In the
United States Court of Appeals
For the Seventh Circuit
No. 06-3951
U NITED S TATES OF A MERICA,
Plaintiff-Appellee,
v.
M IR A LI,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 02-CR-825-1—Wayne R. Andersen, Judge.
A RGUED D ECEMBER 8, 2009—D ECIDED A UGUST 27, 2010
Before E ASTERBROOK, Chief Judge, and R OVNER and
T INDER, Circuit Judges.
R OVNER, Circuit Judge. Mir Ali, and his business
partner, Mohammad Shah, ran a grocery store and a
food stamp scam that defrauded the United States De-
partment of Agriculture (“USDA”) out of several million
dollars. They allowed food stamp recipients to exchange
food stamps for cash instead of food, a practice prohib-
ited by the food stamp program, see 7 U.S.C. § 2024, and
2 No. 06-3951
pocketed a portion of the proceeds. Ali pleaded guilty to
two counts of wire fraud, see 18 U.S.C. § 1343, and was
sentenced to 57 months’ imprisonment. On appeal, he
challenges his plea, his sentence, and the district court’s
orders of $4.9 million in restitution and $2.56 million
in forfeiture. We affirm the conviction and sentence
but remand with instructions to amend the restitution
award.
I.
Congress created the food stamp program to allow low-
income households to receive a greater share of the na-
tion’s food supply. 7 U.S.C. § 2011; see Affum v. United
States, 566 F.3d 1150, 1154 (D.C. Cir. 2009). Stores autho-
rized to participate in the program may accept food
stamps instead of cash for authorized food items and
then redeem those benefits with the government at face
value. See 7 U.S.C. § 2013(a). Illinois uses an electronic
card system known as LINK, similar to a debit card, to
process purchases with food stamps. See id. § 2016; United
States v. Haddad, 462 F.3d 783, 786 (7th Cir. 2006); United
States v. Alhalabi, 443 F.3d 605, 609 (7th Cir. 2006). The
LINK cards of qualified recipients are credited once a
month with benefits. Haddad, 462 F.3d at 786. When the
recipient uses the LINK card at a participating store to
obtain food, the store deducts the corresponding
benefits electronically with a specialized point-of-sale
machine and submits its total food stamp sales to the
USDA for reimbursement. Id.
No. 06-3951 3
Mir Ali, along with Mohammad Shah, owned and
operated Star Foods, Inc., a small grocery store in Chi-
cago. In 1996, Ali applied for Star Foods to participate
in the food stamp program. On his application he esti-
mated that Star Foods’s annual food stamp-eligible sales
would be $150,000 per year. He came to the attention of
law enforcement after Star Foods’s redemptions far
exceeded this estimate. Star Foods redeemed benefits
for over $640,000 in 1997. The next year, in which Star
Foods redeemed over $910,000 in benefits, two under-
cover agents posed as food stamp recipients looking
to exchange benefits for cash. They exchanged $231
and $230 in benefits for $150 in cash each. Star
Foods’s redemptions continued to escalate, amounting to
over $964,000 in 1999, over $1 million in 2000, over
$1.5 million in 2001, and over $1.8 million in 2002.
In 2005 Ali was charged with two counts of wire fraud
stemming from the agents’ undercover purchases. See 18
U.S.C. § 1343. (Shah was likewise indicted, but died
shortly thereafter.) In the indictment, the government
specified that Ali and Shah knowingly devised a scheme
to defraud the USDA by exchanging LINK card benefits
for cash. The government also sought forfeiture of almost
$4.9 million acquired from the scheme, including a resi-
dence and two bank accounts. See id. § 981(a)(c); 28
U.S.C. § 2461. Ali pleaded guilty to both counts without
a plea agreement, but sought a bench trial on the for-
feiture allegation.
At the plea hearing, the government described each of
the charges in the indictment and summarized the evi-
4 No. 06-3951
dence in support. After prompting from the court, the
government explained that each count carried a potential
penalty of 20 years’ imprisonment, a $250,000 fine, and 3-5
years’ supervised release. The total potential imprison-
ment, the government continued, would be 40 years
because the sentences could run consecutively. Ali stated
he understood that those were his potential penalties
and said that he was pleading guilty because he com-
mitted the crimes. His counsel then asked whether
the government would object to a 3-level adjustment
for accepting responsibility. See U.S.S.G. § 3E1.1. The
government stated it would not provided that Ali
was eligible. The court accepted the plea.
The district court then held a bench trial on the forfei-
ture allegation. The government stated it would use
the forfeiture proceeding to prove both the forfeiture
amount and, for purposes of sentencing and restitution,
the loss to the USDA. The government began by
asserting that Ali should forfeit $4,950,992.80, the
alleged proceeds of his wire fraud scheme, and pay
restitution in a like amount to the USDA. Ali countered
that the loss was only $461, the sum of the two under-
cover sales. In the course of the forfeiture hearing,
the government reduced the forfeiture amount to
$2,567,587.05 because the statute allowing for forfeiture
had not become effective until August 2000, two-and-a-
half years after Ali’s scheme began. The government
also revised the loss amount for restitution to $4,290,000.
The principal witness at the forfeiture proceeding
was Mireille Swain, a special agent with the USDA, who
No. 06-3951 5
testified to the existence and extent of the fraud. She
began by explaining that Star Foods had not bought
sufficient inventory to justify its redemptions. She com-
piled a comprehensive list of Star Foods’s monthly re-
demptions since 1997 to August 2002 and noted that
the monthly redemptions significantly exceeded Ali’s
estimate every year. And, Star Foods’s redemptions
also exceeded the redemptions of even much larger
local stores. Based on Star Foods’s bank accounts, it had
deposited $7,159,838 during the scheme, with more than
98% of these deposits consisting of electronic food
stamp redemptions.
She then compared Star Foods’s sizable deposits to
its purchased food and non-liquor stock, which she
assumed were all food stamp-eligible items. Relying
exclusively on Ali’s own business records, Swain deter-
mined that, although Star Foods deposited over
$7 million, Star Foods wrote checks totaling only
$1,829,290.39 to buy food and non-liquor stock. Some
purchases likely included non-food stock, but because
she assumed that all purchases were food stamp-
eligible purchases, this increased the amount of sales Ali
could justify. So, any discrepancy favored Ali. She also
concluded that Star Foods spent only $1.8 million on
food and non-liquor stock because she could not find
any evidence that Star Foods made purchases in any
other form, i.e., with cash. To this end, she reviewed
sixteen months’ of bank reconciliations that cate-
gorized purchases, but no category accounted for pur-
chases made with cash, and each had a reference
number that Swain determined corresponded to a check
6 No. 06-3951
number. She also spot-checked the daily expense
folders seized from Ali’s business and similarly found
that each invoice had a corresponding check. Thus, she
concluded that Ali spent $1,829,290.39 on food and non-
liquor stock.
Swain then estimated that the retail value of the food
and non-liquor stock was approximately $2.7 million. To
arrive at this figure, she applied a 50% markup (what
Swain estimated was the general retail markup for
grocery items) to the amount Star Foods spent on food
and non-liquor inventory. She then assumed that all
these sales were made with food stamps (another as-
sumption that favored Ali). Thus, she concluded, Ali
could justify $2.7 million in food stamp redemptions.
So Swain deducted this amount from the total food
stamps redeemed (approximately $7 million) and opined
that $4.29 million was not justified by Ali’s food and non-
liquor stock purchases. This unjustified amount, she
concluded, was the total loss to the USDA and the pro-
ceeds of Ali’s criminal scheme.
Finally, to calculate the forfeiture amount, Swain con-
sidered only Star Foods’s redemptions and sales after
the forfeiture law was effective. She found that, after the
law’s effective date, Ali redeemed $3,822,432.97 in food
stamps but had only $836,563.35 in food and non-
liquor stock purchases. After applying the 50% markup
($1,254,845.02), Swain concluded that approximately
$2.56 million was not justified by Ali’s food stock pur-
chases. Ali offered no evidence to refute the govern-
ment’s loss or forfeiture calculations.
No. 06-3951 7
After the hearing, the government inexplicably reverted
to its original $4,950,992 figure for restitution when it
gave the probation officer its official version of Ali’s
offense conduct, which the probation officer accepted
without comment. The presentence investigation report
also recommended that Ali not receive the adjustment
for accepting responsibility because Ali told the proba-
tion officer that he was innocent and pleaded guilty just
to get rid of the case. At the sentencing hearing, the
district court invited Ali to respond to whether he
should get the adjustment. Ali minimized his conduct
and said he was merely following Shah’s instructions.
He further insisted that he and Shah had not properly
recorded cash purchases for food and non-liquor stock,
so the government had understated his inventory and
overstated the loss to the USDA. Ali also asserted that
his was not the only store that gave cash for benefits.
After hearing Ali’s statements, the district concluded
that he had not accepted responsibility and would not
receive the adjustment. The district court also acknowl-
edged Ali’s objection to the government’s loss figures
but accepted the probation officer’s $4,950,992 recom-
mendation. The court then calculated Ali’s imprison-
ment range: his offense warranted a base offense level of
7 with an added 18 points for a loss between $2.5 million
and $5 million, see U.S.S.G. § 2B1.1(a), (b)(1)(J), and
when combined with his criminal history category I
yielded a guidelines range of 57-71 months’ imprison-
ment. The court ordered Ali to pay restitution of
$4,900,000, to forfeit $2,560,000, and sentenced him to 57
months’ imprisonment and 3 years’ supervised release.
8 No. 06-3951
II.
Ali appealed, and his lawyer filed a motion to with-
draw under Anders v. California, 386 U.S. 738 (1967),
contending that Ali had no non-frivolous issue to raise
on appeal. But we denied counsel’s motion and observed
that an argument premised on the discrepancy between
the $4.29 million that the government proved for restitu-
tion and $4.9 million that the district court ordered
would not be frivolous. Counsel raises a host of other
issues on appeal but ignores the one argument about
restitution that we considered non-frivolous. Ali now
attacks the voluntariness of his plea, the denial of the
adjustment for acceptance of responsibility, the reliability
of the government’s loss calculation, and the accuracy
of certain statements the government made at oral argu-
ment. We address each in turn.
A.
Ali first argues that he did not knowingly and intelli-
gently plead guilty. Because Ali did not move to with-
draw his guilty plea in the district court, we review for
plain error only. See F ED. R. C RIM. P. 52(b); Puckett v.
United States, 129 S. Ct. 1423, 1429 (2009); United States
v. Anderson, 604 F.3d 997, 1001 (7th Cir. 2010). Under
plain error review, we must find that an error affected
Ali’s substantial rights and seriously affected the fair-
ness, integrity, or public reputation of the judicial pro-
ceedings. See United States v. Marcus, 130 S. Ct. 2159, 2164
(2010); United States v. Polak, 573 F.3d 428, 431 (7th
Cir.), cert. denied, 130 S. Ct. 654 (2009). Ali contends that
No. 06-3951 9
during the plea colloquy, the district court failed to
ensure that he knew the elements of wire fraud. A defen-
dant does not enter a plea voluntarily and knowingly if
he pleads guilty to a crime without knowledge of the
crime’s essential elements. Bradshaw v. Stumpf, 545 U.S.
175, 182-83 (2005); United States v. Davey, 550 F.3d 653, 656
(7th Cir. 2008). But the record does not support Ali’s
argument. The court asked the government to explain
the charges, and the government stated that the two
charges of wire fraud involved an intentional plan to
defraud the USDA’s food stamp program by electronic
means. And to convict a defendant of wire fraud, the
government was required to show just that: an inten-
tional scheme to defraud that uses wires in furtherance
of that scheme. See, e.g., United States v. McGowan, 590
F.3d 446, 457 (7th Cir. 2009); United States v. Leahy, 464
F.3d 773, 786 (7th Cir. 2006).
Ali next contends that the admonitions he received
during the plea colloquy about his possible sentence
were inadequate. See F ED. R. C RIM. P. 11(b)(1)(H). Specifi-
cally, he claims that the government led him to believe
that he would receive a lower sentence for acceptance
of responsibility. See U.S.S.G. § 3E1.1(a)-(b). But the gov-
ernment was clear on whether Ali would receive that
reduction: it would not object to an adjustment under
§ 3E1.1 provided that Ali was eligible, and the district
court found he was not. The government never stipulated
that Ali was eligible for the adjustment. Moreover,
during the colloquy, the government warned that the
potential term of imprisonment was 40 years, and Ali
received just 57 months’ imprisonment, well below the
10 No. 06-3951
total that he was warned about. Thus, Ali has not
shown that the government’s statement about his sen-
tence exposure affected any substantial right. See United
States v. Parker, 368 F.3d 963, 968-69 (7th Cir. 2004).
B.
Ali next contends that the district court erroneously
denied him the adjustment for acceptance of responsi-
bility. See U.S.S.G. § 3E1.1. We review the district court’s
ruling for clear error. See, e.g., United States v. DeLeon,
603 F.3d 397, 406 (7th Cir. 2010); United States v. Panice,
598 F.3d 426, 435 (7th Cir. 2010). Ali maintains that the
district court should have held a hearing on the matter,
rather than just relying on the PSR’s factual finding that
Ali stated he was innocent and pleaded guilty to get rid
of the case. But Ali did not dispute these factual findings
at sentencing and a district court may accept any undis-
puted portion of the PSR as a finding of fact. See F ED.
R. C RIM. P. 32(i)(3)(A); United States v. Heckel, 570 F.3d
791, 795-96 (7th Cir. 2009).
In any event, Ali did have a hearing during which
the court considered acceptance of responsibility. At the
sentencing hearing the district court invited comments
from the government, Ali’s counsel, and Ali himself on
this very issue. Ali spoke at length as to why he was
entitled to the § 3E1.1 adjustment. But as the district court
found, Ali’s testimony supported the recommenda-
tion in the PSR. Ali showed no contrition or remorse.
Instead, he tried to minimize his conduct by claiming that
No. 06-3951 11
Shah set up the fraud scheme and that Ali unwittingly
followed instructions. But blaming someone else for
one’s own actions or minimizing one’s involvement in
the offense is not the sort of genuine contrition the accep-
tance of responsibility reduction seeks to reward. See
United States v. Munoz, 610 F.3d 989, 993 (7th Cir.
2010); DeLeon, 603 F.3d at 408. The purpose of § 3E1.1
is not just to induce guilty pleas, but to identify
defendants who have demonstrated sincere remorse for
their crime and are thereby less likely to delay justice
or engage in further criminal activity when they com-
plete their sentence. United States v. Wells, 154 F.3d 412,
413 (7th Cir. 1998). Thus, even though his guilty plea
reflects some measure of acceptance of responsibility,
the plea alone does not entitle him to a reduction under
§ 3E1.1. See U.S.S.G. § 3E1.1 cmt. n.3; Munoz, 610 F.3d at
993; Panice, 598 F.3d at 435. We therefore do not think
the district court’s conclusion that Ali had not accepted
responsibility was clear error.
C.
Ali also attacks the restitution award, the forfeiture
order, and the loss amount used for sentencing. The
government was required to prove by a preponderance
of the evidence the loss amount for both forfeiture and
sentencing. See United States v. Melendez, 401 F.3d 851,
856 (7th Cir. 2005); United States v. Vera, 278 F.3d 672, 673
(7th Cir. 2002); United States v. Jarrett, 133 F.3d 519, 530
(7th Cir. 1998). The calculation of this amount is a
12 No. 06-3951
factual determination that we review for clear error.
See United States v. Sutton, 582 F.3d 781, 783-84 (7th Cir.
2009); United States v. Oros, 578 F.3d 703, 711 (7th Cir. 2009);
United States v. Swanson, 394 F.3d 520, 528 (7th Cir. 2005);
United States v. Baker, 227 F.3d 955, 967 (7th Cir. 2000);
Jarrett, 133 F.3d at 530. Criminal forfeiture is available
generally for convictions of mail and wire fraud, and
not merely for those special cases that injure financial
institutions. See United States v. Day, 524 F.3d 1361, 1376
(D.C. Cir. 2008); United States v. Schlesinger, 514 F.3d 277,
278 (2d Cir. 2008); see also United States v. Venturella, 585
F.3d 1013, 1016 (7th Cir. 2009), cert. denied, 130 S. Ct. 1547
(2010); United States v. Silvious, 512 F.3d 364, 369 (7th
Cir. 2008).
In essence, Ali’s challenges to the loss calculation,
forfeiture order, and restitution award are the same. He
disputes the reliability of the government’s evidence
used to establish the loss to the USDA. Thus, we analyze
these challenges together. Sentencing judges are not
bound by the stringent evidentiary standards applicable
at trial; rather, the evidence need only be reliable. E.g.,
United States v. Angle, 598 F.3d 352, 357 (7th Cir. 2010);
United States v. Mays, 593 F.3d 603, 608 (7th Cir.), cert.
denied, 130 S. Ct. 3340 (2010).
First, Ali argues that the loss should be measured by
the gain to Ali personally, and thus the government was
required to call as witnesses the cash recipients to deter-
mine the amount that Ali pocketed. He did not make
this argument at the forfeiture proceeding. Arguments
not raised below are forfeited and thus reviewed for
No. 06-3951 13
clear error only. See, e.g., United States v. Alviar, 573 F.3d
526, 538 (7th Cir. 2009), cert. denied, 130 S. Ct. 1312 (2010);
United States v. Middlebrook, 553 F.3d 572, 577 (7th Cir.
2009). The government’s position was that the dollar
value of food stamps that were not spent on eligible
food items but exchanged for cash, were the proceeds—the
gain—of the offense, and were likewise subject to forfei-
ture. See United States v. Uddin, 551 F.3d 176, 181 (2d
Cir.), cert. denied, 129 S. Ct. 2886 (2009); United States v.
Hassan, 211 F.3d 380, 384 (7th Cir. 2000); United States v.
Barnes, 117 F.3d 328, 335 (7th Cir. 1997); United States v.
Lewis, 104 F.3d 690, 692-93 (5th Cir. 1996). According to
the government, therefore, the loss was the entire
amount that Ali received in illegitimate redemptions,
regardless of whether he shared the cash he received
from the government with a food stamp beneficiary.
And we have recognized before that “[t]o determine the
USDA’s loss caused by a food stamp scheme, the proper
calculation is to take the total food stamp redemptions
(i.e., both the fraudulent and legitimate redemptions) less
the legitimate food stamp sales.” United States v. Alburay,
415 F.3d 782, 788 (7th Cir. 2005); see also Haddad, 462 F.3d
at 793; Hassan, 211 F.3d at 383; United States v. Brown, 136
F.3d 1176, 1183 (7th Cir. 1998), superseded by, U.S.S.G.
§ 3B1.2, cmt. n.3(A), as recognized in United States v. Rodri-
guez-Cardenas, 362 F.3d 958, 960 (7th Cir. 2004); Barnes, 117
F.3d at 334-35. And that is what Agent Swain did here:
she determined Star Foods’s total food stamp redemp-
tions (approximately $7 million) and deducted legitimate
food stamp sales (approximately $2.7 million) to arrive
at the loss figure of approximately $4.29 million. She
14 No. 06-3951
estimated Star Foods’s legitimate sales by assuming all
inventory purchases were legitimately exchanged for
food stamp-eligible items. And to determine Ali’s pur-
chases, she relied upon Ali’s own business records, bank
accounts, invoices, and financial statements. By assuming
that all purchases (including a 50% markup) were then
exchanged for food stamp-eligible items, Swain inter-
preted the records and the data in a way that favored Ali.
On this record, we cannot say that the district court’s
factual findings supporting the forfeiture award were
clearly erroneous. See Haddad, 462 F.3d at 793-94 (up-
holding loss calculation under similar circumstances);
Hassan, 211 F.3d at 383-84 (same); United States v. Bahhur,
200 F.3d 917, 924-25 (6th Cir. 2000) (same); United States
v. Cheng, 96 F.3d 654, 657-58 (2d Cir. 1996) (same).
Ali next argues that Agent Swain’s testimony was
unreliable (and thus the court’s conclusion about the
loss was clear error) because the agent failed to recognize
that some bank deposits came from legitimate sales
and not redemptions. But Ali is incorrect. Agent Swain
testified that almost 98% of the bank deposits in Star
Foods’s account consisted of electronic food stamp re-
demptions, and the government removed from its loss
calculation the 2% of deposits unrelated to food stamp
redemptions from its calculation. Ali also complains
that Swain failed to account for Star Foods’s cash pur-
chases for food and non-liquor stock, thereby over-
stating the loss. Ali speculates that Swain spot-checked
too few of his daily expense folders and had she exam-
ined more she would have discovered cash purchases.
But Swain reviewed Ali’s and Star Foods’s records for
No. 06-3951 15
about a 4-year period to hunt for any evidence to sup-
port Ali’s claim that he bought inventory with cash; she
found none. The sentencing court credited Swain’s testi-
mony, a finding that we accord deference, see United
States v. Ngatia, 477 F.3d 496, 500 (7th Cir. 2007). And Ali
offered nothing to rebut Swain’s conclusion of no cash
purchases. Thus, the district court’s conclusion was not
clearly erroneous. See Alburay, 415 F.3d at 790 (holding
district court’s loss calculation not plain error when
government determined loss for food stamp fraud
by relying on defendant’s own estimates and business
documents); Hassan, 211 F.3d at 384 (upholding district
court’s loss calculation when, after government estab-
lished loss by deducting legitimate business from
amount of redemptions, district court provided defen-
dant an opportunity to rebut the government’s evi-
dence and establish transactions were legitimate, but
he did not do so).
Finally, Ali makes a puzzling argument, contending
that Swain failed to account for spoilage and theft in her
loss calculations. But this “failure” would work against
him. Swain assumed that all Star Foods’s inventory pur-
chases led to legitimate food stamp sales and then were
legitimately redeemed. Had Swain assumed that some
purchased inventory spoiled or was stolen (or not legiti-
mately redeemed), Ali would be able to justify fewer of
his redemptions and the loss amount would be greater.
We do not see how the more favorable assumption to Ali
constitutes clear error. See Alburay, 415 F.3d at 788
(stating court would not take issue with government’s
16 No. 06-3951
rounding redemption figure down when it benefitted
defendant).
Nevertheless, we note a problem with the restitution
order. The government concedes that the total loss
proven at the forfeiture proceeding was only $4,290,000
but the district court ordered Ali to pay about $4,900,000
in restitution. The government recognized this error
and moved in the district court to amend the restitution
order. The district court did so but Ali had already filed
a notice of appeal. “The filing of a notice of appeal is
an event of jurisdictional significance—it confers juris-
diction on the court of appeals and divests the district
court of its control over those aspects of the case involved
in the appeal.” Griggs v. Provident Consumer Discount Co.,
459 U.S. 56, 58 (1982); see United States v. Burton, 543
F.3d 950, 952 (7th Cir. 2008); United States v. McHugh,
528 F.3d 538, 540 (7th Cir. 2008). At argument the gov-
ernment recognized this problem as well and asked to
remand. We agree with the government that a corrective
remand is in order. Accordingly, we remand the case,
instructing the district court to correct the restitution
award to reflect that the amount proven at the forfeiture
proceeding was $4,290,000. See Alburay, 415 F.3d at 788.
D.
Ali frames his final issue as a motion seeking remand
for an evidentiary hearing. He argues that at oral argu-
ment the government misrepresented that certain
business records were available to Ali before the forfei-
ture proceeding. He contends that the prosecutor
No. 06-3951 17
never delivered these business records, seized from his
store, but he acknowledges (and the record and the docu-
ments he submits with his motion verify) that his
counsel and Ali himself had access to the records
before the forfeiture proceeding. Thus, we have no
reason to believe that the sentencing judge did not have
the opportunity to hear this evidence. See United States
v. Neal, No. 08-3611, 2010 WL 2652463, at *2 (7th Cir.
July 6, 2010). His motion is denied.
III.
Accordingly, we D ENY Ali’s motion to remand for an
evidentiary hearing, A FFIRM IN PART, and R EMAND
WITH INSTRUCTIONS for the district court to correct
the judgment to reflect that the restitution award
is $4,290,000.
8-27-10