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

No. 01-2801
UNITED STATES     OF   AMERICA,
                                                 Plaintiff-Appellee,
                                 v.


TRACEY HARTZ,
                                            Defendant-Appellant.
                          ____________
            Appeal from the United States District Court
       for the Northern District of Illinois, Eastern Division.
            No. 00 CR 9—George W. Lindberg, Judge.
                          ____________
   ARGUED FEBRUARY 22, 2002—DECIDED JULY 16, 2002
                   ____________


  Before POSNER, KANNE and ROVNER, Circuit Judges.
  ROVNER, Circuit Judge. Tracey Hartz pled guilty to mail
fraud in violation of 18 U.S.C. § 1341, and insurance fraud
in violation of 18 U.S.C. § 1033. In his plea agreement, he
retained the right to appeal his sentence and now argues
that the district court erred in applying an increase to his
offense level under United States Sentencing Guideline
§ 2F1.1(b)(8)(B). We affirm.


                                 I.
  Tracey Hartz was licensed as both an attorney and a real
estate broker in the State of Illinois. He was a “member
2                                                   No. 01-2801

attorney” of Attorney Title Guarantee Fund, an organiza-
tion in the business of providing title insurance in connec-
tion with real estate transactions. As a member attorney,
Hartz signed an agreement to act as an agent of Attorney
Title at real estate closings. In the course of its business,
Attorney Title issued checks to be distributed at real estate
closings to the parties involved in the transaction. In a
typical transaction, an attorney conducting a closing would
distribute the checks to the appropriate parties and place
into the attorney’s own escrow account any funds received
from the buyer or the lender that financed the purchase.
   Hartz devised a scheme to defraud Attorney Title by fab-
ricating real estate transactions and generating paperwork
with the names of real and fictitious buyers, sellers, and
financiers as well as real and fictitious properties. Using
these phony deals, Hartz caused Attorney Title to generate
and deliver to him checks payable to himself and other en-
tities supposedly involved in the transaction. No actual
exchange of properties or refinancing ever occurred, how-
ever, and Hartz deposited many of the checks in his per-
sonal account at Bank One.1 Hartz forged endorsements on
a number of these checks in order to deposit them at Bank
One. Some checks were accepted by Bank One without en-
dorsements. Hartz also induced Attorney Title to issue
checks to third parties to pay off Hartz’s personal debts. He
kept the scheme going for a number of years by using
subsequent phony transactions to repay some of the money
he received from earlier transactions. All in all, he com-
pleted approximately 240 fake real estate deals and caused
Attorney Title to provide him with checks in excess of $67


1
  At the time of these events, Hartz’s bank was the First National
Bank of Chicago. First National Bank of Chicago eventually be-
came known as Bank One through a series of transactions that
are irrelevant here, and we will refer to the bank as Bank One for
simplicity’s sake.
No. 01-2801                                                   3

million. Hartz netted about $1.5 million from the scheme,
and all of that money came from the coffers of Attorney
Title.
   In April 1998, Attorney Title discovered that Hartz had
failed to send title insurance policies on his real estate clos-
ings. Attorney Title therefore stopped providing Hartz with
title commitment letters for his real estate closings. A few
months later, Attorney Title realized Hartz was using im-
proper commitment numbers, confronted Hartz and decided
to stop doing business with him until they could conduct an
audit. When they told Hartz about the audit, he composed
a 24-page document that was part confession and part sui-
cide note, and attempted to kill himself. When his attempt
failed, he confessed fully and took steps to make restitution.
  After the scheme was discovered, Attorney Title brought
suit against Bank One in the Circuit Court of Cook County.
The suit alleged breach of contract claims based on Bank
One’s acceptance of checks drawn on Attorney Title’s bank
over improper endorsements. Although Bank One denied
liability, it eventually paid Attorney Title $150,000 to settle
the claims. At the same time, Bank One agreed to release
all claims it had against Hartz. With the aid of his parents,
Hartz repaid Attorney Title all of the money he had taken
in his fraudulent scheme.
  Hartz pled guilty to two counts of a seven-count indict-
ment in exchange for the government’s offer to dismiss the
remaining five counts. In particular, he admitted he had
engaged in mail fraud in violation of 18 U.S.C. § 1341, and
insurance fraud in violation of 18 U.S.C. § 1033. In the plea
agreement, the parties disagreed about the application of a
number of sentencing provisions, and Hartz retained his
right to appeal his sentence. The main source of disagree-
ment, and the one that Hartz now raises on appeal, was the
4                                                     No. 01-2801

applicability of USSG § 2F1.1(b)(8)(B).2 This section pro-
vides, in relevant part:
    If the offense . . . affected a financial institution and the
    defendant derived more than $1,000,000 in gross re-
    ceipts from the offense, increase by 4 levels. If the re-
    sulting offense level is less than level 24, increase to
    level 24.
Originally, the government claimed that Attorney Title was
an affected financial institution and that because Hartz
derived more than $1 million from Attorney Title, the en-
hancement should apply. Hartz objected to the characteriza-
tion of Attorney Title as a financial institution, and eventu-
ally the government shifted its argument. In the end, the
government maintained that the enhancement was applica-
ble because Bank One was affected by Hartz’s offense, and
that Hartz derived more than $1,000,000 from his offense.
In response to this refashioned argument, Hartz main-
tained that the enhancement did not apply unless the
$1,000,000 was derived from the financial institution; be-
cause Bank One paid out only $150,000 to extract itself
from Hartz’s fraud, he contended the enhancement could
not apply. Ultimately, the district court found that the plain
language of the guideline did not require a link between the
effect on the financial institution and the amount of the


2
  At the time of Hartz’s offense, the guideline in question was
found at USSG § 2F1.1(b)(7)(B). Before that time, it had been
codified at USSG § 2F1.1(b)(6)(B). It was subsequently renum-
bered as USSG § 2F1.1(b)(8)(B) without modification to its con-
tent, and that was its numbering at the time Hartz took his
appeal. Later still, as we shall discuss, the provision was modified
and renumbered as USSG § 2B1.1(b)(12)(A). For simplicity’s sake,
we shall refer to the guideline in effect at the time of Hartz’s sen-
tencing as USSG § 2F1.1(b)(8)(B). We note this repeated renum-
bering because many of the cases addressing these issues use the
prior numbering schemes.
No. 01-2801                                                  5

fraud. Although a proposed amendment to the guideline (a
proposal that was subsequently enacted) did require such
a link, the court found that the proposed change merely re-
inforced its reading of the then-current guideline. The court
found that Bank One was affected by Hartz’s fraud because
Hartz used the bank to commit the fraud and because the
bank was forced to settle claims brought against it by
Attorney Title. The court also found that Hartz derived
more than $1 million from the offense, and therefore satis-
fied both prongs of the guideline, raising his offense level to
24 before additional enhancements and reductions were
calculated. Ultimately, the district court sentenced Hartz to
a term of 46 months’ imprisonment. Hartz appeals.


                             II.
  Guidelines interpretations are questions of law, and we
therefore review the district court’s ruling de novo. United
States v. Parolin, 239 F.3d 922, 928 (7th Cir. 2001), cert.
denied, 533 U.S. 923 (2001); United States v. Gee, 226 F.3d
885, 899 (7th Cir. 2000). On appeal, Hartz argues that Sec-
tion 2F1.1(b)(8)(B) should not apply unless a defendant de-
rives more than $1 million from a financial institution. In
effect, Hartz maintains that the two prongs of the guideline
should be linked together. He contends that a proposed (and
subsequently enacted) amendment to Section 2F1.1 clarified
that a defendant must have taken $1 million from a finan-
cial institution in order to have “affected” that financial in-
stitution. He also argues that the literal interpretation of
the guideline applied by the district court contravenes the
guideline’s context, purpose and legislative history. The
government responds that the bank was affected because
Hartz used the bank to commit his fraud and, in doing so,
exposed the bank to enormous liability, including the
$150,000 Bank One paid to settle the claims brought by At-
torney Title. According to the government, the subsequently
enacted amendment was a substantive change rather than
6                                                  No. 01-2801

a clarification of the guideline and therefore may not be
used to calculate the defendant’s sentence.
  Normally, a district court should apply the guideline in
effect at the time of the sentencing. United States v. Fones,
51 F.3d 663, 669 (7th Cir. 1995). The guideline in effect at
the time of Hartz’s sentencing was § 2F1.1(b)(8)(B). We
may, under certain circumstances, consider later amend-
ments to the guidelines but we may apply later amend-
ments only to the extent that they are clarifying rather
than substantive changes to the guideline. Id.; USSG
§ 1B1.11(b)(2). We begin then by comparing the most re-
cent version of the provision, currently listed at USSG
§ 2B1.1(b)(12)(A) to the guideline in effect at the time
Hartz was sentenced:
    If the defendant derived more than $1,000,000 in gross
    receipts from one or more financial institutions as a re-
    sult of the offense, increase by 2 levels.
See USSG § 2B1.1(b)(12)(A). At the time Hartz was sen-
tenced, the guideline provided:
    If the offense . . . affected a financial institution and the
    defendant derived more than $1,000,000 in gross re-
    ceipts from the offense, increase by 4 levels. If the re-
    sulting offense level is less than level 24, increase to
    level 24.
See USSG § 2F1.1(b)(8)(B).
  Some of the factors we consider in determining if an
amendment is a clarification rather than a substantive
change are: (1) how the Sentencing Commission character-
ized the amendment; (2) whether the amendment changes
the language of the guideline itself or changes only the
commentary for the guideline; and (3) whether the amend-
ment resolves an ambiguity in the original wording of the
guideline. See Fones, 51 F.3d at 669; Ebbole v. United
States, 8 F.3d 530, 538-39 (7th Cir. 1993), cert. denied, 510
No. 01-2801                                                 7

U.S. 1182 (1994). The Sentencing Commission offered the
following explanation for the amendment:
    The enhancement also was modified to address issues
    about what it means to “affect” a financial institution
    and how to apply the enhancement to a case in which
    there are more than one financial institution[s] in-
    volved. Accordingly, the revised provision focuses on
    whether the defendant derived more than $1,000,000 in
    gross receipts from one or more financial institutions as
    a result of the offense.
Supplement to Appendix C, Amendment 617, at 184. The
Sentencing Commission thus did not characterize the
amendment as a clarification but rather as a modification
and revision.
  Moreover, the amendment changed the plain language of
the guideline. The guideline in effect at the time of the sen-
tencing unambiguously required only that the crime affect
a financial institution and that the defendant derive a cer-
tain amount from the offense. In the newer version, the
gross receipts are to be derived from the financial institu-
tion. There is nothing ambiguous about the version the dis-
trict court applied and even Hartz agrees that a literal
reading of the guideline favors the district court’s interpre-
tation. See United States v. Greene, 212 F.3d 758, 761 (3d
Cir. 2000) (under a plain reading of the guideline, “[t]he re-
quirement that a financial institution be affected and the
requirement that the defendant derive more than $1 million
in gross receipts from the offense are separate and distinct
prerequisites.”); United States v. Monus, 128 F.3d 376, 397
(6th Cir. 1997), cert. denied, 525 U.S. 823 (1998) (“The plain
language of the Guidelines indicates that the defendant
must derive a million dollars from the offense, not from the
financial institutions.”). The amendment thus substantively
changes the requirements for applying the guideline by
focusing on the amount derived from the financial institu-
tions rather than the amount derived from the offense as a
whole. Because the amendment substantively changes an
8                                                No. 01-2801

unambiguous provision and because the Sentencing Com-
mission did not characterize the amendment as a clarifica-
tion, we agree that the amendment should not be applied in
sentencing Hartz.
  That leaves the question, though, of whether the govern-
ment has adequately shown that Hartz “affected” a finan-
cial institution. In this case, the government argues that
Hartz affected Bank One by using the bank to actually fa-
cilitate the crime and by exposing the bank to liability for
accepting his forged and sometimes unendorsed checks for
deposit. As we discussed, Bank One settled a claim brought
against it by Attorney Title for $150,000 as a result of
Hartz’s fraudulent activities at the bank. We need not de-
termine the outer limits of the meaning of “affected” today
because Hartz’s fraud clearly affected Bank One. Hartz
used the bank to commit the fraud and as a result, the bank
was forced to pay $150,000 to Attorney Title to extract itself
from civil liability for its actions in inadvertently assisting
Hartz’s scheme. This was not an insubstantial amount.
Moreover, Hartz funneled $67 million in fraudulently ob-
tained checks through the bank; had the fraud been dis-
covered at some other point in time, the liability to the bank
may have been even greater. Indeed, the offense would not
have succeeded without the use of the bank to facilitate the
crime. Finally, several of our sister circuits have held that
the effect need not be direct so long as the bank is victim-
ized by the offense. See United States v. Bennett, 252 F.3d
559, 566 (2d Cir. 2001), cert. denied, 122 S. Ct. 1307 (2002)
(bank “affected” for the purposes of the guideline when
fraudulent bank loans facilitated the fraud scheme that al-
lowed defendant to shift millions of dollars from one com-
pany to another and then into his personal accounts, even
though he did not benefit directly from the loans); United
States v. Johnson, 130 F.3d 1352, 1355 (9th Cir. 1997)
(embezzlement “affected” bank in both financial and non-
financial ways including through damages to bank’s rep-
utation, its employee morale, and its customer relations);
No. 01-2801                                                9

United States v. Schinnell, 80 F.3d 1064, 1070 (5th Cir.
1996) (financial institution had been “affected” where the
defendant engaged in an extensive fraudulent scheme using
forged signatures, fraudulent endorsements and wire trans-
fers all presented to banks in order to induce the banks to
advance funds). See also United States v. Kopshever, 6 F.3d
1218, 1221 (7th Cir. 1993).
  There is no need to go beyond the plain language of the
guideline here, but we will respond to Hartz’s other two ar-
guments briefly. Hartz maintained that the district court’s
reading of the guideline was inconsistent with its purpose
and legislative history. Hartz correctly points out that the
guideline was enacted as a result of Congress’ desire to
punish crimes against financial institutions more heavily
than the same crimes when directed to other victims. See
United States v. Lauer, 148 F.3d 766, 769 (7th Cir. 1998).
There is nothing in our interpretation that runs contrary to
this intent. Under our formulation, the guideline punishes
crimes of a certain magnitude that victimize financial insti-
tutions. We also reject Hartz’s claim that the detrimental
effect on Bank One was caused by the bank’s own negli-
gence in accepting the forged endorsements and unendorsed
checks. Hartz is in no position to blame one of the victims
of his scheme for falling prey to his fraud. See Eastern
Trading Co. v. Refco, Inc., 229 F.3d 617, 625 (7th Cir. 2000)
(contributory negligence is not a defense to fraud). The
district court correctly interpreted and applied the enhance-
ment.
                                                 AFFIRMED.

A true Copy:
      Teste:
                        ________________________________
                        Clerk of the United States Court of
                           Appeals for the Seventh Circuit

                    USCA-97-C-006—7-16-02
