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

No. 06-1570
UNITED STATES OF AMERICA,
                                           Plaintiff-Appellee,
                             v.

GIGI A. ZACCAGNINO,
                                        Defendant-Appellant.
                       ____________
         Appeal from the United States District Court
               for the Central District of Illinois.
         No. 03 CR 10095—Michael M. Mihm, Judge.
                       ____________
 ARGUED OCTOBER 17, 2006—DECIDED NOVEMBER 3, 2006
                   ____________


  Before FLAUM, Chief Judge, and BAUER and EASTERBROOK,
Circuit Judges.
  FLAUM, Chief Judge. In September 2002, Gigi A.
Zaccagnino, her husband Peter Zaccagnino, and Wendell
Gates were indicted on a number of charges stemming from
a fraudulent investment scheme. On March 23, 2005, Gigi
Zaccagnino entered a plea of guilty on three separate
counts: racketeering conspiracy (Count 1); conspiracy to
commit mail fraud and wire fraud (Count 7); and money
laundering conspiracy (Count 15). The other charges
against her were eventually dropped. On February 15,
2006, Gigi Zaccagnino was sentenced to 97 months in
prison. Her sentence reflected a ten-level increase pre-
2                                                No. 06-1570

scribed by the United States Sentencing Guidelines because
the amount of laundered funds exceeded $20 million. Gigi
Zaccagnino now appeals the sentencing court’s finding that
she was responsible for the entire amount of loss caused by
the investment scheme. For the following reasons, we
affirm.


                      I. BACKGROUND
  In 1997, Peter Zaccagnino began operating a fraudulent
scheme in which he sold historical bonds—bonds issued by
railroads or by foreign governments—to investors, falsely
claiming that the bonds were valid security for a line of
credit that could be used to buy notes in a high-yield
investment.1 In reality, the bonds had no value to anyone
other than collectors. Peter Zaccagnino obtained over $6.8
million from the sale of these bonds. During this time, Gigi
Zaccagnino attended meetings where her husband repre-
sented to investors that the bonds could yield seven to
thirty percent of their valuation within a year. She also
notarized some of the investment documents.
  Peter Zaccagnino sold the historical bonds through two
corporate entities and deposited most of the sales proceeds
into the corporations’ accounts. One of those corpora-
tions was Wonder Glass Products. Gigi Zaccagnino was
the secretary, treasurer, and director of that corporation.
She opened a corporate bank account for Wonder Glass
in May 1997 and held sole signatory authority on the
account. Just two days after Wonder Glass was incorpo-
rated, it began paying Gigi Zaccagnino a salary. In a



1
  Before the bond scheme began, Peter and Gigi Zaccagnino
operated a used car business in Florida for several years. That
business, Fleetwood Motors One, Inc., filed for bankruptcy in
March 1998.
No. 06-1570                                             3

December 1998 credit card application, she represented
that she received $5,200 a month from her employment
with Wonder Glass.
  In March 1998, Gigi Zaccagnino incorporated a business
called Diamond in the Rough (“DIR”) in the British Virgin
Islands. Peter Zaccagnino promoted DIR as a firm that
placed client funds into high-yield offshore investment
programs, promising investors substantial earnings. Gigi
Zaccagnino served as president, secretary, and director of
DIR. Money from the historical bond sales was then
transferred into an off-shore DIR bank account. Gigi
Zaccagnino used $300,000 from that account to buy corpo-
rate stock in her name.
  Throughout 1998, Peter Zaccagnino offered investors
various “high-yield investments” that he claimed involved
major international banks. To document the purported
success of these investments, Peter Zaccagnino prepared
and mailed fake account statements and other documents
to investors. The statements showed substantial earnings
on the bogus investments, which encouraged investors to
send more money.
  To further this scheme, Peter Zaccagnino held a meeting
in Peoria, Illinois in October 1999. At the meeting, Gigi
Zaccagnino sat at a table and made prospective investors
promise that they would not record the meeting. Mean-
while, Peter Zaccagnino told them that they could make
huge sums of money with the proposed investments
and that he had been arranging similar investments
successfully for so long that he was ready to retire. This
foreign investment scheme earned Peter Zaccagnino
millions in addition to the money from the historical
bond sales.
  The SEC began investigating the historical bond sales
and obtained a preliminary injunction against Peter
Zaccagnino in December 1998 and a permanent injunction
4                                                No. 06-1570

in June 1999. Notwithstanding the injunctions, Peter
Zaccagnino continued selling the bonds. He was careful,
however, about putting his name on corporate documents
after the SEC investigation; instead, Gigi Zaccagnino
and others served as corporate officers and directors of
corporations involved in the criminal enterprise. For this
reason, some of the people whose names appeared on
corporate documents had no apparent connection to the
fraudulent activities. For example, Marlene and Patsy
Irace, Peter Zaccagnino’s sister and brother-in-law, are
listed as president and secretary of an entity that was used
to deal with disgruntled investors, even though they were
not aware of or involved in the investment scheme. Peter
Zaccagnino also used his mother’s name as a front for a
corporation under his control.
  The Presentence Report (“PSR”) for Gigi Zaccagnino
recommended that she be held accountable for the total loss
related to the investment scheme—approximately
$21,241,846.17. The PSR calculated her total offense
level as 32, which included a ten-level increase because
the loss amount exceeded $20 million. Before sentencing,
Gigi Zaccagnino objected to the PSR’s finding that she
was responsible for the total loss amount. In particular, she
argued that she should not be held accountable for funds
received before December 1999, as she was unaware of the
criminal conduct before that date.
  At the sentencing hearing, Gigi Zaccagnino reiterated this
argument, clarifying that she became aware of the criminal
conduct in December 1999, when she overheard her hus-
band and one of his business partners laughing about the
falsity of the statements they sent to investors. This district
court rejected Gigi Zaccagnino’s version of events. The judge
stated that although it considered the possibility that the
defendant had been an innocent dupe in the early days of
the conspiracy, in reviewing the record, he concluded that
“her involvement . . . was simply too substantial.” Tran-
No. 06-1570                                                  5

script of Sentencing Hearing at 504, United States v.
Zaccagnino, No. 03 CR 10095 (C.D. Ill. Feb. 15, 2006).
Specifically, the court noted her role as a director of the
corporations, her role as a signatory on the corporate
accounts, and her involvement in the preparation of
documents. Id. The court said to Gigi Zaccagnino, “I cannot
pinpoint at what moment you became criminally aware of
what your husband was doing, but I place it at a time
earlier than you do.” Id. at 519. The court further com-
mented on her lavish lifestyle during the period of the
conspiracy, noting that she spent “with wild abandon on
real estate, cars, [and] jewelry,” and that she lied “on
virtually every application [she] made for credit or loan.” Id.
at 520.


                      II. DISCUSSION
  In determining relevant conduct under the guidelines,
a defendant engaged in a jointly undertaken criminal
activity is liable for all reasonably foreseeable acts per-
formed in furtherance of the jointly undertaken criminal
activity. U.S. SENTENCING GUIDELINES MANUAL § 1B1.3
(2004) (hereinafter “U.S.S.G.”). However, “[a] defendant’s
relevant conduct does not include conduct of members of
a conspiracy prior to the defendant joining that con-
spiracy; even if the defendant knows of that conduct.” Id. at
§ 1B1.3, cmt. n.2(ii). Therefore, a sentencing court
must assess the reasonable foreseeability of the loss by
inquiring into the scope of the criminal activity the defen-
dant agreed to undertake jointly. United States v. Flores, 5
F.3d 1070, 1083 (7th Cir. 1993). Determining the amount of
loss reasonably foreseeable to Gigi Zaccagnino was espe-
cially important in this case because U.S.S.G. § 2S1.1(b)(2)
provides for a ten-level increase in a defendant’s base
offense level if the value of the funds involved in a money
laundering scheme is greater than $20 million.
6                                                No. 06-1570

  The definition of loss is a question of law subject to
de novo review, while the amount of loss is a finding of
fact reviewed for clear error. United States v. Vivit, 214 F.3d
908, 914 (7th Cir. 2000). Gigi Zaccagnino challenges the
sentencing court’s finding that she was involved in
the conspiracy from the beginning and was therefore
responsible for the entire loss occasioned by it. Because
both the start date of her involvement in the conspiracy and
the loss amount for which she is responsible are questions
of fact, this Court reviews the district court’s findings for
clear error.
   Although this case ultimately turns on whether Gigi
Zaccagnino is responsible for a loss of less than $20 million,
the government divides that question into two: (1) whether
Gigi Zaccagnino waived the argument that she
is responsible for only the $1,102,573.25 that she personally
received; and (2) whether the district court plainly erred in
finding that she was responsible for $21,241,846.17, the
total amount of loss. Because Gigi Zaccagnino argued at all
times that she was responsible for less than the total loss
amount, and any amount under $20 million could lessen her
sentence, it is unnecessary to consider the government’s
waiver argument.2
  Gigi Zaccagnino argues that the district court clearly
erred by holding her accountable for the entire loss occa-
sioned by the fraudulent investment scheme because the


2
   The government essentially argues that because Gigi
Zaccagnino claimed during other stages of the proceedings
that she was responsible for a loss amount in the range of $5
million to $10 million, she cannot now claim that she is only
responsible for approximately $1.1 million. Gigi Zaccagnino
contends that she is using the $1.1 million figure as her fall-
back position because there are only two “hard” numbers in this
case relating to her criminal responsibility: the total amount
of loss and the amount she personally received.
No. 06-1570                                                7

evidence demonstrates that she personally received only
$1.1 million. However, Zaccagnino’s reliance on the amount
of money that she personally received is misplaced. If the
court correctly determined that losses in excess of $1.1
million were reasonably foreseeable to the defendant after
she joined the conspiracy, the amount she personally
received is irrelevant.
  Gigi Zaccagnino also claims that the district court is
sentencing her based on her husband’s activities rather
than her actual involvement in the conspiracy, and that
significant losses occurred before she joined the criminal
enterprise. She contends that neither the PSR nor the
sentencing court determined at what point she knowingly
became involved in the fraudulent activities. Furthermore,
she asserts, the government offered no evidence suggest-
ing that she was aware of the criminal activity before
late 1999. By then, the historical bonds scheme was essen-
tially over.
  Although no witness directly challenged Zaccagnino’s
claim that she was duped until 1999, the court chose not to
credit her version of events. In fact, the court specifically
said that it placed the defendant’s awareness “at a time
earlier” than she did. Transcript of Sentencing Hearing at
519, Zaccagnino, No. 03 CR 10095. We defer to the sentenc-
ing court’s credibility assessment. See Carnes Co. v. Stone
Creek Mech., Inc., 412 F.3d 845, 848 (7th Cir. 2005) (recog-
nizing that a trial court’s assessment of credibility can
virtually never amount to clear error). The fact that Gigi
Zaccagnino notarized documents, was a named officer, and
opened corporate accounts in the early days of the scheme
permit the inference that she participated in the conspiracy
from the start. Moreover, the SEC injunction against Peter
Zaccagnino in 1998, which should have put the defendant
on notice of the criminal activity well before December
1999, also supports the district court’s finding.
8                                               No. 06-1570

  Gigi Zaccagnino also claims that the court failed to
determine the scope of the agreement she entered into when
she joined the conspiracy. We disagree. The district court
specifically found that her involvement was substantial,
and it reiterated some of the evidence supporting its
conclusion: the corporate directorships, the signatory
authority, and preparation of documents. As a result of her
substantial involvement, the court expressly rejected the
defendant’s claim that she was an innocent dupe in the
beginning. She attempts to align herself with other rela-
tives of Peter Zaccagnino whose only involvement in the
scheme was that their names appeared on corporate
documents. As discussed above, however, Gigi Zaccagnino’s
involvement in the conspiracy went beyond having her
name on corporate documents.
  Finally, Gigi Zaccagnino seizes on the fact that the
court said, “there was no legitimate business here period
from what I’ve been able to determine. None.” Transcript of
Sentencing Hearing at 504, Zaccagnino, No. 03 CR 10095.
Because the PSR recognized that the Zaccagninos legiti-
mately operated a used car business for several years, Gigi
Zaccagnino argues, the court’s statement demonstrates a
misunderstanding of the facts. Therefore, she reasons, its
decision to hold her responsible for the entire loss was
premised on error. This argument fails for two reasons.
First, Gigi Zaccagnino takes the district court’s statement
out of context. The court was referring only to the illegiti-
macy of the investment scheme. Nothing in the transcript
indicates that the court was questioning the legitimacy of
a car dealership that went bankrupt in 1998. Second, the
fact that the defendant may have assisted her husband in
operating a legitimate business has no bearing on whether
she was also helping him operate fraudulent ones.
  Because Gigi Zaccagnino did not demonstrate that the
sentencing court clearly erred in holding her accountable for
No. 06-1570                                             9

the entire amount of the investors’ losses, we affirm her
sentence.


                   III. CONCLUSION
  For the reasons outlined above, we AFFIRM Gigi
Zaccagnino’s conviction and sentence.

A true Copy:
      Teste:

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




                  USCA-02-C-0072—11-3-06
