In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 13‐1343
UNITED STATES OF AMERICA,
Plaintiff‐Appellee,
v.
BRANT L. RUSHTON,
Defendant‐Appellant.
____________________
Appeal from the United States District Court for the
Central District of Illinois.
No. 1:12‐cr‐10037‐JES‐JAG‐1 — James E. Shadid, Chief Judge.
____________________
ARGUED NOVEMBER 19, 2013 — DECIDED DECEMBER 26, 2013
____________________
Before POSNER, SYKES, and HAMILTON, Circuit Judges.
POSNER, Circuit Judge. A commodity pool is an invest‐
ment fund made up of contributions by a number of differ‐
ent investors. The contributions are commingled and used
by the commodity pool operator to buy and sell futures con‐
tracts. Because commodity pools are common vehicles for
fraud, including Ponzi schemes, the Sentencing Commission
has ordained a 4‐level guidelines sentencing enhancement
for fraud committed by a commodity pool operator. U.S.S.G.
2 No. 13‐1343
§ 2B1.1(b)(18)(B)(iii). Brant Rushton, who operated a com‐
modity pool that he used as the vehicle for a Ponzi scheme,
pleaded guilty to one count each of mail fraud and money
laundering. 18 U.S.C. §§ 1341, 1956(a)(1)(B)(i). The statutory
maximum prison sentence for each of these crimes is 20
years. The probation service calculated Rushton’s guidelines
sentencing range by adding to the base offense level for the
mail fraud the 4‐level enhancement for commodity pool op‐
erator fraud and a 2‐level enhancement for abuse of a posi‐
tion of trust. U.S.S.G. § 3B1.3. Other adjustments brought the
total offense level in the presentence report to 28 and the
guidelines sentencing range to 78 to 97 months. Neither side
objected to the presentence report at the sentencing hearing.
Rushton’s lawyer did argue that enhancements for operating
a commodity pool and for abuse of trust overlap and there‐
fore that including both in calculating a sentencing range
overestimated the appropriate sentence for his client. But he
was appealing to the sentencing judge’s discretion rather
than challenging the probation service’s calculation of the
guidelines range.
The judge sentenced Rushton to 96 months in prison and
ordered him to make restitution to his victims of $1.62 mil‐
lion. The appeal challenges just the prison sentence.
The judge was indignant that Rushton’s victims had, in
the judge’s words at the sentencing hearing, “include[d]
your parents [defrauded of $116,000], relatives [including an
uncle defrauded of $30,000 that he had intended for the care
of his mentally disabled son—Rushton’s cousin], friends,
senior citizens, and disabled children.” As is typical of such
schemes, much of the money that Rushton stole he spent on
luxury items, including $150,000 on horses alone.
No. 13‐1343 3
The judge dwelled particularly on the plight of Dorris
Dunn, who “was 85 years old when she invested [in Rush‐
ton’s commodity pool]. If there’s one thing we all know, [it’s
that] the main thing that senior citizens worry about is that
they won’t have enough money to live on and will have to
ask their children or others for help. And they’re generally
too proud to do that. Your [Rushton’s] actions made sure
that her concerns came true.” Despite the judge’s strong lan‐
guage about exploiting an elderly victim, the government
did not seek, nor the judge impose or even mention, the 2‐
level “vulnerable victim” enhancement authorized by
U.S.S.G. § 3A1.1(b)(1).
On appeal Rushton argues not that it was merely inap‐
propriate for the judge to add an abuse of trust enhancement
on top of the enhancement for his being a commodity pool
operator, as he argued in the district court, but that it violat‐
ed the guidelines. And the government now agrees, noting
that the parties had overlooked U.S.S.G. § 2B1.1, Application
Note 14(c), which bars the abuse of trust enhancement in a
fraud case if the enhancement for being a commodity pool
operator applies. The guidelines commentary explains that
because commodity pool operators “are subject to height‐
ened fiduciary duties imposed by securities law or commod‐
ities law” and therefore the sentencing court “is not required
to determine specifically whether the defendant abused a
position of trust,” Application Note 14(c) “provides that, in
cases in which the new, four level enhancement [for com‐
modity pool operator fraud] applies, the existing two level
enhancement for abuse of position of trust … shall not ap‐
ply.” U.S.S.G. App. C, vol. II, p. 367 (Amendment 653, Nov.
1, 2003).
4 No. 13‐1343
While conceding the error in the calculation of the guide‐
lines range, the government argues that it is not a plain er‐
ror, as it must be for the appellant to prevail, because he
didn’t argue in the district court that it was an error. E.g.,
United States v. Garrett, 528 F.3d 525, 527 (7th Cir. 2008). (Re‐
call that in objecting to the overlap Rushton was merely ap‐
pealing to the judge’s exercise of sentencing discretion, con‐
ferred on sentencing judges by 18 U.S.C. § 3553(a), which
lists factors that the judge must consider in deciding, after
calculating the defendant’s guidelines sentencing range,
what sentence to give.) A plain error is an error that is not
only indisputable but also prejudicial—that is, that had an
adverse effect on the party complaining of it. United States v.
Marcus, 560 U.S. 258 (2010); Johnson v. United States, 520 U.S.
461, 466–69 (1997); United States v. Olano, 507 U.S. 725, 734
(1993); United States v. Paladino, 401 F.3d 471, 481–82 (7th Cir.
2005). The government argues that the error was not plain—
but for reasons that have changed during the course of this
appeal.
In its appeal brief the government argued that any error
in adding the 2‐level abuse of trust enhancement was offset
by the judge’s failure to include a 2‐level vulnerable‐victim
enhancement; for had the judge been apprised of this omis‐
sion he would surely (in light of what he said about Dorris
Dunn) have added—and would have been required by the
guidelines to add—a vulnerable‐victim enhancement in cal‐
culating the defendant’s guidelines range. And since a 2‐
level vulnerable victim enhancement would be identical to
the enhancement that the judge mistakenly imposed for
abuse of trust, the applicable guidelines range would have
been exactly what the judge calculated, albeit erroneously.
Moreover, if he thought there were many vulnerable victims
No. 13‐1343 5
of Rushton’s fraud—as he may well have thought—he was
required to impose an additional 2‐level enhancement, on
top of the 2‐level enhancement for one vulnerable victim. §
3A1.1(b)(2).
But the government withdrew its argument after making
it, in acknowledgment of decisions of ours that forbid the
government to seek additional sentencing enhancements on
remand from an unrelated sentencing appeal. United States v.
Love, 706 F.3d 832, 842 n. 4 (7th Cir. 2013); United States v. Tel‐
lo, 687 F.3d 785, 798–800 (7th Cir. 2012); United States v. Sut‐
ton, 582 F.3d 781, 786 (7th Cir. 2009).
Our court appears to be alone in refusing to allow the
government to seek a sentencing enhancement that had not
been rejected at the original sentencing, as in United States v.
Wyss, 147 F.3d 631, 633 (7th Cir. 1998), but merely had not
been advocated, so that the government was not trying to
take a second bite from the same apple. In other circuits the
government is allowed on appeal to ask the appellate court
to order or authorize the district judge to add a previously
unmentioned enhancement if the court is remanding the
case for a complete rather than limited resentencing, provid‐
ed that the government is not seeking to punish the defend‐
ant for his temerity in having challenged his original sen‐
tence by appealing. (That is, provided the government’s
purpose in seeking a higher sentence on remand is not “vin‐
dictive.” Alabama v. Smith, 490 U.S. 794, 798–99 (1989); War‐
ing v. Delo, 7 F.3d 753, 758 (8th Cir. 1993).)
Illustrative cases from the other circuits are United States
v. Matthews, 278 F.3d 880, 885–87 (9th Cir. 2002) (en banc)
(“as a general matter, if a district court errs in sentencing, we
will remand for resentencing on an open record—that is,
6 No. 13‐1343
without limitation on the evidence that the district court
may consider”); United States v. Ynfante, 78 F.3d 677, 679–80
(D.C. Cir. 1996) (“the government relied on ‘the existing rec‐
ord’ and did not introduce any new evidence at the resen‐
tencing. The remand was occasioned not by the govern‐
ment’s failure to meet its burdens of production and persua‐
sion at the original sentencing, but by the district court’s le‐
gal error in construing the guidelines. At resentencing, the
district courtʹs task was to apply a proper construction of the
guidelines to the record already before it”); United States v.
Cornelius, 968 F.2d 703, 705 (8th Cir. 1992) (“once a sentence
has been vacated or a finding related to sentencing has been
reversed and the case has been remanded for resentencing,
the district court can hear any relevant evidence on that is‐
sue that it could have heard at the first hearing,” though of
course “the sentencing court must … adhere to any limita‐
tions imposed on its function at resentencing by the appel‐
late court”); United States v. Sanchez Solis, 882 F.2d 693, 699
(2d Cir. 1989) (“in the interests of truth and fair sentencing a
court should be able on a sentence remand to take new mat‐
ter into account on behalf of either the Government or the
defendant [provided that] … both parties have had an op‐
portunity to be heard”).
Thus, according to the rule in other circuits, when the
evidence that would justify an enhancement was before the
district court at the original sentencing (namely the evidence
that Dorris Dunn was indeed a vulnerable victim), and was
merely overlooked, the government could seek its correction
on remand even though it had failed to object in the district
court to the error. But that is not our rule—in defense of
which we note that it prevents the government from holding
in reserve an objection at the original sentencing, so that if
No. 13‐1343 7
need be it can spring it on the defendant and the court
should the defendant succeed in getting his original sentence
overturned. Fear of such a tactic might dissuade some de‐
fendants from appealing a sentence. But this is not the case
in which to reexamine our rule and by rejecting it eliminate a
conflict with the other circuits; for the government has not
challenged it.
Later still the government told us, agreeing with a point
that we’d raised at the oral argument, that the sentencing
judge had committed a further error, which if corrected
would make up for the erroneous imposition of the en‐
hancement for abuse of trust. Remember that Rushton had
pleaded guilty to money laundering as well as to fraud, but
that the presentence report had ignored his money launder‐
ing plea in calculating his guidelines range. That was error.
The report should have calculated offense levels for both
counts, fraud and money laundering, and selected the higher
of the two as the basis for calculating the defendant’s guide‐
lines sentencing range. U.S.S.G. § 3D1.3(a), Application Note
2. And the higher level was the offense level for the money
laundering count, not for the fraud count.
The offense level for money laundering in violation of 18
U.S.C. § 1956 (as in the present case) levitates from the un‐
derlying offense (the crime that produced the money that the
defendant laundered) by adding 2 levels to the total offense
level for that offense. U.S.S.G. §§ 2S1.1(a)(1), (b)(2)(B); see,
e.g., United States v. Hodge, 558 F.3d 630, 636–37 (7th Cir.
2009); United States v. Anderson, 526 F.3d 319, 328 (6th Cir.
2008); United States v. Cruzado‐Laureano, 440 F.3d 44, 48 (1st
Cir. 2006). The result in this case would be a total offense
level of 28—the same as the offense level that the judge cal‐
8 No. 13‐1343
culated by erroneously adding the 2‐level abuse of trust en‐
hancement to the total offense level for fraud. The effect of
the offsetting errors is shown in detail in the following table:
The ranges would not have been the same had the 2‐
level enhancement for abuse of trust been permissible. It is
permissible in a money laundering case—but only when the
abuse of trust relates to the money laundering itself rather
than to the underlying offense (the offense that generated
the money that the defendant laundered). See U.S.S.G.
§ 2S1.1, Application Note 2(C); United States v. Keck, 643 F.3d
789, 799–801 (10th Cir. 2011); United States v. Byors, 586 F.3d
222, 226–28 (2d Cir. 2009); United States v. Anderson, 526 F.3d
319, 328 (6th Cir. 2008). It is impermissible when, as stated in
the abuse of trust guideline, U.S.S.G. § 3B1.3, “an abuse of
trust … is included in the base offense level or specific of‐
fense characteristic.” See, e.g., United States v. Cruzado‐
Laureano, supra, 440 F.3d at 48. True, a sentencing judge is
not always or even often forbidden to double count. E.g.,
No. 13‐1343 9
United States v. Vizcarra, 668 F.3d 516, 519 (7th Cir. 2012). But
the passage we just quoted from the abuse of trust guideline
shows that the double counting in this case was impermissi‐
ble; Rushton’s 4‐level enhancement for operating a commod‐
ity pool fraud already took account of abuse of trust, as ex‐
plained in the guidelines commentary that we quoted earli‐
er.
Here the government’s argument stops. As the govern‐
ment sees it, because Rushton would face the same offense
level (28) on remand, there can be no plain error—and resen‐
tencing would be futile to boot because the sentencing range
would be unchanged (not so, as we’ll soon see). But this
overlooks the fact that the failure to sentence under the
money laundering guideline was not the sentencing judge’s
only error. Given what he said about Dorris Dunn, he
should have added at least a 2‐level vulnerable‐victim en‐
hancement, raising the defendant’s total offense level to 30
and the guidelines sentencing range to 97 to 121 months.
That would make the 96‐month sentence that the judge im‐
posed a below‐guidelines sentence, doubtless contrary to
what he intended.
The defendant insists that Dorris Dunn was not a vul‐
nerable victim, because her money was in trust (the “Dorris
Dunn Trust”) and presumably the trustee, unlike the benefi‐
ciary, was not old, infirm, afflicted with a mental illness
(Dunn has bipolar disorder), financially inexperienced, or
otherwise especially vulnerable to a Ponzi schemer. The de‐
fendant is wrong. His mistake may seem academic now that
the government has disclaimed seeking a vulnerable‐victim
enhancement (and would in any event be barred from doing
so by our forfeiture rule) should we remand for resentenc‐
10 No. 13‐1343
ing. Not so; it is not academic, because the judge can impose
the enhancement on his own, as part of a resentencing pro‐
ceeding, and should do so.
For there is no basis for doubting that Dorris Dunn was
a vulnerable victim. The presentence report—to which, re‐
member, the defendant made no objection—describes Dunn
as having been introduced to Rushton by her son, another
victim of Rushton’s Ponzi scheme, so that she might invest
in his commodity pool. In the son’s words, quoted in the
presentence report, Dunn was swayed by “Brant’s way of
words to have her trust him and his abilities in investing her
life savings with him.” And the money lost as a result of the
scheme was her money; she was the beneficial owner. The
loss was $190,000, and though we don’t know her overall
financial situation—only that the $190,000 loss was her en‐
tire investment in the commodity pool—it left her feeling
“betrayed.” She was a vulnerable victim of the Ponzi
scheme. United States v. Goldberg, 406 F.3d 891, 892–93 (7th
Cir. 2005); United States v. Sims, 329 F.3d 937, 944 (7th Cir.
2003); United States v. Pol‐Flores, 644 F.3d 1, 4 (1st Cir. 2011);
United States v. Hawes, 523 F.3d 245, 255 (3d Cir. 2008). The
judge should also have considered whether there were other
vulnerable victims, maybe enough others (recall his refer‐
ence to the defrauded uncle, senior citizens, and disabled
children) to require a further 2‐level enhancement.
So what we have is a thoroughly botched sentencing in
which the parties, the probation service, and the sentencing
judge are all implicated. We can’t blame any of them too
harshly, because the sentencing guidelines are absurdly
complex. But botched the sentencing was, and the remedy is
not speculation about what the judge would have done had
No. 13‐1343 11
he calculated the sentencing range accurately; it is a resen‐
tencing from scratch, see United States v. Tovar‐Pina, 713 F.3d
1143, 1147–48 (7th Cir. 2013); United States v. Langford, 516
F.3d 205, 216–19 (3d Cir. 2008); United States v. Lozano, 514
F.3d 1130, 1135–36 (10th Cir. 2008), beginning with a revision
by the probation service of the presentence report.
The alternative to ordering resentencing would be to
pronounce the errors not plain because they were offsetting:
the enhancement for abuse of trust was wrong, but so was
the judge’s failure to sentence under the money laundering
guideline. But that ignores the judge’s failure to impose a
further enhancement, or enhancements, for the presence of a
vulnerable victim, or vulnerable victims. That was another
error. Properly computed, Rushton’s total offense level
would have been either 30 and his guidelines sentencing
range 97 to 121 months, or even 32 (sentencing range 121 to
151 months) if there were, as there may well have been,
many vulnerable victims, not just Dorris Dunn.
It can be argued that since the government is not asking
for a longer sentence than the judge gave, we should let it
stand even though it is based on a miscalculation of the sen‐
tencing range. But while the government was precluded by
our forfeiture rule from arguing in this court for a vulnera‐
ble‐victim enhancement, a defendant who appeals from a
sentence takes a risk that if the case is remanded for resen‐
tencing, as the defendant in this case urges be done, he will
receive a longer sentence should the court of appeals notice
an error in his favor committed in the sentencing proceeding
that he has appealed. As long as the higher sentence on re‐
mand is not vindictive, its exceeding the defendant’s original
sentence does not invalidate it. See, e.g., United States v.
12 No. 13‐1343
Warda, 285 F.3d 573, 580–81 (7th Cir. 2001); United States v.
Goldberg, supra, 406 F.3d at 894; United States v. Johnson, 715
F.3d 179, 181–82 (6th Cir. 2013); United States v. Garcia‐
Guizar, 234 F.3d 483, 487–90, (9th Cir. 2000) (“Garciaʹs higher
sentence resulted solely from the district courtʹs correction of
an error in Garciaʹs first presentence report, an error the dis‐
trict court was obligated to correct,” id. at 489).
We cannot predict what sentence the district judge will
impose on remand; it is unlikely to be shorter but uncertain
whether it will be longer. The correct guidelines range is a
range, not a point. There thus is sentencing discretion even
when the judge imposes a sentence within the range. And
the calculation of the defendant’s guidelines sentencing
range is merely the first step in sentencing, though an essen‐
tial step because it has what psychologists call an “anchor‐
ing” effect. The calculation is complicated, mandatory, and
done first; thus it is likely to exert a not wholly conscious tug
on the judge when, after having determined the guidelines
range, he is deciding what sentence to give, guided by the
sentencing factors in 28 U.S.C. § 3553(a). See, e.g., Stephanos
Bibas, “Plea Bargaining Outside the Shadow of Trial,” 117
Harv. L. Rev. 2463, 2515–19 (2004); Birte Englich & Thomas
Mussweiler, “Sentencing Under Uncertainty: Anchoring Ef‐
fects in the Courtroom,” 31 J. Applied Soc. Psychol. 1535
(2001). A mistake—in this case a cascade of mistakes—in cal‐
culating the guidelines range can affect the sentence even if a
correct calculation would result in the same range. But in
this case it would not.
Having calculated the range correctly, the judge must
then decide, as a matter of discretion, whether to sentence
within it; and that decision may be influenced by the factors
No. 13‐1343 13
that determined the range, since he is free to reject those fac‐
tors. The judge in this case may believe, for example, that
money laundering is not a more serious offense than fraud,
and so he might sentence at the low end of the new guide‐
lines range (for his disagreement with the weight that the
guidelines give particular conduct does not alter the range,
though it may influence his exercise of his sentencing discre‐
tion) despite the 2‐level enhancement for the money laun‐
dering count to which Rushton pleaded guilty. In that event
the judge might even decide to reimpose his original sen‐
tence, which was just a month short of the bottom of the cor‐
rect guideline. Alternatively he might decide that since
Rushton’s total offense level is at least 30 (because there
should have been a vulnerable‐victim enhancement, and
maybe a double such enhancement), his previous sentence—
a below‐guidelines sentence because the correctly calculated
total offense level is at least 30—was too lenient. And finally
there is the unresolved question whether there were enough
additional vulnerable victims to warrant an additional 2‐
level enhancement.
REVERSED AND REMANDED.