                                                                       FILED
                                                            United States Court of Appeals
                                                                    Tenth Circuit

                                                                September 29, 2014
                   UNITED STATES COURT OF APPEALS
                                                Elisabeth A. Shumaker
                                                                    Clerk of Court
                                TENTH CIRCUIT


 UNITED STATES OF AMERICA,

              Plaintiff - Appellee,
                                                   Nos. 11-2190 & 11-2241
 v.                                           (D.C. No. 1:09-CR-03065-MCA-1)
                                                           (D.N.M.)
 KEVIN POWERS,

              Defendant - Appellant.


                           ORDER AND JUDGMENT *


Before HOLMES, HOLLOWAY, ** and MURPHY, Circuit Judges.



      Defendant-Appellant Kevin Powers was convicted of seventeen counts of

wire fraud for his role in fraudulently obtaining mortgage loans for nine houses

      *
             This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Federal Rule of Appellate
Procedure 32.1 and Tenth Circuit Rule 32.1.
      **
              The late Honorable William J. Holloway, Jr., United States Senior
Circuit Judge, participated as a panel member when oral argument was heard on
this case but passed away before having an opportunity to vote on or otherwise
participate in the consideration of this order and judgment. “The practice of this
court permits the remaining two panel judges if in agreement to act as a quorum
in resolving the appeal.” United States v. Wiles, 106 F.3d 1516, 1516 n.* (10th
Cir. 1997); see also 28 U.S.C. § 46(d) (noting circuit court may adopt procedure
permitting disposition of an appeal where remaining quorum of panel agrees on
the disposition). The remaining panel members have acted as a quorum with
respect to this order and judgment.
and making undisclosed cash payments to the buyers of those homes. See 18

U.S.C. § 1343. On appeal, Mr. Powers challenges his conviction based on the

district court’s admission of certain testimony and evidence at trial. He also

challenges his sentence based on the district court’s application of the gross-

receipts enhancement under § 2B1.1(b)(14)(A) of the U.S. Sentencing Guidelines

(“U.S.S.G” or “the Guidelines”). 1 Exercising jurisdiction under 28 U.S.C.

§ 1291, we affirm Mr. Powers’s conviction but remand to the district court for re-

sentencing in accordance with this order and judgment’s clarification of the

proper scope of the sentencing enhancement.

                                         I

      Mr. Powers was a realtor and mortgage broker in Albuquerque, New

Mexico. In 2010, he was charged in a seventeen-count indictment in the United

States District Court for the District of New Mexico. These charges arose from

Mr. Powers’s role in fraudulently obtaining mortgage loans for nine houses

acquired by six buyers in 2006 and 2007. By providing false and incomplete

information to lenders, Mr. Powers was able to obtain loans for the buyers greater

than the actual sale prices of the houses. Mr. Powers funneled these excess funds



      1
             Although the 2013 edition of the Guidelines renumbered this
provision as § 2B1.1(b)(16)(A), the U.S. Probation Office used the 2010 edition
of the Guidelines in preparing the Presentence Investigation Report (“PSR”) in
this case. Because neither party disputes that decision, we also rely on the 2010
edition.

                                         2
back to the buyers in what is commonly described as a mortgage “cash back”

scheme.

      Mr. Powers was the central figure in this scheme. With one exception, he

was the individual who located the properties involved, and he was the one that

brought them to the attention of the buyers. Mr. Powers, acting for the buyers,

would make offers on the properties that were considerably higher than the

sellers’ asking prices. He would explain the high offers to the sellers by saying

that the added money was for renovations or landscaping, and that it would be

paid out at closing to a firm called K&E Construction. This, however, was not

the whole story. Mr. Powers did not inform the sellers that he owned K&E

Construction, or that the firm was in fact merely a shell entity through which the

additional money would pass before ultimately being kicked back to the buyers.

      After a seller agreed to the proposed inflated purchase price, Mr. Powers

would assist the buyer in applying for financing. He, rather than the buyers,

prepared the loan applications; in doing so, he knowingly misrepresented both his

clients’ intended use of the properties and their financial qualifications for the

loans. For example, he indicated that properties were being purchased as primary

residences instead of as investment properties and he listed incomes far higher

than the buyers’ true incomes.

      In the deals underlying his prosecution, Mr. Powers helped secure loans

from four different lenders: SunTrust Mortgage Company, National City

                                          3
Mortgage, Accredited Home Lenders, and RFC Cameron Financial Group, Inc.

(collectively, the “lenders”). At the time the loans were obtained, each of the

lenders offered one-hundred-percent loan-to-value stated-income financing 2 for

homes bought as primary residences.

      At trial, the government offered testimony from witnesses who worked at

the four lenders and were familiar with their firms’ lending practices in 2006 and

2007. Over multiple objections, they explained the requirements for the lenders’

loan programs at issue and, based on their review of the actual loan documents in

this case, they testified that the incomes listed in the loan documents qualified the

buyers for the loans that they had received. The witnesses also answered

hypothetical questions regarding whether these loans would have been approved if

certain information on the applications had been different—that is, if the incomes

had been substantially lower than stated, if the buyers had expressed an intent to

use the houses as investment properties rather than primary residences, and if the

lending companies had known that the money paid out at closing was actually

going to the buyers to make the mortgage payments.



      2
              A “stated-income” or “no-income-verification” loan is so called
because “the lender accepts the borrower’s statement of his income without trying
to verify it.” United States v. Phillips, 731 F.3d 649, 651 (7th Cir. 2013) (en
banc). For this reason, these loans are sometimes referred to as “liars’ loans.” Id.
One-hundred-percent loan-to-value financing simply refers to financing that
covers the full purchase price of a piece of property, rather than requiring a down
payment on some portion of the price.

                                          4
      After a nine-day trial, a jury found Mr. Powers guilty of all seventeen

counts. The Probation Office prepared a PSR, in which it recommended, inter

alia, a two-level enhancement under § 2B1.1(b)(14)(A) of the Guidelines.

Section 2B1.1(b)(14)(A) provides that a two-level enhancement to a defendant’s

offense level is warranted where “the defendant derived more than $1,000,000 in

gross receipts from one or more financial institutions as a result of the offense.”

In stating that the enhancement was applicable to Mr. Powers, the PSR relied on

the full mortgage amounts of five of the loans, implicitly applying the entire loan

amounts to Mr. Powers. Over Mr. Powers’s objections, the district court applied

the sentencing enhancement after finding that “as a technical matter, Mr. Powers

did directly and through his shell, K&E Construction Company, derive more than

1 million dollars.” R., Vol. III, at 3104 (Sentencing Hr’g, dated Sept. 13, 2011).

      The district court ultimately sentenced Mr. Powers to fifty-six months’

imprisonment and $1,155,317.50 in restitution. 3

      Mr. Powers now asserts three errors on appeal. First, he claims that some

of the lender witnesses’ testimony was admitted in error because it constituted

expert testimony from lay witnesses. Second, he argues that the district court

improperly allowed documents into evidence as business records without an

adequate foundation. And, third, Mr. Powers contends that the district court


      3
              Although he originally filed a notice of appeal regarding the
restitution, Mr. Powers does not challenge the restitution order on appeal.

                                          5
incorrectly applied the gross-receipts enhancement.

      As to Mr. Powers’s first two claims, which implicate the propriety of his

conviction, upon concluding that he failed to preserve these claims, we review

them for plain error and determine that the district court committed no clear or

obvious error. Accordingly, we uphold Mr. Powers’s conviction. On the

sentencing question, by contrast, we find it necessary to clarify the correct scope

of the gross-receipts enhancement. Having done so, we remand this case to the

district court for re-sentencing in accordance with this order and judgment.

                                         II

      We begin with Mr. Powers’s assertion that the district court erred under

Federal Rule of Evidence 701 4 by improperly allowing the lender witnesses to

give expert opinion testimony and to testify to legal conclusions. Before

addressing the merits of this claim, however, we first consider whether or not Mr.

Powers preserved this issue. The government argues that, although Mr. Powers

undoubtedly objected at trial to much of the testimony that is the focus of this

appeal, he did not do so expressly on the basis of Rule 701. Instead, the

government asserts that Mr. Powers merely raised a variety of objections on other



      4
             Rule 701 limits opinion testimony from witnesses who are not
qualified as experts. Such testimony must be “(a) rationally based on the
witness’s perception; (b) helpful to clearly understanding the witness’s testimony
or to determining a fact in issue; and (c) not based on scientific, technical, or
other specialized knowledge within the scope of Rule 702.” Fed. R. Evid. 701.

                                          6
specific grounds: speculation, lack of personal knowledge, assuming facts not in

evidence, improper hypothetical, and lack of foundation. Mr. Powers disagrees.

He claims that he satisfied the preservation requirement in Federal Rule of

Evidence 103 because it was “apparent from the context” of his objections that he

was objecting to improper lay-witness testimony under Rule 701. Aplt. Reply Br.

at 1 (quoting Fed. R. Evid. 103(a)(1)(B)) (internal quotation marks omitted).

Resolving this dispute is our first order of business.

                                           A

      “A timely objection, accompanied by a statement of the specific ground of

the objection, must be made when evidence is offered at trial to preserve the

question for appeal, unless the ground is apparent from the context of the

objection.” United States v. Norman T., 129 F.3d 1099, 1106 (10th Cir. 1997)

(citing Fed. R. Evid. 103(a)(1)). “Absent a timely and specific objection, this

court reviews such challenges for plain error.” United States v. McGlothin, 705

F.3d 1254, 1260 (10th Cir.), cert. denied, --- U.S. ----, 133 S. Ct. 2406 (2013);

see United States v. Ramirez, 348 F.3d 1175, 1181 (10th Cir. 2003).

      Although Mr. Powers made numerous timely and specific objections at

trial, the Rule 701 issue that he presses on appeal was not the basis for any of

them. 5 It is well established in this circuit that “[t]he specific ground for reversal


      5
             Mr. Powers made one objection that could conceivably be read as
                                                                   (continued...)

                                           7
of an evidentiary ruling on appeal must . . . be the same as that raised at trial.”

Ramirez, 348 F.3d at 1181 (omission in original) (quoting Norman T., 129 F.3d at

1106) (internal quotation marks omitted); accord United States v. Taylor, 604

F.3d 1011, 1015 (7th Cir. 2010). Mr. Powers argues that, even without express

invocation of Rule 701, the nature of his concerns was clear in context because

his objections went to the “heart” of the rule’s foundational requirements. The

record, however, does not bear this assertion out.

      Mr. Powers’s objections—scattered across approximately 600 pages of trial

testimony—specifically raised a variety of concerns other than Rule 701. These

objections never called “the nature of the [alleged Rule 701] error . . . to the

attention of the [district court], so as to alert [it] to the proper course of action

and enable opposing counsel to take proper corrective measures.” Fed. R. Evid.


      5
        (...continued)
implicating Rule 701. It came after one of the lender witnesses, a Mr. Rowland,
stated that interest rates are generally lower for individuals borrowing money to
purchase primary residences than for those purchasing investment properties
“because . . . there is less risk for the mortgage company.” R., Vol. III, at 683
(Trial Tr., dated Apr. 7–20, 2011). Mr. Powers’s attorney objected, stating: “I
don’t know on what basis Mr. Rowland is stating these conclusions about less risk
and more risk. There seems to be a scientific basis or something to do that, and I
don’t know if he has that basis.” Id. (emphasis added). We are not convinced
that one objection referring obliquely to the expert-opinion rules, buried in over
600 pages of trial testimony, can bear the weight of preserving a Rule 701
objection for the broad swath of testimony challenged here. Even if this objection
sufficiently stated a Rule 701 ground for Mr. Powers’s objection to the Rowland
testimony, any error in overruling the objection was harmless “given the wealth
of evidence put forth by the prosecution.” United States v. Cass, 127 F.3d 1218,
1225 (10th Cir. 1997).

                                            8
103 advisory committee’s note. As such, Mr. Powers’s specific objections were

not enough to preserve the alleged errors that he presses on appeal. 6 We thus

proceed with our analysis of Mr. Powers’s Rule 701 objections to the lender

witnesses’ testimony under the plain-error standard. 7

      6
              Mr. Powers directs us to several cases from our sister circuits, which
he claims found a Rule 701 issue adequately preserved by objections similar to
those in this case. His reliance on those cases is misplaced. Some of them fail to
help Mr. Powers because the decisions do not describe the character of the
objections that the courts relied on in finding the Rule 701 issue preserved. See
United States v. Johnson, 617 F.3d 286, 292 n.6 (4th Cir. 2010) (finding that Rule
701 objection was clear in the context of the “many” other objections during the
challenged testimony, but silent as to what these other objections were); United
States v. Freeman, 498 F.3d 893, 904 (9th Cir. 2007) (same). Without that crucial
information, these cases merely stand for the proposition that context sometimes
is enough; they do not speak to whether the context should be deemed sufficient
here. Other cases Mr. Powers cites do not actually address the preservation issue.
See United States v. Graham, 643 F.3d 885, 896 (11th Cir. 2011) (declining to
reach the preservation question because “[r]egardless of the applicable standard of
review, the record clearly show[ed] that [the witness] was testifying based on his
own personal knowledge . . . , and the district court did not err by admitting his
testimony”); Bank of China v. NMB LLC, 359 F.3d 171, 180–81 & n.10 (2d Cir.
2004) (noting that “the District Court . . . concluded that the testimony satisfied
the requirements for lay opinion testimony”). The other cases Mr. Powers points
to are distinguishable because the objections more directly suggested a Rule 701
objection. See, e.g., United States v. Massino, 546 F.3d 123, 129 (2d Cir. 2008)
(objecting that testimony was “the opinion of this witness”); Hirst v. Inverness
Hotel Corp., 544 F.3d 221, 225 (3d Cir. 2008) (objecting that witness was “[n]ot
an expert witness” (alteration in original)).
      7
              To the extent that Mr. Powers raises an additional challenge based on
his contention that the lay witnesses were allowed to testify to “impermissible
legal conclusions about materiality,” Aplt. Opening Br. at 32, we find that this
challenge, too, was not preserved, because Mr. Powers made no such objection at
trial. Indeed, the record shows not only that Mr. Powers failed to raise a
sufficiently specific objection to the materiality line of questioning, but also that
Mr. Powers actually engaged in precisely the same sort of questioning he now
                                                                        (continued...)

                                          9
                                           B

      To succeed under our “rigorous plain-error standard,” Mr. Powers must

demonstrate: “(1) an error, (2) that is plain, which means clear or obvious under

current law, and (3) that affects substantial rights. If he satisfies these criteria,

this Court may exercise discretion to correct the error if [4] it seriously affects the

fairness, integrity, or public reputation of judicial proceedings.” United States v.

Cooper, 654 F.3d 1104, 1117 (10th Cir. 2011) (alteration in original) (quoting

United States v. Goode, 483 F.3d 676, 681 (10th Cir. 2007)) (internal quotation

marks omitted).

      As for the second prong, we have clarified that “to be clear or obvious, the

error must be contrary to well-settled law.” United States v. Taylor, 514 F.3d

1092, 1100 (10th Cir. 2008). “In general, for an error to be contrary to well-

settled law, either the Supreme Court or this court must have addressed the issue.”

United States v. Ruiz-Gea, 340 F.3d 1181, 1187 (10th Cir. 2003). And, although

the “absence of such precedent will not . . . prevent a finding of plain error if the



      7
        (...continued)
argues was inappropriate. Accordingly, we find that Mr. Powers’s argument that
the district court erred by admitting testimony concerning the “materiality” to the
underwriting process of the various types of information included on the loan
application forms is waived under the invited-error doctrine, which “precludes a
party from arguing that the district court erred in adopting a proposition that the
party had urged the district court to adopt.” ClearOne Commc’ns, Inc. v. Bowers,
643 F.3d 735, 771 (10th Cir. 2011) (quoting FTC v. Accusearch Inc., 570 F.3d
1187, 1204 (10th Cir. 2009)) (internal quotation marks omitted).

                                           10
district court’s interpretation [of statutory or regulatory provisions] was ‘clearly

erroneous,’” id. (quoting United States v. Brown, 316 F.3d 1151, 1158 (10th Cir.

2003)), “[g]enerally, such a circumstance [i.e., the absence of controlling

precedent] will close the door on a claim that the error . . . is clear or obvious,”

United States v. Schneider, 704 F.3d 1287, 1304 (10th Cir.) (Holmes, J.,

concurring, joined by Martinez, J.), cert. denied, --- U.S. ----, 133 S. Ct. 2868

(2013). This is especially true where caselaw from our sister circuits does not

definitively support a finding of error. See Schneider, 704 F.3d at 1304 (Holmes,

J., concurring, joined by Martinez, J.); cf. United States v. Hardwell, 80 F.3d

1471, 1484 (10th Cir. 1996) (“Although neither the Supreme Court nor this court

has decided the issue, given the weight of authority from other circuits, we

conclude that the error was sufficiently clear and obvious to be plain error . . . .”);

cf. also United States v. Ahidley, 486 F.3d 1184, 1193 n.7 (10th Cir. 2007) (“[W]e

do not believe the presence of contrary circuit authority should control our

determination of whether the district court’s error was plain.”).

      In this case, even assuming arguendo that there was error, it would not be

clear or obvious; accordingly, we need not determine under the first prong of the

plain-error standard whether the district court actually erred. See Abernathy v.

Wandes, 713 F.3d 538, 553 (10th Cir. 2013) (“We need not decide whether there

was error . . . because even assuming arguendo that there was error, it would not

be plain (i.e., clear or obvious).”), cert. denied, --- U.S. ----, 134 S. Ct. 1874


                                           11
(2014). Mr. Powers’s argument is that the lender witnesses’ testimony failed to

satisfy any of the requirements of Rule 701, which says that lay-witness opinion

testimony must be “(a) rationally based on the witness’s perception; (b) helpful to

clearly understanding the witness’s testimony or to determining a fact in issue;

and (c) not based on scientific, technical, or other specialized knowledge within

the scope of Rule 702.” Fed. R. Evid. 701. For the reasons explained below, the

lender witnesses’ testimony at issue in this case did not clearly or obviously run

afoul of any of these three requirements.

                                            1

      Rule 701(a) requires lay-witness opinion testimony to be based on the

witness’s “first-hand knowledge or observation.” Fed. R. Evid. 701 advisory

committee’s note. This “perception requirement stems from [Rule] 602 which

requires a lay witness to have first-hand knowledge of the events he is testifying

about so as to present only the most accurate information to the finder of fact.”

United States v. Bush, 405 F.3d 909, 916 (10th Cir. 2005) (quoting United States

v. Hoffner, 777 F.2d 1423, 1425 (10th Cir. 1985)) (internal quotation marks

omitted); see Fed. R. Evid. 602 (“A witness may testify to a matter only if

evidence is introduced sufficient to support a finding that the witness has personal

knowledge of the matter.”). Mr. Powers asserts two different errors with respect

to this requirement. First, he argues that the lender witnesses were not personally

involved in the loans at issue in this case and thus had no first-hand knowledge of


                                            12
why these particular loans were approved. Second, he argues that because the

lender witnesses lacked personal involvement in the transactions, it was

inappropriate for the district court to allow these witnesses to answer hypothetical

questions relating to the transactions.

      However, although the witnesses were not directly involved in the

transactions, and thus lacked contemporaneous personal knowledge of them, they

did have personal knowledge of their respective employers’ lending practices at

the time the transactions took place and, by the time of trial, had become familiar

with the specific loan documents as well. The question is thus whether it was

clear or obvious error for the district court to treat this kind of personal

knowledge—contemporaneous knowledge of the policies and practices of a

business combined with after-acquired knowledge of particular transactions—as

sufficient under Rule 701(a), and whether it was clear or obvious error to allow

such testimony when it included witnesses’ opinions on the implications of

various hypothetical changes to specific transactions.

      That we have been unable to find any Supreme Court or Tenth Circuit

caselaw that is directly on point (and Mr. Powers directs us to none) itself

suggests that any error committed by the district court was not clear or obvious.

See Ruiz-Gea, 340 F.3d at 1187. Cases from our sister circuits, while instructive

to a degree, do not substantially clarify the picture—certainly not in a such a way

that the district court’s decision to allow the lender witnesses’ testimony


                                          13
constituted clear or obvious error. In United States v. Hill, 643 F.3d 807 (11th

Cir. 2011), for example, which involved a very similar scheme to the case on

appeal, the defendant argued that the district court had improperly allowed expert

testimony masquerading as lay testimony. Id. at 840. As in Mr. Powers’s case,

            [a]t trial, the district court permitted several representatives of
            victim lending institutions, all of whom were involved in
            mortgage and loan approval for their respective companies, to
            testify about whether the disclosure of misrepresentations in
            some of the fraudulent loan applications would have had any
            effect on their decision to approve the mortgage or loan.

Id. The Eleventh Circuit concluded that the district court “did not abuse its

discretion by permitting the witnesses who had personally dealt with the

fraudulent loan transactions at issue to respond to the government’s questions

about what would have happened if the facts had been different,” id. at 842,

indicating that in the Eleventh Circuit’s view, there was nothing inherently

inappropriate about lay witnesses answering hypothetical questions regarding

transactions based on their personal knowledge.

      The Eleventh Circuit’s conclusion in Hill that the district court did not

abuse its discretion, standing alone, lends some support for the view that the

district court did not err here, where the lay witnesses answering the hypothetical

questions possessed personal knowledge of their respective lenders’ policies and

procedures and knowledge of the loan files at issue. However, without

elaboration, the Hill court also observed that, “[a]s for the witnesses who were



                                        14
not personally involved with the transactions at issue, any error in admitting their

testimony was harmless.” Id. This language seemingly points in the opposite

direction on the question of whether the district court erred here, suggesting that

the Eleventh Circuit believed it would be error to allow lay witnesses to answer

hypothetical questions about transactions as to which they did not have personal

involvement. But the court did not expressly render such a holding in Hill and it

did not offer any reason for drawing the distinction it did between those witnesses

who were personally involved in the transactions and those who were not.

      The best that we can say about Hill is that it sends unclear signals on the

propriety under Rule 701 of the challenged lay witness testimony in this case.

And, even if Hill tilts toward a conclusion that the district court erred here, it is

only one case, and Mr. Powers has not demonstrated that Hill’s interpretation of

the personal-knowledge requirement is representative of the weight of authority

among our sister circuits. Accordingly, Hill will not take Mr. Powers across the

finish line on the second prong of the plain-error test.

      Furthermore, Mr. Powers’s argument is undermined by decisions in a

number of other circuits explaining that lay witnesses may, consistent with Rule

701(a), testify broadly regarding an employer’s practices, policies, and

procedures, so long as their testimony is derived from personal knowledge and

experience at the business. See, e.g., United States v. Valencia, 600 F.3d 389,

416 (5th Cir. 2010) (ruling that a former risk officer’s testimony “recreat[ing]


                                           15
much of the analysis he regularly performed when evaluating risk tolerances” was

“properly characterized as . . . lay opinion” testimony because his “knowledge

and analysis were derived from duties he held at [the firm]”); US Salt, Inc. v.

Broken Arrow, Inc., 563 F.3d 687, 690 (8th Cir. 2009) (“[P]erceptions based on

industry experience[] [are] a sufficient foundation for lay opinion testimony.”

(first alteration in original) (quoting Burlington N. R.R. Co. v. Nebraska, 802 F.2d

994, 1004–05 (8th Cir. 1986)) (internal quotation marks omitted)); United States

v. Munoz-Franco, 487 F.3d 25, 36 (1st Cir. 2007) (holding that a former

executive’s testimony regarding what information company’s board “should have”

had in its decisionmaking process was lay opinion testimony because her position

and regular attendance at board meetings gave her the requisite personal

knowledge); Tampa Bay Shipbuilding & Repair Co. v. Cedar Shipping Co., 320

F.3d 1213, 1223 (11th Cir. 2003) (determining that district court did not abuse its

discretion in permitting officers and employees to testify as lay witnesses, based

on their “particularized knowledge garnered from years of experience within the

field,” about the reasonableness of their corporation’s pricing in light of industry

standards).

      In the instant case, where the lender witnesses’ testimony was based on

their personal knowledge and experience with their respective firms’ application-

assessment policies and procedures, it requires no great stretch of the imagination

to see how a court could conclude that this testimony was based on the witnesses’


                                         16
“first-hand knowledge or observation” as required by Rule 701(a). See Fed. R.

Evid. 701 advisory committee’s note. In sum, where “we cannot say . . . that the

district court was clearly wrong,” Ruiz-Gea, 340 F.3d at 1188, any error

committed by the district court here under Rule 701(a) was not plain.

                                         2

      We next consider Mr. Powers’s arguments regarding Rule 701(b), which

requires a witness’s testimony to be helpful to the jury. Mr. Powers argues that

the challenged testimony was not helpful because it was based on “hypothetical

facts” and on “documents not in evidence,” i.e., the lending institutions’

underwriting guidelines. Aplt. Opening Br. at 31.

      With respect to use of hypothetical facts, we note again that Mr. Powers

has identified no case from this court or the Supreme Court that clearly prohibits

lay witnesses from offering opinion testimony based on their personal experience

in response to hypothetical questions. Indeed, the only case Mr. Powers cites for

this proposition is the Eleventh Circuit’s decision in United States v. Henderson,

409 F.3d 1293 (11th Cir. 2005), which does recite, in dicta, the view that “the

ability to answer hypothetical questions is ‘[t]he essential difference’ between

expert and lay witnesses.” Id. at 1300 (alteration in original) (quoting Asplundh

Mfg. Div. v. Benton Harbor Eng’g, 57 F.3d 1190, 1202 n.16 (3d Cir. 1995)). But

Henderson’s dictum is belied by the Eleventh Circuit’s own more recent decision

in Hill, which—as noted above—did not consider it an abuse of discretion for the


                                        17
district court to allow lay witnesses to “answer[] hypothetical questions . . .

based . . . on their personal experiences as officers of financial institutions with

knowledge of their companies’ policies and of the specific transactions at issue.”

Hill, 643 F.3d at 842. Even the Eleventh Circuit, then, does not appear to

categorically reject lay witness opinion testimony in response to hypothetical

facts, but instead considers the propriety of such testimony by reference to the

basis of personal knowledge of the witness.

      Thus, Mr. Powers cannot establish by reference to the Eleventh Circuit or

otherwise that it is well-settled law that the mere fact that lender witnesses offer

opinion testimony in response to hypothetical facts renders their testimony

categorically unhelpful to the jury. And, considering that the witnesses here

testified largely based on their knowledge and experience, as already discussed,

we conclude that it was not clear or obvious error for the district court to

determine that this testimony was in fact helpful to the jury. Any error in

admitting this testimony—based on hypothetical questions—thus was not plain.

      Mr. Powers’s second contention under Rule 701(b) is that the lender

witnesses’ testimony was not helpful because they testified on the basis of the

lenders’ underwriting guidelines, which Mr. Powers asserts were not in evidence.

At the outset, we note that Mr. Powers proceeds from a false factual predicate.

The underwriting guidelines for two of the four lenders—SunTrust and National

City Mortgage—actually were in evidence. The jury therefore had the


                                          18
opportunity to compare the witnesses’ testimony with the actual guidelines with

respect to the five loans (out of nine) underwritten by these two lenders, and Mr.

Powers was, of course, free to argue to the jury that they should afford less

weight to the testimony about the guidelines that were not in evidence.

Considering these facts, and considering that Mr. Powers has not pointed us to

any caselaw or other authority that would suggest that the district court’s

admission of the testimony of the lender witnesses was clearly or obviously

wrong under Rule 701(b), we conclude that Mr. Powers has not carried his burden

on the second prong of the plain-error test.

                                          3

      Finally, we turn to Mr. Powers’s contentions regarding Rule 701(c), which

disallows testimony based on “scientific, technical, or other specialized

knowledge within the scope of Rule 702.” Fed. R. Evid. 701(c). Mr. Powers

argues that the lender witnesses’ testimony was based on specialized knowledge

of underwriting practices in the mortgage industry and thus was not admissible

under Rule 701. The government responds that the testimony was admissible lay

testimony because it was based on the witnesses’ personal familiarity with the

specific underwriting processes and policies of their employers and had been

acquired through their employment with the lenders.

      Our decision in James River Insurance Co. v. Rapid Funding, LLC, 658

F.3d 1207 (10th Cir. 2011), offers a useful framework for analyzing Mr. Powers’s


                                         19
challenge. The testimony at issue there consisted of a real estate investor’s

valuation of property owned by his company; we concluded that it constituted

expert opinion testimony. Specifically, starting from the general principle that

“Rule 701 ‘does not permit a lay witness to express an opinion as to matters

which are beyond the realm of common experience and which require the special

skill and knowledge of an expert witness,’” id. at 1214 (quoting Randolph v.

Collectramatic, Inc., 590 F.2d 844, 846 (10th Cir. 1979)), we identified in James

River four “reasons [to] support our conclusion that [the] testimony fell outside

the category of lay opinion,” id. To be clear, while we seek guidance from James

River, we remain cognizant of the fact that we did not declare there that these

four reasons would necessarily be cogent or even relevant in every case, nor did

we purport to establish an exhaustive four-factor test.

      Regarding the first factor, in James River, we noted that the valuation

testimony both required the exercise of technical judgment (in choosing among

alternative methodologies for calculating depreciation, for example) and involved

calculations that “require[d] more than applying basic mathematics.” Id. Second,

the witness’s calculations in James River were “based in part on his professional

experience,” which the court also found suggested that the testimony was expert

opinion because “[k]nowledge derived from previous professional experience falls

squarely within the scope of Rule 702.” Id. at 1215 (alteration in original)

(quoting United States v. Smith, 640 F.3d 358, 365 (D.C. Cir. 2011)) (internal


                                         20
quotation marks omitted). Third, the witness “relied on a technical report by an

outside expert” that ran over fifteen hundred pages and used “specialized

accounting calculations.” Id. Fourth, and finally, James River involved

“landowner testimony about land value,” and the court observed that “the Federal

Rules of Evidence generally consider [such testimony] to be expert opinion.” Id.

      Using James River’s four factors as a framework for our analysis—insofar

as these facts are relevant on this record—we conclude that the district court did

not commit clear or obvious error in concluding that the lender witnesses’

testimony complied with Rule 701(c)’s requirements. With respect to the first

factor, Mr. Powers argues that “[t]he lender representatives in this case were

asked to perform debt-to-income ratio calculations . . . requiring them to apply

specialized knowledge and prior experience in the mortgage industry well beyond

that of the average lay person.” Aplt. Opening Br. at 33. We disagree.

      The calculation of debt-to-income ratios is the kind of basic math that we

have permitted lay witnesses to include in their testimony. Compare Ryan Dev.

Co. v. Ind. Lumbermens Mut. Ins. Co., 711 F.3d 1165, 1170–71 (10th Cir. 2013)

(ruling that an accountant’s calculation of lost income and other claims using only

“basic arithmetic, personal experience, and no outside expert reports” fell “under

Rule 701 as lay testimony”), and Bryant v. Farmers Ins. Exch., 432 F.3d 1114,

1124 (10th Cir. 2005) (holding that the calculation of the arithmetical mean of

103 numbers was “well within the ability of anyone with a grade-school


                                         21
education” and “aptly characterized as a lay opinion”), with LifeWise Master

Funding v. Telebank, 374 F.3d 917, 929 (10th Cir. 2004) (concluding that a

calculation of lost profits that involved sophisticated economic models including

“moving averages, compounded growth rates, and S-curves” was “technical” and

“specialized” and could not be offered as lay opinion testimony). Calculating

such debt-to-income ratios simply involves dividing the loan applicant’s monthly

debts by her monthly income—a calculation, on the one hand, certainly no more

complicated than finding the arithmetical mean of a large group of numbers, see

Bryant, 432 F.3d at 1124, and hardly comparable, on the other hand, to the kind

of complex computations described in either James River or Lifewise.

      Regarding the second James River factor, we used somewhat categorical

language in articulating it—viz., “[k]nowledge derived from previous professional

experience falls squarely within the scope of Rule 702,” 658 F.3d at 1215—that

could conceivably be read as placing under Rule 702 all witness testimony that

stems to any degree from knowledge acquired through professional experience.

But we believe that such an expansive reading of this language would be

mistaken. Indeed, in James River, we noted that lay witnesses could properly

offer testimony that involved “a limited amount of expertise.” Id. at 1214. And

such expertise surely could be (and often will be) the product of prior

professional experience. Cf. Fed. R. Evid. 701 advisory committee’s note

(“[M]ost courts have permitted the owner or officer of a business to testify to the


                                        22
value or projected profits of the business, without the necessity of qualifying the

witness as an accountant, appraiser, or similar expert. Such opinion testimony is

admitted not because of experience, training or specialized knowledge within the

realm of an expert, but because of the particularized knowledge that the witness

has by virtue of his or her position in the business.” (citation omitted)); James

River, 658 F.3d at 1216 (recognizing that we have previously “allowed business

owners to testify [under Rule 701] about business (as opposed to property) value”

where that testimony was based on “sufficient personal knowledge of their

respective businesses and of the factors on which they relied to estimate lost

profits” and where “the owners offered valuations based on straightforward,

common sense calculations” (quoting LifeWise, 374 F.3d at 929–30) (internal

quotation marks omitted)).

      Furthermore, such a broad reading of this second-factor language of James

River would be inconsistent with our recognition in Ryan Development that

witnesses with arguably pertinent professional experience could nevertheless offer

Rule 701 lay testimony under certain circumstances, including where they possess

personal familiarity with documentary evidence at issue. See Ryan Dev., 711 F.3d

at 1170 (allowing accountants to testify as lay witnesses regarding lost income

where their testimony was based on “personal experience” analyzing the

documentary evidence at issue and involved only basic calculations, even

“[t]hough accountants often testify as expert witnesses” ); cf. Peshlakai v. Ruiz,


                                          23
No. CIV 13-0752 JB/ACT, 2013 WL 6503629, at *18 n.8 (D.N.M. Dec. 7, 2013)

(“[A]lthough there is logic in the assumption that almost all of a physician’s

treatment of her patients relies on scientific technical, or other specialized

knowledge, requiring it to be admitted under rule 702, the Tenth Circuit does not

seem to draw such a bright line. Although the Tenth Circuit has not defined the

bounds of permissible testimony for a treating physician as a lay witness, it seems

that it is permissible for a treating physician to provide testimony about the

treatment of the physician’s patients.”).

      Like the accountants who were allowed to testify as lay witnesses in Ryan

Development, the lender witnesses in this case testified based on their personal

experience, employed only basic calculations, and did not rely on outside expert

reports. Indeed, their testimony was—like the testimony of the business owner or

officer discussed in the advisory committee’s note to Rule 701—based on

“particularized knowledge” that they possessed “by virtue of [their] position[s]”

at their respective employers. Fed. R. Evid. 701 advisory committee’s note.

Thus, we are convinced that the district court would not—at the very least—have

clearly or obviously strayed from the teaching of this second James River factor

in concluding that the lender witnesses’ testimony did not qualify as expert

testimony, even though it was based in part on knowledge derived from their

relevant professional experience. As for the third and fourth James River factors,

they are not relevant here: there were no outside expert reports for the lay


                                            24
witnesses to rely on, and the testimony was not related to land valuation.

Therefore, we go no further than the first two factors. Based upon the foregoing

analysis, we cannot say that the district court in this case committed a clear or

obvious error under Rule 701(c).

      In sum, we conclude that Mr. Powers’s arguments relating to the admission

of the lender witnesses’ testimony as lay testimony under Rule 701 fail under

plain-error review. Consequently, we do not disturb the district court’s decision

to admit this testimony.

                                         III

      We turn now to Mr. Powers’s second challenge on appeal. He argues that

the district court erred in allowing the admission of loan records related to loans

issued by RFC Cameron Financial Group, Inc. (“Cameron”). Four of the

seventeen counts on which Mr. Powers was found guilty relate to loan

transactions involving Cameron. At trial, the government did not seek to admit

into evidence loan records that were obtained directly from Cameron. Instead, the

government successfully entered into evidence Cameron loan documents that were

in the files of companies that serviced Cameron loans. The original Cameron

loan documents were apparently unavailable, having been destroyed some time

prior to the government’s attempt to obtain them (which itself occurred some time

after Cameron declared bankruptcy and went out of business).

      Mr. Powers argues that Cameron’s loan applications and other relevant loan


                                          25
documents were admitted erroneously under the business-records exception to the

hearsay rule found in Federal Rule of Evidence 803(6), “which provides that

certain records of regularly conducted business activity are admissible for their

truth even though they contain hearsay.” United States v. Blechman, 657 F.3d

1052, 1065 (10th Cir. 2011). At the outset, the government contends that Mr.

Powers failed to properly preserve an objection to the admission of these records

under Rule 803(6), and that, accordingly, we should review Mr. Powers’s claim

on appeal under the plain-error standard instead of for an abuse of discretion.

      Thus, as with Mr. Powers’s Rule 701 claims, we begin by inquiring

whether Mr. Powers properly preserved his objections. Concluding that he did

not, we proceed with our analysis under the demanding plain-error standard. We

determine that, even assuming arguendo that the district court erred in admitting

the Cameron documents, it did not clearly or obviously do so. Thus, Mr. Powers

cannot prevail on this ground under the rigorous plain-error standard.

                                           A

      Mr. Powers does not claim to have objected during the trial to the

introduction of the Cameron documents. But, in Mr. Powers’s view, he did not

need to because he had properly preserved this claim by objecting to the

documents in a motion in limine. “A pretrial motion in limine to exclude

evidence will not always preserve an objection for appellate review,” but we have

held that it “may . . . when the issue (1) is fairly presented to the district court,


                                           26
(2) is the type of issue that can be finally decided in a pretrial hearing, and (3) is

ruled upon without equivocation by the trial judge.” United States v. Mejia-

Alarcon, 995 F.2d 982, 986 (10th Cir. 1993); see also Fed. R. Evid. 103(b)

(“Once the court rules definitively on the record—either before or at trial—a

party need not renew an objection . . . to preserve a claim of error for appeal.”).

Under these standards, we conclude that Mr. Powers did not preserve his

business-records claim because the district court did not rule definitively or

unequivocally on Mr. Powers’s objection on this ground.

      Prior to trial, Mr. Powers filed a motion in limine objecting to the

introduction of the Cameron records as business records of the loan servicers. He

argued, inter alia, that:

             It is not sufficient that the United States present testimony from
             the loan servicers to the effect that their records contain
             documents from Cameron’s loan file; what is important is that
             the custodian of records of a loan servicing company cannot
             authenticate the . . . entire contents of the records of the separate
             business which created them [i.e., Cameron].

R., Vol. I, at 589 (Mot. in Limine & Reply, filed Jan. 26, 2011).

      The district court ruled on the motion orally at a hearing, and during a brief

exchange there, Mr. Powers explained that his objection was directed at the

adequacy of the foundation for the records. After the government responded that

it would be able to lay appropriate foundations at trial for these records through

witnesses from the loan servicing companies, the district court overruled Mr.



                                           27
Powers’s objections, “[s]ubject to foundation being laid.” Id., Vol. III, at 204

(Hr’g Tr., dated Feb. 9, 2011) (emphasis added). In other words, the district

court’s ruling in favor of the admissibility of the documents was expressly

contingent on the government laying a proper foundation for the documents.

      The court’s explicit statements therefore seemingly belie any suggestion

that it ruled “definitively” or “without equivocation” on Mr. Powers’s objection,

see Fed. R. Evid. 103(b); Mejia-Alarcon, 995 F.2d at 986, and Mr. Powers points

to no authority that would lead us to a contrary conclusion. Consequently, Mr.

Powers was obliged to renew his foundation objections at trial; this he failed to

do. Therefore, he has not preserved them for appeal, and our review is only for

plain error.

                                         B

      Even if we assume arguendo that the district court erred by allowing the

government to admit the Cameron loan documents as business records of the

various companies that serviced the loans, we conclude that Mr. Powers cannot

satisfy the second prong of the plain-error test because any such error was not

clear or obvious. Our analysis of Mr. Powers’s argument under Rule 803(6)

requires some discussion of the alleged errors, even though we need not and do

not decide whether there was actually any error in this case.

      Mr. Powers claims that the district court erred by failing to properly heed

the requirements set forth in Rule 803(6), which articulates an exception from the


                                         28
hearsay doctrine for

             [a] record of an act, event, condition, opinion, or diagnosis if:
             (A) the record was made at or near the time by—or from
             information transmitted by—someone with knowledge; (B) the
             record was kept in the course of a regularly conducted activity of
             a business, organization, occupation, or calling, whether or not
             for profit; (C) making the record was a regular practice of that
             activity; (D) all these conditions are shown by the testimony of
             the custodian or another qualified witness . . . ; and (E) neither
             the source of information nor the method or circumstances of
             preparation indicate a lack of trustworthiness.

Fed. R. Evid. 803(6). In essence, Mr. Powers argues that it was error for the

district court to admit the Cameron files as the business records of the loan

servicing companies, because the records custodians of those companies were not

in a position to establish the required foundation under the Rule. 8 In particular,

      8
            We have interpreted Rule 803(6) to require the records custodian or
another qualified witness to lay foundation testimony establishing that

             the records (1) were prepared in the normal course of business;
             (2) were made at or near the time of the events recorded; (3)
             were based on the personal knowledge of the entrant or of a
             person who had a business duty to transmit the information to the
             entrant; and (4) are not otherwise untrustworthy.

United States v. Irvin, 682 F.3d 1254, 1261 (10th Cir. 2012). Here, the
government put on three witnesses to lay the foundation for the Cameron
documents. The first witness, the records custodian for Specialized Loan
Services, testified that the documents were “records of acts and events made at or
near the time, by or from information transmitted by a person with knowledge of
the events recorded in th[e] documents”; “kept in the course of Specialized Loan
Services’ regularly conducted business activity”; that it was “the regular practice
of Specialized Loan Services’ business activity to make those records”; the
records were “true and accurate copies of th[e] originals”; and they were “records
collected or generated by Specialized Loan Services in connection with loans
                                                                      (continued...)

                                          29
according to Mr. Powers, because Cameron created the documents, witnesses

from the loan servicing companies could not offer the required proof that the

documents were prepared in the normal course of business or that they were

prepared at or near the times of the transactions. Nor, reasons Mr. Powers, could

they speak to whether the documents were complete or accurate.

      Mr. Powers’s arguments boil down to an assertion that the district court

erroneously applied the so-called “adoptive business records” doctrine, under

which “a record created by a third party and integrated into another entity’s

records” can be “admissible as the record of the custodian entity,” so long as

certain other requirements are met that fully satisfy the strictures of Rule 803(6).

Brawner v. Allstate Indem. Co., 591 F.3d 984, 987 (8th Cir. 2010). He argues

that we should either reject this doctrine outright—and, therefore, presumably

conclude that the district court erred in resorting to it—or, alternatively, embrace

the doctrine but hold that, in order for witnesses to satisfy its requirements, they

must provide substantial foundational testimony relating to matters such as the

record-keeping system of the business that prepared the records. If we elect to

adopt the latter approach, Mr. Powers urges us to conclude that the district court



      8
         (...continued)
applied for in connection with the purchase of [the property at issue].” R., Vol.
III, at 665–66. The other two witnesses testified similarly for their respective
companies. In short, all three records custodians offered testimony that was
purportedly designed to satisfy the foundational requirements set out in Rule
803(6).

                                         30
erred in admitting the challenged loan documents because “[t]he custodians here

could only confirm that the loan servicers collected Cameron’s documents but had

no knowledge as to how Cameron’s records were produced” or whether the

documents “were complete or accurate.” Aplt. Opening Br. at 48–49.

      Because we are reviewing Mr. Powers’s challenge only for plain error,

however, we have no need to comprehensively engage in an analysis of the

substance of Mr. Powers’s arguments, and we decline to do so. Notably, we need

not definitively opine on whether the district court erred (as a categorical matter)

in recognizing the adoptive business records doctrine, or erred in applying the

doctrine on the facts of this case. In other words, we need not address the first

prong of the plain-error test. Instead, we elect to restrict our analysis to the

second prong, that is, whether the district court committed clear or obvious error.

With respect to that prong, we conclude that there is no controlling

precedent—from our court or the Supreme Court—that definitively speaks to the

vitality of the adoptive business records doctrine, much less precedent that

explicitly prohibits the district court from recognizing that doctrine, or that

mandates that the district court apply the doctrine in any particular way.

Furthermore, we have no reason to believe that the court’s tacit interpretation of

Rule 803(6) as embodying such a doctrine is otherwise clearly erroneous.

Accordingly, for these reasons, we determine that Mr. Powers cannot satisfy the

second prong of the plain-error test.


                                          31
      As previously noted, our analysis on this prong generally turns on whether

“either the Supreme Court or this court . . . have addressed the issue.” Ruiz-Gea,

340 F.3d at 1187. However, in the absence of such precedent, we may find this

prong satisfied where the district court’s interpretation of the statutory or

regulatory provision at issue is “clearly erroneous,” United States v. Story, 635

F.3d 1241, 1248 (10th Cir. 2011) (internal quotation marks omitted); accord

United States v. Poe, 556 F.3d 1113, 1129 (10th Cir. 2009). Mr. Powers

recognizes that our circuit has not previously opined in a controlling decision on

the vitality or propriety of the adoptive business records doctrine. See Irvin, 682

F.3d at 1265 (“This court has . . . never decided whether ‘adoptive business

records’ are admissible under Rule 803(6).”). 9 Nor has the Supreme Court opined

on the subject. Thus, if Mr. Powers hopes to keep the door open on his claim that

the district court clearly or obviously erred in recognizing and applying the

doctrine, cf. Schneider, 704 F.3d at 1304 (Holmes, J., concurring, joined by

Martinez, J.) (noting that, “[g]enerally, such a circumstance [i.e., the absence of

controlling Tenth Circuit or Supreme Court precedent] will close the door on a



      9
              Irvin clarified any ambiguity over whether we had previously
recognized the doctrine in United States v. Carranco, 551 F.2d 1197 (10th Cir.
1977). Irvin made clear that Carranco merely “recognized [that] such an
argument could have been made on the facts of that case, but declined to
separately consider it because the necessary objections had not been made before
the trial court.” Irvin, 682 F.3d at 1265. “At best,” we wrote, “Carranco can be
read as assuming, without deciding, that one company can ‘adopt’ the business
records of another company for purposes of Rule 803(6).” Id.

                                          32
claim that the error . . . is clear or obvious”), he must demonstrate that the district

court’s tacit interpretation of Rule 803(6) as embodying such a doctrine is clearly

erroneous. This he cannot do.

      In this regard, our survey of the landscape of our sister circuits’ decisions

indicates that—far from acting in a clearly erroneous fashion—the district court’s

tacit reading of the scope of Rule 803(6) to include the adoptive business records

doctrine was quite reasonable (if not mandatory). Specifically, the courts of

appeals have overwhelmingly chosen to recognize—either explicitly or

implicitly—an adoptive business records doctrine. See, e.g., Brawner, 591 F.3d

at 987 (collecting cases and agreeing with the “[s]everal other courts [that] have

held that a record created by a third party and integrated into another entity’s

records is admissible as the record of the custodian entity, so long as the

custodian entity relied upon the accuracy of the record and the other requirements

of Rule 803(6) are satisfied”); United States v. Adefehinti, 510 F.3d 319, 326

(D.C. Cir. 2007) (collecting cases and joining the “several courts [that] have

found that a record of which a firm takes custody is thereby ‘made’ by the firm

within the meaning of the rule (and thus is admissible if all the other requirements

are satisfied)”); Air Land Forwarders, Inc. v. United States, 172 F.3d 1338,

1342–44 (Fed. Cir. 1999) (reviewing cases and holding that testimony regarding

“first-hand knowledge as to the procedures used in the original preparation of

each of the [documents at issue] . . . is not necessary where an organization


                                           33
incorporated the records of another entity into its own, relied upon those records

in its day-to-day operations, and where there are other strong indicia of

reliability”).

       In the face of this widespread acceptance of the adoptive business records

doctrine among our sister circuits, Mr. Powers fails to direct us to any court that

has specifically rejected the doctrine. Indeed, the only legal authority Mr. Powers

cites in opposition to the doctrine’s applicability is the dissenting opinion in Air

Land Forwarders. This lopsided support for the doctrine indicates that Mr.

Powers cannot possibly demonstrate here that the district court’s reading of Rule

803(6) to encompass the doctrine is clearly erroneous. Cf. Story, 635 F.3d at

1248 (“Our circuit precedent has repeatedly noted that a circuit split is strong

evidence that an error is not plain.”). Thus, in this case, the absence of

controlling authority from our court or the Supreme Court regarding the adoptive

business records doctrine does “close the door,” Schneider, 704 F.3d at 1304

(Holmes, J., concurring, joined by Martinez, J.), on Mr. Powers’s claim that the

district court clearly or obviously erred in admitting the Cameron records based

on the testimony of the loan-servicing-company records custodian witnesses.

Thus, Mr. Powers cannot satisfy the second prong of the plain-error test on this

ground.

                                          IV

       Lastly, we address Mr. Powers’s argument that the district court incorrectly


                                          34
applied the gross-receipts enhancement of the Guidelines in calculating his

sentence. This enhancement provides that if a “defendant derived more than

$1,000,000 in gross receipts from one or more financial institutions as a result of

the offense,” he is subject to a two-level increase to his base offense level.

U.S.S.G. § 2B1.1(b)(14)(A). The commentary to this section explains that “the

defendant shall be considered to have derived more than $1,000,000 in gross

receipts if the gross receipts to the defendant individually, rather than to all

participants, exceeded $1,000,000.” U.S.S.G. § 2B1.1 cmt. n.11(A) (emphasis

added). Mr. Powers’s appeal focuses on the district court’s interpretation of the

term “participants”—specifically, he argues that the district court erroneously

failed to treat the buyers for whom Mr. Powers prepared falsified loan

applications as “participants” within the meaning of the application note, and thus

erred by attributing to Mr. Powers money that was ultimately transferred to the

buyers.

      The meaning of “participants” in this context is an issue of first impression

in this court. Addressing it here, we clarify that district courts identifying

“participants” in a fraud for purposes of U.S.S.G. § 2B1.1(b)(14)(A) should

employ the definition of “participant” set forth in U.S.S.G. § 3B1.1 cmt. n.1 and

ask whether an individual was a “participant” in the “relevant conduct” as defined




                                          35
in U.S.S.G. § 1B1.3(a)(1)(B). 10 Recognizing that the record here does not permit

us to apply this standard without engaging in fact-finding—which the courts of

appeals eschew—we remand to the district court with instructions to vacate Mr.

Powers’s sentence; to determine, consistent with this order and judgment, which

of the buyers were “participants” in Mr. Powers’s charged scheme and its relevant

conduct; and to re-sentence Mr. Powers accordingly.

      We review the district court’s legal interpretation of the Guidelines de

novo, see United States v. Hamilton, 587 F.3d 1199, 1222 (10th Cir. 2009), and

“interpret the Sentencing Guidelines according to the accepted rules of statutory

construction,” United States v. Nacchio, 573 F.3d 1062, 1066 (10th Cir. 2009).

      10
             In pertinent part, U.S.S.G. § 1B1.3 explains that offense
characteristics under chapter two of the Guidelines and adjustments under chapter
three “shall be determined on the basis of”:

            (1)    (A) all acts and omissions committed, aided, abetted,
                   counseled, commanded, induced, procured, or willfully
                   caused by the defendant; and

                   (B) in the case of a jointly undertaken criminal activity (a
                   criminal plan, scheme, endeavor, or enterprise undertaken
                   by the defendant in concert with others, whether or not
                   charged as a conspiracy), all reasonably foreseeable acts
                   and omissions of others in furtherance of the jointly
                   undertaken criminal activity,

            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 responsibility for that offense[.]

U.S.S.G. § 1B1.3(a)(1)(A)–(B).


                                         36
When we interpret a guideline, we look first to the language of the guideline

itself, and then to the guideline’s interpretive and explanatory commentary, which

“is authoritative unless it violates the Constitution or a federal statute, or is

inconsistent with, or a plainly erroneous reading of, that guideline.” Nacchio, 573

F.3d at 1066–67.

      In this case, neither the text of U.S.S.G. § 2B1.1(b)(14)(A) nor the

commentary to this section offers a definition of “participants,” though we

consider it relevant that this word is employed, rather than a more specific term

such as “codefendants.” We have not previously defined the scope of the word

“participants” for purposes of the gross-receipts enhancement, and the Supreme

Court also has been silent on the subject. This is not to say that we have not

previously interpreted the terms of the enhancement. In particular, in United

States v. Weidner, 437 F.3d 1023 (10th Cir. 2006), we clarified that the

enhancement precludes attribution of the same money to multiple codefendants.

Id. at 1046. Weidner also contains language that suggests that the term

“participants” is not synonymous with the term “codefendants.” 11 See id.

(distinguishing a Third Circuit opinion by noting that there was no indication in

that case “that the individuals to whom the defendant transferred the receipts were



      11
              Although Weidner does contain language that suggests a broader
reading of the term “participants” than “codefendants,” we recognize that this
language is arguably dictum on the facts of Weidner because there the gross-
receipts enhancement was applied based on the conduct of codefendants.

                                           37
codefendants or otherwise participated in the criminal scheme” (emphasis

added)).

      Because the text and commentary of U.S.S.G. § 2B1.1(b)(14)(A) are both

silent concerning the definition of its term “participants” and because controlling

caselaw is as well, we turn to the traditional tools of statutory construction. See

United States v. Marrufo, 661 F.3d 1204, 1207 (10th Cir. 2011) (“We interpret

the Sentencing Guidelines according to accepted rules of statutory construction.”

(quoting Nacchio, 573 F.3d at 1066) (internal quotation marks omitted)). As

particularly relevant here, it is well-settled that “[t]he normal rule of statutory

construction assumes that identical words used in different parts of the same act

are intended to have the same meaning.” Sorenson v. Sec’y of Treasury, 475 U.S.

851, 860 (1986) (internal quotation marks omitted); accord First Nat’l Bank of

Durango v. Woods (In re Woods), 743 F.3d 689, 697 (10th Cir. 2014); see Brown

v. Gardner, 513 U.S. 115, 118 (1994) (“[T]here is a presumption that a given term

is used to mean the same thing throughout a statute . . . .”); see also Antonin

Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts

170–73 (2012) (discussing the “presumption of consistent usage”).

       In light of this canon of construction, we find it particularly worthy of

attention that another provision of the Guidelines expressly defines the term

“participant.” Cf. Nacchio, 573 F.3d at 1073 & n.11 (noting that our

interpretation of “gain” in one section of the Guidelines “comports with another


                                           38
reference to ‘gain’ in the Guidelines”). U.S.S.G. § 3B1.1 provides adjustments to

a defendant’s offense level based on his or her role in the offense, measured by

key factors such as the number of “participants” involved in the offense. For

example, the guideline provides for a four-level increase where a defendant “was

an organizer or leader of a criminal activity that involved five or more

participants.” U.S.S.G. § 3B1.1(a).

      In the application notes to § 3B1.1, the advisory committee defined

“participant”: “A ‘participant’ is a person who is criminally responsible for the

commission of the offense, but need not have been convicted. A person who is

not criminally responsible for the commission of the offense (e.g., an undercover

law enforcement officer) is not a participant.” U.S.S.G. § 3B1.1 cmt. n.1. In

light of the well-established presumption of consistent usage, and in the absence

of any contrary authority, we conclude that the word “participants” for purposes

of the gross-receipts enhancement of U.S.S.G. § 2B1.1 should be read

consistently with the role-in-the-offense definition of the essentially identical

term in the commentary to U.S.S.G. § 3B1.1. And, under that definition, a

“participant” need not have committed the same criminal offense as the

defendant; it is enough that the “participant” was criminally involved in—and,

therefore, culpable for—the same relevant conduct, as that concept is explicated

in U.S.S.G. § 1B1.3. See, e.g., United States v. VanMeter, 278 F.3d 1156, 1166

(10th Cir. 2002).

                                         39
      In VanMeter, we explained that courts must “consider all relevant conduct

under U.S.S.G. § 1B1.3 in determining the application of a U.S.S.G. § 3B1.1

aggravating role adjustment.” Id. And we specifically held that it made “no

difference” that the alleged participant “may not have been responsible for

violating [the statute under which the defendant was convicted],” because the

defendant had “supervis[ed]” the alleged participant’s criminally culpable acts

that were a part of the “relevant conduct” for the defendant’s offense of

conviction. See id.

      Thus, applying U.S.S.G. § 3B1.1’s definition of “participant” in the context

of the gross-receipts enhancement, the material inquiry is not whether the home

borrowers recruited by Mr. Powers were charged or convicted of the same crimes

but, rather, whether they were involved in the same relevant conduct as Mr.

Powers—that is, whether they should be considered criminally culpable actors in

the same relevant conduct. Put another way, in seeking under U.S.S.G.

§ 2B1.1(b)(14)(A) to identify participants—that is, those individuals whose

obtaining of monetary receipts affects the application of the gross-receipts

enhancement—courts should focus on the putative participants’ criminal

culpability for the same relevant conduct attributed to the defendant; participants

can include individuals who have been neither charged nor indicted, and




                                         40
participants need not be culpable for the same offense as the defendant. 12

      In this case, the standard we have articulated means that if the buyers were

criminally culpable for acts that are part and parcel of the relevant conduct of Mr.

Powers’s mortgage fraud scheme, the cash back that they received would not

qualify as “gross receipts to the defendant [i.e., Mr. Powers] individually, rather

than to all participants,” and thus could not be factored into the determination of

whether Mr. Powers received the requisite amount, in excess of $1,000,000,

which would trigger the enhancement under U.S.S.G. § 2B1.1. The district court

did not make factual findings regarding the criminal culpability of the buyers in

Mr. Powers’s relevant conduct. Accordingly we are not in a position to determine

whether any or all of the buyers ought to have been considered participants for

purposes of the gross-receipts enhancement under U.S.S.G. § 2B1.1. For this

reason, we remand the case to the district court with instructions to vacate the

portion of its judgment related to Mr. Powers’s sentence; to determine, consistent

with this order and judgment, which of the buyers were “participants” in Mr.

Powers’s scheme; and to re-sentence Mr. Powers accordingly.

                                          V


      12
             Mr. Powers has consistently expressed his approval of a similar view,
arguing that the buyers in this case should have been counted as participants for
purposes of the gross-receipts enhancement simply because they “were involved
in the fraud scheme.” Aplt. Opening Br. at 64; see also id. (arguing that
“participants” should not be limited to codefendants or distinguish between
indicted and unindicted individuals).

                                         41
      For the foregoing reasons, we AFFIRM Mr. Powers’s conviction but

REMAND the case to the district court with directions to VACATE Mr.

Powers’s sentence and re-sentence Mr. Powers consistent with this order and

judgment and, in particular, with our analysis of the term “participants” in the

gross-receipts enhancement of U.S.S.G. § 2B1.1. 13



                                              Entered for the Court



                                              JEROME A. HOLMES
                                              Circuit Judge




      13
            The government filed a motion to supplement the record, which Mr.
Powers did not oppose. We GRANT that motion.

                                         42
