In the
United States Court of Appeals
For the Seventh Circuit

No. 99-1724

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

ANGEL C. LOPEZ,

Defendant-Appellant.



Appeal from the United States District Court
for the Central District of Illinois.
No. 97 CR 20014--Michael M. Mihm, Judge.


Argued October 27, 1999--Decided August 17, 2000



  Before FLAUM, Chief Judge, HARLINGTON WOOD, JR. and
EVANS, Circuit Judges.

  HARLINGTON WOOD, JR., Circuit Judge. Angel Lopez
("Lopez") pleaded guilty to conspiracy to
embezzle and misapply credit union funds and
conspiracy to execute a scheme to defraud. Lopez
was sentenced to thirty-eight months in prison
and to pay restitution in the amount of
$1,029,867. Lopez challenges the sentencing
determination and the amount of restitution. We
affirm.

I.   BACKGROUND

  It is necessary to try to unravel the
convoluted and complicated transactions involved.
Credit Union One ("CU1") was a state-regulated
credit union incorporated under the laws of
Illinois, but also falling within the regulatory
authority of the National Credit Union
Administration ("NCUA"), which organizes and
approves federal credit unions. CU1 was federally
insured by the National Credit Union Share
Insurance Fund ("NCUSIF").

  Lopez graduated from high school and began
working in the financial field in 1959. He was
hired by CU1 in 1976 as assistant general
manager. He was promoted to general manager in
1978. In 1979, his title was changed to
president. Less than a year later, Lopez became
a member of CU1’s board of directors. All board
members were required to sign an oath of
fiduciary duty to act in the best interests of
the credit union and to consider the interests of
the credit union before their own personal
interests. Board members were to receive no
compensation for their services, other than
reasonable and necessary reimbursement for
expenses incurred while on official credit union
business. The board of directors provided
oversight and direction for the operation of the
credit union, with the primary goal of offering
high savings rates. To offset the higher savings
rate, CU1 charged higher interest rates on loans.
Unfortunately, this left a large pool of tempting
cash.

  Richard Binet ("Binet") was CU1’s chairman of
the board throughout Lopez’s employment. Binet
managed an investment portfolio of approximately
$82 million on a yearly average from 1986 to
early 1990. Lopez testified that he and Binet did
not sit down and form an elaborate plan on how
they would defraud CU1; it was basically an
arrangement where Lopez and others supported
Binet’s actions and were consequentially rewarded
by Binet. Lopez stated that anyone who objected
to Binet’s activity was quickly removed from the
board. During his tenure as president, Lopez
authorized at least $400,299 in direct and
indirect consulting fees to Binet, in addition to
authorizing CU1 purchases of two automobiles for
Binet at a total cost of $40,644.

  Binet had CU1’s board contract with CUSI, Ltd.,
a corporation formed by Binet, which received
payments totaling approximately $17,000
authorized by Lopez. According to Binet, the
services CUSI was to provide were illusory and of
no value. Lopez was also an officer of CUSI.
After CUSI stopped receiving money for Binet, he
created Credit Union Management, Inc. to receive
CU1 money for his benefit.

  Binet also had CU1 create a travel agency known as
CU1 Travel. Lopez was listed as the "owner" of CU1
Travel and his wife as manager. Following an audit
by Deloitte & Touche in 1989, travel agency losses
of $141,231 were listed for 1988 and subsidiary
losses of $25,539 for 1989.

  Binet, after complaining to the board about the
marketing efforts being made on CU1’s behalf,
proposed that Hana Advertising Associates, Inc.
be given the marketing contract for CU1. The
board agreed. During interviews with the FBI,
after making a proffer (use immunity) agreement,
Lopez stated that he knew Binet owned numerous
companies, but that he (Lopez) was not involved
in any of the companies. Although Lopez stated
that "he had no involvement with a company called
. . . Hanah [sic]," Hana Advertising was
incorporated under the laws of Illinois with
Binet listed as president and Lopez as a
director. Without the board’s knowledge or
approval, Lopez ordered checks totaling
approximately $230,000 to be issued to Hana
Advertising from 1986 to 1987./1 Lopez stated
that he signed the contract and approved the
checks to Binet because "that [wa]s the way Binet
wanted it," and that Lopez’s relationship with
the board was basically, "You scratch my back,
I’ll scratch yours." Lopez stated that if Binet
left, Lopez knew his lucrative compensation
package/2 would be "seriously reduced."

  Lopez also stated that he knew Binet owned or
controlled a company called Innovo, but did not
admit to any involvement with that company
either. However, Lopez later admitted to owning
a substantial amount of stock in Innovo Group
Inc., which was owned by Binet. Innovo received
a contract from CU1 in order to expedite the
purchase of plastic bags. Lopez eventually sold
his shares in Innovo, making a net profit of
approximately $100,000. Lopez also facilitated a
CU1 loan of approximately $100,000 to Innovo,
which was never paid back.

  Having worked without a contract since 1976,
and being concerned about a retirement plan, in
1984 Lopez had his lawyer prepare an employment
contract which included a provision allowing
Lopez to retire after ten years of employment. If
Lopez exercised the retirement option, the
contract required CU1 to hire Lopez for a period
of not less than ten years as a "special
consultant" at an annual salary equal to fifty
percent of his highest annual salary earned while
president of CU1. The contract was self-renewing
every five years and specified Lopez could not be
terminated for "negligent or inadvertent
omissions or violations of regulatory rules or
laws." The board never reviewed or discussed this
contract. Under Binet’s direction, the contract
was bought out in 1988 for $580,000, which the
government argued was approximately $300,000 more
than its true value.

  Lopez also stated that dealing with Binet
became a necessity after Binet decided that CU1
should invest in collateralized mortgage
obligations ("CMOs")/3 and collateralized
mortgage obligation residuals ("CMORs")./4 Both
Lopez and Binet stated that Binet was the only
person at CU1 who had any knowledge of CMOs/CMORs
and that they and the board did not want to hire
an outside consultant who might recommend
needless transactions in order to increase
commissions. Lopez authorized payments to Binet
as an investment advisor in the amounts of
$78,000 for 1988 and $45,500 for 1989.

  Although Lopez continually denied awareness of
or participation in a CMOR transaction with Binet
for personal profit, Binet stated that in
February 1988, he and Lopez used $8.8 million of
CU1 money to purchase a CMOR, with CU1 owning
eighty percent of the investment and Lopez and
Binet owning twenty percent. Binet stated the
CMOR was sold for a $1 million gain. He also
testified that he had destroyed a fax from Lopez
on June 6, 1988, which showed a portion of the
money being returned to CU1. Lopez received part
of his profits in the form of a "deferred
compensation" payment of $250,000 orchestrated by
Binet, and through the transfer of a universal
life program insurance policy for Lopez which
Binet had CU1 purchase in 1986. The policy, known
as a "key man" policy, insured that if Lopez
died, CU1 would own the cash flow from the
policy. According to Binet, he had the ownership
of the policy changed from CU1 to Lopez and Lopez
was able to redeem the policy for a cash value of
$265,000.
  In February 1989, Lopez received notice that
NCUA was going to conduct a review of CU1 in
connection with CU1’s status as an insured of the
NCUSIF. NCUA has mandatory regulations concerning
the buying and selling of CMOs and CMORs. As one
of NCUSIF’s insureds, CU1 had agreed to follow
the NCUA regulations. After the review, NCUA
notified Lopez of numerous concerns regarding the
fact that CU1 had nearly fifty percent of its
assets invested in CMOs/CMORs. CU1 agreed to sell
fifty percent of the CMO/CMOR investments by
December 31, 1989, and agreed to dispose of the
remaining fifty percent by the following year.
However, Binet and Lopez decided to seek private
insurance in order to distance CU1 from NCUA
examinations and federal regulations. Presented
as a money-saving step, the board voted to
terminate its share insurance with NCUA and
sought private share insurance coverage with the
National Deposit Insurance Corporation (now known
as "ASI"). On February 11, 1990, the insurance
conversion became effective and CU1 was relieved
of its obligation to comply with NCUA’s
requirements.

  During a joint examination of CU1 by ASI and
the Illinois Department of Financial Institutions
("DFI") in February 1991, it was noted that CU1
was not acting on divesting the CMOs/CMORs. As a
result, CU1 entered into a Letter of
Understanding and Agreement with the DFI and ASI
promising to engage a portfolio manager to assist
in the pricing and sales of all the CMOs/CMORs
and immediately cease payment of all compensation
to the board of directors. Lopez admitted he
provided false information to the DFI regulators
about the CMOs/CMORs.

  Lopez was removed as president and as a
director of CU1 in 1992 following an
investigation by the DFI. On February 14, 1997,
Lopez signed a proffer agreement which granted
him use immunity for any information he provided
which was relevant to the criminal activity
engaged in while at CU1. Lopez was interviewed by
government agents for three days and also
assisted the government in locating and arresting
Binet. On December 29, 1997, Lopez signed a plea
agreement and on January 5, 1998, reviewed the
plea agreement before the district court and
pleaded guilty to conspiracy to embezzle and
misapply funds belonging to CU1 and conspiracy to
execute a scheme to defraud.

  The court’s sentencing calculations for fraud
began with a base offense level of 6 under sec.
2F1.1(a) of the 1989 United States Sentencing
Guidelines ("U.S.S.G." or the "Guidelines"),/5
with an 11 level increase incurred for a loss of
$1,051,043./6 U.S.S.G. sec. 2F1.1(b)(L).
Additional increases were applied as follows: 2
levels for more than minimal planning, U.S.S.G.
sec. 2F1.1(b)(2)(A); 2 levels for abuse of a
position of public or private trust and use of
his position which "significantly facilitated the
commission or concealment of the offense", sec.
3B1.3; and 2 levels for obstruction of justice
when testifying untruthfully before the grand
jury about the CMOR, sec. 3C1.1 comment. n.1(c).
These additions created an adjusted offense level
of 23. A 2 level downward adjustment for
acceptance of responsibility under sec. 3E1.1
comment. n.4, was also made, which resulted in a
total offense level of 21. With no prior criminal
history, Lopez’s Guideline range for sentencing
was thirty-seven to forty-six months. U.S.S.G.
sec. 5A. The district court sentenced Lopez to
thirty-eight months incarceration, and, under the
Mandatory Victim Restitution Act of 1996
("MVRA"), ordered restitution to CU1 in the
amount of $1,029,867./7

  Lopez contends that the district court erred on
eight issues: (1) by violating the immunity
proffer to enhance Lopez’s sentence, (2) by
enhancing his sentence for obstruction of
justice, (3) by using gain to Binet as a
substitute for loss where there was no loss to
the victim, (4) by basing the estimated gain on
unreliable and contradictory evidence, (5) by
determining an arbitrary value for services
rendered by Binet, (6) by failing to reduce the
Guideline losses by the value of the cars
recovered by CU1, (7) by enhancing the loss
figure with bonuses paid to certain CU1
employees, and (8) by violating the Ex Post Facto
Clause in applying the MVRA.

II. ANALYSIS
A. Violation of Immunity Agreement

  Lopez argues that the February 1997 proffer
agreement providing use immunity prohibited the
district court from using any information about
the personal CMOR transaction in Lopez’s
sentencing. The terms of the immunity agreement
provide:

[N]o statement made or information provided by
[Lopez] pursuant to this agreement may be used
directly against your client in any criminal
case, including sentencing . . . . [Lopez] will
provide complete and truthful information . . .
regarding his criminal conduct and everything he
knows or has reason to believe about the criminal
conduct of others. . . . Should [Lopez] knowingly
make any materially false statement or omission
in providing information under this agreement,
the government will be entitled to use his
statements and evidence he provides directly to
institute and support a criminal prosecution for
any offense as well as a prosecution for giving
false statements and perjury. . . . [Lopez] must
neither conceal or minimize his own actions or
involvement in any offense, nor conceal,
minimize, fabricate, or exaggerate anyone else’s
action or involvement in any offense. He must be
completely truthful about the facts whatever
those may be.

(Emphasis in original.)

  After signing the proffer, Lopez testified
before government agents and the grand jury that
Binet supervised the CMO/CMOR investments for
CU1. He stated that when Binet approached him to
purchase a CMOR with CU1’s money for their own
profit, he refused to participate in such an
action and had no idea if Binet ever did so.
Binet later testified that he and Lopez made such
an investment, that Binet had had records of
Lopez’s participation which he had since
destroyed, and that Lopez personally benefitted
from the transaction. In addition, Lopez failed
to mention the fact that he had conspired to
alter the minutes of the board meetings, although
the minutes were discussed with the government
and Lopez knew the government was relying on the
minutes in its investigation.

    "As a contract, a proffer agreement must be
enforced according to its terms." United States
v. Cobblah, 118 F.3d 549, 551 (7th Cir. 1997)
(citation omitted). As in Cobblah, the proffer
"contract" obligated Lopez to give statements
that were entirely truthful. See id. The proffer
emphasized that Lopez should not seek to conceal
or minimize his own actions in the offenses
involved and clearly stated that any false
statements or omissions could then be used
against him. Given the language of the proffer,
the government was within its rights to consider
the proffer agreement had been voided due to
Lopez’s omissions concerning the CMOR and the
alteration of the minutes. See id. We cannot say
the district court erred in its determination
that the government had established, by a
preponderance of the evidence, that Lopez did
know about the CMOR used for his and Binet’s
personal profit and that Lopez concealed the fact
that he and others changed the board minutes. See
id. Lopez violated the terms of the proffer,
making it unenforceable.
  Furthermore, in his plea agreement, signed
December 29, 1997, ten months after the proffer,
Lopez admitted to the following:

  On April 20, 1988, the defendant and Richard
Binet caused $8.8 million of CU1 funds to be used
to purchase a CMO residual with CU1 owning 80% of
the investment and the defendant and Binet owning
20% of said investment. Said use of CU1 funds was
never made known to the Board of Directors and
the defendant knew that individuals were not
entitled to own REMIC/8 investments. When said
investment was sold for a $1 million gain, the
defendant knew that the benefit was not provided
to CU1. The defendant himself did not take any of
these funds directly but benefitted from a
$250,000 cash payment under the heading of
Deferred Compensation Plan. Further, the
defendant benefitted when a life insurance policy
which had originally been purchased by CU1 as a
key-man policy, beneficiary of which was to be
CU1, was transferred to him personally.

Lopez also admitted in the plea agreement that he
conspired to alter the minutes of the board
meetings. The plea agreement also stated that the
government was requesting a 2 level enhancement
for obstruction of justice, based on Lopez’s
failure to fully disclose the CMOR transaction
and his failure to disclose alteration of the
minutes.

  Lopez discussed the terms of the plea agreement
with the district court at the plea hearing.
Lopez stated that the plea agreement represented
"every understanding" he had with the government
and that he understood the terms of the plea
agreement. Lopez cannot invoke the proffer after
agreeing to the admissions and terms set forth in
the plea agreement.

B.   Obstruction of Justice
  The Guidelines provide for an increase of 2
levels if the offender obstructed justice during
the investigation or prosecution of his offense.
U.S.S.G. sec. 3C1.1./9 The plea agreement states
that "[p]ursuant to sec. 3C1.1, the defendant may
receive 2 points for obstructing or impeding the
administration of justice during the
investigation or prosecution of the instant
offense . . . ." More specifically, the plea
agreement notes that because Lopez admitted his
guilt after being confronted with evidence that
he caused the minutes to be altered, he would
fall into a sentencing category under sec. 3E1.1
comment. n.4, which allows for both an
obstruction of justice and an acceptance of
responsibility adjustment to be applied. Lopez
also admitted in the plea agreement to knowledge
of the CMOR transaction Binet engineered and to
receiving personal benefits from the profits of
that transaction.

  "To establish an obstruction of justice, the
sentencing court must make an independent factual
finding that the defendant engaged in a willfull
attempt to provide false testimony." United
States v. Sinclair, 74 F.3d 753, 762 (7th Cir.
1996) (citing United States v. Dunnigan, 507 U.S.
87, 93-96 (1993)). This finding may be reversed
only if clearly erroneous. Id. (citation
omitted). Based on the evidence of Lopez and
Binet’s intertwined dealings, the substantial
amounts of money funneled to Lopez, and the
testimony of Binet about both the minutes and the
CMOR, the court determined that Lopez had
willfully withheld information about material
facts. The court stated, "I . . . believe there
were things you didn’t tell them that you were
aware of and should have told them and didn’t
until they were discovered somewhere else . . .
." Given these findings, we cannot say the
district court’s conclusion that Lopez’s
testimony was intentionally withheld, and not the
result of confusion, mistake, or faulty memory,
was clearly erroneous. See id. Moreover, because
the district court recognized this finding was a
factual determination based in large part on an
issue of credibility, such credibility
determinations "can virtually never be clear
error." United States v. Hickok, 77 F.3d 992,
1007 (7th Cir. 1996) (quoting Anderson v. Bessemer
City, 470 U.S. 564, 575 (1985)); see also United
States v. Fiore, 178 F.3d 917, 924 (7th Cir.
1999). We also note that the court’s enhancement
for obstruction of justice is not incompatible
with a reduction for acceptance of
responsibility. See United States v. Buckley, 192
F.3d 708, 711 (7th Cir. 1999); United States v.
Ramunno, 133 F.3d 476, 480 (7th Cir. 1998); United
States v. Lallemand, 989 F.2d 936, 938 (7th Cir.
1993).

C.   Gain as Substitute for Loss

  Lopez argues the district court erred in using
the estimated profit made on the CMOR transaction
by his co-conspirator Binet towards Lopez’s
sentence, even though the court determined that
there was no "actual loss" to CU1 because the
$8.8 million "borrowed" from CU1 was returned,
albeit with some (but not all) profit made on the
transaction. Lopez refers us to Application Note
8(b) to U.S.S.G. sec. 2F1.1 which, he asserts,
provides that a loss figure should be reduced "by
the amount the lending institution has recovered
or can expect to recover." There is no such
language in the 1989 Guidelines. This section
first appears in the 1991 Guidelines, sec. 2F1.1
comment. n.7(b), which deals specifically with
fraudulent loan application and contract
procurement cases, and pertains to a defendant
who understates debt information to obtain a
loan./10 There is no language in sec. 2F1.1 of
the 1989 Guidelines which requires the district
court to offset the amount of loss, although
comment. n.10 does allow for consideration that
a total dollar loss may overstate the seriousness
of a crime when "understating debts to a limited
degree in order to obtain a substantial loan
which the defendant genuinely expected to repay
. . . ." However, this language is not applicable
to the instant case, where Binet and Lopez did
not manufacture a "fraudulent loan" scheme but
simply took and used CU1’s money outright.

  Under sec. 2F1.1 comment. n.8 of the 1989
Guidelines, "The offender’s gross gain from
committing the fraud is an alternative estimate
that ordinarily will understate the loss."
Section 2F1.1 "allow[s] the defendants’ gain to
be used as a basis for calculating an approximate
loss when evidence of the exact amount of loss is
not available." United States v. Andersen, 45
F.3d 217, 221 (7th Cir. 1995).

  While the meaning of loss under sec. 2F1.1
presents a question of law subject to de novo
review, United States v. Holiusa, 13 F.3d 1043,
1045 (7th Cir. 1994), the district court’s finding
on the amount of loss is reviewed for clear error
only. United States v. Dillard, 43 F.3d 299, 309
(7th Cir. 1999).

  Lopez argues that because the $8.8 million was
returned to CU1, there was no loss. He does not
deny the misapplication of funds for the CMOR
occurred. Lopez also maintains that because Binet
supervised and benefitted the most from the
transaction, he should not be held accountable
for Binet’s gain. Lopez admitted in his plea
agreement that he conspired with Binet to
embezzle, misapply, and defraud funds from CU1.
Section 1B1.3 comment. n.1, states:

In the case of criminal activity undertaken in
concert with others, whether or not charged as a
conspiracy, the conduct for which the defendant
"would be otherwise accountable" also includes
conduct of others in furtherance of the execution
of the jointly-undertaken criminal activity that
was reasonably foreseeable by the defendant.

  Binet testified this particular CMOR transaction
was purportedly made on behalf of CU1, but that
twenty percent of the profit was to go to Lopez
and to him. He also testified that Lopez was
involved in helping to transfer and receive the
monies. The transfer of $8.8 million of CU1 funds
was documented by the government. Therefore, any
estimated profit which Binet made on the
investment was correctly determined to be a loss
to CU1. Binet’s profit from this particular
transaction would not have been realized without
his illegal use of CU1’s funds. See United States
v. Marvin, 28 F.3d 663, 665 (7th Cir. 1994). The
profits were "intertwined with and an ingredient
of [defendant]’s overall fraudulent scheme." See
id. Additional punishment is merited where
sufficient evidence provides for determination of
monetary loss. See United States v. Schneider,
930 F.2d 555, 559 (7th Cir. 1991).

  The district court did not clearly err, based
on Binet’s statements that Lopez was involved in
this particular CMOR transaction, and Binet’s
testimony, along with Lopez’s testimony and
evidence in the record concerning benefits
received by Lopez, in determining that the
estimated profit from the CMOR transaction should
be applied as a factor in Lopez’s sentencing.

D.   Estimated Gain Based on Unreliable Evidence

  "Generally, the defendant’s gain may provide a
reasonable approximation of a victim’s loss, and
may be used when more precise means of measuring
loss are unavailable." Andersen, 45 F.3d at 221.
The amount of loss sustained by a victim must be
established by a preponderance of the evidence.
18 U.S.C. sec. 3664(d). In determining a sentence
under the Guidelines, the court has an
"obligation to employ fair procedures to
determine the accuracy of information used in
sentencing." United States v. Franz, 886 F.2d
973, 980 (7th Cir. 1989); see also United States
v. Agyemang, 876 F.2d 1264, 1270 (7th Cir. 1989).
"[T]he court properly discharge[s] its obligation
under sec. 2F1.1 of the Sentencing Guidelines by
reducing the available information to a
’reasonable estimate’ of the loss." United States
v. Haddon, 927 F.2d 942, 952 (7th Cir. 1991);
U.S.S.G. sec. 2F1.1 comment. n.8. "Every factual
inaccuracy does not amount to a constitutional
violation." Franz, 886 F.2d at 980 (citations
omitted). The burden of proof on appealing a
district court’s loss calculation requires the
defendant to show that the determination "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)).

  Based on calculations from incomplete
documentation concerning the CMOR
transaction,/11 Binet stated that he believed
he, through his company, Credit Union Mortgage,
had received $1,360,000. He said, "I don’t know
the exact amount, but it was at least a million."
He also stated that he was certain that he had
received $800,000 because he used that amount to
fund Innovo, his company in Texas. Lopez argues
that because Innovo’s annual report listed a
"debt" balance of $413,754 during the relevant
period when Binet was siphoning off his profits
from the CMOR, that is the amount that should be
considered Binet’s profit. Binet also testified
that he recalled approximately $600,000 had been
funneled into Innovo by the time it went public.
Although the district court noted that Binet "had
a lot of things going on at that same time . . .
that he was the man in terms of all of this
movement of money from one place to another, and
I’m not sure that it’s totally clear in his mind
what he did," the court believed Binet had "made
an effort to be truthful in his testimony."

  To the extent that the district court’s
findings rest on credibility determinations, they
command even greater deference than ordinary
factual findings. Fed.R.Civ.P. 52(a); see Johnson
v. Zerbst, 327 U.S. 106, 111-12 (1946). This
court may not re-judge credibility and may
reverse only if, after reviewing the record, we
are left with the firm belief that the district
court made a mistake. Zeige Distributing Co.,
Inc. v. All Kitchens, Inc., 63 F.3d 609, 612 (7th
Cir. 1995) (citation omitted). "Congress has
mandated this deferential standard of review, see
18 U.S.C. sec. 3742(e), and we do not second-
guess the sentencing judge." United States v.
McEntire, 153 F.3d 424, 431 (7th Cir. 1998)
(citations omitted).

  The district court calculated the estimated
profit at $600,000. This amount was arrived at
after hearing Binet testify at an alleged co-
conspirator’s trial, in addition to three
separate sentencing hearings. The court reviewed
all of the available documentation concerning the
CMOR during the three sentencing hearings and
asked questions of both parties in seeking to
reconcile the documentation with the testimony.
The record indicates the district court’s
inquiries were sufficiently searching to ensure
the probable accuracy of the available evidence.
See United States v. Beler, 20 F.3d 1428, 1443
(7th Cir. 1994). The district court judge stated
repeatedly that "Mr. Binet has been credible in
his testimony." Although the district court
stated there was sufficient evidence to support
a finding of $800,000 or more, the court reduced
the amount of loss to $600,000, given the
"grossly incomplete" records of the CMOR
transaction. The court noted the $413,754 loan
amount but, from the documents and testimony,
believed the profit on the $8.8 million CMOR to
be more than that.

  We are satisfied the district court "correctly
applied the guidelines to findings of fact that
do not leave us with the definite and firm
conviction that a mistake has been committed."
United States v. Jordan, 890 F.2d 968, 972 (7th
Cir. 1989). Based on the evidence available, the
district court did not clearly err in determining
the estimated profit loss to CU1 was $600,000 on
a CMOR transaction involving $8.8 million and in
applying that amount to Lopez’s sentence.

E.   Arbitrary Determination of Binet’s Services

  Binet received $399,500 during the four years
he managed CU1’s investment portfolio. Lopez
argues the entire amount should be deducted from
CU1’s losses because the portfolio earned money
during every year in question and Binet was worth
that much in managing a portfolio of
approximately $82 million on average. Of course,
this amount was "paid" to Binet through Lopez’s
manipulations and without the board’s knowledge.

  The government proposed an offset based on the
annualized investment fees for 1988 and 1989,
$27,833.60 and $17,858.01 respectively, but
divided the figures in half to take into account
the amount of time Binet spent "working" at CU1
for personal gain. The defendants proposed fees
based on percentage points of the total of net
investments for each year, resulting in
calculations of approximately $300,000 for 1988,
$353,000 for 1989, and $428,000 for 1990.

  The district court followed Schneider in
determining that there should be a certain offset
where the defendant provides a service. See 930
F.2d at 558./12 However, as the government
noted, when the NCUA, DFI, and ASI came in, they
all agreed that CU1 was not being managed well
and was involved in numerous questionable
investments, in addition to the embezzlement and
fraud later discovered. After hearing Binet’s
testimony, the district court noted the
difficulty in quantifying an amount for Binet’s
services to CU1 in the absence of any records
because Binet had so many "projects" going on, it
was difficult to separate the time spent on
legitimate CU1 investment business.

  Binet was not a certified or licensed
investment broker or manager nor was he
registered with the SEC. The board was never
given the opportunity to determine what they
might wish to pay him or someone else. The court
was concerned that Binet was not licensed as an
investment manager and that he involved CU1 funds
in higher risk investments, both factors which
lowered the value of the services rendered.

  The district court’s determination of loss under
sec. 2F1.1 (b)(1) of the Guidelines is a finding
of fact reviewable for clear error only. United
States v. Strozier, 981 F.2d 281, 283 (7th Cir.
1992). The district court noted that testimony
indicated most credit unions do not have salaried
investment managers, as was the case with CU1.
The court then determined the offset to be one-
fifth of the $399,500 (the amount Binet had
chosen to "pay" himself); that is, $79,900 for
the four-year period. Because there are no
precise figures, as in Schneider, where the
difference between the contract price and the
contractor’s costs was used as the measure of
damages rather than the full contract price, 930
F.2d at 558, the district court, after hearing
methods of calculations from both parties,
determined the amount based on a percentage of
Binet’s self-remuneration.

  We agree that Binet’s services should not be
calculated on a par with a licensed professional
who does not commit embezzlement or fraud with a
client’s money. Given the annualized investment
fees of $27,833.60 for 1988 and $17,858.01 for
1989, the district court’s fee of $19,975 per
year is a "reasonable estimate," Haddon, 927 F.2d
at 952, and is not "outside the realm of
permissible computations." Hassan, 211 F.3d at
383 (citation omitted).

F.   Failure to Reduce Loss by Value of Cars

  Lopez makes the same argument here he used in
opposing Binet’s gain as a measure of loss, again
referring us to "Application Note 8(b) to
U.S.S.G. sec. 2F1.1" which is not found in the
1989 Guidelines. We repeat, that note is not
applicable to the instant case.

  The court stated that the loss amount for
sentencing was determined by the original capital
outlay for the two cars because the defendants
had no right to purchase the vehicles with CU1
funds. There is no dispute that the original
expenditures for the two cars were $20,767 and
$19,877. Lopez argues that the trade-in and/or
resale value of each car should be deducted from
the loss amount. The district court did deduct
the trade-in/resale values from the restitution
amount, but stated that "the loss was determined
by the amount of [CU1] money that was expended to
purchase these items or lease them . . . ." The
district court did not clearly err in using the
purchase price of the cars for sentencing
purposes.

G.   Employee Bonuses

  Binet testified that in February 1990 a payment
of $13,852 was made to Charles Wiseman, an
employee of CU1. Both Binet and Lopez testified
that Wiseman and several other employees assisted
in the cover-up of irregularities at CU1 prior to
obtaining private insurance. Lopez testified that
these bonuses were approved by the board.
Although Lopez stated that most or all employees
received annual bonuses, the bonuses for these
particular employees (and only these employees)
were issued on February 28, 1990. The insurance
conversion became effective on February 11, 1990.
The government maintains the timing of the
bonuses to these particular employees indicates
the payments were payoffs for assisting with the
fraud.

  Minutes of the board meetings from December
1986, December 1987, and December 1989 state that
employee year-end bonuses were authorized at
those times. The district court found that the
people involved and the timing indicated the
payments were directly related to the change in
insurance. We cannot say the district court
committed clear error in making this
determination.

H.   Restitution Ex Post Facto Claim

  Lopez argues that ordering restitution under the
MVRA, 18 U.S.C. sec. 3663A,/13 which requires
restitution be ordered "without consideration of
the economic circumstances of the defendant," 18
U.S.C. sec. 3664(f)(1)(A), violates the Ex Post
Facto Clause of the Constitution, Art. I, sec. 9,
cl. 3. He asks us to overrule our holding in
United States v. Newman, 145 F.3d 531, 537 (7th
Cir. 1998) (finding that the MVRA applies to
cases in which a defendant is convicted on or
after April 24, 1996, the date of the enactment
of the MVRA, even though the criminal conduct may
have occurred prior to April 24, 1996).
  Congress amended the Victim and Witness
Protection Act ("VWPA") in 1996 in an effort to
guarantee restitution to the victims of criminal
conduct. See Newman, 145 F.3d at 537. The Ex Post
Facto Clause prohibits the enactment of a "law
that changes the punishment, and inflicts a
greater punishment, than the law annexed to the
crime, when committed." Calder v. Bull, 3 U.S.
386, 390 (1798). In Newman, we held that
restitution does not qualify as criminal
punishment. 145 F.3d at 538; see also United
States v. Black, 125 F.3d 454, 467 (7th Cir.
1997). We observed in Newman that other courts
disagree with this finding and the Eighth
Circuit, in particular, does not agree with our
characterization of restitution under the VWPA.
Id. at 539.

  Lopez notes the split in the circuits on this
issue and asks us to adopt the argument of the
Tenth Circuit in United States v. Nichols, 169
F.3d 1255 (10th Cir. 1999). His argument is
misplaced, as Nichols states, "[W]e accept the
view of the Seventh Circuit [in Newman] that the
Ex Post Facto Clause does not bar application of
the MVRA to a defendant whose criminal conduct
occurred before the effective date of the statute
and reject the views of the Second, Third,
Eighth, Ninth, Eleventh and D.C. circuits to the
contrary." 169 F.3d at 1280 n.9.

  We decline to reconsider the holding in Newman.

III.   CONCLUSION

  Based on the above-stated reasons, we affirm
the findings of the district court.



/1 Although several checks were issued in 1986, the
marketing contract was signed on May 16, 1987 and
terminated in December 1987. According to Lopez’s
testimony, Binet instructed Lopez to use the name
Hana Advertising on the 1986 checks for Binet’s
"work performed," even though Binet had not yet
created the contract using Hana Advertising’s
name. However, Lopez testified that the checks
had actually been written to Binet, but the IRS
1099 forms were issued in the name of Hana
Advertising.

/2 Lopez’s W2 form for 1989 listed $182,727 as his
annual salary.

/3 According to Barron’s Business Guide Dictionary of Banking
Terms 127-28 (Thomas P. Fitch et al. eds., 1990),
a CMO is a:
mortgage-backed bond secured by the cash flow of
a pool of mortgages. In a CMO, the regular
principal and interest payments made by borrowers
are separated into different payment streams,
creating several bonds that repay invested
capital at different rates. . . . A CMO pays the
bondholder on a schedule that differs from the
mortgage pool as a whole, and includes fast pay,
medium pay, and slow pay bonds to suit the needs
of different investors. The common arrangements
include: a fast-pay bond with a maturity much
shorter than the total pool; a bond paying
interest only for a period that may be fixed or
contingent on how prior CMOs perform, before
payment of principal begins; and a bond paying
variable interest based on an index . . . . Fast
paying bonds appeal mostly to savings and loans
seeking short-term liquidity investments, whereas
longer-term CMOs appeal to the investment needs
of pension funds and institutional investors. .
. .

/4 Barron’s Business Guide Dictionary of Banking Terms 524,
states that a CMO residual is:

cash flow resulting from the difference between
the income stream generated by a pool of
mortgages and the cash flow necessary to fund a
series of collateralized mortgage obligation
bonds. Also known as equity.

/5 The record states that the 1989 edition of the
Guidelines has been used to compute sentencing
for the crimes, which were committed from July
1984 through February 1990.

/6 The figure was derived from: profit from contract
buyout-$37,000; CMOR-$600,000; overpayment to
Binet through CUSI-$17,000; overpayment to Binet
through Hana Advertising-$230,799; direct
payments to Binet-$78,000 and $45,500; bonuses
paid to CU1 employees-$36,000; and purchase of
cars for Binet-$40,644, totaling $1,130,943, less
an offset for the value of Binet’s services
rendered to CU1 as determined by the district
court to be $79,900, resulting in a final total
of $1,051,043.

/7 This amount was derived from the $1,051,043
total, less an offset of $21,176 for the trade-in
and resale value of the two cars purchased for
Binet.

/8 A real estate mortgage investment conduit
("REMIC") is a "mortgage securities vehicle
authorized by the Tax Reform Act of 1986 that
holds commercial and residential mortgages in
trust, and issues securities representing an
undivided interest in these mortgages. . . .
similar to a collateralized mortgage obligation
(CMO) . . . ." Barron’s Business Guide Dictionary of Banking
Terms 497. Most of the parties involved in the
case did not understand the exact nature of each
of the investments involved and tended to use
CMO, CMOR, and REMIC interchangeably.

/9 U.S.S.G. sec. 3C1.1 (1989) states, "If the
defendant willfully impeded or obstructed, or
attempted to impede or obstruct the
administration of justice during the
investigation or prosecution of the instant
offense, increase the offense level by 2 levels."
/10 This language appears in sec. 2F1.1 comment.
n.8(b), of the most current Guidelines (1998).

/11 Neither party was able to obtain complete records
from the banks involved, in part due to the lapse
of time between the transaction dates in 1987-88
and the filing of the indictment in March 1997.
Also, according to Binet, most of the CU1
documents on this particular CMOR transaction
were diverted to him and were later destroyed. In
addition, information about this transaction did
not come to light until after Binet’s arrest in
1997.

/12 We note that Schneider limits this "offset"
calculation of loss to fraud cases "where the
fraud is discovered or otherwise interrupted
before the victim has been fleeced." 930 F.2d at
558. The fraud in the instant case was not
interrupted or discovered prior to completion of
the criminal activity. However, the government
does not argue that Binet should not receive an
offset for his services; there is no challenge to
the offset itself, only to the amount.

/13 Lopez mistakenly refers to the MVRA as 18 U.S.C.
sec. 4663A et seq.
