NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued November 10, 2010
Decided December 10, 2010
Before
RICHARD D. CUDAHY, Circuit Judge
DANIEL A. MANION, Circuit Judge
DIANE S. SYKES, Circuit Judge
No. 09‐4149
UNITED STATES OF AMERICA, Appeal from the United States District
Plaintiff‐Appellee, Court for the Northern District of Illinois,
Eastern Division.
v.
No. 08 CR 480
UGUR YILDIZ,
Defendant‐Appellant. Rebecca R. Pallmeyer,
Judge.
O R D E R
Ugur Yildiz pleaded guilty to willfully exporting, without a license, firearms
qualifying as defense articles. See 22 U.S.C. § 2778(b)(2). The district court sentenced him to
90 months’ imprisonment—33 months above the applicable guidelines range. Yildiz
appeals, arguing that the court’s decision to impose an above‐range sentence was improper
because it was based, not on the offense of conviction, but on uncharged, unrelated criminal
conduct. We affirm.
No. 09‐4149 Page 2
Background
In September 2005, after the Bureau of Alcohol, Tobacco, and Firearms revoked his
federal firearms license, Yildiz legally transferred ownership and registration of 207 guns
from his defunct firearms business into his own name. Beginning in June 2006, law
enforcement authorities in Canada started a special investigation of Yildiz after they began
recovering his firearms in connection with drug‐related and violent crimes. In cooperation
with the Canadian police investigation, ATF agents interviewed Yildiz twice in October
2006. He admitted that he made three trips to Canada between April and June and that on
one of these trips he crossed the border with more than 200 weapons even though he knew
it was illegal for him to export the guns. Yildiz explained that he brought the weapons into
Canada to store them with a business associate, Daniel Wasiluk, until the two could arrange
a deal to export the guns and other items to Turkey. But the two men disagreed about the
value of the guns, and the deal never materialized. Yildiz claimed that he had not been able
to reach Wasiluk since negotiations broke off around July 2006, and, as far as he knew, the
guns were still in Wasiluk’s storage facility.
The Canadian investigation continued, and the evidence mounted that Yildiz had
knowingly sold the guns on the black market to the head of an organized crime ring.
Canadian police seized more of Yildiz’s guns in connection with crimes such as homicide,
home invasion, drug trafficking, and assault. Canadian police also arrested Wasiluk in
2007, and he informed police that he never agreed to store Yildiz’s guns. Instead, Wasiluk
said that he had arranged a meeting between Yildiz and an Asian man named “Mikey,”
who police suspected was the head of a crime syndicate and whose real name, it turned out,
was Huy Ta. The men met at a strip club where Wasiluk overheard Yildiz and Ta discuss a
gun deal and saw them exchange phone numbers. Wasiluk told authorities that Yildiz later
called him to say that something had gone wrong and that, if anyone asked, Wasiluk should
confirm that he had a storage facility. Another individual, who was arrested for a drug
crime and found with one of Yildiz’s guns, informed Canadian police that Ta told him that
he had recently received a shipment of 240 guns, and the informant provided the same
phone numbers for Ta that police later linked to Yildiz’s phone records. Canadian police
later arrested Ta as well, and found three guns in his car, all of which were registered to
Yildiz.
Yildiz was arrested in 2008, and he pleaded guilty to one count of illegal exportation
of defense articles. In the presentence report, the probation officer assigned a base offense
level of 26, see U.S.S.G. § 2M5.2(a)(1), and subtracted three levels for acceptance of
responsibility, see id. § 3E1.1. With no prior criminal history, the probation officer calculated
a guidelines range of 46 to 57 months based on a total offense level of 23. Canadian
authorities had not yet disclosed all their investigative findings, so the presentence report
No. 09‐4149 Page 3
provided only a basic description of the offense, focusing on the fact that Yildiz transported
the guns across the border knowing that his conduct was illegal. The probation officer did
not find any reason for recommending an above‐range sentence, but the presentence report
did not include reference to Ta or the connection between Yildiz’s guns and other criminal
activity.
After the presentence report was issued, however, the government asked the district
court to impose an above‐guidelines sentence based on aggravating factors related to the
offense and evidence of two instances of prior, uncharged criminal conduct. The
government cross‐referenced the adjustments in § 2K2.1(b)(1), which governs offenses
involving the transportation of firearms, and asked the court to increase Yildiz’s offense
level by six for exporting more than 200 firearms. The government sought an additional
four‐level increase because the circumstances surrounding the transfer of the firearms
meant it was reasonably foreseeable to Yildiz that the guns would fall into the hands of
criminals and be used in other felony offenses. In relation to Yildiz’s personal history and
characteristics, the government urged the court to consider evidence that Yildiz had
engaged in a pattern of fraud: he had masterminded an illegal scheme to purchase and
export a large amount of Schedule III narcotics and lied to immigration officials to obtain
citizenship.
At sentencing the government presented testimony from four witnesses. First, an
ATF agent, who had interviewed Yildiz, described the inconsistencies in Yildiz’s statements
to authorities about his plan to store the firearms in Canada and his communications with
Wasiluk. For example, although Yildiz insisted he lost contact with Wasiluk approximately
one month after transporting the guns to Canada, the agent explained that phone records
showed Yildiz regularly contacted Wasiluk through October 2006, when authorities initially
interviewed Yildiz. Next, a detective with the Canadian police testified about the
investigation into Yildiz’s suspected gun trafficking and the statements Wasiluk made to
police. He described the evidence tying Ta to Yildiz, including phone records showing over
30 calls between the two men during the three weeks around the time of Yildiz’s last trip to
Canada. The detective acknowledged several contradictions in Wasiluk’s story, but
emphasized that Wasiluk consistently described the meeting with Yildiz and Ta at the club
and overhearing a discussion about guns, and he never wavered in saying that Yildiz’s
story about the storage agreement was a lie. To corroborate Wasiluk’s account, the
government introduced copies of Yildiz’s phone records and evidence showing that, as of
July 2009, Canadian police had seized 36 weapons registered to Yildiz in connection with
serious criminal activity.
As for Yildiz’s uncharged criminal conduct, the government presented testimony
from two witnesses who described Yildiz’s involvement in a scheme to export controlled
No. 09‐4149 Page 4
substances and his false statements to immigration officials. An agent with the Drug
Enforcement Administration explained that Yildiz had recruited a pharmacist, Richard
Wahlstrom, to front a pharmaceutical supply business for him. In 2006, the business
purchased 939,000 dosages of hydrocodone, a Schedule III controlled substance, but never
filed the required documentation with the DEA to show the disposition of those pills.
When DEA agents later searched the business’s office, which was located in the same
building as Yildiz’s defunct firearms business, they could not find the drugs or any record
of their sale. Curiously, Yildiz showed up during the search, but initially denied any
connection to the pharmaceutical business other than serving as the landlord for the
property. Four days later, however, Yildiz informed police that he had the missing drugs,
and, after meeting police at the property, he broke open a wall connecting the business
office to his gun shop and pulled out roughly half the missing pills. According to the DEA
agent, Yildiz told police that he had hidden the drugs for safekeeping until he could get
approval to ship them to Turkey, but never explained what happened to the rest of the
drugs. The DEA agent also testified that Yildiz called all the shots, served as the financial
backer for the pharmaceutical business, and that Yildiz threatened Wahlstrom at gunpoint
when Wahlstrom resisted placing a drug order for him. Although the agent recommended
prosecuting Yildiz, she confirmed that Yildiz was never charged with a crime.
Last, an agent with Immigration and Customs Enforcement testified about the
suspicious circumstances and evidence of fraud relating to Yildiz’s applications for
temporary residence and, later, for citizenship. Over the years Yildiz had given conflicting
accounts to immigration officials about the timing and circumstances of his entry to the
United States—initially claiming that he crossed the border from Mexico by himself at age
12 to work as a blueberry picker, later saying that he came in as a student and had a green
card, and later still saying that he came over from Turkey with his father when he was
about 6 years old. But when he submitted his 2002 application for citizenship, Yildiz swore
under oath that he had never given false or misleading information to an immigration
official. Despite this evidence of fraud in his file, Yildiz was granted citizenship in 2003.
Yildiz attacked the government’s evidence, arguing that it was unreliable and that
the statements Wasiluk and Wahlstrom gave to authorities were self‐serving and not
credible. Yildiz insisted that Wasiluk double‐crossed him and sold the weapons to Ta on
his own without Yildiz’s knowledge or consent. Yildiz characterized his conduct as “a
handshake deal” with Wasiluk that resulted in “an honest business mistake,” and urged the
court to consider that he had no prior criminal history, that he had strong family ties, and
that he had experienced health problems since being detained in jail. Yildiz also argued
that the evidence relating to the incident with the pharmaceutical business and the alleged
immigration fraud was irrelevant because he was never charged, and, thus, the court could
not consider it at sentencing.
No. 09‐4149 Page 5
The district court rejected Yildiz’s version of the events and determined that an
above‐range sentence was warranted based on the large number of guns involved, the use
of the weapons in further criminal activity, and the evidence of additional criminal
misconduct. The court agreed with the government’s recommendation for a six‐level
increase in the offense level because of the large number of weapons involved and,
referencing § 2K2.1(b)(1), recalculated a base offense level of 29. The court also found that
the government presented sufficient evidence to show that Yildiz masterminded the
pharmaceutical scandal and lied to immigration authorities. The court determined that
“even a modest recognition of th[is] wrongdoing,” such as assessing a one‐level increase in
Yildiz’s criminal history category, would result in an adjusted range of 97 to 121 months.
Explaining the necessity for an upward adjustment, the district judge stated:
I don’t need to draw the conclusion for which the government has argued; i.e., that
Mr. Yildiz knew that what he was doing was dumping guns into Canada into [the]
hands of unlawful—of criminals, in order to conclude that a sentence beyond at least
the calculated guideline is appropriate here. Again, the enhancement that I think is
appropriate reflects the number of weapons involved and the fact that Mr. Yildiz has
engaged in unlawful conduct in the past that has never been charged. So I’m again
concluding that the appropriate guideline under my calculation would be from 97 to
121 months.
But in light of Yildiz’s family considerations, the court imposed a sentence of 90 months’
imprisonment. And in its written statement of reasons, the court summarized the facts
justifying an above‐range sentence:
Defendant was involved in transporting a very large number of weapons over the
border, dozens of which have been traced to violent crimes and drug offenses in
Canada. Defendant argues that there is no evidence that he was aware that the guns
he transported would be used for criminal purposes, but his own version of
events—that he deposited the guns in a storage locker in Canada pursuant to a
“handshake” deal and intending to ship them illegally yet again—reveals a shocking
lack of concern for a substantial cache of deadly weapons. Nothing in the record
provides any basis for a conclusion that Defendant understood that the guns were to
be used for any lawful purpose. Whether viewed as a departure reflecting the
number of weapons involved or a sentencing variance, an above‐guidelines sentence
is warranted.
The court then explained that the “§ 3553 factors, also militate against leniency,” and noted
that Yildiz’s criminal history was understated based on the evidence of immigration fraud,
his “unlawful exportation of thousands of pills,” and his failure to pay taxes on any of his
No. 09‐4149 Page 6
legal business ventures for years. The court concluded by recognizing that although Yildiz
has a loving and supportive family, “a lengthy sentence [was] necessary to afford adequate
deterrence, protect the public from further offenses, and reflect the seriousness of this
offense conduct.”
Analysis
On appeal Yildiz argues that the district court erred by sentencing him above the
guidelines range based on uncharged misconduct. But sentencing courts have broad
discretion to consider uncharged or even acquitted conduct as long as the conduct is
established by a preponderance of the evidence. United States v. Watts, 519 U.S. 148, 152
(1997) (per curiam); United States v. Mays, 593 F.3d 603, 609‐10 (7th Cir. 2010); United States v.
Heckel, 570 F.3d 791, 797 (7th Cir. 2009); see 18 U.S.C. § 3661; U.S.S.G. § 1B1.4. Yildiz’s brief
includes a single sentence suggesting that the government’s evidence of his involvement in
the drug scheme and immigration fraud was unreliable because it rested on the self‐serving
statements of Wahlstrom—who had reason to minimize his own role in the misconduct—or
stale evidence of statements made to immigration officials 20 years ago. But Yildiz does not
develop an argument that the district court clearly erred in making its factual findings. See
United States v. Santiago, 495 F.3d 820, 824 (7th Cir. 2007). And any such argument would be
untenable given the mountain of evidence the government introduced at sentencing to
show that Yildiz had given false statements to immigration authorities, surreptitiously
controlled the pharmaceutical supply business, and admitted concealing a large amount of
controlled substances from federal agents with plans to illegally export the drugs to Turkey.
All this evidence reflected Yildiz’s pattern of engaging in fraud and demonstrated that his
criminal history was underrepresented, even though he had no prior convictions.
In a related argument, Yildiz contends that even if the district court could take into
account some types of uncharged conduct, it still could not consider the immigration fraud
or drug scandal because those incidents had nothing to do with the illegal exportation of
weapons. He cites United States v. Allen, 488 F.3d 1244 (10th Cir. 2007), in support of his
argument that the court could consider only uncharged conduct similar to the conviction
offense. In Allen, the defendant had been convicted for drug possession, but the
government introduced evidence that he had discussed with a paramour his desire to
kidnap and rape a child and that a witness identified the defendant as the man who had
attempted to abduct her 10‐year old daughter from a store. 488 F.3d at 1246‐48. The district
court found this evidence credible, but instead of considering the uncharged conduct as
understated criminal history, it looked to the guideline for sexual abuse offenses and
sentenced the defendant as though he actually had abducted and sexually assaulted a
young child. Id. at 1251‐52. The Tenth Circuit remanded the case, concluding that the
No. 09‐4149 Page 7
district court had given excessive weight to unrelated, uncharged conduct in imposing a
sentence 225 months above the applicable guidelines range. Id. at 1259.
But Yildiz’s case is distinguishable from Allen because most of the increase in Yildiz’s
sentence is attributable to aggravating factors directly related to the conviction
offense—namely, the large number of weapons involved and their use in continued
criminal activity. Unlike the defendant in Allen, Yildiz was not sentenced for crimes that he
merely thought about committing or that he only discussed with someone. Here, after
determining that a preponderance of the evidence supported findings that Yildiz
masterminded the drug scandal and that he lied to immigration officials, the district court
assessed a modest increase for the uncharged conduct, but still sentenced Yildiz largely
based on the nature and circumstances of the conviction offense. In fact, if the district court
had applied just the six‐level increase for the number of weapons and refused to consider
the additional uncharged conduct, it still would have resulted in an adjusted range of 87 to
108 months and Yildiz’s 90‐month sentence would have been at the low end of even that
range. Thus, his argument that the district court’s sentence was “substantially based on
uncharged, unrelated conduct” and “totally irrelevant evidence” is unpersuasive.
Here, the district court relied on § 3553(a)(1) and determined that Yildiz’s uncharged
misconduct reflected a troubling pattern of dishonesty, of which the conviction offense was
just the latest in a series of schemes to defraud others for economic gain. Because Yildiz had
not been convicted for his prior misconduct, the court concluded that his criminal history
was underrepresented and assessed a modest increase in his guidelines range. Unlike the
sentence in Allen, most of the increase in Yildiz’s sentence is attributable to aggravating
factors directly related to the conviction offense or his pattern of misconduct that the court
determined was highly relevant to his illegal exportation of weapons.
Finally, even if the district court could consider the uncharged conduct, Yildiz
argues, it improperly weighed this conduct in its sentencing decision. Sentences are
reviewed for reasonableness under an abuse‐of‐discretion standard. Gall v. United States,
552 U.S. 38, 51 (2007); United States v. Williams, 616 F.3d 685, 694 (7th Cir. 2010). In imposing
a sentence outside the guidelines range, a sentencing court need only state its reasons,
consistent with § 3553(a), for determining why the sentence is appropriate for a particular
defendant. United States v. Angle, 598 F.3d 352, 359 (7th Cir. 2010); United States v. Valle, 458
F.3d 652, 658 (7th Cir. 2006). Contrary to Yildiz’s argument that his sentence was
substantially increased based on uncharged conduct, the district court explained that most
of the upward adjustment was attributed to the six‐level increase the court assessed for the
large number of guns involved in the crime. As a result, Yildiz’s offense level jumped from
23 to 29, and his corresponding guidelines range increased from 46 to 57 months, to 87 to
108 months. Yildiz did not object to this increase or the court’s decision to look to
No. 09‐4149 Page 8
§ 2K2.1(b)(6) in calculating the six‐level adjustment. The court then considered the
government’s evidence of immigration fraud, the illegal drug scheme, and the recovery of
the guns in connection with serious criminal activity, and determined that this misconduct
warranted an increase of one criminal history category, yielding a range of 97 to 121
months’ imprisonment. In recognition of Yildiz’s arguments in mitigation, the court
declined to sentence him even within that adjusted range. In arriving at a sentence of 90
months, the court explained its decision in relation to the § 3553(a) factors, noting that a
longer sentence was necessary to deter future criminal activity, protect the public, and
account for the seriousness of Yildiz’s offense. The explanation the court provided at
Yildiz’s sentencing hearing and in its subsequent written statement of reasons sufficiently
supports its above‐guidelines sentence.
AFFIRMED.