                               In the

    United States Court of Appeals
                 For the Seventh Circuit
Nos. 12-3631 & 12-3670

UNITED STATES OF AMERICA,
                                                   Plaintiff-Appellee,

                                 v.


DANIEL SULLIVAN and
JOHN J. SULLIVAN,
                                             Defendants-Appellants.

        Appeals from the United States District Court for the
           Northern District of Illinois, Eastern Division.
           No. 10 CR 821 — Rubén Castillo, Chief Judge.


  ARGUED FEBRUARY 19, 2014 — DECIDED AUGUST 28, 2014


   Before BAUER, FLAUM, and HAMILTON, Circuit Judges.
   BAUER, Circuit Judge. Defendants-appellants, Daniel Sulli-
van and John J. Sullivan, are brothers who owned a group of
companies that offered remodeling services to homeowners:
New Look Home Services, J&D Home Services, A-Z Home
Services, and Contract Services. While the appellants provided
honest work on construction jobs when their clients paid in
cash, they fabricated a far more profitable, but illegal scheme.
2                                      Nos. 12-3631 & 12-3670

By promising homeowners that they could remodel their
homes at a discount, the appellants duped numerous people
into refinancing their homes and paying the loan proceeds
directly to one of the appellants’ companies. Once they had
the money, the appellants left the job sites unfinished and the
homeowners’ finances in disrepair.
    The appellants targeted neighborhoods on the South and
West sides of Chicago. Some of the appellants’ employees
worked as telemarketers and cold-called homeowners. Daniel
Sullivan told telemarketer Martin Kelliher to look for “elderly,
ignorant homeowners,” and John Sullivan added that “[t]he
more ignorant, the better. Also, the older, the better.” Reading
from a script provided by the appellants, employees asked
unsuspecting homeowners if they needed remodeling work;
if they said yes, the employees offered free in-person esti-
mates. The appellants also hired employees to distribute flyers
advertising their discounted remodeling services door-to-door
and used a company to mass mail flyers to residents of these
target neighborhoods.
    Once these advertising efforts stimulated leads, the appel-
lants either visited the homeowners themselves or sent their
salesmen, James Browning and Pat Rooney. John Sullivan told
Browning to have customers sign blank contracts “in case we
ever need to amend something to suit us better” or the blank
contracts “could be used as a release.” John Sullivan main-
tained the predatory sales mantra, telling Browning that the
small cash remodeling jobs “keep[] the track open, but the
refinancing, we get rich with those.”
Nos. 12-3631 & 12-3670                                        3

    The appellants referred the homeowners to specific loan
officers, usually Jeff Kleinberg and Angelo Petropoulos, who
completed the refinancing. The appellants required the
homeowners to sign letters of direction, so the title companies
sent checks directly to the appellants’ companies. With the
checks from the refinance in hand, the appellants then required
the homeowners to sign over the checks because they needed
payment before the remodeling work could begin. The
appellants hired subcontractors to do some of the work, but
then abandoned the remodeling jobs before completion. From
2002 to 2006, the appellants collected over $1.2 million from
over forty homeowners who were victims of the scheme.
    In January 2011, a grand jury returned an indictment
charging Daniel and John Sullivan with wire fraud in violation
of 18 U.S.C. § 1343. They were prosecuted in the same trial. The
government presented testimony from six victimized home-
owners; testimony from J&D Home Services employees;
testimony from a subcontractor who worked on J&D Home
Services projects; documents from the appellants’ business and
personal records; and testimony from various bankers and
investigators who verified the financial transactions. The jury
found Daniel and John Sullivan guilty of two counts of wire
fraud each.
    At the sentencing hearing, the district court found that the
loss calculation for the appellants’ scheme was more than
$400,000 but less than $1,000,000 and accordingly increased the
appellants’ offense level. The district court also applied five
separate offense level enhancements because the appellants’
conduct involved: (1) vulnerable victims; (2) a violation of a
prior court order; (3) sophisticated means; (4) mass-marketing
4                                        Nos. 12-3631 & 12-3670

or ten to forty-nine victims; and (5) leadership or organization
of the scheme. The district court sentenced each Sullivan
brother to 168 months’ imprisonment.
    The appellants do not appeal their convictions but they
challenge the length of their sentences. They argue that the
district court’s factual findings in the loss calculation and the
application of the five other offense level enhancements were
in error.
    The government has the burden of proving a defendant’s
relevant conduct by a preponderance of the evidence at
sentencing. United States v. Schroeder, 536 F.3d 746, 753 (7th Cir.
2008). We review the district court’s factual findings during
sentencing for clear error, and “we will only reverse if we are
left with the definite and firm conviction that a mistake has
been made.” United States v. Love, 680 F.3d 994, 999 (7th Cir.
2012) (quoting United States v. Radziszewski, 474 F.3d 480, 486
(7th Cir. 2007)). We address each of the appellants’ arguments
in turn.
    A. The Loss Calculation
    At sentencing, the court calculates the actual or intended
loss amount associated with a defendant’s fraud and applies
whichever is greater. U.S.S.G. § 2B1.1 cmt. app. n.3(A). The
court’s loss calculation amount only needs to be “a reasonable
estimate of the loss.” Id. § 2B1.1 cmt. app. n.3(C). To succeed on
appeal, a defendant must show that the court’s loss calculation
“‘was not only inaccurate but outside the realm of permissible
computations.’” United States v. Hassan, 211 F.3d 380, 383 (7th
Cir. 2000) (quoting United States v. Jackson, 25 F.3d 327, 330 (6th
Cir. 1994)).
Nos. 12-3631 & 12-3670                                        5

    The appellants contend that each remodeling job varied in
terms of scope and amount of work completed. Therefore, they
argue that the district court overestimated the loss amount by
accepting the government’s contention that every refinance job
was fraudulent without making a definite finding of each
victims’ actual losses.
   For its proffer on forfeiture, the government totaled the
gross income from the appellants’ refinance jobs from 2002 to
2006, then deducted the labor and material costs. The govern-
ment based the labor costs on the trial testimony of Kryzsztof
Koterba, the appellants’ primary subcontractor, who said the
most the appellants ever paid him on a project was $8,000; the
government based the material costs on an account the
appellants had at a store called Remodelers Supply. The
government concluded that the appellants caused a loss of
$756,924.90.
    To debunk the government’s calculation, appellants’
counsel argued that the evidence at trial did not support the
notion that “every refi is a bad refi.” Counsel addressed the
work performed at one victim’s house, arguing that “[i]f you
look at the pictures … there’s a lot of concrete laid and a
walkway … There was a new boiler put in. These things cost
a lot of money.” Counsel disputed labor costs by stating that
subcontractors other than Koterba worked for the appellants.
Counsel also attacked the accuracy of the government’s
deduction for material costs, noting that “sometimes [the
appellants] went to Home Depot. They didn’t always buy
materials at Remodelers [Supply].” Counsel closed with a
general argument that “[a]ny time you do a remodeling job …
I think if you hire a contractor, you can reasonably expect them
6                                       Nos. 12-3631 & 12-3670

to double the price of materials and double the price of their
labor …” and concluded that the appropriate forfeiture
amount should be between $80,000 and $100,000.
    The district court, for the most part, accepted the govern-
ment’s calculation. The district court reasoned that actual, not
intended loss was appropriate “since subcontractors were
used, [and] that amount of services needs to be deducted from
the loss.” However, the district court increased the deduction
for material costs by ten percent, “to allow for those costs that
were incurred at other places, such as Home Depot.” Given
that the maximum estimated labor and material costs per job
was about $15,000, the district court excluded all refinance jobs
less than $15,000 before calculating actual loss. The district
court found a forfeiture and loss amount of $748,601.90, which
increased the appellants’ offense levels by fourteen points.
     We find that the district court reasonably estimated the loss
attributed to the appellants’ scheme. While subcontractor
Koterba testified that the most he ever received was $8,000, the
district court used the more conservative $15,000 to determine
the universe of transactions that should be considered
fraudulent. This step was done before calculating actual loss to
ensure that only fraudulent proceeds were thrown into the pot
all. This made the overall calculation even more conservative
and thus especially reasonable.
   The appellants submitted no evidence of their net proceeds
from the refinance projects, no invoices from Koterba or other
subcontractors, nor any receipts for the materials
they purchased from other locations. The appellants’ counter-
arguments were“wholly unsubstantiated statements” that do
Nos. 12-3631 & 12-3670                                            7

not “‘undermine, nor even question, the court’s acceptance
of the government’s proof of loss.’” Borassi, 639 F.3d at 784
(quoting United States v. Sensmeier, 361 F.3d 982, 989 (7th Cir.
2004)). There was no error in the district court's decision to
base its loss calculation on the reasonably reliable evidence
submitted by the government “rather than a sum ascertained
by conjecture.” Radziszewski, 474 F.3d at 487.
   B. Vulnerable Victim Enhancement
    The application of the vulnerable victim enhancement is
appropriate when “the defendant knew or should have known
that a victim of the offense was a vulnerable victim.” U.S.S.G.
§ 3A1.1(b)(1). A “vulnerable victim” is a person “who is
unusually vulnerable due to age, physical or mental condition,
or who is otherwise particularly susceptible to the criminal
conduct.” U.S.S.G. § 3A1.1 cmt. app. n.(2). A victim’s financial
desperation is an example of how a person can be susceptible
to a financial crime. United States v. Johns, 686 F.3d 438, 460 (7th
Cir. 2012). A victim may be vulnerable based on any applicable
factor and only one victim needs to be vulnerable, not the
entire targeted group. United States v. White, 737 F.3d 1121,
1142 (7th Cir. 2013).
   The appellants attack this enhancement two-fold. They
argue that none of their victims qualify as vulnerable; and if
they do, the government failed to prove that the appellants
knew or acted upon their victims’ vulnerability.
    We find that there was sufficient testimony from the six
victims at trial to support the district court’s finding that the
victims qualified as vulnerable. Harold Ray, for instance, was
a fifty-nine year old retiree dependent upon Social Security
8                                         Nos. 12-3631 & 12-3670

disability payments after suffering a stroke. There was also
sufficient evidence to support the court’s finding that the
appellants knew of their victims’ vulnerabilities. Kelliher’s
testimony was direct evidence that the appellants targeted
elderly and unsophisticated people for their refinancing
scheme. Additionally, the appellants did not take advantage of
all their customers, only the ones willing to refinance their
homes. See United States v. Christiansen, 594 F.3d 571, 576 (7th
Cir. 2010) (offering services selectively instead of to the general
public at-large was evidence that a defendant knew her victims
were susceptible to fraud). The appellants selectively targeted
their victims, and the district court did not err in its application
of this enhancement.
    C. Violation of a Prior Judicial Injunction Enhancement
    The parties stipulated that “[o]n May 13, 2004, the Circuit
Court of Cook County, Illinois, entered a permanent injunction
against John Sullivan and New Look Home Services, Incorpo-
rated, barring John Sullivan and New Look Home Services
from engaging in the home repair business in the city of
Chicago.” The U.S. Sentencing Guidelines provide for a two-
level increase in the offense level if a defendant’s conduct
violated “any prior, specific judicial or administrative order,
injunction, decree, or process not addressed elsewhere” in the
Sentencing Guidelines. U.S.S.G. § 2B1.1(b)(9)(C).
   The appellants first challenge this enhancement on the
ground that John took affirmative steps to avoid violating
the injunction. Secondly, they argue that the injunction did
not prevent Daniel or anyone other than John Sullivan
Nos. 12-3631 & 12-3670                                        9

from engaging in activity otherwise prohibited by the 2004
injunction.
    Browning’s testimony undermines the appellants’ argu-
ment that John Sullivan took steps to avoid violating the prior
injunction. Browning testified that after Cook County issued
the injunction, the appellants told him that the only way to
keep New Look Home Services operational was to start a new
company and name him as president. The appellants told
Browning that John Sullivan could not be president any longer
because of the injunction. Daniel Sullivan also told Browning
that he could not be president because he needed to hide the
company’s assets from his ex-wife. Browning agreed to the
arrangement, Daniel Sullivan paid Browning $500, and the
appellants had a lawyer make the changes. From then on
Browning was the named president of J&D Home Services, but
his actual role did not change. John Sullivan may have ceased
participating in outside sales, but did not stop managing J&D
Home Services, paying the employees’ paychecks, or engaging
in the home repair business. There was no error in the district
court’s application of this enhancement against John Sullivan.
    Moreover, a defendant does not need to be named in the
prior order for the enhancement to apply; it is sufficient that
the defendant controlled the named entity and had knowledge
of the prior order. U.S.S.G. § 2B1.1 cmt. app. n.(8)(C). Daniel
Sullivan was a co-owner of New Look Home Services and
worked in partnership with his brother before the injunction.
Daniel Sullivan obviously knew about the prior injunction—he
told Browning about it and he paid Browning $500 for the use
of his name. There was no error in the district court’s applica-
10                                      Nos. 12-3631 & 12-3670

tion of this sentencing enhancement against Daniel Sullivan
either.
     D. Sophisticated Means Enhancement
   The appellants argue that their crime was the “garden
variety home repair fraud scheme” and the district court’s
application of the sophisticated means enhancement was in
error. We are not convinced.
    The Sentencing Guidelines’ commentary defines “sophisti-
cated means” as an “especially complex” operation “pertaining
to the execution or concealment of an offense.” U.S.S.G. § 2B1.1
cmt. app. n.(9)(B). In a real estate fraud case, we held that a
defendant’s “coordination of various moving parts of the
scheme and his ability to fool so many” victims spoke “to the
scheme’s sophistication.” United States v. Knox, 624 F.3d 865,
871 (7th Cir. 2010). Knox, a real estate broker, “deceived real
estate buyers into purchasing overpriced properties by making
promises he would never keep, and he lied to sellers by telling
them that he sold the properties for a lower amount than was
true. He then tricked mortgage lenders by falsifying the
prospective buyer’s loan applications.” Id.
    The appellants’ scheme is analogous to Knox. The appel-
lants falsified construction contracts and lied to convince
homeowners into paying substantial sums from their refinance
loans for remodeling work the appellants never intended to
finish. The appellants coordinated various moving parts—their
employees, subcontractors, and mortgage brokers—to fool
their victims. The district court did not err in its finding that
the appellants used sophisticated means to achieve their
scheme.
Nos. 12-3631 & 12-3670                                          11

   E. Mass-Marketing or Ten to Forty-Nine Victims En-
      hancement
     The Sentencing Guidelines call for a two-level enhancement
if a defendant used mass-marketing to commit the offense or
the offense involved between ten and forty-nine victims.
U.S.S.G. § 2B1.1(b)(2)(A).
    In the appellants’ brief, they state that their scheme in-
volved “ordinary, everyday ‘cold-calling,’” sending “mailings
ordinarily sent by all types of small businesses,” and “old-
fashioned knocking on doors.” They conclude that this conduct
is not the type of illegal activity contemplated by the Sentenc-
ing Guidelines.
     The appellants’ admitted conduct falls squarely within the
Sentencing Guidelines’ definition of “mass-marketing,” which
is a plan to solicit “by telephone, mail, internet, or other means
to induce a large number of people to purchase goods or
services … .” U.S.S.G. § 2B1.1 cmt. app. n.(4)(A); see also United
States v. Christiansen, 594 F.3d 571, 576 (7th Cir. 2010); United
States v. Heckel, 570 F.3d 791, 794 (7th Cir. 2009). The appellants
hired telemarketers to sell their services by phone, paid a
company to mail thousands of fliers to residents in Chicago,
and directed employees to canvass neighborhoods. The district
court made no mistake in finding that the appellants used
mass-marketing and applying this sentencing enhancement.
   F. Organizer or Leader Enhancement for John Sullivan
    Finally, John Sullivan argues that the district court erred in
its finding that he was the organizer or leader of a criminal
activity because the scheme involved less than five participants
12                                       Nos. 12-3631 & 12-3670

and it was not an otherwise extensive organization. Or, if we
disagree with his characterization of the criminal activity, he
argues that he did not lead or recruit the other members of the
scheme; his brother did.
    The Sentencing Guidelines provide for a four-level en-
hancement “[i]f the defendant was an organizer or leader of a
criminal activity that involved five or more participants or was
otherwise extensive.” U.S.S.G. § 3B1.1(a). A criminal activity
that had less than five participants but “used the unknowing
services of many outsiders could be considered extensive.”
U.S.S.G. § 3B1.1 cmt. app. n.(3); see also United States v. Tai, 41
F.3d 1170, 1174 (7th Cir. 1994). “[I]f a head count is the sole
basis for an ‘otherwise extensive’ finding, the heads counted
must add up to something greater than five.” Tai, 41 F.3d at
1174. Here, the appellants used the unknowing services of
more than five outsiders to implement their fraud. They used
at least three employees, Kelliher, Browning, and Rooney;
two mortgage brokers, Kleinberg and Petropoulos; one sub-
contractor, Koterba; one lawyer to change the business entity
records; several title companies to close the refinance loans;
and a direct mail company to mail their advertisements. The
appellants’ fraud scheme easily qualifies as an extensive
criminal activity.
   We also reject John Sullivan’s assertion that his brother was
the leader of the scheme, not him. The organizer or leader
enhancement is appropriate if a defendant exercised “control
over others” or was “responsible for organizing others for the
purpose of carrying out the crime.” Knox, 624 F.3d at 874
(quoting United States v. Wasz, 450 F.3d 720, 729 (7th Cir. 2006)).
Browning testified that John and Daniel took the lion’s share of
Nos. 12-3631 & 12-3670                                       13

the money from the refinance jobs and both exercised control
over the operations at J&D Home Services. But, he testified that
John was the boss of the operation and Daniel was second in
command. The district court’s characterization of the scheme
as extensive, as well as its determination of John’s leadership
role were both proper.
                       CONCLUSION
    The district court reasonably estimated the amount of loss
in determining the appellants’ offense level and properly
enhanced the offense level further for the other five aggravat-
ing factors. Accordingly, we AFFIRM the appellants’ sentences.
