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

No. 06-1924
UNITED STATES OF AMERICA,
                                          Plaintiff-Appellee,
                             v.

STEVEN E. WHITING,
                                      Defendant-Appellant.
                       ____________
         Appeal from the United States District Court
              for the Eastern District of Wisconsin.
        No. 04 CR 21—Rudolph T. Randa, Chief Judge.
                       ____________
 ARGUED SEPTEMBER 25, 2006—DECIDED DECEMBER 15, 2006
                       ____________


 Before BAUER, KANNE, and WOOD, Circuit Judges.
  BAUER, Circuit Judge. A jury convicted Steven E.
Whiting of converting funds withdrawn from employee
paychecks and making a series of false statements relating
to health care matters at two companies, Badger Die
Casting, Inc. and Western Rubber, Inc., in violation of
18 U.S.C. §§ 664, 669, and 1035. The funds were intended
for payment of health insurance premiums, self-funded
health benefit programs, and a 401(k) fund. Whiting was
sentenced to 90 months of incarceration, three years of
supervised release, and ordered to pay $922,875.44 in
restitution. On appeal, Whiting asserts that the district
court erred in (1) concluding that the relationship be-
tween Whiting and the employee benefit plans could
2                                            No. 06-1924

support a conversion action; (2) finding that the evidence
was sufficient to support Whiting’s convictions for con-
version; (3) admitting evidence of his wealth; and (4)
calculating his sentence. We affirm the conviction and
reverse for resentence.


                    I. Background
    A. Badger Die Casting
  In 1998, Steven Whiting purchased Badger Die Casting
with financing from LaSalle National Bank and a series of
promissory notes from the former owners. Badger’s
employees were members of the United Electrical, Radio &
Machine Workers of America. Their collective bargaining
agreement required that Badger provide health insurance
to employees but also allowed Badger to self-fund the plan
with notice to the employees.


     1. Health Insurance
  Initially, Badger employees were covered by a United
Healthcare insurance policy that was funded in part by
employee payroll deductions. Employee contributions
were withheld from paychecks and kept in Badger’s
general operating account until they were used to pay the
United Healthcare premium.
  By October 2000, the company was in financial distress
and behind in payments to vendors, service providers,
and utility companies. In June 2001, Badger withheld
$6,134.00 from employee paychecks intended for the
payment of the June health insurance premium. Although
these funds were deducted, Whiting defaulted on the
United Healthcare premium for June. As a result, United
Healthcare terminated the policy.
No. 06-1924                                              3

  In June 2001, Whiting decided to institute a self-funded
medical plan for Badger, as well as two other companies
that he owned: Western Rubber, Inc. and GAC Plastics. To
administer the self-funded plan, Whiting entered into a
contract with Medical Benefits Administrator (“MBA”).
MBA was not an insurance company; it processed claims
and provided stop-loss insurance coverage for medical
claims in excess of $30,000.
   When Whiting decided to switch the company to self-
funded insurance, he instructed the Human Resources
Director, Teresa Palkowski, to post a notice at the com-
pany. Palkowski’s initial draft referred to MBA as the
new “plan administrator,” but Whiting told her to use the
term “insurance carrier” because “administrator” could
be a “red flag.” In late June, Palkowski posted a notice
describing MBA as “our new health insurance carrier.”
Whiting further instructed Palkowski to depart from
Badger’s past practice of holding a group presentation on
a new plan and, instead, have MBA enroll employees in
the plan in groups of one or two. In March 2002, Badger
first gave official notice to the employees that the plan
was self-funded.
  Although the self-funded plan was effective July 1, 2001,
due to processing delays medical claims were not pre-
sented to Badger for approval until late September 2001.
Whiting did not give Palkowski permission to authorize
MBA to pay medical bills; he only approved the payment
of prescription expenses.
  On April 15, 2002, LaSalle National Bank foreclosed on
Badger’s assets. On May 1, 2002, MBA sent a termina-
tion letter to Badger employees and directed them to send
all unfunded medical claims directly to Whiting. As a
result, Badger employees were left with $414,775 in
unpaid medical claims.
4                                            No. 06-1924

    2. 401(k) Plan
  Badger employees also participated in a 401(k) savings
plan. Pursuant to the 401(k) plan, Badger initially with-
held employee contributions and matched a percentage.
Employee funds were then forwarded to Strong Funds for
investment, on a monthly basis. Whiting had final author-
ity on all checks; he decided whether to forward employee
funds to Strong Funds.
  In late 2001 and early 2002, Badger did not fund its
401(k) plan. The 401(k) contributions withheld from
employee paychecks were $7,163.00 for December 2001;
$7,379.00 for January 2002; $2,460.00 for February 2002;
$3,011.00 for March 2002; and $739.00 for April 2002.
Badger deducted these 401(k) contributions but failed to
forward them to Strong Funds. In accordance with Whit-
ing’s instructions, the employee funds remained in
Badger’s operating account and were not paid to Strong
Funds.


    3. Wealth Evidence
  Although Whiting spent no more than six to eight hours
a week at Badger reviewing aging accounts payable,
determining which checks to pay, and dealing with human
resource issues, he withdrew approximately $798,000 in
management fees and expenses. He also withdrew another
$676,000 in miscellaneous expenses related to, among
other things, equipment leases paid to entities that he
controlled.
  Through his management company, the Garrett Group,
LLC, Whiting received management fees and expenses
from Badger. His initial monthly management fee was
$10,000, which was thereafter increased to $40,000,
and finally reduced to $20,000. In 1999, 2000, and
2001, Whiting withdrew $311,169.70, $314,781.51, and
No. 06-1924                                             5

$94,099.84, respectively. Around the time that Whiting
defaulted on the United Healthcare premium for June, he
directed his controller to pay him $20,126.00. Notably, in
1999, the Garrett Group purchased a $1.3 million air-
plane. Badger had out-of-state customers, but Whit-
ing’s trips to see them were “very, very seldom.”
  Whiting alone directed which checks were written.
Although Whiting’s management fees were paid on a
monthly basis, all other accounts were aged as long as
possible.


 B. Western Rubber, Inc.
  In November of 1997, Whiting acquired the assets of
Western Consolidated Technologies with financing from
LaSalle National Bank and renamed the company West-
ern Rubber, Inc. Western employees were members of the
United Steel Workers of America. Their collective bargain-
ing agreement required that Western provide health
insurance for covered employees.


   1. Health Insurance
  Western provided health insurance to its employees first
through Humana and then through Trustmark Insurance
Company. Western withheld $5,620.00 from employee
paychecks intended for payment of the June 2001 pre-
mium. Although these funds were deducted, Western
defaulted on the June premium. As a result, Trustmark
terminated its coverage of Western and did not pay any
doctor or hospital claims for the month of June.
  In June 2001, Whiting instituted a self-funded health
plan and hired MBA as the administrator. Western
continued to deduct funds from the employees’ paychecks,
since the company “intended to continue to provide the
6                                            No. 06-1924

same coverage, and insurance benefits, that were always
provided in the past.” Western informed its employees
and the union of this change and instructed them to
bring their medical bills to the company for payment.
  The company’s controller, Allen DeSomer, cautioned
Whiting about the risks, given the older ages of the
employees, and specifically advised him that an employee,
Dale Garber, had been diagnosed with cancer. Whiting
told DeSomer that self-funding was “working well” at
Badger, and he did not believe monthly health care costs
for cancer treatment would exceed $10,000. General
manager Phil Hamilton also advised Whiting of Garber’s
situation and recommended that a separate insurance
policy be taken out to cover his medical expenses. Whiting
represented that he had a plan to provide funding for
Garber’s cancer treatments. Despite the concerns ex-
pressed by DeSomer and Hamilton, Whiting imple-
mented the self-funded plan and did not take out a sepa-
rate insurance policy for Garber.
  Western processed the medical claims for the months of
June, July, and August. During these months, DeSomer
could not write checks for employee medical claims without
Whiting’s approval. In September 2001, Western hired
MBA to administer its plan, which, like the one at Badger,
included a stop-loss insurance policy. MBA began to
administer the self-funded plan in September, but all
checks and medical claims still needed Whiting’s approval.
  In February 2002, Whiting directed DeSomer to limit
expenses to raw materials only and to notify the employees
that Western was closing its doors. The employees were
left with $375,530 in unpaid medical claims.


    2. Wealth Evidence
  Generally, Whiting would visit Western once a month
and review financials with the controller. During his
No. 06-1924                                            7

ownership of Western, Whiting withdrew approximately
$756,000 in management fees and expenses. His monthly
management fees were $20,000 in 1999 and 2000. In 2001,
he reduced his fees but continued to receive payments
for the airplane and rent. Although Western was late
paying its May Trustmark premium and failed to pay its
June Trustmark premium, it promptly paid Whiting’s
monthly airplane expense of approximately $4,100 in
May, June, and July.
  Throughout this time period, Western made rent pay-
ments to WRA Holdings, an entity that Whiting con-
trolled, and Whiting, in turn, made mortgage payments to
LaSalle National Bank. Whiting charged Western monthly
rent of $10,000 in 1998, $12,000 in 1999 and 2000, and
later reduced the monthly rent to $9,000 and $8,000
for 2001, even though the monthly mortgage owed to the
bank was only $6,000. Over the course of Whiting’s
ownership, Western paid WRA Holdings approximately
$457,000 in rent. WRA Holdings, in turn, paid manage-
ment fees to Whiting.
  In the summer and fall of 2001, Whiting directed what
bills the company paid. Specifically, Whiting instructed
the company’s controller to overnight his management
fees and expenses and to delay paying other creditors. At
one point when Western had received payment from some
customers, DeSomer e-mailed Phil Hamilton, the general
manager, and asked how they could keep Whiting from
withdrawing the aforementioned management fees. In
response, Hamilton joked, “Not tell him about it, huh?”


 C. District Court Proceedings
  In September 2004, Whiting was indicted on thirteen
counts of violating Title I of the Employee Retirement
Income Security Act of 1974 (“ERISA”). Counts one
8                                           No. 06-1924

through three charged Whiting with violating 18 U.S.C.
§ 644: count one charged Whiting with converting ap-
proximately $6,134.00 deducted from paychecks of
Badger employees that was intended for the June 2001
health insurance premium; count two charged Whiting
with converting approximately $6,761.00 deducted from
paychecks of Badger employees that was intended for the
July 2001 health insurance premium; count three
charged Whiting with converting $5,620.00 funds from
paychecks of Western employees that was intended for
the June 2001 health insurance premium. Count four
charged Whiting with violating 18 U.S.C. § 669 by know-
ingly converting and misapplying funds deducted from
employee paychecks for a health care benefit program
as defined 18 U.S.C. § 24(b). Counts five through
nine charged Whiting with converting $7,163.00 for
December 2001; $7,379.00 for January 2002; $2,460.00 for
February 2002; $3,011.00 for March 2002; and $739.00
for April 2002 intended for the Badger 401(k) plan.
Counts ten through thirteen charged Whiting with vio-
lating 18 U.S.C. § 1035 by knowingly and willfully mak-
ing materially false statements and representations
involving a health care benefit program as defined in 18
U.S.C. § 24(a). Specifically, count ten charged Whiting
of misrepresenting that MBA was Badger’s new health
insurance carrier; count eleven charged Whiting of mis-
representing that Badger would change insurance
carriers from United Healthcare to MBA; count twelve
charged that Whiting misrepresented that Badger had
a continuing schedule in place for catching up with med-
ical claims; and count thirteen charged that Whiting
misrepresented that he had a plan to provide funding for
cancer treatments of a Western employee.
No. 06-1924                                                    9

    1. Motion to Dismiss
  Whiting moved for dismissal of counts one through three
and five through nine, arguing that the indictment did
not state a cause of action because the collective bargain-
ing agreements did not support an action for conversion.
The district court rejected Whiting’s argument and found
that once deducted from employee paychecks, employee
contributions are plan assets for the purposes of 18 U.S.C.
§ 664. The district court held that Whiting’s motion to
dismiss “in essence, challenges the government’s ability
to prove that Whiting converted the employee assets of
a plan subject to ERISA” and “that issue must await trial.”


    2. Jury Instruction
  Prior to trial, Whiting requested a jury instruction that
the jury must “look to any agreements between the par-
ties and the rights and obligations created by those agree-
ments” to determine whether employee contributions
are plan assets under ERISA. Whiting further requested
an instruction that “when a party is allowed to com-
mingle funds, he holds money merely as a debtor to the
other party and can not be guilty of conversion of those
funds, unless the parties have an agreement that in-
dicates otherwise.”1 The district court declined the


1
  The following is the complete jury instruction relating to
conversion of plan assets that Whiting requested: “Conversion
must involve the property of another, not the property of the
defendant. In this case, funds were deducted from paychecks
of employees at Badger Die Casting and Western Rubber to
pay the employee contribution for the health insurance premium.
This money was placed into the general operating account of the
company. An employer is not required to create a separate
account for this money. To determine whether this money was
                                                   (continued...)
10                                                No. 06-1924

above instruction, holding that this information was ir-
relevant.
  At the close of the trial, the district court judge in-
structed the jury that in order to find the defendant
guilty of converting funds intended for payment of health
insurance premiums and the 401(k) plan, the government
must establish beyond a reasonable doubt that (1) the
defendant converted funds to his own use or the use of
another; (2) the funds were assets of an employee pension
benefit plan subject to ERISA; and (3) the defendant acted
willfully and with fraudulent intent. The judge further
instructed the jury that
     plan assets include amounts that a participant has
     withheld from his wages by an employer, for
     contribution to the plan as of the earliest date on
     which such contributions can reasonably be segre-
     gated from the employer’s general assets, but in no
     event shall that date occur later than 90 days from
     the date on which such amounts would otherwise
     have been payable to the participant in cash (in
     the case of amounts withheld by an employer from
     a participant’s wages). (quotations and ellipses
     omitted).




1
  (...continued)
the asset of an employee welfare benefit plan, as opposed to the
asset of the company, you must look to any agreements between
the parties and the rights and obligations created by those
agreements.
  When a party is allowed to commingle funds, he holds money
merely as a debtor to the other party and can not be guilty of
conversion of those funds, unless the parties have an agreement
that indicates otherwise.”
No. 06-1924                                               11

    3. Wealth Evidence
  Whiting also moved in limine to bar evidence of his
wealth. The government argued that this evidence was
probative of Whiting’s willfulness and intent to defraud.
Whiting countered that the wealth evidence was too
prejudicial. The district court, in denying the motion,
agreed with the government that Whiting’s wealth was
relevant on the issue of his intent. At trial, evidence of
Whiting’s management fees, expense reimbursements, and
personal expenditures was introduced. Such evidence
included a $135,195 recreational vehicle Whiting pur-
chased in June 1999; a $1.1 million home in Brookfield,
Wisconsin; a vacation home in Florida with a market
value of $1.6 million in November 2004; and a $1.3 million
dollar airplane.


    4. Verdict and Sentencing
  On May 23, 2005, a jury acquitted Whiting on counts
two, eleven, and twelve and found him guilty on the
remaining ten counts. At sentencing, the district court
applied a base offense level of 6, and then increased the
sentence by the size of applicable loss. As part of this
figure, the district court applied the total unpaid claims
to Whiting’s figure because employees had trusted
Whiting to take care of their health care. The district court
sentenced Whiting to 90 months of incarceration, three
years of supervised release, and ordered him to pay
$922,875.44 in restitution. Whiting timely filed this
appeal.


                      II. Discussion
  A. ERISA Plan Assets
  Whiting asserts that the funds deducted from employee
paychecks were not ERISA plan assets based on the terms
12                                             No. 06-1924

of the collective bargaining agreements. Whiting con-
tends that the relationship between himself and the
employee benefit plans could not support a conversion
action. He asserts that the collective bargaining agree-
ments establish that he was a debtor and not a bailee, and
as a debtor he cannot be liable for conversion; at most
he merely failed to satisfy a contractual debt. Whiting
also argues that the employees had a future interest in
the funds, while a possessory interest would be required
to support a conversion charge. He asserts that the
employees do not have a present interest in the unpaid
contributions until they are actually paid to the plan,
which never occurred. In sum, Whiting contends that
because he was never required to segregate the funds
and never delivered the funds to the intended recipient,
the funds never became “plan assets” that could have
been converted. As such, Whiting challenges the district
court’s denial of his motion to dismiss and denial of Whit-
ing’s jury instruction on the definition of plan assets.
  To determine whether an employer can avoid criminal
liability by never applying employee payroll funds to the
ERISA plans to which they were intended, we must
consider the meaning of ERISA plan assets. Under 18
U.S.C. § 664,
     any person who embezzles, steals, or unlawfully
     and willfully abstracts or converts to his own use
     or to the use of another, any of the moneys, funds,
     securities, premiums, credits, property, or other
     assets of any employee welfare benefit plan or
     employee pension benefit plan, or of any fund
     connected therewith, shall be fined under this
     title, or imprisoned not more than five years, or
     both.
     As used in this section, the term “any employee
     welfare benefit plan or employee pension benefit
No. 06-1924                                                 13

      plan” means any employee benefit plan subject to
      any provision of title I of the Employee Retirement
      Income Security Act of 1974.
Id.
  ERISA does not define what constitutes “plan assets” of
an ERISA fund. John Hancock Mut. Life Ins. Co. v. Harris
Trust & Sav. Bank, 510 U.S. 86, 89,114 S. Ct. 517, 126 L.
Ed. 2d 524 (1993). Despite the absent of a definition, the
term “plan assets” appears throughout the statute. “Plan
assets” are required to be held in trust, 29 U.S.C.
§ 1103(a), to be used for the exclusive benefit of partici-
pants and beneficiaries, § 1103(c)(1), and to be allocated
among participants and beneficiaries upon termination
of the plan, § 1344(a). According to a Department of
Labor Regulation, plan assets “include amounts . . . that
a participant or beneficiary pays to an employer, or
amounts that a participant has withheld from his wages
by an employer, for contribution to the plan as of the
earliest date on which such contributions can reasonably
be segregated from the employer’s general assets.” 29
C.F.R. § 2510.3-102(a). According to this regulation, the
earliest date is “the date on which such amounts would
otherwise have been payable to the participant in cash
(in the case of amounts withheld by an employer from a
participant’s wages).” § 2510.3-102(c).
  Other circuits have defined the term “plan assets” to
include funds withdrawn from employee checks before
they are deposited into benefit plans. Bannistor v. Ullman,
287 F.3d 394, 402 (5th Cir. 2002) (defining ERISA plan
assets to include contributions withheld from employee
paychecks and for deposit into their benefit plans, even
though the contributions have not actually been delivered
to the benefit plan); United States v. Grizzle, 933 F.2d 943,
947 (11th Cir. 1991) (holding that employee contribu-
tions are plan assets even if they have not been delivered
to the plan); United States v. LaBarbara, 129 F.3d 81, 88
14                                            No. 06-1924

(2nd Cir. 1997) (holding that once wages were paid,
defendant had contractual obligations to the fund that
constituted assets by any common definition); Navarre v.
Luna, 406 F.3d 1192, 1200 (10th Cir. 2005) (agreeing
with the reasoning and outcome in LaBarbara). In line
with this authority, we find that unremitted employee
contributions, including employee contributions withheld
from employee paychecks that have not been delivered to
their intended benefit plans, can be plan assets for the
purposes of § 664 of ERISA.
  The funds withdrawn from employee paychecks repre-
sent an amount of money paid to employees in compensa-
tion. Once the contributions are withheld, the money
no longer belongs to the company; rather, the funds be-
long to the employees. Therefore, employees have a pres-
ent interest in the funds. In this case, the funds were
withdrawn for payment of insurance premiums and 401(k)
plans. By leaving the employee payroll deductions in the
general operating account, Whiting directed those funds
to be used for purposes other than they were intended.
Diverting money earmarked for an intended recipient
and keeping it in your own pocket is conversion.
  In challenging the jury instruction given by the district
court, Whiting claims that as a matter of law, the dis-
trict court failed to properly instruct the jury on conver-
sion of plan assets because it did not direct the jury to
consider the collective bargaining agreements. Whiting’s
argument is that to determine whether the specified
funds were plan assets that were converted, the jury
must be instructed to consider the Badger and Western
collective bargaining agreements.
  Although Whiting states that the district court refused
to acknowledge the collective bargaining agreements, the
district court’s pretrial and trial rulings did not pre-
clude Whiting from arguing to the jury that the collective
No. 06-1924                                             15

bargaining agreements did not make him responsible for
the employee funds. In fact, the collective bargaining
agreements were admitted into evidence. Additionally,
there was no dispute that the deductions made from
paychecks were employee contributions to the plan. The
jury did not need a specific instruction to establish the
relationship between Whiting and his employees.


  B. Insufficiency of Evidence
  In weighing the sufficiency of the evidence, we view the
evidence in the light most favorable to the prosecution and
will reverse a conviction only if no rational trier of fact
could have found the essential elements of the offense
beyond a reasonable doubt. United States v. Peters, 277
F.3d 963, 967 (7th Cir. 2002).
  The jury convicted Whiting with violating ERISA § 664
by converting $6,134.00 of funds intended for the June
2001 health insurance premium at Badger. Section 664
imposes liability when a person converts to his own use
or to the use of another funds of an employee welfare
benefit plan. 18 U.S.C. § 664. Whiting challenges the
sufficiency of the evidence to support this conviction by
claiming that there is no evidence in the record regarding
Whiting’s use of employee payroll deductions. However,
the evidence conclusively showed that employee con-
tributions were deducted from Badger employee pay-
checks and the June health insurance premium was never
paid. During this time, Whiting enriched himself with
promptly paid management fees and expenses. A rational
fact finder could conclude that this violated § 644. Thus,
the evidence was sufficient to show that Whiting did not
use the $6,134 charged in count one for payment of the
June 2001 United Health care premium at Badger. A
rational jury could find that this money was converted.
16                                              No. 06-1924

  The jury also convicted Whiting of converting employee
401(k) contributions for December 2001 through April
2002. Whiting argues that the evidence was insufficient
to support this verdict because there was no evidence that
he used the employee 401(k) contributions; rather, the
funds remained in Badger’s general operating account.
Failure to use funds in accordance with Whiting’s obliga-
tion supports a conversion conviction under § 664. The
evidence at trial established that Whiting had a duty to
fund the 401(k) plans. Badger’s controller testified that the
employee funds were not paid to the 401(k) because
Whiting never directed that the payments be made. The
jury properly rejected Whiting’s defense that LaSalle
restricted Whiting expenditures because none of the
checks LaSalle rejected were destined for the 401(k) fund.
The jury also heard evidence that Whiting enriched
himself with promptly paid management fees and ex-
penses during this time. A rational fact finder could
conclude that this violated § 644. Accordingly, the evi-
dence was sufficient to support the jury’s findings.


  C. Wealth Evidence
  Whiting directs his third challenge to the district court’s
admission of Whiting’s management fees, expense reim-
bursements, and personal expenditures. The district court
admitted this evidence under Federal Rule of Evidence
404(b) for the purpose of showing Whiting’s willfulness
and intent for engaging in the fraudulent scheme. We
review the district court’s evidentiary rulings for an
abuse of discretion, United States v. Thomas, 453 F.3d 838,
844 (7th Cir. 2006), and will reverse only where no reason-
able person would agree with the decision made by the
trial court. Id. at 845.
  Whiting first asserts that the district court abused its
discretion in admitting irrelevant evidence of his financial
No. 06-1924                                              17

condition. Whiting argues that the evidence was irrele-
vant because the government could not prove that the
specific dollars in the conversion counts were used to pay
Whiting’s fees or expenses. Evidence is relevant where it
has the tendency to make the existence of any fact of
consequence either more probable or less probable than
it would be without the evidence. Fed. R. Evid. 401. As
part of its case in chief, the government was required to
prove that Whiting acted willfully and with fraudulent
intent. We often have held that “when a defendant is
charged with a specific intent crime, the government may
present other acts evidence to prove intent.” United States
v. Curry, 79 F.3d 1489, 1495 (7th Cir. 1996). The evidence
of Whiting’s wealth shows that over a two to three year
period after acquiring Badger and Western, Whiting
willfully withdrew significant amounts of money in
management fees and related expenses, such that there
were insufficient funds to cover health care and 401(k)
obligations. This evidence was relevant to Whiting’s in-
tent to defraud.
  Citing Federal Rule of Evidence 403, Whiting asserts
that the probative value of the evidence was substan-
tially outweighed by its prejudicial effect, which was
aggravated by the government’s improper use of the
evidence. Whiting suggests that the government’s purpose
in presenting this evidence was to trigger an emotional
reaction by the jury through painting Whiting as a
wealthy individual. We disagree. Evidence of Whiting’s
wealth shows the manner in which he directed company
funds to be spent. This evidence is highly probative of his
intent to defraud his companies. In fact, this seems to be
the only evidence that illustrates Whiting’s intent. See
United States v. Mobley, 193 F.3d 492, 496 (7th Cir. 1999)
(putting money to questionable ends cannot prevent the
prosecutor from making an otherwise proper demonstra-
tion of motive and effect.) Moreover, the prejudicial effect
18                                              No. 06-1924

of the wealth evidence was not great, considering this
was a criminal prosecution, not a civil lawsuit seeking
money damages. The district court did not abuse its
discretion in admitting this evidence.


  D. Sentencing
  Finally, Whiting attacks the calculation of his sentence.
Whiting asserts that the district court erred in determin-
ing that Whiting caused $921,380 in loss. We agree. When
imposing a sentence, a district court must first calculate
the advisory guideline range and then select a sentence
within or outside the range in light of the factors set
forth in 18 U.S.C. § 3553(a). United States v. Robinson,
435 F.3d 699, 700-01 (7th Cir. 2006). In the post-Booker
era, this Court continues to review the district court’s
application of the Sentencing Guidelines de novo and its
factual findings for clear error. United States v. Bothun,
424 F.3d 582, 586 (7th Cir. 2005).
  U.S. Sentencing Guidelines Manual § 2B1.1 assigns a
base offense level of 6 and then requires, in § 2B1.1(b)(1),
that the offense level be increased by the size of applicable
“loss.” Application Note 3 defines how “loss” is determined.
“Actual loss” is “the reasonably foreseeable pecuniary
harm that resulted from the offense.” U.S. Sentencing
Guidelines Manual § 2B1.1, Application Note 3(a)(i).
Reasonable foreseeable pecuniary harm is “pecuniary
harm that the defendant knew, or under the circum-
stances, reasonably should have known, was a potential
result of the offense.” U.S. Sentencing Guidelines Manual
§ 2B1.1, Application Note 3(a)(iv). Causation includes two
distinct principles, cause in fact, commonly known as “but
for” causation, and legal causation. Whiting challenges the
district court’s calculation of “actual loss.”
  The jury convicted Whiting of converting $66,117, but
the district court based his Sentencing Guidelines range on
No. 06-1924                                                    19

a loss figure of $921,380.2 The district court reasoned that
Whiting’s misrepresentations, charged in counts ten and
thirteen, caused the total loss of all unpaid medical claims.
To determine this loss figure, the district court correctly
applied the standard of whether the losses were “reason-
ably foreseeable pecuniary harm” and acknowledged
that Note 3(a) required a finding that the false state-
ments were a cause-in-fact of the loss. The court then
conceded that the statement that MBA was a “carrier” “is
not really causal of losses relative to the unpaid medical
claims” and stated that “there isn’t strict causal—and
I think the defense focused too much on cause.” Nonethe-
less, the district court applied the unpaid claims to Whit-
ing’s loss figure because the employees had trusted
Whiting to provide health care. We find that the district
court improperly applied the loss causation standard by
finding both no causation and causation.


                       III. Conclusion
  Based on the foregoing reasons, we AFFIRM in part,
REVERSE in part, and REMAND for new sentencing consis-
tent with this opinion.

A true Copy:
        Teste:

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


2
    The judgment reflects a corrected amount of $922,875.44.


                     USCA-02-C-0072—12-15-06
