarantees signed
by Lane and the Seventh Day Adventists. The City of
Chicago held a junior mortgage on the property which
was reduced to $1,750,000 as of December 31, 1991. Conti-
nental Partners also owed $2,300,000 to Cole Taylor Bank,
secured by guarantees from Lane and the Seventh Day
Adventists. Loyola had also independently guaranteed
$1,916,000 of the debt to Cole Taylor. Daiwa was the
first creditor to file suit in 1992 seeking to foreclose on
Continental Plaza. A judgment of foreclosure was en-
tered, and in May 1993, a sheriff’s sale was ordered. Both
Lane and the Seventh Day Adventists stood to be per-
sonally liable if the sale of Continental Plaza resulted in
a shortfall on the debt owed. Cole Taylor also filed suit
in 1992, seeking to enforce the personal guarantees made
by Continental Partners in connection with the financing
of Continental Plaza. As a result, in June 1992, Cole Taylor
obtained a $2.2 million judgment against Lane. Also dur-
ing this time, unbeknownst to Lane, Loyola agreed to pay
Cole Taylor $1,700,000 on Loyola’s $1,916,000 guarantee
to Cole Taylor. In return, Cole Taylor agreed to return to
Loyola 90% of any money that Cole Taylor collected on
the loan from other sources.
  In early 1993, Lane proposed a refinancing plan for
Continental Plaza that would have purportedly resulted
in the revitalization of Continental Plaza and the dis-
missal of the Daiwa and Cole Taylor lawsuits. Lane’s refi-
nancing plan included the following elements: (1) the
Seventh Day Adventists would contribute $2,500,000, in
return for their release from all liabilities on their per-
sonal loan guarantees, and their interest in Continental
6                                               No. 01-4084

Partners would be converted to a limited partnership;
(2) Daiwa would receive $2,500,000 as full payment on the
debt Continental Partners owed Daiwa, and dismiss its
lawsuit; (3) ANB would issue a new loan for $1,900,000,
which would be secured by a first mortgage on Conti-
nental Plaza, and further secured by an agreement from
Loyola to purchase the loan if it went into default; and
(4) Cole Taylor would receive $1,600,000 as partial pay-
ment on Continental Partners’s debt to Cole Taylor, take
as security a second mortgage subordinate to ANB’s lien,
and dismiss its lawsuit.
  A necessary requirement for this refinancing was a vi-
able anchor tenant for Continental Plaza. In May 1993,
Lane produced to ANB a copy of a lease for the anchor
tenant space at Continental Plaza, which was dated May
7, 1993. Lane’s proposed tenant was a grocery store called
“Your Supermarket, Inc.” The signatory for Your Super-
market was Franklin Searcy, who signed on behalf of
Leonard Muhammad. Your Supermarket, Inc. agreed to
lease the anchor space for five years at a rate of $120,000
per year. The lease indicated that the landlord was ANB
as trustee.
  In early August 1993, Lane on behalf of Continental
Partners, and ANB signed a commitment letter for the
$1,900,000 refinancing loan. The commitment letter out-
lined the following conditions that had to be met before
ANB would issue the loan: (1) Loyola had to sign the loan
purchase agreement; (2) Continental Partners had to
tender a fully executed version of the May 7, 1993 lease with
Your Supermarket; (3) Continental Partners had to ten-
der an Estoppel Certificate signed by Your Supermar-
ket, certifying that the May 7, 1993 lease was in effect;
(4) Continental Partners had to tender financial state-
ments for Your Supermarket, or alternatively, obtain a
No. 01-4084                                              7

$240,000 security deposit from Your Supermarket; (5) Con-
tinental Partners had to sign a Mortgage and a Collateral
Assignment of Leases and Rents as further security for the
loan; and (6) Lane had to sign a personal guarantee
for repayment of the loan. On November 1, 1993, Lane’s
refinancing deal on Continental Plaza closed based on
these provisions. Pursuant to this refinancing deal, Cole
Taylor accepted in remuneration for Continental Part-
ners’s loan obligations a lower final figure of $1,450,000
and dismissed its lawsuit. Cole Taylor then paid Loyola
$1,350,000 in accordance with Cole Taylor’s side agree-
ment with Loyola.
  At the time of the closing, Lane and ANB executed
an amendment to the May 7 lease with Your Supermar-
ket (which was to be renamed “Shopper’s Lane”). Pursu-
ant to the amended lease, the obligation to pay rent would
begin on December 1, 1993, and the annual rent was in-
creased from $120,000 to $180,000. The amended lease
also stated that Shoppers Lane had paid a security deposit
of $240,000 to ANB as landlord, which ANB could use
for closing costs in connection with the refinancing of the
shopping center. Despite his assurances to ANB concern-
ing the existence of an appropriate anchor tenant, Lane
was having difficulties finalizing the lease agreement
with Muhammad. Specifically, Lane was unable to obtain
a $240,000 security deposit from Shopper’s Lane, and so
Lane personally borrowed that money from Reverend
Wilbur Daniel, pastor of the Antioch Bible Church, and
used it as the security deposit. Reverend Daniel and Lane
then began negotiations whereby Reverend Daniel would
take over the duties of anchor tenant from Muhammad.
Despite these efforts, Lane and Daniel were never able
to reach a final agreement on Shopper’s Lane. Neither
Shopper’s Lane nor Your Supermarket ever opened in
the anchor tenant space at Continental Plaza.
8                                               No. 01-4084

  Notwithstanding these difficulties, the ANB refinancing
closed, including the amended lease, and during closing,
Lane tendered to ANB a guarantee of payment stating
that except as disclosed in writing, there was no action
pending that might adversely affect his ability to honor
his guarantee, and that he was not in default under any
agreements to which he was a party. Lane did not dis-
close to ANB the NIRT lawsuit in Texas against Lane
and the Casa Bonita entities for $2.4 million despite the
fact that his net worth, not including the $2.4 million
judgment, was approximately $1.9 million. Lane also did
not disclose his obligation to repay Reverend Daniel the
$240,000 that Lane tendered to ANB as Shopper’s Lane’s
security deposit on the anchor tenant space.
  Finally, in June 1996, Lane’s Continental Plaza refinanc-
ing deal collapsed due to nonpayment of rent by the pur-
ported anchor tenant, “Shopper’s Lane.” At that time, the
amount outstanding on ANB’s loan was $1,736,000. ANB
called that amount due from Loyola pursuant to Loyola’s
agreement to purchase the loan in the event of default.
Loyola complied and paid the $1,736,000 to ANB. In
exchange Loyola received title to the Continental Plaza
property which was subsequently transferred for no con-
sideration to the City of Chicago.


C. South Shore Bank Refinancing
  At this same time, Lane was negotiating with South
Shore Bank of Chicago (“South Shore”) to refinance three
loans to LSM which totaled $615,000. South Shore held
as collateral on these loans a $100,000 certificate of de-
posit. Under the refinancing, South Shore would return
the $100,000 CD to LSM, and accept in its stead LSM’s
interest in the Springfield Office Partnership (“SOP”). South
No. 01-4084                                              9

Shore and Lane agreed that South Shore could liquidate
the SOP, and South Shore would retain half of the pro-
ceeds as collateral and tender the other half to Lane and
his associates. The refinancing was consummated and, in
1996, South Shore Bank sold the SOP for $500,000 and re-
turned approximately half of this money to Lane and his
associates.
  Pursuant to the refinancing of each of the three loans,
Lane tendered to South Shore Bank a guarantee stating
that he was not in default on any obligation that would
affect his performance of his guarantee, and that there
was no litigation pending against him that could adversely
affect his performance of his guarantee. Lane did not
disclose to South Shore the Texas state court judgment
in favor of NIRT of $2,400,000, the related collection pro-
ceedings, or the ongoing negotiations with NIRT concern-
ing SOP.


D. The Trial
  The initial indictment in this case, filed on August 16,
2000, charged that, in November 1993, Lane made false
statements to ANB about a supermarket lease with intent
to cause ANB to issue a $1.9 million loan to Contin-
ental Partners. On February 14, 2001, a superseding indict-
ment added four false statement charges relating to the
personal guarantees that Lane and his partners gave to
ANB and to South Shore Bank.
  The nine counts charged that, in connection with ANB ‘s
$1.9 million loan in November 1993 and South Shore’s
three loans totaling $615,000 in December 1994, Lane
falsely stated that he was not in default on any matter,
and that there was no undisclosed pending litigation that
would “adversely affect” his ability to honor his personal
10                                             No. 01-4084

guarantees of those loans. The indictment charged that
the statements were false because, at the time, Lane was
in default and in litigation in connection with the $2.4
million debt that he owed to NIRT, which he failed to
disclose to the banks. The case proceeded to a jury trial,
where Lane’s theory of his defense was that he had inad-
vertently submitted mistaken statements to the lending
institutions. The jury returned a verdict of guilty as to
Counts 3, 6, 7, 8 and 9, and reported that they were unde-
cided as to Counts 2, 4 and 5. The court declared a mis-
trial as to the counts on which the jury was hung, and
accepted the guilty verdict on the other counts. In sum,
Lane was found guilty on: (1) Count 3 relating to Lane’s
representation to ANB that Shopper’s Lane Supermarket,
Inc. had provided a $240,000 security deposit, when in
fact Lane himself borrowed, and then provided, that mon-
ey; (2) Count 6 concerning Lane’s representation to ANB
that he was not in default under any agreements to which
he was a party, and there was no action pending against
him that could adversely affect his ability to honor his
guarantee, when he was actually in default on a guaran-
tee to pay a debt of $1,500,000 in principal plus interest
relating to the Casa Bonita entities in Texas and there was
related collection litigation pending; and (3) Counts 7, 8
and 9 relating to Lane’s statements to South Shore Bank
that he was not in default on any obligation that could
affect his performance of his guarantee and that there
was no litigation pending against him that could affect
the performance of his guarantee, when at that time he
was subject to the $2,400,000 Texas state court judgment
and related collection proceedings.
  At sentencing, the court determined that the actual
and intended losses to ANB and Loyola were $1,264,000,
which was arrived at by subtracting the value of the Conti-
nental Plaza property (the amount pledged to secure the
No. 01-4084                                                 11
                                                              1
loan) from the amount of the default caused by the fraud.
The court also found that Lane was responsible for rele-
vant conduct losses of $500,000 to NIRT arising out of
the South Shore refinancing loans bringing the total loss
to $1,764,000. Section 2F1.1 imposes a 12-level increase
for losses above $1,500,000, resulting in a base offense
level of 18. The court also imposed a two-level increase
for more than minimal planning, hence the guideline
range was 33-41 months. The court then found that the
$1,764,000 overstated the seriousness of Lane’s offenses,
and granted a one-level downward departure. With the
downward departure, Lane’s offense level was 19, man-
dating a sentencing range of 30-37 months. The court
imposed a sentence of 30 months. Lane appeals both his
conviction and sentence.


                          II. Analysis
A. Evidentiary Rulings
  On appeal Lane argues that the district court erred
in allowing the government to introduce evidence of
Lane’s outstanding debts and financial condition unre-
lated to the NIRT debt, while at the same time prevent-
ing him from introducing evidence of his lack of intent
to defraud ANB and South Shore.


    1.   Introduction of extrinsic acts evidence.
  First, Lane argues that the court improperly allowed the
government to present evidence relating to Lane’s indebted-


1
  The value of the property, $464,000 was arrived at by taking
the assessed value, $880,000 and subtracting the amount of the
unpaid property taxes due at the time of the default, $416,000.
12                                              No. 01-4084

ness unrelated to his debt to NIRT. Specifically, the jury
heard the testimony of seven witnesses concerning the
debts Lane owed them as well his promises to pay those
       2
debts. The government also introduced: a 1995 finan-
cial statement of Frank Swain (Lane’s partner in LSM);
evidence that Lane’s interest in the SOP had also been
pledged to the Grove Park Associates at the time of the
South Shore refinancing; and Lane’s 1992, 1993 and 1994
tax returns. Lane contends that this information was
highly prejudicial and inadmissible character evidence
under the balancing test of Rule 404(b). The district court
admitted the extrinsic act evidence, finding that it was
admissible as direct evidence of, or inextricably inter-
twined with, the crimes charged under 18 U.S.C. § 1014.
  We review a district court’s construction of evidentiary
rules de novo. See United States v. Centracchio, 265 F.3d
518, 524 (7th Cir. 2001). In determining whether an error
occurred in the application of those rules, this court re-
views preserved claims for an abuse of discretion, see
United States v. Senffner, 280 F.3d 755, 762 (7th Cir. 2002),


2
  Evidence as to Lane’s other concurrent debts to the follow-
ing individuals and organizations were presented to the jury:
     1.   The Small Business Administration;
     2.   J&R Dairy;
     3.   Grove Park;
     4.   Private Bank, which related to a New Mexico “dude
          ranch”;
     4.   Central Grocers;
     5.   Associated Bank;
     6.   Reverend Daniel;
     7.   Cole Taylor.
No. 01-4084                                                13

and will not reverse a jury verdict if the erroneous rul-
ing is determined to be harmless. Fed. R. Crim. P. 52(a);
Rehling v. City of Chicago, 207 F.3d 1009, 1017 (7th Cir.
2000). An “[a]buse of discretion only occurs when no rea-
sonable person could take the view of the trial court.” United
States v. Hilgeford, 7 F.3d 1340, 1345 (7th Cir. 1993).
  The government argues that Lane has waived this issue
on appeal because before the district court Lane objected
to the extrinsic act evidence on the basis that it would
portray him as a “deadbeat” and now argues that the
evidence was used to portray him as a “liar.” If a claim is
not preserved we review for plain error. However, we find
that Lane has adequately preserved this claim on appeal.
He briefed his Rule 404(b) and Rule 403 objections fully
before trial, and at trial made repeated objections to the
other debt evidence. The district court overruled those
objections. At one point during trial, the government
agreed that Lane had preserved his objections to the
other debt evidence: “Your Honor, I think that a stand-
ing objection to the evidence regarding Mr. Lane’s debts
would preserve their record and we would not think it’s
necessary or appropriate to object every time there is a
reference to it.” The government’s distinction between a
“deadbeat” and a “liar” is de minimis and Lane’s Rule
404(b) and 403 objections at the district court sufficiently
alerted the court and the government as to the argu-
ments that Lane now raises on appeal. See United States.
v. Manso-Portes, 867 F.2d 422, 426 (7th Cir. 1988).
  The primary issue, therefore, is whether the govern-
ment’s introduction of Lane’s outstanding debts and other
financial obligations was correctly treated as direct or
inextricably intertwined evidence, and therefore outside
the scope of Rule 404(b), or whether should it have been
treated as character evidence. Rule 404(b) is inapplicable
14                                              No. 01-4084

where the “bad acts” alleged are really direct evidence of
an essential part of the crime charged. United States v.
Elder, 16 F.3d 733, 737 (7th Cir. 1994). Similarly, cases
applying the “intricately related” doctrine have recog-
nized that evidence concerning the chronological unfold-
ing of events that led to an indictment, or other circum-
stances surrounding the crime, is not evidence of “other
acts” within the meaning of Rule 404(b). See Hilgeford,
7 F.3d 1340, 1345-46 (7th Cir. 1993) (evidence of a defen-
dant’s litigation concerning ownership of farm lost in
foreclosure was intricately related to subsequent prosecu-
tion for filing false tax returns where knowledge of non-
ownership was at issue). Although inextricably related evi-
dence does not have to satisfy 404(b), it still must satisfy
the balancing test of Rule 403. See United States v. Ward,
211 F.3d 356, 362 (7th Cir. 2000). Against this backdrop
we then consider whether the evidence to which Lane
objects was direct, or intricately related, evidence of the
charged offenses.
  To answer this question we turn to the statute un-
der which he was charged, 18 U.S.C. § 1014. Section 1014
criminalizes “knowingly mak[ing] any false statement
or report . . . for the purpose of influencing in any way
the action” of a Federal Deposit Insurance Corporation
(FDIC) insured bank “upon any application, advance, . . .
commitment, or loan.” United States v. Wells, 519 U.S. 482,
490 (1997) (citing 18 U.S.C. § 1014). Counts 6-9 of the
indictment alleged that Lane falsely stated in his guaran-
tees of payment to ANB and South Shore that there was
no litigation pending which might adversely affect his
ability to honor his debts to those institutions. In order to
show that Lane’s statements to the banks were false, the
government had the burden of proving that Lane’s debts,
and specifically his debt to NIRT and subsequent $2.4
million judgment, could adversely affect his performance
No. 01-4084                                                   15

on those guarantees. Under §1014, the government also had
to prove that Lane knew that he could not honor those
guarantees at the time the agreements were executed.
  In order to establish this knowledge the government
offered evidence of Lane’s net worth and annual income,
of which Lane’s tax returns served as direct evidence.
Because his net worth and available income was relevant
to Lane’s ability, and knowledge of his ability, to honor
the guarantees, the tax returns were properly categorized
as non-404(b) evidence. Additionally, under Count 3,
which charged that Lane falsely stated to ANB that the
tenant under the lease had tendered a security deposit,
the government had the burden to show that this state-
ment was false because Lane himself had tendered the
deposit. Therefore, the evidence introduced concerning
Lane’s $240,000 debt to Reverend Daniel, incurred to ob-
tain the money for the security deposit, was properly
categorized as direct evidence of Lane’s false statements
to ANB.
   The admissibility of the remaining extrinsic debt evi-
dence turns on whether it was intricately related to Lane’s
charged criminal activity. “This Circuit has a well-estab-
lished line of precedent which allows evidence of un-
charged acts to be introduced if the evidence is ‘intricately
related’ to the acts charged in the indictment.” United States
v. Ryan, 213 F.3d 347, 350 (7th Cir. 2000) (quoting United
States v. Gibson, 170 F.3d 673, 680 (7th Cir. 1999)). Under the
“intricately related” doctrine, the admissibility of Lane’s
uncharged activity turns on:
    whether the evidence is properly admitted to provide
    the jury with a complete story of the crime [on] trial, . . .
    whether its absence would create a chronological or
    conceptual void in the story of the crime, . . . or whether
    it is so blended or connected that it incidentally in-
16                                             No. 01-4084

     volves, explains the circumstances surrounding, or
     tends to prove any element of, the charged crime.
Ryan, 213 F.3d at 350, quoting United States v. Ramirez,
45 F.3d 1096, 1102 (7th Cir. 1995) (citations omitted).
  Here, the extrinsic debt evidence introduced by the
government provided the jury with both the complete
story of Lane’s fraud and tended to prove the charged
offenses. The existence of the outstanding and past due
loans to a variety of organizations, banks, and one individ-
ual, see supra n. 2, demonstrated Lane’s complete finan-
cial situation as well as provided to the jury a timeline as
to Lane’s increasing debts and lack of financial liquidity
to meet those obligations. The extrinsic debts also com-
pleted the story of Lane’s fraud by demonstrating his ac-
tual, as opposed to claimed, financial worth. Specifically
the extrinsic debt evidence, which was also undisclosed
to the defrauded banks, showed that Lane’s financial
statements were incomplete. Finally the evidence tended
to show Lane’s intent to defraud, in contrast to his de-
fense that a mistake had been made in the refinancing
application to ANB, because more than just his debt to
NIRT was omitted from his financial statement. The basis
for the criminal charges against him were his efforts to
induce financial institutions to refinance his debts, and
by failing to disclose these other debts he was able to
achieve this goal. If the government had been limited to
only the introduction of Lane’s own financial statements,
which were admittedly incorrect, it would not have pro-
vided the jury with a complete picture of the Lane’s knowl-
edge of the falsity of his statements and his purpose in
obtaining the refinancing from ANB and South Shore.
Accordingly, because we find that the evidence of Lane’s
outstanding debts was both direct evidence of his fraudu-
lent activity as well as intricately related to the crimes
No. 01-4084                                             17

charged, we need not address Lane’s concerns under Rule
404(b). See Ward, 211 F.3d at 362.
   The question remains as to whether the district court
abused its discretion in admitting this evidence, because
intricately intertwined evidence must still satisfy the
“balancing test” requirements of Rule 403. Rule 403 pro-
vides that, although relevant, evidence may be excluded
if its probative value is substantially outweighed by the
danger of unfair prejudice, confusion of the issues, or
potential to mislead the jury. Fed. R. Evid. 403. Lane ar-
gues that because it is obvious that a $2.4 million judg-
ment can “materially affect” the ability of someone whose
claimed net worth is $2.5 million to repay a $1.9 million
loan, this evidence had no probative value. In other words,
he concedes that the Casita Bonita judgment alone showed
his inability to make good on the refinancing scheme
and therefore no other evidence was necessary. Lane
also claims that the Swain financial statement from 1995
had no bearing on the 1993 and 1994 charged crimes,
and was only introduced to provide additional fodder for
the government’s prejudicial argument that Lane should
be found guilty because he is a liar.
  However, the government’s evidence gave a clear indica-
tion as to what Lane’s financial situation was, and how he
misrepresented it. Although the evidence was harmful to
Lane, it was not unfairly prejudicial within the meaning
of Rule 403. The probative value of the evidence out-
weighed any prejudicial effect of its admittance in that
the government had the burden of showing that Lane
knew his statements to ANB and South Shore were false
and also that the statements were made with the intent
to induce the banks into lending him more money.
  Moreover, even if some of the evidence was improperly
admitted, it was harmless error. At the close of trial, at
18                                               No. 01-4084

Lane’s request, the district court instructed the jury as
follows: “You have heard the evidence of acts of the de-
fendant other than those charged in the indictment. You
may consider this evidence only on the question of the
defendant’s motive, intent, knowledge, and absence of
mistake or accident. You should consider this evidence
only for this limited purpose.” This limiting instruction
mitigated whatever unfair prejudice may have existed. See
United States v. Macey, 8 F.3d 462, 467 (7th Cir. 1993) (hold-
ing that improper introduction of extrinsic acts evidence
was harmless in light of overwhelming evidence of guilt
as well as limiting instructions). Additionally, the direct
evidence of fraud was overwhelming, considering the
existence of the NIRT debt and proof of Lane’s knowledge
of that debt, and therefore any error was harmless. See
United States v. Manganellis, 864 F.2d 528, 539 (7th Cir.
1988) (“An error is harmless if the other untainted incrimi-
nating evidence is overwhelming.”).


  2.   Exclusion of lack of intent evidence.
  Next, Lane contends that the district court improperly
prevented him from presenting evidence that he lacked
the specific intent required by 18 U.S.C. § 1014. Specif-
ically, Lane argues that the district court erroneously pre-
vented him from introducing: (1) evidence relating to
Loyola’s involvement in the refinancing of the ANB loan
and the fact that the alleged “victim”—ANB—actually
benefitted from the refinancing; (2) evidence that ANB
had already determined that Lane had a negative net
worth, and had further determined from this that it would
not have done the deal without Loyola’s Put Agreement,
which Lane knew; (3) evidence relating to a post-closing
conversation that Lane had with ANB bankers and law-
yers on February 16, 1994; and (4) testimony from the
No. 01-4084                                                      19

drafter of the Amendment to Lease that the language in
the Amendment did not prohibit Lane or anyone else
from advancing the security deposit on behalf of the su-
permarket tenant. This court reviews the exclusion of
evidence for abuse of discretion. United States v. Foster, 30
                             3
F.3d 65, 67 (7th Cir. 1994).
  Lane first contends that if the court had allowed him
to introduce evidence of Loyola’s involvement with the
shopping center refinancing scheme and ANB’s deter-
mination of his net worth, it would have proven the over-
whelming importance of Loyola’s Put Agreement in ANB’s
decision to refinance. Essentially he claims that ANB did
not rely on his net worth in the refinancing but instead
only relied on Loyola to repay the debt in case of a de-
fault. Because his guarantee was immaterial to the deal, he
argues, he had no motivation to misstate his finances.
  However, the materiality of Lane’s guarantee and ANB’s
reliance thereon is irrelevant. Section 1014 does not re-
quire that a false statement must be material or even
mention materiality. Specifically § 1014 only criminalizes
“knowingly mak[ing] any false statement or report . . . for


3
   Lane suggests that any curtailing of his ability to elicit testi-
mony about the losses by ANB and Loyola may violate his
Sixth Amendment right to confront witnesses against him.
The Confrontation Clause guarantees the right of criminal
defendants to cross-examine witnesses in order to show their
possible motive, self-interest or lack of credibility. See Delaware
v. Van Arsdall, 475 U.S. 673, 679 (1986). However, a trial judge
may still limit cross-examination based on issues such as ha-
rassment, prejudice, confusion of the issues, repetitiveness or
lack of relevance. Id.; see also United States v. Cavender, 228 F.3d
792, 798 (7th Cir. 2000). Therefore, the court’s rulings on Lane’s
objections are still scrutinized under Rule 403.
20                                                No. 01-4084

the purpose of influencing in any way the action” of a
Federal Deposit Insurance Corporation (FDIC) insured
bank “upon any application, advance, . . . commitment,
or loan.” Wells, 519 U.S. at 490 (citing 18 U.S.C. § 1014), cf.
United States v. Erskine, 588 F.2d 721, 722 (9th Cir. 1978)
(holding that the “elements of a section 1014 violation
include these requisite mental states: knowledge of falsity,
and the intent to influence action by the financial institu-
tion concerning a loan or one of the other transactions
listed in the statute”). We have previously and repeatedly
interpreted § 1014 to exclude any element of materiality.
See United States v. Swanquist, 161 F.3d 1064, 1075 (7th
Cir. 1998) (citing Wells, 519 U.S. at 490-91) (“[M]ateriality
is not, and never was, an element of the crime of know-
ingly making a false statement to a federally-insured bank
under § 1014.”); see also United States v. Reynolds, 189 F.3d
521, 525-26 (7th Cir. 1999); United States v. Krilich, 159 F.3d
1020, 1028 (7th Cir. 1998).
   Based on this line of case law, the district court excluded
any evidence that tended to show that ANB and Loyola
did not rely on Lane’s financial condition in deciding to
participate in the refinancing. Because this evidence was
irrelevant to the crimes charged and therefore had limited
probative value, we find that by excluding it, the district
court did not abuse its discretion. See United States v.
Adames, 56 F.3d 737, 746 (7th Cir. 1995) (stating that a dis-
trict court’s balancing of probative value versus prejudice
is a “highly discretionary function which is afforded great
deference by this Court”).
   Lane also contends that the district court erred in exclud-
ing evidence of Loyola’s involvement with the shopping
center refinancing scheme because the manner in which
ANB and Loyola structured the deal prevented losses to
either party in the transaction. In turn Lane reasons that
No. 01-4084                                                   21

the evidence that neither the bank nor ANB sustained a
loss would have tended to show that he did not have
the requisite intent to defraud ANB. However, much
like materiality, loss is not an element under § 1014. Be-
cause the lack of loss is not a defense, evidence regard-
ing the lack of loss is irrelevant. See United States v. Waldrip,
981 F.2d 799, 806 (5th Cir. 1993).
   In response, Lane cites United States v. Copple, 24 F.3d 535,
545 (3d Cir. 1995), for the proposition that “when the
contested issue is intent, whether or not victims lost money
can be a substantial factor in the jury’s determination
of guilt or innocence.” Copple, 24 F.3d at 545. See also United
States v. Foshee, 569 F.2d 401, 403-04 (5th Cir. 1978) (su-
perseded on other grounds by United States v. Foshee, 578
F.2d 629 (5th Cir. 1978)). Copple and Foshee both involve
mail fraud under 18 U.S.C. § 1344. Section 1344 proscribes
any scheme to defraud or obtain money or property from
a financial institution by means of false and fraudulent
pretenses, representations or promises. 18 U.S.C. § 1344.
However, the district court properly observed that the in-
tent described by § 1014 is different from the intent delin-
eated in § 1344. Section 1344 requires the showing of an
intent to deceive a bank in order to obtain from it money
or other property. See United States v. Kenrick, 221 F.3d 19,
26-27 (1st Cir. 2000). On the other hand, § 1014 proscribes
false statements made “for the purpose of influencing
in any way the action” of the lending institution. 18 U.S.C.
§1014 (emphasis added). See also United States v. Madsen,
620 F.2d 233, 235 (10th Cir. 1980) (“(T)he only intent nec-
essary (is) an intent to influence the bank, and not an intent
to harm the bank or to profit.”). Therefore, even if this
evidence may have tended to show that Lane did not
intend to cause ANB or Loyola a loss, it would not nec-
essarily have been probative on the issue of whether he
intended to influence the banks to issue the loan with his
22                                             No. 01-4084

own false statements. Even if the court had considered
whether the victims suffered a loss as relevant to the issue
of intent, the court did not improperly exclude this evi-
dence, considering its lack of probative value and the
possibility that the jury would consider the evidence for
irrelevant purposes. Therefore the district court did not
abuse its discretion in excluding the evidence of ANB’s
and Loyola’s losses on the refinancing.
  Lane also contests the district court’s exclusion of a
conversation in February 1994, and a related memo, where
he and his attorney advised ANB that Lane had forestalled
the opening of Shopper’s Lane, and that he was negoti-
ating with other tenants for the anchor tenant space. Lane
claims that this evidence “demonstrated for the jury that
[defendant] was communicating to ANB in good faith
about the status of the grocery store tenant, and that ANB
knew about the uncertainty of the anchor tenant.”
  The district court properly excluded this evidence for
several reasons. First, the evidence was properly catego-
rized by the district court as inadmissible hearsay because,
even under Lane’s theory of the case, the statements of
Lane and his attorney were relevant only if true. Fed. R.
Evid. 801, 802. Lane relies on United States v. McClure, 546
F.2d 670, 672-73 (5th Cir. 1977), for the proposition that
this evidence was not offered for the truth of the matter
asserted but instead was admissible as non-hearsay evi-
dence to prove his lack of intent to defraud. McClure
does not support this position. In that case, evidence of
a series of threats made by the government’s confidential
informant was admitted to show that the informant
had entrapped other drug dealers. The evidence was not
admitted to prove the defendant’s intent, but rather to
show that he was entrapped. Id.
No. 01-4084                                               23

   Second, it is not clear how a conversation on February 16,
1994 is relevant to the statements made on November 1,
1993, when the refinancing, including the fraudulent leas-
ing agreement, was executed. This is especially so when
those statements were not admissions of fraudulent activ-
ity or attempts to cure the fraud, but instead were explana-
tions of delays caused by the fraud and requests for more
time to find a qualified tenant.
  Even if we were to assume that the evidence would
have shown that Lane was acting in good faith in Feb-
ruary 1994, the fact that he may have been communicating
to the bank in good faith in February 1994 has no bearing
on whether he was honest with the bank in November
1993. See United States v. Winograd, 656 F.2d 279, 284 (7th
Cir. 1981) (defendant may not seek to establish his inno-
cence through proof of the absence of criminal acts on
other specific occasions). Due to these concerns, we find
that the district court did not abuse its discretion in ex-
cluding Lane’s post-offense statements.
  Lane also contends that the district court erred by pre-
cluding Keith Moore, the attorney for the Seventh Day
Adventists and Continental Partners, from testifying that
the Amendment to Lease did not prohibit Lane from
advancing the deposit on behalf of the supermarket tenant.
The district court excluded this testimony, finding that
the document adequately spoke for itself. The district
court’s ruling was proper under Rule 403 because the
meaning of the Lease Amendment was plain from the
face of the document, and hence the probative value of
Moore’s testimony was minimal. Second, any such testi-
mony from one of Lane’s own attorneys would be self-
serving and certainly extrinsic absent any ambiguity in the
document. Additionally, Lane’s counsel was able to, and
did, make this point during closing argument. Moreover,
24                                                No. 01-4084

any probative value was substantially outweighed by the
dangers of unfair prejudice and juror confusion. There-
fore the court did not abuse its discretion in excluding
Moore’s testimony.
  Considering the district court’s evidentiary rulings
under the standard that an “[a]buse of discretion only
occurs when no reasonable person could take the view of
the trial court.” United States v. Hilgeford, 7 F.3d 1340, 1345
(7th Cir. 1993), we find that the district court did not
abuse its discretion in the admission or exclusion of evi-
dence at trial.
  To the extent that any errors were made, they were
harmless considering the wealth of evidence presented
against Lane as to his debt to NIRT and knowledge
of the falsity of the financial statements he provided to
ANB. Rehling, at 1017.


B. Sentencing
  On appeal, Lane also challenges his sentence. Our re-
view of a district court’s sentencing decision is deferen-
tial. The district court’s assessment of the amount of loss
is a factual finding, which we will not disturb unless it
is clearly erroneous. United States v. Strozier, 981 F.2d 281,
283 (7th Cir. 1992); United States v. Haddon, 927 F.2d 942,
952 (7th Cir. 1991). The meaning of “loss,” however, is a
legal question on which our review is plenary. United States
v. Downs, 123 F.3d 637, 642 (7th Cir. 1997)
  Under the sentencing guidelines, Lane’s sentence is
dependent on the actual or intended loss caused by his
fraud. The comment notes to § 2F1.1 (in effect at the time
of Lane’s offense) instruct that, in fraudulent loan applica-
tion cases, the court is to use for sentencing purposes
No. 01-4084                                                   25

either the intended loss or the actual loss to the victim,
                        4
whichever is greater. See United States v. Kipta, 212 F.3d
1049, 1052 (7th Cir. 2000). The actual loss is “the amount
of the loan not repaid at the time the offense is discov-
ered, reduced by the amount the lending institution has
recovered (or can expect to recover) from any assets
pledged to secure the loan.” U.S.S.G. § 2F1.1, App. Note
8(b); see also United States v. Saunders, 129 F.3d 925, 931 (7th
Cir. 1997) (discussing the calculation of loss under the
defendant’s fraudulent loan application theory). In United
States v. Morris, 80 F.3d 1151, 1171 (7th Cir. 1996), we
analyzed U.S.S.G. § 2F1.1 and noted that actual loss is
determined “by subtracting from the face amount of the
loan both the amount repaid prior to discovery of the
fraud and any amount to be recovered from assets pledged
as collateral to secure the loan.”
  Comparatively, intended loss is the amount of money
that the defendant places at risk as a result of the fraudu-


4
   U.S.S.G. § 2F1.1 was replaced on November 1, 2001 with
U.S.S.G. § 2B1.1. The commentary to the new guidelines spe-
cifically allows a net loss approach that includes payments
made to the defrauded entity only in cases where it is “the
offender who transfers something of value to the victim(s)” prior
to detection of the fraud. U.S.S.G. Manual, Supp. to App. C
at 188 (2001). Additionally the new guidelines no longer ap-
ply to the approach adopted by this circuit in United States v.
Holiusa, 13 F.3d 1043 (7th Cir. 1994), wherein we credited an
offender in a check kiting scheme with payments made to
defrauded investors. Id. at 189. The guidelines now direct
courts to exclude gains made by successful investors in a
fraudulent investing scheme, as those gains are only intended
to lure and defraud other investors. Id. However, because Lane
was sentenced on August 28, 2001, the applicable guidelines
are contained in the November 1, 2000 guidelines manual.
26                                             No. 01-4084

lent loan application. See Downs, 123 F.3d at 643-44 (dis-
cussing repayment of loans after the fraud is discovered
and holding that such payments do not reduce the loss
calculation). In the context of a fraudulent loan applica-
tion, we have stated that “the unsecured portion of a loan
is a common-sense estimate of the interim risk faced by
the lending institution and gives a defendant credit for
the pledged assets the lending institution could readily
use for recompense.” Cf. United States v. Mau, 45 F.3d 212,
216 (7th Cir. 1995) (“when calculating ‘intended’ loss in
a fraudulent loan case, the amount of the loan can only be
offset by the value of the collateral the [lender] has or
expects to gain at the time the fraud is discovered”). Fur-
thermore, Application Note 8 to § 2F1.1 instructs as fol-
lows: “[T]he loss need not be determined with precision.
The court need only make a reasonable estimate of the
loss, given the available information.”
  In this context we analyze the district court’s assess-
ment of Lane’s sentence. At the time of the default, the
amount of the loan not repaid was $1,736,000 and the
fair market value on the property was determined to be
$472,000. Thus, the district court calculated the actual
and intended loss to ANB and Loyola as the amount of
the loan outstanding at the time the fraud was discov-
ered, $1,736,000, less the assessed value of Continental
Plaza, $472,000. The arithmetic led the district court to
find an actual and intended loss to ANB and Loyola of
$1,264,000. The court also found that Lane’s conduct with
respect to a $2.4 million judgment against him owed to
National Investment Reality Trust (NIRT) on the Casita
Bonita Apartments was relevant conduct with respect to
his fraud. This conduct led to an actual loss of $500,000
to NIRT. These two losses established a total of $1.764
million, or an offense level of 18.
No. 01-4084                                                    27

  In this case Lane argues that no actual loss has occurred
because the primary lender, ANB, was fully reimbursed
for $1.736 million when Lane defaulted on the refinanc-
          5
ing loan. Additionally, the third party that reimbursed
the loan on Lane’s behalf, Loyola, has stated they suf-
fered no loss. This argument is at least plausible because
neither ANB nor Loyola arguably suffered an actual loss
on their investments due to third-party agreements, at
least one of which was negotiated without Lane’s knowl-
edge or participation. ANB did not lose any money be-
cause it recovered the unpaid loan amount from Loyola,
pursuant to Loyola’s agreement to purchase the Contin-
ental Plaza refinancing loan if it went into default. Addi-
tionally, Loyola recovered $1.35 million from Cole Taylor
Bank, one of the initial lenders on Continental Plaza, in
November 1993 under a separate agreement contingent
upon refinancing with ANB. Loyola earned substantial
interest income from that $1,350,000, so that by the time
Loyola paid $1,736,000 to ANB in 1996, Loyola claims to
have profited by approximately $69,000. The district
court took these factors into account at sentencing
and reduced Lane’s offense level by one point to more


5
   Lane does not mention the numerous other investors who lost
money on the project. Cole Taylor and Daiwa Bank both ended
up with estimated losses of close to $1,000,000 after the refi-
nancing scheme. The Seventh Day Adventists walked away
from the deal with a loss of $2.5 million and the City of Chicago
ended up with unpaid loans and the now worthless property
after Loyola sold the property to them for $1.00. The dis-
trict court did not include these losses as relevant conduct and
therefore the additional losses were not included for the calcula-
tion of Lane’s sentence. However, for Lane to argue that no
one was financially harmed by his fraudulent loan statements
in the face of these losses is disingenuous to say the least.
28                                                No. 01-4084

accurately reflect the loss caused by his crime. Lane was
                                   6
eventually sentenced to 30 months.


    1.   Actual Loses
  We have not had an opportunity in this circuit to ex-
amine the law for determining actual loss in loan fraud
schemes where the victim has obtained restitution from
a third party. However this scenario was addressed in
United States v. Wilson, 980 F.2d 259 (4th Cir. 1992). The
Fourth Circuit held in Wilson that amounts paid by third-
party guarantors are not to be deducted from the loss
calculation. Id. at 261-62. In that case, Everett Wilson
obtained a loan from a bank to open a furniture business.
Id. at 260. In making the loan, the lender required a third-
party guarantee and a security interest in the assets of
the furniture business. Id. Subsequently, Wilson sub-
mitted false financial statements to the lender. Id. at
260-61. When the fraud was eventually discovered, the
third-party guarantor paid a portion of the outstanding
debt as part of a settlement agreement. Id. The court
analogized such payments pursuant to a guarantee to post-
discovery restitution, which is not deducted from the
loss calculation. Id. This reasoning is sound under both
the language of the guidelines and our previous case law.
  Primarily, the sentencing guidelines do not contemplate
the attribution of third-party guarantees to the actual loss

6
  The district court found that the actual and intended losses
to both Loyola and ANB totaled $1,264,000. We find that the
district court correctly determined the actual loss to the pri-
mary victim ANB, and also find that, under the intended loss
guideline, Lane would receive the same sentence. Therefore
we need not address the district court’s analysis as to Lane’s
conduct which caused Loyola’s loss in the transaction.
No. 01-4084                                                29

calculation. The Sentencing Guidelines stipulate that in
fraud cases, “[a]s in theft cases, loss is the value of the
money, property or services unlawfully taken . . . .” U.S.S.G.
§ 2F1.1 application note 8 (emphasis added). See also
United States v. Januzs, 135 F.3d 1319, 1324 (10th Cir. 1998)
(“[T]he purpose of the loss calculation under the Sentenc-
ing Guidelines is to measure the magnitude of the crime
at the time it was committed.”) In this case, when Lane
fraudulently obtained the funds through the refinancing,
which were, in large part, immediately transferred to
another bank where he was in default, the crime was
committed. His fraud was not discovered until his failure
to obtain an anchor tenant caused his default on the loan.
In calculating the actual loss for the crime, courts are
required to take the amount of the loan not repaid at
the time the offense is discovered and deduct the amount
that the institution has recovered from assets pledged
to secure the loan. The theory that must therefore sup-
port the holding in Wilson, which we adopt here, is that
when calculating actual loss, a third-party guarantee
unsupported by additional collateral is not an “asset
pledged to secure the loan.”
  The loan in this case was made to Continental Partners
and the only asset that secured the loan was a mortgage
on the Continental Plaza properties. It was also guaranteed
by both Lane and Loyola, but neither of those guarantees
was secured by any additional collateral. As shown in
detail above, Lane’s guarantee was practically worthless
and, appropriately, Lane does not argue that his own
personal guarantee should have been considered as an
asset pledged to secure the loan. Loyola’s promise to
honor the loan in case of default through the put agree-
ment was not itself secured by any property or other
security. The only difference between the two guarantees
was that Loyola had the financial wherewithal to honor its
30                                              No. 01-4084

guarantee, while Lane did not. That Loyola chose to honor
its guarantee and pay off Lane’s obligations after his de-
fault, does not decrease the magnitude of his crime.
  The commentary to the Sentencing Guidelines also
supports the use of this methodology. We must consider the
language used in § 2F1.1 in light of its placement within
the Sentencing Guidelines, as “the meaning of statutory
language, plain or not, depends on context.” King v. St.
Vincent’s Hosp., 502 U.S. 215, 221 (1991); see also Shell Oil
Co. v. Iowa Dept. of Revenue, 488 U.S. 19, 26 (1988). In Com-
ment 8(b) to Section 2F1.1, the guidelines state that the
loss actually caused or intended to be caused by the de-
fendant may be understated when he repays that loan.
In the case where the defendant himself repays the loan,
the guidelines state that a downward departure may be
warranted. The guidelines do not call for this additional
analysis when the loan is repaid through other agency. We
can logically deduce that the Sentencing Commission
omitted this scenario because if pay-offs by third-party
guarantors were deducted from actual loss, then a fraudu-
lent loan applicant could lie with impunity on a loan
application as long as he had a co-signer willing to step
up in case of a default. Instead, the guidelines instruct
that when the losses calculated under the guidelines seri-
ously overstate or understate the losses actually caused
by the defendant’s conduct, a departure may be warranted.
  In this case, the district court considered the ultimate
losses to the individual lending institutions and reduced
Lane’s sentence accordingly. This was proper. Once the
amount of loss is calculated under the guidelines, the
court has the discretion to modify the amount of loss to
more accurately reflect the economic realities of the crime
and the time to take economic realities into account “is [at]
a district court’s downward departure decision.” Downs,
No. 01-4084                                                   31

123 F.3d at 644; see also United States v. Stockheimer, 157
F.3d 1082, 1089 (7th Cir. 1998); United States v. Bonanno, 146
F.3d 502, 509-10 (7th Cir. 1998); United States v. Coffman, 94
F.3d 330, 336-37 (7th Cir. 1996); United States v. Studevent,
116 F.3d 1559, 1562-63 (D.C. Cir. 1997).
  Additionally, the Wilson decision’s comparison of pay-
ments by third-party guarantors of post-discovery restitu-
tion recognizes that the calculation of loss for the purposes
of restitution differs from actual loss for the purposes
of sentencing. Restitution tracks “the recovery to which
[the victim] would have been entitled in a civil suit against
the criminal.” United States v. Martin, 195 F.3d 961, 968
(7th Cir. 1999). See also United States v. Campbell, 106 F.3d 64,
69 (5th Cir. 1997) (noting in a bank fraud case that 18
U.S.C. § 3663 (b)1(B)(ii) provides that in determining the
appropriate amount of restitution, “the loss attributed to
the illegal act may be offset by the value of any part of
the property that is returned”). Because ANB has recov-
ered completely from Loyola due to Lane’s default,
they could not now recover again from Lane in the form of
restitution. However, the absence of the possibility of
restitution has not precluded this court from finding an
actual or intended loss in fraudulent loan cases. Saunders,
129 F.3d at 931 (holding that actual loss to the victims was
the amount of loss attributed to investors at the time of
the detection of the fraud despite full restitution prior to
trial); Downs, 123 F.3d at 643-44 (rejecting the argument
that loss calculation should be reduced by post-discovery
restitution). Other circuits have also followed this ap-
proach. See, e.g., Janusz, 135 F.3d at 1324 (holding that
amounts recovered by fraud victims may count towards
restitution, but are not subtracted from the loss calcula-
tion); United States v. Mummert, 34 F.3d 201, 204-5 (3d Cir.
1994) (refusing to reduce amount of loss caused by fraud
notwithstanding fact that co-participant in crime offered
32                                                   No. 01-4084

to make gratuitous transfer of property which was basis
of loan transaction). Thus, in calculating actual loss for
sentencing purposes under the fraudulent loan context,
the district court cannot reduce the amount of actual
loss because the defendant, or any other party, makes
restitution after the scheme has been exposed.
  Also analogous is United States v. Wolfe, 71 F.3d 611,
616 (6th Cir. 1995), where the defendant ran a Ponzi or
pyramid scheme in which he caused investors to lose
approximately $4.2 million. Id. at 613. On appeal, the
defendant in Wolfe argued that the actual loss was signifi-
cantly less than $4.2 million because a substantial portion
of the losses suffered by first-time investors could be
recovered from beneficiaries of the scheme through the
bankruptcy estate. The Sixth Circuit rejected the defen-
dant’s argument. Citing Wilson, the court held that “the
agency of another cannot be used to reduce the amount
of loss” and that therefore, Wolfe was not entitled to
“reduce the magnitude of his own crime by relying on the
actions of the bankruptcy trustee.” Id. at 617 (citing Wilson,
980 F.2d at 262). In this case, Lane cannot similarly benefit
from the decision by Loyola to honor its separate guaran-
                                 7
tee, unsupported by collateral.


7
  Wolfe is distinguishable from the “net loss” approach argued
by Lane and to some extent followed in a Ponzi scheme sce-
nario in United States v. Holiusa, 13 F.3d 1043 (7th Cir. 1994). In
Holiusa, we reduced the actual loss calculation by amounts
given by the defendant himself to his defrauded investors, not
by a third party. In Wolfe, the third party was forced to dis-
gorge those assets absent any intent to repay by the defrauder.
Therefore, Wolfe is much more analogous than Holiusa to our
present scenario because Lane’s stated desire to prevent ANB
from losing money had nothing to do with whether or not Loyola
                                                    (continued...)
No. 01-4084                                                33

  Lane argues that United States v. Schneider, 930 F.2d 555
(7th Cir. 1991), holds that at sentencing we must examine
the economic reality of the situation when determining
actual or intended loss. In Schneider we distinguished
between outright theft, an act complete when the good is
taken, and the situation in that case where a contractor
intends to perform a valuable service, but fraudulently
obtains the right to perform. However, Lane’s situation
differs from Schneider in that Lane’s scheme failed because
he couldn’t obtain an anchor tenant, whereas it was per-
fectly possible for the deceptive contractors in Schneider
to have ultimately performed the contract to the govern-
ment’s satisfaction. Because Lane was not able to obtain
an anchor tenant, Continental Plaza could not have been
a successful business entity. When the loan was finally paid
off it was not through anything Lane did, but instead
through the independent actions of a third party.
  Furthermore, in Schneider we made clear that “in the
case of fraud, the loss need not be actual; it is enough if it
is probable or intended.” 930 F.3d at 556. See also Strozier,
981 F.2d at 284. Because the viability of Continental Plaza
was contingent on the existence of an anchor tenant,
Lane’s inability to obtain an anchor tenant made default
highly probable. Thus, the district court properly con-
cluded that Lane caused ANB an actual loss of $1.264
million because Lane was not entitled under the Sentencing
Guidelines to benefit from Loyola’s third-party guarantee.


7
  (...continued)
honored its Put Agreement. His initial proposal did not in-
clude the Put Agreement and that agreement was only obtained
due to ANB’s caution over the project. Lane cannot receive
beneficial treatment by the courts simply because he chose
to defraud a bank with cautious lending policies.
34                                               No. 01-4084

  2.   Intended loss.
  Even if we were not inclined to adopt the Fourth Cir-
cuit’s reasoning in Wilson, Lane’s offense level for sen-
tencing would be the same if we focused on the intended
loss to ANB under the guidelines. In United States v.
Downs, 123 F.3d 637 (7th Cir. 1997), we stated that “the
unsecured portion of a loan is a common-sense estimate
of the interim risk faced by the lending institution and
gives a defendant credit for the pledged assets the lending
institution could readily use for recompense.” Id. at 643-44.
“This estimate of loss similarly has the advantage of not
‘making the term of a criminal sentence turn on conjec-
ture.’ ” Id. (citing United States v. Mount, 966 F.2d 262, 267
(7th Cir. 1992) (Ripple, J., concurring)). The determination
of intended loss under the Sentencing Guidelines there-
fore focuses on the conduct of the defendant and the objec-
tive financial risk to victims caused by that conduct. This
analysis excludes consideration of third-party guaran-
tees. This determination also applies even when the
amount at risk was not lost (e.g., the project financed by
the undersecured loan succeeded nevertheless). See United
States v. Higgins, 270 F.3d 1070, 1075 (7th Cir. 2001);
Stockheimer, 157 F.3d at 1089; Downs, 123 F.3d at 643-44;
Wilson, 980 F.2d at 261-62; Schneider, 930 F.2d at 558-59.
  Lane argues that he never intended to cause ANB a loss,
as evidenced by the fact that Loyola was brought in to
participate in the refinancing. However, Lane was taking
a significant gamble on the refinancing project by not
disclosing that he did not have an anchor tenant in place
when the refinancing deal was consummated. Much like
any gambler, Lane likely did not intend to fail at his ven-
ture; nevertheless, gamblers often lose. And in this case,
Lane was not gambling his own money, but that of ANB.
The “secured portion of the loan” was only the amount of
No. 01-4084                                                    35

the loan protected by the limited value of the Continental
Plaza mortgage. Cf. In Re Hunter, 970 F.2d 299 (7th Cir. 1992)
(describing a debt as unsecured when it is not protected by
a security interest in or mortgage on property, but only a
guarantee). The intended loss therefore is $1.02 million: the
amount of the initial loan, $1,900,000 less the assessed value
of the Continental Plaza properties at the time of the
refinancing, $880,000. This amount is different than the
district’s court’s determination of intended loss, but the
error is harmless in that it falls within the same guide-
            8
line range. Coffman, 94 F.3d at 337. Because intended
loss is only to be considered if it exceeds actual loss, the
district court accurately concluded that Lane’s sentence
should be based on an actual loss to ANB of $1.264 million.


    3.   Relevant conduct.
  Finally, the district court properly held Lane account-
able for the relevant conduct loss under the guidelines
relating to the South Shore Bank fraud. Lane was found
guilty of three counts of making false statements in con-
nection with refinancing loans (totaling $615,744.39) from
South Shore. The district court’s subsequent task under
§ 2F1.1 was to determine the amount of loss attributable
to the defendant’s criminal conduct, including the loss
attributable to the offense of conviction and any relevant

8
   The district court erred in its determination of intended loss
in that it assessed the value of the Continental Plaza property at
the time of the default and not at the time of the refinancing.
Because Continental Partners failed to pay property taxes
over the life of the loan, the value of the property steadily
decreased. However, for intended loss purposes courts should
examine the status quo at the time the fraudulent loan applica-
tion is made. See generally, Mount, 966 F.2d at 267.
36                                                No. 01-4084

conduct under U.S.S.G. § 1B1.3. See United States v. Sykes,
7 F.3d 1331, 1335-36 (7th Cir. 1993). Relevant conduct
includes “all acts . . . willfully caused by the defendant,”
§ 1B1.3(a)(1)(A), that “occurred during the commission of
the offense of conviction, in preparation for that offense,
or in the course of attempting to avoid detection or respon-
sibility for that offense.” § 1B1.3(a)(1)(A)-(B). The guide-
lines’ “relevant conduct” provision requires a defendant’s
sentence to be based on “all harm that resulted from the
acts or omissions” of the defendant and “and all harm
that was the object of such acts and omissions” that oc-
curred during the commission of the offense or in prepa-
ration for that offense. U.S.S.G. § 1B1.3(a)(3). We have
held that § 1B1.3 “limits relevant conduct, for the purposes
of Chapters Two and Three sentencing determinations, to
criminal conduct.” United States v. Schaefer, 291 F.3d 932,
940 (7th Cir. 2002). However, sentencing courts may also
consider as relevant conduct “any other information
specified in the application guideline.” U.S.S.G. § 1B1.3
(a)(4).
  The district court properly held that the loss to NIRT of
Lane’s interest in the Springfield Office Partnership was
relevant conduct to Lane’s convictions for defrauding
South Shore Bank. The evidence demonstrated that Lane
shielded Springfield Office Partnership from the collec-
tion efforts of NIRT. In this case, South Shore did not lose
any money from the transaction because it cashed out of
the SOP relatively quickly. On the other hand, NIRT was
left holding the bag, which in this case turned out to be
        9
empty. Accordingly, because U.S.S.G. § 2F1.1 allows a court


9
  Following the refinancing in 1994, South Shore Bank sold
SOP for $500,000 in 1996. Half of the proceeds were applied to
                                                 (continued...)
No. 01-4084                                                   37

to depart upward or downward if losses calculated under
the guideline understate the “seriousness of defendant’s
conduct,” the district court properly included this NIRT
loss as relevant conduct under § 1B1.3 (a)(4). The district
court also determined that Lane’s actions as to both South
Shore and NIRT involved a common purpose, common
actors, and a similar modus operandi. The court stated
that “[t]he two schemes—to defraud NIRT, and to mis-
represent debts to South Shore—were carried out at the
same time, in the same manner, and in the same transac-
tions. South Shore accepted collateral that was being
sought after by NIRT, of whom South Shore was unaware
because of Lane’s fraudulent refinancing application.”
United States v. Lane, 194 F. Supp. 2d 758, 774 (N.D. Ill. 2002).
Lane’s fraudulent loan application and fraudulent negotia-
tions placed both South Shore and NIRT at risk, as neither
of them knew about the other, and they both simulta-
neously sought Lane’s interest in the Springfield Office
Partnership. Accordingly, Lane’s actions in hiding assets
from NIRT was also relevant conduct under § 1B1.3(a)(4) to
his convictions on the South Shore counts pursuant to
§2F1.1(a)(2), which allows a court to increase a defen-
dant’s offense level if the offense involves a scheme to
defraud more than one victim. The loss to NIRT was
properly determined to be the value of the Springfield
Office Partnership, $500,000. Cf. United States v. Williams,
292 F.3d 681, 685 (10th Cir. 2002) (holding that the initial
loan secured by the same Jaguar convertible that was then


9
  (...continued)
Lane’s loan with South Shore and the other half was returned to
Lane and his associates. NIRT was not notified of any of these
transactions and none of the proceeds of these transactions
were applied to Lane’s $2.4 million debt.
38                                             No. 01-4084

fraudulently re-pledged could serve as relevant conduct
to the subsequently charged fraudulent loan under 1B1.3).
  In sum, we find that the district court properly deter-
mined that Lane was responsible for $1,764,000 in losses.
This figure represents the actual loss to ANB of $1,264,000,
and the $500,000 relevant conduct loss to NIRT.


                     III. Conclusion
  In conclusion, we find that the district court properly
admitted relevant evidence of Lane’s financial status as
direct evidence of Lane’s fraud and not as improper charac-
ter evidence under Federal Rule of Evidence 404(b). The
court also properly barred evidence proffered by Lane
that would have demonstrated he lacked specific intent
to defraud, as that is not an element of the crime. Finally,
the court did not erroneously calculate the actual loss
for sentencing purposes. Therefore we AFFIRM Lane’s con-
viction and sentence.
No. 01-4084                                                39

  ROVNER, Circuit Judge, concurring. I concur in the judg-
ment and join all of Judge Manion’s thorough opinion
with the exception of part II.B.1 regarding the actual loss
calculation. In my view, the intended loss, as measured by
the unsecured portion of the Continental Plaza refinanc-
ing, represents the most sound approximation of the in-
jury caused by Lane’s fraud. The actual loss calculation
poses a conundrum of logic if not legal theory in this case.
Loyola, which nominally bore the loss by virtue of its
obligation to reimburse ANB, contends that it did not in
fact lose, but to the contrary made, money notwithstand-
ing Lane’s fraud. Loyola would have been $1.35 million
out of pocket had the fraudulently-induced refinancing
never occurred, so until the refinancing arrangement col-
lapsed in 1996, Loyola had the use of this money, earned
substantial interest thereon, and by its own account ulti-
mately came out ahead notwithstanding the fact that it
had to pay off ANB in the amount of $1.736 million. But
if Lane’s fraud did not (fortuitously) cause a real loss
to Loyola, it nonetheless did pose an interim risk to ANB
as the lender. The amount of this potential or “intended”
loss ($1.02 million) is less than the figure that Judge Norgle
used, but, as Judge Manion points out, the error did
not affect the calculation of the sentencing range. Ante at
35 & n.8. I would therefore affirm Lane’s sentence on
the basis of the intended loss calculation and refrain from
deciding whether there was an “actual” loss in this case.

A true Copy:
        Teste:

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

                    USCA-02-C-0072—3-24-03
