In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 11‐3743
UNITED STATES OF AMERICA,
Plaintiff‐Appellee,
v.
DONELLA LOCKE,
Defendant‐Appellant.
____________________
Appeal from the United States District Court for the
Southern District of Indiana, Indianapolis Division.
No. 1:08‐cr‐00018‐LJM — Larry J. McKinney, Judge.
____________________
ARGUED OCTOBER 29, 2012 — DECIDED JULY 21, 2014
____________________
Before POSNER, KANNE, and ROVNER, Circuit Judges.
ROVNER, Circuit Judge. In her second appeal before this
court, Donella Locke asks us to reverse the district court’s
judgment on sentencing, claiming that the lower court
errantly calculated the amount of loss attributable to her
conduct. Because Locke waived this issue, we decline to
consider the matter and affirm, and in doing so revisit the
factors that distinguish loss and restitution.
2 No. 11‐3743
I.
Donella Locke and her co‐conspirator engaged in real
estate fraud that involved, among other things, the use of
false documents, false social security numbers, payments to
fictitious vendors and contractors, and inflating income on
documents to banks. The more specific details of the fraud
are outlined in the first appeal of this case at United States v.
Locke, 643 F.3d 235 (7th Cir. 2011).
The indictment originally charged Locke with fifteen
counts of illegal conduct, but at trial the government pre‐
sented evidence of only five. Upon Locke’s motion to
dismiss at the close of the government’s case, the govern‐
ment conceded that it failed to present any evidence for ten
counts, and the district court granted the motion accord‐
ingly.
Locke’s presentence investigation report recommended a
sixteen point addition to the offense level computation
because the offense involved a loss of more than $1 million.
Specifically, the report calculated a loss of $2,360,914.51
based on all of the properties underlying all fifteen counts
against Locke, including the properties that formed the basis
of the ten dismissed counts. Locke objected, arguing that her
sentence should be based solely on the convicted conduct
which would account for a loss of less than $1 million. Her
written objection to the presentence report stated:
Donella objects to the loss calculation reflected
in paragraph 64. It is Donella’s position that
the loss amount should be based on the five
No. 11‐3743 3
counts of conviction (9, 10, 11, 12, and 14) (sic)1
and not the counts upon which she was
acquitted. If calculated on the five counts of
conviction only, the loss amount would be well
below $1,000,000 and would result in an addi‐
tional 14 levels pursuant to U.S.S.G.
2B1.1(b)(1)(I).
Supplemental Addendum to the Presentence Report at p.24.
In response, the probation office argued that relevant
conduct could be considered in determining the loss
amount, but that even if the loss amount was based solely on
Locke’s convicted conduct, the loss amount would still
exceed $1 million.
At the January 27, 2010 sentencing hearing, the lawyer
for Locke stated, “I am withdrawing that objection [to the
loss amount], Your Honor. We have no objection to the
Government’s calculation or to the calculation of loss
amount that’s reflected in the pre‐sentence report.” (R. 118,
Tr. 1/27/10, p.3).
Based on the government’s representations that the loss
amount exceeded $1 million, but was less than $2.5 million,
the district court found that Locke’s adjusted offense level
was 25 under the advisory Sentencing Guidelines which
corresponds to a recommended sentence of 57‐71 months.
The district court sentenced Locke to 71 months for each
count, to run concurrently, followed by three years of super‐
vised release, and ordered her to pay $2,360,916.51 in resti‐
1 The counts of conviction should have included Count 8, but not Count
12. In other words, it should have read (8,9,10,11, and 14).
4 No. 11‐3743
tution to thirteen entities. At the initial sentencing hearing,
the district court’s loss calculation—the number calculated
to determine the sentence—and its restitution order—the
amount the defendant must repay to the victims—were
identical.
In her first appeal to this court, Locke argued that her
sentence should be vacated because the district court did not
make the findings necessary when using relevant conduct to
increase the sentence based on the number of victims. (We
ignore the other issues not relevant to this second appeal).
We affirmed Locke’s conviction, but agreed that the district
court lacked evidentiary support for using relevant conduct
to determine the number of victims and remanded for re‐
sentencing. Locke, 643 F.3d at 245–46.
Locke also objected to the restitution calculation which
we noted required a different analysis than that for deter‐
mining loss. Id. at 247, n.7. The specific findings that the
district court needed to make for a restitution determination
are governed by the Mandatory Victim Restitution Act
(MVRA), 18 U.S.C. § 3663A. Locke, 643 F.3d at 247; see also
Robers v. United States, 134 S. Ct. 1854, 1856 (2014). This court
held that the district court’s findings on the record were
insufficient to satisfy the requirements of the MVRA, and
remanded for a recalculation of the amount of restitution in
addition to a recalculation of the number of victims. Locke,
643 F.3d at 248.
Before the re‐sentencing, Locke filed a successful motion
in limine, arguing that the government could not present
new evidence at the re‐sentencing proceeding without
violating constitutional principles of due process, the Sixth
Amendment, and double jeopardy. Locke moved the district
No. 11‐3743 5
court to bar the government from introducing any evidence
regarding relevant conduct not already in the record at the
first sentencing. With the motion granted, the government
could not prove that Locke committed the alleged relevant
conduct by a preponderance of the evidence, as it had
offered no evidence of relevant conduct at trial or at the first
sentencing hearing. This meant that the district court recal‐
culated the advisory guidelines without the two‐level
enhancement for offenses involving ten or more victims.
At the second sentencing, Locke admitted that she had
withdrawn her objections to the amount of loss in the first
sentencing, but nevertheless asserted that she had always
disputed she was responsible for relevant conduct and that
her loss amount should not be greater than the restitution
amount calculated without regard to relevant conduct.
(R.169, Tr. 11/18/11, p.11,16). The government contended
that the issue of loss was not properly before the district
court because Locke had withdrawn her objection to the loss
amount at the initial sentencing hearing and thus it was
waived and not an issue for appeal. Id. at 18–19. Further‐
more, the government noted that loss and restitution are
calculated differently, and that restitution numbers may
change as property is recovered and sold. After the re‐
sentencing hearing, the district court sentenced Locke to 57
months of imprisonment, three years of supervised release,
and ordered her to pay $340,789 in restitution to lenders. The
court reduced the restitution by the amount recovered from
sales of the property, as we explain further below. See 18
U.S.C. § 3663A(b).
Locke appealed, arguing that the district court erred
when it failed to reduce the loss amount incurred as a result
6 No. 11‐3743
of Locke’s convicted conduct by the amounts the victims
received when they sold the real estate that secured the
fraudulently obtained loans.
II.
We begin by addressing the question of waiver, as all
other arguments rise or fall on the resolution of this
question.
When a defendant intentionally relinquishes or abandons
a known right, the issue has been waived and cannot be
reviewed on appeal, not even for plain error. United States v.
Natale, 719 F.3d 719, 729–30 (7th Cir. 2013). On the other
hand, a defendant who errantly misses a viable objection to
an error has forfeited the argument, but may ask an
appellate court to review the error if it is plain. United States
v. Kennedy, 726 F.3d 968, 975 (7th Cir. 2013). That is, if it is
clear or obvious and seriously affects the fairness, integrity,
or public reputation of judicial proceedings. United States v.
Jones, 739 F.3d 364, 368 (7th Cir. 2014). But a defendant who
affirmatively states “I do not object” or “I withdraw my
objection” has not forfeited the right, but rather intentionally
relinquished or waived the right and cannot ask for review.
United States v. OʹMalley, 739 F.3d 1001, 1007 (7th Cir. 2014);
United States v. Kirklin, 727 F.3d 711, 716 (7th Cir. 2013)
(“[c]ounselʹs affirmative statement that he had no objection
to the proposed [jury] instruction constitutes waiver of the
ability to raise this claim on appeal.”). This is true even
where a defendant has initially raised the issue but then
explicitly waived it. United States v. Knox, 624 F.3d 865, 875
(7th Cir. 2010) (noting that a defendant waived appellate
review of his challenge to a loss calculation where he
initially raised the objection to the loss calculation and then
No. 11‐3743 7
later withdrew it, as indicated in both his and defense
counselʹs statements on the record); see also United States v.
Kincaid, 571 F.3d 648, 654 (7th Cir. 2009) (“[W]e have held
that a defendant waived his right to challenge a sentencing
calculation by initially objecting to the calculation, but later
withdrawing the objection.”); United States v. Venturella, 585
F.3d 1013, 1019 (7th Cir. 2009) (finding waiver where
defendant filed objections to the presentence challenging the
loss and restitution calculations, but later withdrew these
objections in a revised sentencing memorandum and reiter‐
ated during sentencing that she agreed with the figures in
the resentence report addendum); United States v. Scanga, 225
F.3d 780, 783 (7th Cir. 2000) (finding waiver where defend‐
ant first objected to the presentence report calculations but
withdrew the objection after calculations were revised in the
presentence report addendum); United States v. Redding, 104
F.3d 96, 99 (7th Cir. 1996) (finding waiver where defendant
objected to the calculations before sentencing, but accepted
them during the sentencing hearing).
In this case Locke’s counsel could not have been more
clear that he was withdrawing the objection to the loss
amount and thus waived the issue of loss when he stated, “I
am withdrawing that objection [to the loss amount], Your
Honor. We have no objection to the Government’s calcula‐
tion or to the calculation of loss amount that’s reflected in
the presentence report.” (R. 118, Tr. 1/27/10, p.3).
Indeed the waiver is clear, not only from counsel’s
explicit words, but also from the district court’s language at
the first sentencing. Given Locke’s clear waiver of the loss
issue, the district court discussed relevant conduct only as it
8 No. 11‐3743
related to the number of victims and not to the amount of
loss:
First of all, addressing the [sic] paragraph 71
[of the presentence investigation report], the
offense involved 10 or more victims, certainly
the guidelines and 2 points if the—if it does
involve 2 or more victims. So the issue is
whether the conduct was charged and the
other counts that weren’t tried amounts to
relevant conduct.
And the relevant conduct is—I think the law in
[sic] relevant conduct is fairly clear and
adequately cited by the Government. It causes
the Court to find that that 2 points extra is
correct, and I will find it correct.
(R. 118, 1/27/10 at 19).2
And in appealing that sentence to this court, Locke still
never raised the issue of loss and relevant conduct. In her
first appellate brief, she objected only to the court’s use of
relevant conduct to increase the number of victims. See 10‐
3151, R. 13, Brief and Required Short Appendix of Donella Locke,
2 Later, the district court stated, “There are 16 points that are added
because the loss exceeded a million dollars in this case, no matter how
you arrive at that million dollars, whether you arrive at the million
dollars by applying the notion of relevant conduct or whether you donʹt.
But I would always be interested in the amount of money thatʹs lost or
the amount of money that the defendant intended for the loss to be, as
that makes—that makes a sentence more serious, makes a sentence
higher.” (R. 118, Tr. 1/27/10, p.37). The district court was not considering
relevant conduct for loss at all, but rather utilizing the loss figure
accepted by the defendant.
No. 11‐3743 9
at 3, 11, 27. Specifically, after discussing the general
requirements for relevant conduct, Locke argued, “Here, the
District Court used the concept of ‘relevant conduct’ to
increase the number of ‘victims’ for sentencing purposes, but
failed to make ‘explicit’ findings to support its reliance on
this ‘relevant conduct.’” Id. at 27. And after noting the two
point increase for number of victims and the sixteen point
increase for amount of loss—Locke went on to argue only
against the two‐point increase for number of victims:
The District Court, however, made no explicit
findings, nor explicitly adopted the Report,
when it used the ‘relevant conduct’ provision
of the Sentencing Guidelines to find more
‘victims’ than those contained in the Locke
Counts. … The District Court’s use of relevant
conduct increased Ms. Locke’s offense level by
two points; giving Ms. Locke a total offense
level of 25, which carries a sentencing range of
57‐71 … If the relevant conduct addition is not
taken into account, Ms. Locke’s total offense
level would be 23, which carries a sentencing
range of 46‐57 months.
Id. at 29–30. Locke’s opening brief in her first appeal made
no mention of relevant conduct as it related to loss. It could
not, as Locke had explicitly waived the issue.
Although in our first decision on appeal this court began
its discussion with a general discussion of relevant conduct,
it is clear that we applied our findings regarding relevant
conduct only to the calculation of the number of victims.
Under the heading “Offense Level and the Number of
Victims,” we concluded, “Had the additional victims not
10 No. 11‐3743
been included in the offense level calculations, Locke’s
offense level would have been 23.” Locke, 643 F.3d at 246.
Because the issue of the amount of loss had been waived, the
district court never addressed it and this court had no reason
to review it. And the courtʹs silence on an issue raised on
appeal means it is not available for consideration on remand.
United States v. Barnes, 660 F.3d 1000, 1006 (7th Cir. 2011). In
short, the issue of loss had been waived and was outside the
scope of the remand.
This case takes on an unnecessarily complicated pallor by
co‐mingling the concepts of loss and restitution. In this
appeal, Locke presents the argument about loss and restitu‐
tion with the same lexicon i.e. that both the calculation for
loss and for restitution were based on relevant conduct—and
then maintains that she never waived her right to object to
the use of relevant conduct. But this argument misunder‐
stands the nature of the two related but legally distinct
concepts. Restitution is a payment of losses sustained by
victims of crime. See 18 U.S.C. § 3663A(a)(1). It is limited to
the actual losses caused by the specific conduct underlying
the offense. United States v. Orillo, 733 F.3d 241, 244 (7th Cir.
2013). A loss calculation, used for sentencing purposes on
the other hand, can also include the amount a defendant
placed at risk (United States v. Swanson, 394 F.3d 520, 527 (7th
Cir. 2005)) and must be based on the conduct of conviction
and relevant conduct that is criminal or unlawful. Orillo, 733
F.3d at 244, United States v. Littrice, 666 F.3d 1053, 1060 (7th
Cir. 2012).
The confusion in this case comes from the fact that
although Locke waived any right to ask the appellate court
to reconsider the amount of loss, on remand, the district
No. 11‐3743 11
court was required to reconsider restitution. And in order to
calculate restitution, the district court had to consider
something akin to “relevant conduct” when making calcula‐
tions about restitution under the MVRA. 18 U.S.C. § 3663A.
The MVRA, however, does not speak of “relevant conduct,”
and the term is not applicable in evaluating restitution.
United States v. Frith, 461 F.3d 914, 920 (7th Cir. 2006). Rather,
the MVRA requires, “in a case of an offense that involves as
an element a scheme, conspiracy, or pattern of criminal
activity” restitution for “any person directly harmed by the
defendant’s criminal conduct in the course of the scheme,
conspiracy, or pattern.” 18 U.S.C. § 3663A(a)(2); Locke, 643
F.3d at 247; U.S. v. Randle, 324 F.3d 550, 556 (7th Cir. 2003).
Although the “in the course of a scheme” language of the
MVRA is similar to the “relevant conduct” consideration of
Section 1B1.3 of the Sentencing Guidelines, we have empha‐
sized that they are not the same, despite the fact that the
necessary findings may overlap to some extent. U.S. v.
Westerfield, 714 F.3d 480, 489 (7th Cir. 2013) (“Although the
‘relevant conduct’ analysis for the Sentencing Guidelines is
analytically different from this analysis under the MVRA,
we have recognized that the evidence is similar and can
overlap.”); Locke, 643 F.3d at 247, n.7 (“We caution that this is
not the same analysis as “relevant conduct” determinations,
as ‘relevant conduct’ is not within the scope of the MVRA.”);
United States v. Hussein, 664 F.3d 155, 161, n.2 (7th Cir. 2011)
(“the amount of restitution does not always correspond to
guidelines loss because the rules for calculating each differ”);
Frith, 461 F.3d at 920 (Relevant conduct is not within the
scope of the MVRA); United States v. Caputo, 517 F.3d 935,
943 (7th Cir. 2008) (loss for the purpose of § 2B1.1, does not
12 No. 11‐3743
require more than an estimate. Restitution, by contrast,
requires an exact figure).
Because it is not the same determination, it is entirely
possible to waive a finding of loss without waiving a finding
for restitution and vice versa. See, e.g., Hussein, 664 F.3d at
161, n.2 (defendant argued issue of loss, but waived
argument on restitution); United States v. Stoupis, 530 F.3d 82,
84 n.6 (1st Cir. 2008) (defendant waived restitution, but not
loss amount).
Locke argues that the government waived waiver by
introducing at sentencing “evidence conclusively showing
that the actual loss associated with Ms. Locke’s convicted
conduct is far less than $1 million.” Locke’s Reply brief at 9.
In fact, however, what the government did was submit
evidence regarding restitution, an issue that had not been
waived. As Locke goes on to say in her reply brief, before the
re‐sentencing, the government filed what it called a
“Sentencing Memorandum Relating to Restitution.”
(emphasis ours) Locke’s Reply Brief at 9. And that memo‐
randum sets forth the specific restitution that the govern‐
ment calculated for each particular victim lender. Presenting
arguments about restitution cannot waive waiver of the loss
argument.
This case illuminates how the waiver doctrine preserves
the fairness and integrity of the proceedings. At the first
sentencing, Locke explicitly waived the issue of loss. And as
the government pointed out at re‐sentencing, Locke knew at
the time she withdrew her objection that she was agreeing to
a $2.3 million loss and knew that the amount might include
more than that which was covered by the counts of convic‐
tion. (R. 118, Tr. 1/27/10, pp. 6–8, 37); (R. 169 Tr. 11/18/11, p.
No. 11‐3743 13
8). One could speculate about the tactical reasons for doing
so: the loans enumerated in the indictment totaled over $8
million. Perhaps locking in a loss more than $1 million and
less than $2.5 million was a good hedge. As the government
stated at re‐sentencing, “I could share things outside the
record as well as to why the defense withdrew [the objection
to the loss amount], but that would be entirely improper, so
we’re asking the Court not to engage in any of that
speculation as to why the defense withdrew.” (R. 169, Tr.
11/18/11, p.19–20). And indeed we cannot speculate as to
why Locke withdrew her objection at the time. We can only
conclude that Locke withdrew any objection to the fact that
the loss exceeded $1 million but was less than $2.5 million.
And, in fact, the banks loaned out $1.8 million on the five
convicted counts alone. Id. at p.29. Locke claims that she had
no opportunity to challenge the district court’s loss calcula‐
tion at her original sentencing hearing because the evidence
upon which she now relies—that is the amount the banks
recouped—did not exist until after the original sentencing
hearing. This is not correct. The application notes to
Sentencing Guideline 2B1.1 state that the amount of loss
shall be reduced as follows:
in a case involving collateral pledged or
otherwise provided by the defendant, the
amount the victim has recovered at the time of
sentencing from disposition of the collateral,
or, if the collateral has not been disposed of by
that time, the fair market value of the collateral
at the time of sentencing.
Application note 3(E)(ii) to U.S.S.G. § 2B1.1.
14 No. 11‐3743
Locke was free to preserve a challenge to the loss amount
based on the fair market value of the collateral at the time of
the first sentencing. See e.g. Green, 648 F.3d at 583–84; U.S. v.
Lane, 323 F.3d 568, 585–90 (7th Cir. 2003). Instead, she made
a tactical decision to withdraw any objection to the loss
amount. Had Locke not withdrawn the objection, the court
would have taken evidence regarding both the amount
placed at risk, the fair market value of the collateral and
relevant conduct in determining the amount of loss. By
waiving the objection, the district court had no reason to
consider either matter and no evidence was presented.
Because the issue has been waived, we need not delve
deeper into the manner in which this Circuit credits or does
not credit recoupment against loss, but a good description
can be found in U.S. v. Green, 648 F.3d 569, 583–84 (7th Cir.
2011); see also U.S. v. Radziszewski, 474 F.3d 480, 486–87 (7th
Cir. 2007).
Moreover, in response to Locke’s motion in limine on re‐
sentencing, the court agreed to limit its consideration to the
evidence already contained in the record. This meant that
the government could not present additional evidence
relating to fraudulent transactions constituting part of the
same scheme to defraud as required under 2B1.1’s calcula‐
tion of loss. It would be unfair to allow the defendant to
undo her waiver to the amount of loss, but not allow in any
evidence that would have been used against her had she not
waived the issue. Locke cannot now ask the court to only
consider those pieces of evidence—the amount recovered
from the collateral—that work in her favor to reduce her
loss.
No. 11‐3743 15
Thus because the court could not accept new evidence,
the government was limited to the number of victims in the
five counts of conviction. A restitution calculation, however,
because it is measured by the actual loss to the victim, can
change over time. Robers, 134 S. Ct. at 1856. As the court
noted in Robers, “a sentencing court must reduce the restitu‐
tion amount by the amount of money the victim received in
selling the collateral, not the value of the collateral when the
victim received it.” Robers, 134 S.Ct. at 1856. In this case, at
the time of the original sentencing most of the houses subject
to the fraud were in foreclosure proceedings. At the time of
the re‐sentencing, many of the houses had been sold or
reclaimed by the banks and then resold, so the government
had more accurate numbers for the amount of money the
banks actually lost.
Although it is true that the application notes to U.S.S.G.
2B1.1 instruct that loss amounts also should be offset by the
collateral, the issue of loss had been waived. Had it not been
waived, the district court could have considered the
evidence about sale of the homes to determine the amount of
offset of the collateral, but then the relevant conduct of the
unconvicted counts would also have been fair game. Locke
cannot argue that the court should have considered evidence
to lower the amount of loss, but not to consider conduct that
surely would have increased the amount of loss. That
smacks of wanting to have one’s cake and eat it too.
The judgment of the district court is AFFIRMED.