United States v. Panice

In the

United States Court of Appeals
For the Seventh Circuit

No. 08-3323

U NITED S TATES OF A MERICA,
Plaintiff-Appellee,
v.

F RANK P ANICE,
Defendant-Appellant.

Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 1:06-cr-00876-1—Charles P. Kocoras, Judge.

A RGUED S EPTEMBER 17, 2009—D ECIDED M ARCH 17, 2010

Before R OVNER, W OOD , and T INDER, Circuit Judges.
T INDER, Circuit Judge. Frank Panice’s greed got the
better of him. He pled guilty to twenty counts arising
out of one fraudulent scheme and he stipulated to the
offenses arising out of another scheme. The district court
sentenced him to 360 months’ imprisonment, which was
within the Guidelines range. Panice appeals his sentence.
We vacate the sentence and remand for resentencing.
2 No. 08-3323

I. Background
Frank Panice and six codefendants were charged on
December 1, 2005, in a ten-count indictment with mail and
wire fraud and criminal copyright infringement. The
charges arose out of an advance fee scheme to defraud
persons seeking jobs in the technology sector. The
scheme took place from April 2001 through Decem-
ber 2002. As part of the scheme, Panice offered inter-
views and promised jobs to applicants, provided they
completed a training course that cost between $250 and
$450. However, there were no jobs to be had, and the
course was designed in such a way that it could not be
completed. Hundreds paid the fee. Panice claimed that he
hired six or seven people, but in reality, those persons
were hired to hustle the program to others. Panice
refused to refund the money paid, and he and his cohorts
pocketed the fees. The case was assigned to Judge Robert
W. Gettleman, see United States v. Panice, No. 05-CR-972
(N.D. Ill.), and is referred to as the “Receiver case.”
Panice also engaged in another fraudulent scheme, this
time an investment scheme, from late 2003 and con-
tinuing until his arrest in December 2006. Panice created
an entity called “Bank Watch,” purportedly a financial
services company, and advertised that Bank Watch in-
vested in CDs insured by the FDIC. Bank Watch did not
invest a single penny of investor money. Panice and
codefendant Brian Jines (also a codefendant in the
Receiver case) kept the money for themselves. Panice
and Jines communicated, and caused others to commu-
nicate, several false and fraudulent representations to
No. 08-3323 3

Bank Watch investors and prospective investors to
induce them to invest with Bank Watch. At least eighty-
seven victims sent more than $5.4 million to Bank Watch.
Panice was involved in this scheme while out on bond on
the Receiver case. As a result of this scheme, Panice
faced twenty counts, including mail fraud, interstate
transportation of stolen securities, money laundering,
and structuring of currency transactions. This case was
assigned to Judge Charles P. Kocoras and is referred to
as the “Bank Watch” case, see United States v. Panice,
No. 06-CR-876 (N.D. Ill.). This appeal is from the “Bank
Watch” case.
Panice pled guilty to all charges against him in the Bank
Watch case. At his change of plea hearing on February 21,
2008, the government said that the parties had an agree-
ment to put on the record. Government counsel stated:
The government agrees to dismiss the indictment
in the Receiver Corp case . . . on three conditions.
The first one is that he [Panice] admits sufficient
facts to form the factual basis of a plea in the
Receiver Corp case; second, is that he agrees that
that offense will constitute a stipulated offense, for
purposes of the Sentencing Guidelines; and, the
third condition is that he agrees to any restitution
ordered by you for the Receiver Corp case.
Panice’s attorney asked for clarification of the distinction
between “stipulated conduct” and “relevant conduct,” and
the Assistant United States Attorney explained: “certain
things are aggregated, if there is a stipulated—the loss
amount will be aggregated; the number of victims, and
4 No. 08-3323

such; and, that, essentially, it is that he was convicted of
that case for purposes of these Guidelines, not that it
was only considered for relevant conduct.”
The court questioned Panice: “Did you get the three
conditions now on which that indictment will go away;
but, it, in effect, will be measured in terms of your
possible punishment in this case? Do you understand
that?” Panice answered, “Yes, sir.” Then the court reiter-
ated the three conditions including that “this offense
conduct [in the other case] constitutes a stipulation . . .
which has an effect on various calculations, as well as
affording restitution to be ordered in my case for
conduct engaged in in the other case.” The court again
asked Panice whether he understood; Panice said he did.
Then after Panice was sworn, the court stated:
[Y]ou have a plea agreement in this case, even
though it is not in writing. You understand that;
do you not? And that is the plea agreement we
talked about. The . . . other indictment . . . being
dismissed on the satisfaction of the three condi-
tions Ms. Nasser outlined and which I have just
repeated for you. Do you understand that?
Panice answered, “yes,” and the court added, “So, that
is a binding plea agreement.”
Thus, Panice stipulated to the facts and offenses charged
in the Receiver case. He admitted under oath that “I am,
beyond a reasonable doubt, . . . guilty of the offenses
charged in the indictment” in the Bank Watch case. Panice
agreed that Bank Watch had “87-some investors” and that
a total of “5 million-some dollars” were sent to Bank
No. 08-3323 5

Watch. Later, in response to the prosecutor’s concern
that Panice had to admit to other facts to support a
guilty plea, the court stated that Panice “has admitted
that he got money from 87 investors, to the tune of
$5 million.” Panice made no objection.
Panice also stated that “[w]ith respect to the indict-
ment [in the Receiver case], I plead guilty to having
participated together with Brian J[i]nes and Tony Volz in
the offense as charged in that indictment.” Panice said
he thought between $160,000 and $200,000 was received
from that scheme. He claimed that six or seven persons
got jobs, but subsequently admitted that those people
were hired to hustle the program to other applicants.
On August 19, 2008, Judge Kocoras sentenced Panice
to a within-Guidelines sentence of 360 months’ imprison-
ment (the range was 360 months to life). The judge
ordered restitution of $4,915,683.52, which included
$4,826,358.52 for Bank Watch victims and $89,325 for
Receiver victims.

II. Discussion
Panice challenges his sentence only. He makes several
arguments: First, he asserts that the district court’s deter-
mination of the number of victims, which resulted in an
increase to his offense level under U.S.S.G. § 2B1.1, was
erroneous; he claims that he should have been given a
reduction for acceptance of responsibility under U.S.S.G.
§ 3E1.1; he submits that the court denied him his right
to allocution before imposing the sentence; he contests
6 No. 08-3323

the court’s calculation of the amount of restitution; and,
finally, he argues that the court presumed that a within-
Guidelines sentence was reasonable and failed to con-
sider what sentence was appropriate for him in light of
the sentencing factors of 18 U.S.C. § 3553(a).
We review the district court’s findings of fact at sen-
tencing and applications of the Guidelines for clear error.
United States v. House, 551 F.3d 694, 701 (7th Cir. 2008).
When a defendant argues that the district court
made a procedural error, such as failing to appreciate
the Guidelines’ advisory nature or failing to consider the
§ 3553(a) factors, we review the sentencing procedures
de novo. Id. If the district court’s sentencing procedures
were sound, then we consider whether the sentence
was substantively reasonable. United States v. Cooper,
591 F.3d 582, 590 (7th Cir. 2010).

A. Number of Victims & U.S.S.G. § 2B1(b)(2)(C)
Panice argues that the district court erred in calculating
the number of victims to be 250 or more. U.S.S.G.
§ 2B1.1(b)(2)(C) instructs courts to apply a 6-level increase
to the offense level if the offense involved 250 or more
victims. The application notes define “victim” to include
“any person who sustained any part of the actual loss
determined under subsection (b)(1).” U.S.S.G. § 2B1.1
cmt. n.1. “Actual loss” is defined as “the reasonably
foreseeable pecuniary harm that resulted from the of-
fense.” Id. n.3(A)(i). And “reasonably foreseeable
pecuniary harm” is defined as “pecuniary harm that the
defendant knew, or under the circumstances, reasonably
No. 08-3323 7

should have known, was a potential result of the of-
fense.” Id. n.3(A)(iv). Panice raises several challenges to
the number of victims, but we find no error.
Panice argues that the Receiver victims should not be
counted because they were not victims of Bank Watch.
Under the Guidelines, stipulated offenses are treated as
offenses of conviction and are properly included in the
offense level calculations. See United States v. Eske, 925
F.2d 205, 207 (7th Cir. 1991); U.S.S.G. § 1B1.2(c) & cmt.
n.3. Panice admitted to facts sufficient to predicate a
finding of guilt as to the conduct and charges in the
Receiver case, and he has a binding plea agreement in
which he agreed that the conduct in that case con-
stituted stipulated offenses. Therefore, the court did not
err in counting the Receiver victims in the victim total.
Next, Panice argues that the government failed to prove
by a preponderance of the evidence that there were 212
Receiver victims. In considering evidence at sentencing,
a court is not subject to a strict application of the rules of
evidence. United States v. Rollins, 544 F.3d 820, 838 (7th
Cir. 2008). The district court “may consider information
that has ‘sufficient indicia of reliability to support its
probable accuracy.’ ” Id. (quoting United States v. Abdulahi,
523 F.3d 757, 761 (7th Cir.), cert. denied, 129 S. Ct. 265
(2008)). In finding the number of victims in the Receiver
case, the district court relied on the representation of
Assistant United States Attorney (“AUSA”) John
Podliska, the prosecutor in the Receiver case, that the
Judgment and Commitment order (“J&C”) entered by
Judge Gettleman against Tony Volz in that case listed
8 No. 08-3323

212 victims to whom restitution was ordered. Podliska
had a copy of the J&C entered by Judge Gettleman
as supporting documentation. The J&C had sufficient
indicia of reliability to support its probable accuracy, so
the district court could rely on it. See id. And Panice
had stipulated to the conduct charged in the Receiver
indictment.
The district court had other reliable information about
the number of Receiver victims. Panice’s Presentence
Investigation Report (“PSR”) stated that according to the
government’s version of the offense, the Receiver
scheme had 439 victims. The district court may rely on
facts presented in the PSR if the PSR is based on suffi-
ciently reliable information. Id. The defendant bears
the burden of proving that the PSR is inaccurate
or unreliable. Id. If he has no evidence to question the
PSR’s accuracy or reliability, the court may rely on the
PSR. Id. Panice offered no evidence to counter the PSR’s
assertion of 439 Receiver victims; all he had was his
bald assertion that there were fewer than 212 victims.
This was insufficient. See id.
Moreover, Panice’s own statements support the finding
that there were more than 212 Receiver victims. During
his change of plea hearing, the court asked Panice how
much money he received from the training course fees;
Panice answered, “I think $160,000 to $200,000.” The
record shows that the fee ranged from $250 to $450. If we
assume that everyone paid the higher fee and take
$160,000 as the amount of money received, then there
would be 355 victims. Panice stated at his plea hearing that
the fee had been $250 and was increased to $450, so we
No. 08-3323 9

know that all of the victims did not pay the higher fee. The
actual number of victims would be even higher if we
knew what number of victims paid which fee.
Panice also argues that the 221 victims who recovered
their application fees from the credit card companies
should not have been considered victims under U.S.S.G.
§ 2B1.1. He cites United States v. Yagar, 404 F.3d 967 (6th
Cir. 2005), a bank fraud case, for support. The Yagar
defendant stole checks drawn on various accounts and
used them to deposit money into the accounts of 50
persons, using stolen bank information. After depositing
the checks, she withdrew a portion of the deposited funds.
Id. at 968. The Yagar court held that account holders
who only temporarily lost funds because their banks
reimbursed them for their losses were not victims within
the meaning of U.S.S.G. § 2B1.1. Id. at 971. The court
acknowledged that there could be cases in which a
person could be a victim even if ultimately reimbursed,
but reasoned that where the monetary loss was short-
lived and immediately covered by a third-party, there
was no “actual loss” or “pecuniary harm.” Id. The record
does not disclose how quickly the 221 victims of Panice’s
fraud recovered their fees, but the record does not
suggest that it happened immediately. Furthermore, Yagar
is not binding on us and we are not persuaded by
its reasoning.
In our view, the fact that the victims were eventually
reimbursed does not negate their victim status. The
application notes to § 2B1.1 support the conclusion
that “victim” includes a person whose losses were reim-
10 No. 08-3323

bursed. The definition of “victim” in the notes contains
no temporal restriction; nor does it state that the loss
must be permanent. Victims whose losses were reim-
bursed sustained an actual loss for the period of time up
until the point at which they were reimbursed. Other
circuits have adopted the view that a victim who is reim-
bursed for his or her loss is a victim within the meaning
of U.S.S.G. § 2B1.1(b)(2). See, e.g., United States v.
Stepanian, 570 F.3d 51, 55-58 (1st Cir. 2009) (reimbursed
account holders); United States v. Lee, 427 F.3d 881, 895
(11th Cir. 2005) (mail fraud victims). But see United States
v. Kennedy, 554 F.3d 415, 419 (3d Cir. 2009) (concluding
that account holders who were fully reimbursed before
they even knew their funds were missing were not “vic-
tims” within the meaning of § 2B1.1 because they
suffered no pecuniary harm); United States v. Conner, 537
F.3d 480, 489 (5th Cir. 2008) (concluding that fully-reim-
bursed account holders were not victims under § 2B1.1).1
Panice criticizes the court for telling his counsel that he
did not have a “straight-face” argument about the
number of victims. According to Panice, this violated
Federal Rule of Criminal Procedure 32(i)(1)(C) and (D) and
U.S.S.G. § 6A1.3. However, Panice’s attorney offered
nothing to counter the reliable victim information on

1
In any event, these 221 individuals need not be included in the
number of victims to warrant a 6-level increase under
§ 2B1.1(b)(2)(C), because, as we shall see, Panice waived any
right to challenge the court’s finding that there were 87 Bank
Watch victims. (212 Receiver victims plus 87 Bank Watch
victims equals 299 victims.)
No. 08-3323 11

which the court relied. We cannot say that the court’s
assessment of the weakness of this defense argument
was inaccurate.
Panice argues that the district court erred in concluding
that there were 87 Bank Watch victims; he claims the
number was only 46. He challenges the inclusion of
spouses (which adds 23 victims, without whom there
would have been 64 victims). He also argues that eight
other individuals should not be counted as victims: six
who stopped payment on their checks or intercepted
them in the mail before they were negotiated, and two
who were fully reimbursed on their investments plus
interest. (These eight were excluded from the actual loss
computation and the restitution order.) And Panice
identifies two other groups of people—ten persons
total—he thinks should not be counted as victims: those
whose funds were among the last to be deposited into
Bank Watch accounts at National City Bank, which were
administratively frozen in August 2005, and those whose
funds were the last ones deposited in eleven other banks
and seized by the government in November 2006.
Yet, Panice admitted that there were “87-some” Bank
Watch victims. During his plea hearing, the court said,
“[T]here were 87-some investors. You may not know the
exact number, but that sounds about right; does it not?”
Panice answered, “Yes, sir.” Later, the court recapped that
Panice “admitted that he got money from 87 investors,”
and there was no objection or clarification by Panice’s
counsel. And, at sentencing when the parties were dis-
cussing the number of victims, Panice’s attorney effectively
12 No. 08-3323

conceded that the number of victims in the Bank Watch
case was 87:
Court: The first problem is the 250 is not predi-
cated solely on that [Receiver] fraud scheme.
We have the Bank Watch case. That is part of the
game.
Counsel: That is 87.
Panice argues that his attorney was just reiterating that
87 victims were attributed to the Bank Watch case and
was not conceding that there were in fact 87 victims.
This argument is not persuasive in light of the context in
which the statement was made and the fact that his
attorney did not then dispute the number of Bank Watch
victims. Instead, Panice’s counsel argued over the
number of victims in the Receiver case. And even later
still, the court summarized its understanding as follows:
“in our case, the number is 87 . . . we are talking numbers
of people here—87, which I do not understand to be in
dispute.” Panice’s counsel said nothing then to disabuse
the court of its understanding. Thus, Panice has waived
any right to challenge whether the number of Bank Watch
victims was 87. But even if Panice had not waived this
right and the number of Bank Watch victims was
reduced to 46, the total number of victims is still more
than 250, and six levels were properly added to
Panice’s offense level under U.S.S.G. § 2B1.1(b)(2)(C).
Panice contends that the Sarbanes-Oxley Act of 2002
was aimed at “serious fraud” and was not intended to
cover run-of-the-mill Ponzi schemes such as his. Thus,
he submits that the district court should have disre-
No. 08-3323 13

garded U.S.S.G. § 2B1.1(b)(2)(C). The Sarbanes-Oxley Act
was enacted to protect investors and build confidence in
U.S. securities markets. See Sarbanes-Oxley Act of 2002,
Pub. L. No. 107-204, 116 Stat. 745 (stating that the Act is
to “protect investors by improving the accuracy and
reliability of corporate disclosures made pursuant to the
securities laws, and for other purposes”); Carnero v.
Boston Scientific Corp., 433 F.3d 1, 7 (1st Cir. 2006). Though
not on the same level as Enron or WorldCom, Panice’s
schemes were serious frauds and bilked investors of
millions of dollars. The Sarbanes-Oxley Act reaches
Panice’s misconduct. Perhaps consideration of the
stiffer penalties under the Sarbanes-Oxley Act and the
Enron and WorldCom cases would weigh in favor of a
“downward departure” for Panice. But such a consider-
ation would be more appropriately given by the
district court when evaluating the sentencing factors,
particularly § 3553(a)(6)—the need to avoid unwar-
ranted sentencing disparities.
Finally, Panice argues the application of the victim
enhancement offends the ex post facto clause. The amend-
ment to U.S.S.G. § 2B1.1 became effective January 25, 2003;
Panice’s conduct in the Receiver case occurred from 2001
to 2002. This argument is foreclosed by United States v.
Demaree, 459 F.3d 791, 795 (7th Cir. 2006) (holding that
the application of the Guidelines in effect at sentencing
rather than at the time of defendant’s conduct does not
violate the ex post facto clause even if the current Guide-
lines suggest a harsher sentence because the Guide-
lines are only advisory, not binding). See also United
States v. Nurek, 578 F.3d 618, 625-26 (7th Cir.) (reaffirming
14 No. 08-3323

Demaree), petition for cert. filed, (U.S. Dec. 11, 2009) (No. 09-
8147).
The district court did not err in finding that the
offense involved more than 250 victims; it correctly
applied the six-level increase to Panice’s offense level
under U.S.S.G. § 2B1.1(b)(2)(C).

B. Acceptance of Responsibility Under
U.S.S.G. § 3E1.1
Panice argues that the district court erred in not giving
him a reduction for acceptance of responsibility under
U.S.S.G. § 3E1.1. We review the court’s decision to deny a
defendant this reduction for clear error. United States
v. Acosta, 534 F.3d 574, 581 (7th Cir. 2008); see also
U.S.S.G. § 3E1.1 cmt. n.5.
Section 3E1.1 provides: “If the defendant clearly demon-
strates acceptance of responsibility for his offense,
decrease the offense level by 2 levels.” U.S.S.G. § 3E1.1(a).
(“ ‘Offense’ means the offense of conviction and all
relevant conduct under § 1B1.3 . . . unless a different
meaning is specified or is otherwise clear from the con-
text.” U.S.S.G. § 1B1.1 cmt. n.1(H).) Merely pleading
guilty does not entitle a defendant to an acceptance of
responsibility reduction. United States v. Krasinski, 545
F.3d 546, 554 (7th Cir. 2008). The Guideline’s Application
Notes state that in deciding if a defendant is entitled to
a reduction, factors the court may consider include
whether the defendant “truthfully admitt[ed] the conduct
comprising the offense(s) of conviction, and truthfully
No. 08-3323 15

admitt[ed] . . . any additional relevant conduct”; volun-
tarily terminated or withdrew from criminal conduct;
voluntarily paid restitution before an adjudication of
guilt; and voluntarily assisted authorities in recovering
the fruits and instrumentalities of the offense(s). U.S.S.G.
§ 3E1.1 cmt. n. 1(a)-(c), (e); see also United States v. Silvious,
512 F.3d 364, 370 (7th Cir. 2008) (holding that defendant
was not entitled to reduction for acceptance of responsi-
bility where he failed “to fully account for the proceeds of
his crime and attempt[ed] to delay a long-scheduled
hearing based on an incredible claim of innocence”); United
States v. Dillard, 43 F.3d 299, 306 (7th Cir. 1994) (concluding
that the defendant’s conduct was inconsistent with accep-
tance of responsibility where he was less than truthful
and did not give a complete statement of his involvement
in the offense or account for the proceeds he received).
The district court determined that Panice did only the
minimum necessary to accept responsibility, but not
enough to earn a reduction under § 3E1.1. The judge
noted that Panice pled guilty. However, after reading the
PSR and other materials and looking back at the plea
hearing transcript, the judge wondered whether he
and Panice had been talking about the same conduct. The
judge also highlighted the fact that Panice “did not lift
a finger” to right the wrongs he had done to the victims,
remarking: “Silence. No cooperation.” In particular, the
judge commented that Panice did not account for the
proceeds of the fraud or attempt to assist the govern-
ment in recovering any of the victims’ money. Thus, the
judge expressly relied on two factors identified by the
application notes—truthful admission of offense conduct
16 No. 08-3323

and voluntary assistance to authorities—in deciding
that Panice was not entitled to a reduction for acceptance
of responsibility.
We find no error in the district court’s determination
that Panice barely admitted the facts necessary to
predicate a finding of guilt in this case. The sentencing
transcript and record support the finding that Panice
was less than candid in admitting his involvement and
participation in the fraud schemes. For example, in ex-
plaining his involvement in Bank Watch, Panice
claimed that he believed he would be able to make things
right, when he knew all along that none of the money
would be invested in CDs. He also denied that the
scheme was phony from the get-go, but then admitted
he never did what he promised to do with investors’
money. With respect to the Receiver case, Panice was
evasive when the court asked him if he told people he
had jobs for them, which was untrue; Panice claimed he
was building teams for Computer Associates. He also
claimed that the training program was completable and
that six or seven people found jobs. He eventually con-
ceded, when confronted, that those people were hired
to hustle the program to others. And when the court
questioned Panice whether he did “anything to make it
right,” Panice asserted: “We did pay everybody back in
the end.” But this was a result of a class action lawsuit,
not because of any voluntary payment by Panice. Nor
do we find any error in the court’s determination that
Panice failed to account for the proceeds of his frauds
and wholly failed to assist the government in the
No. 08-3323 17

recovery of the victims’ money. The court was right:
Panice didn’t lift a finger to help.
Panice asserts that the district court placed unjustified
and unrealistic emphasis on restitution and remorse. He
does not contend that these factors are inappropriate
considerations—they most certainly are. See United States
v. Grasser, 312 F.3d 336, 339-40 (7th Cir. 2002) (indicating
that voluntary payment of restitution prior to adjudica-
tion of guilty can be a basis for an acceptance of responsi-
bility reduction); United States v. Johnson, 227 F.3d 807, 816
(7th Cir. 2000) (noting that a “sense of remorse . . . should
be attendant to an acceptance of responsibility”); U.S.S.G.
§ 3E1.1 cmt. n.1(c). And we have no quarrel with the
district court’s appraisal of Panice’s failures in these areas.
He also complains that the sentencing judge did not
permit him to address the judge before deciding Panice
had not earned a reduction for acceptance of responsi-
bility. Panice’s attorney requested that Panice be allowed
to make a statement before the court made “a final deci-
sion.” The court responded, “I am not sentencing. . . . [W]e
are discussing an issue where the facts are extant and
his statement is not going to help me resolve that issue.” 2
The court continued: “I will let him speak because we
still have the harder decision about what the right sen-

2
It seems that the court understood counsel’s reference to
“final decision” to mean the ultimate sentence to be imposed.
Counsel did not specify that Panice wanted to read the state-
ment before the court decided whether Panice was entitled to
an acceptance of responsibility reduction.
18 No. 08-3323

tence is in this case. But he is not entitled [to] acceptance.”
The fact that was “extant” in the court’s mind was that
Panice had not made any effort to get the victims’ money
back or find out where it went. Panice offered nothing
in his statement at sentencing, and offers nothing even
now on appeal, to refute that fact. Panice also had the
opportunity to submit sentencing papers prior to the
sentencing hearing in which he could argue for a reduc-
tion for acceptance of responsibility. And he did.
Panice submits that he never had an opportunity to
speak on the acceptance of responsibility issue. That is
incorrect. As the district court said it would, it gave Panice
an opportunity to speak. Panice took advantage of that
opportunity and claimed that he was deeply remorseful
for the pain he had caused the investors. He also claimed
that he would do his best to make restitution upon
his release. He did not, however, rebut the fact that he
had done nothing whatsoever to assist in the recovery of
any of the money taken from the victims. He merely
denied that he had any of the victims’ money. Even
assuming Panice does not have a stash of cash hidden
away somewhere, not having the money and refusing
to assist the government in tracking down the money
are not the same thing.
Furthermore, the court imposed no limitation on what
Panice could say during his allocution; nothing
prevented him from addressing the matters that he be-
lieved were pertinent to acceptance of responsibility.
Because the Guidelines are advisory only, had Panice
said something that demonstrated to the court that he
No. 08-3323 19

truly had accepted responsibility for his criminal actions,
then the court could have taken that into account in
deciding whether a within-Guidelines sentence was
appropriate. Or, the court might have reconsidered its
earlier finding that Panice had not done enough to earn
a reduction for acceptance of responsibility. But Panice
offered nothing of the sort.
Panice argues that he accepted responsibility for the
offenses for which he pled guilty and that the Receiver
case, whether considered relevant conduct or stipulated
conduct, should not have affected acceptance of responsi-
bility in the Bank Watch case. The problem with this
argument is that he admitted to facts sufficient to
predicate a finding of guilt as to the conduct and charges
in the Receiver case, and he has a binding plea agree-
ment in which he agreed that the conduct in that case
constituted stipulated offenses. As a result, Panice waived
any right he may have had to challenge whether the
court could consider his conduct in the Receiver case
in deciding whether he had earned a reduction for accep-
tance of responsibility. See United States v. Hampton, 585
F.3d 1033, 1044 (7th Cir. 2009) (stating that waiver is the
intentional relinquishment or abandonment of a known
right). Therefore, in determining whether Panice was
entitled to a reduction for acceptance of responsibility,
the district court did not err in considering Panice’s
acceptance of responsibility for the conduct and offenses
committed in the Receiver case. Even the fact that Panice
makes this argument on appeal, after he agreed that his
conduct in the Receiver case constituted stipulated of-
fenses, is yet another indication that he has not fully
20 No. 08-3323

accepted responsibility for his criminality. See United
States v. Roche, 415 F.3d 614, 617 (7th Cir. 2005) (concluding
that defendant’s argument that he was entitled to accep-
tance of responsibility, after he had agreed to a limited
waiver of his appeal right, which included waiver of the
argument that he should be granted a reduction for
acceptance, showed he had not fully accepted responsi-
bility). The district court’s determination that Panice
did not qualify for a reduction for acceptance of responsi-
bility was not clearly erroneous.

C. Right of Allocution and Federal Rule
of Criminal Procedure 32
Panice argues that he was denied his right to a meaning-
ful allocution. In particular, he complains that the
district court did not permit him to read a written state-
ment before making a final decision on acceptance of
responsibility. He also suggests that the court had
already decided that it would impose “the stiffest sen-
tence possible under the Guidelines” before giving
Panice a chance to speak. Panice did not object at sen-
tencing, so we review for plain error. United States v.
Noel, 581 F.3d 490, 501 (7th Cir. 2009). Thus, we look for
an error that was plain and affected Panice’s substantial
rights. Id. We find no error here.
Under Federal Rule of Criminal Procedure 32, “[b]efore
imposing sentence, the court must . . . address the defen-
dant personally in order to permit the defendant to
speak or present any information to mitigate the sen-
tence . . . .” Fed. R. Crim. P. 32(i)(4)(A)(ii); see also Noel,
No. 08-3323 21

581 F.3d at 502 (finding plain error in district court’s
failure to directly address the defendant at sentencing).
We have held that a district court must give a defendant
a “meaningful opportunity to address the court prior to
the imposition of sentence.” United States v. Luepke, 495
F.3d 443, 444 (7th Cir. 2007). In Luepke, we concluded that
the defendant was denied that right because the court
definitively announced the sentence of 240 months’
imprisonment and then later invited the defendant to
speak before imposing the sentence it had just an-
nounced. Id. at 445, 450. Here, in contrast, before imposing
sentence, the district court addressed Panice personally
and permitted him to speak in an attempt to mitigate his
sentence. True, the court had already determined that the
Guidelines range was 30 years to life. But the court did not
announce where in (or out of) that range Panice’s sentence
would fall before Panice was allowed to speak. Panice was
not denied the right to a meaningful allocution.
According to Panice, the district court decided that it
would impose the stiffest sentence possible under the
Guidelines before he was allowed to make a statement.
The sentence imposed, however, reveals this claim is
false. The court sentenced Panice at the low end of the
range. Had the judge already decided to impose the
stiffest sentence possible, it would have sentenced him
at the upper end of the range. The fact that the judge
sentenced Panice to the low end of the Guidelines range
suggests that Panice’s statements may have influenced
the sentence imposed.
Panice complains that the judge did not allow him to
address the court at the point during sentencing when
22 No. 08-3323

counsel were arguing whether a reduction for acceptance
of responsibility was warranted. The judge said that the
“facts are extant” and whatever Panice had to say relative
to acceptance of responsibility was “not going to help . . .
resolve that issue.” A defendant’s right of allocution is not
unlimited. United States v. Alden, 527 F.3d 653, 663 (7th
Cir. 2008) (stating that the court may limit the defendant’s
allocution to the purpose of Rule 32). The court did not
err in refusing to allow Panice to speak at that particular
point in the hearing. The court subsequently gave both
the defense and the government an opportunity to raise
“anything of a factual nature” that was related to the
Guidelines calculations. Both sides said they had
nothing to raise. Had Panice wanted to present further
information regarding the acceptance of responsibility
issue, he could have. He didn’t.

D. Amount of Restitution
Panice challenges the amount of restitution ordered by
the district court. We review the district court’s authority
to order restitution de novo and review the amount of
restitution ordered for an abuse of discretion. United
States v. Hosking, 567 F.3d 329, 331 (7th Cir. 2009). Panice
argues that restitution should not have been ordered to
the Receiver victims because the Receiver scheme
was not part of the Bank Watch scheme for which he was
convicted. He claims that the government failed to prove
that the Receiver victims were owed $88,895. And he
argues that the amount of restitution ordered for Bank
Watch is erroneous because it included $607,509.39 of
No. 08-3323 23

investor funds for which payment was stopped or which
were returned to investors as well as $872,555 that were
seized under the forfeiture order.
The Mandatory Victim Restitution Act provides that
when sentencing a defendant convicted of a certain
offense, “the court shall order . . . that the defendant
make restitution to the victim of the offense . . . . ” 18 U.S.C.
§ 3663A(a)(1). In addition, “[t]he court shall also order,
if agreed to by the parties in a plea agreement, restitution
to persons other than the victim of the offense.” Id.
§ 3663A(a)(3); see also United States v. Peterson, 268 F.3d
533, 534 (7th Cir. 2001). As described above, Panice
entered into a plea agreement in which he agreed to
make restitution to the Receiver victims as ordered by
the district court. Thus, the court had the authority to
order Panice to make restitution to the Receiver victims.
To the extent that Panice claims he had to agree to the
specific amount of restitution to be awarded, his claim
fails. Peterson teaches that the plea agreement need not
specify the final amount of restitution to be ordered by
the court. Id. at 534-35.
Panice also disputes the amount of restitution owed. At
his change of plea hearing, he claimed that he sent some
of the Receiver victims refunds and that “[t]hey were all
paid by the end.” But then he was less certain, testifying
that “I thought they were all paid. I might be mistaken.”
Panice asserts that his counsel argued that “most, if not
all, Receiver victims recovered or were reimbursed
the application fees.” But argument does not replace
evidence or other reliable information. Panice offered no
24 No. 08-3323

evidence to refute the factual assertion in the PSR that the
outstanding loss in the Receiver case was $88,895. This
assertion was based on the representation by AUSA
Podliska, the prosecutor in the Receiver case. At Panice’s
sentencing, Podliska stated that at least $88,000 in restitu-
tion was ordered in the Receiver case. He said that the
judgment in Tony Volz’s case listed the victims and the
amount of restitution owed each, reflecting a total “close
to $90,000.” Panice’s counsel claimed that he had never
seen “the document”—a copy of Volz’s J&C—but did not
object to the court’s consideration of it or to AUSA
Podliska’s representations.
A district court “may rely on the information contained
in the PSR so long as it is well supported and appears
reliable.” United States v. Heckel, 570 F.3d 791, 795 (7th Cir.
2009). Panice had the burden of showing that the PSR
was inaccurate or unreliable. See id. A “bare denial of its
accuracy” does not discharge this burden. Id. (quota-
tion omitted). The government has the burden of demon-
strating the accuracy of such information only when a
defendant “creates real doubt” as to the information’s
reliability. Id. at 795-96. As stated, the prosecutor’s repre-
sentations formed the basis for the PSR’s conclusion that
the actual loss in the Receiver case was $88,895. The
information in the PSR was backed up by AUSA
Podliska’s statements at the sentencing hearing and
Volz’s judgment. Neither Panice’s assertions at his guilty
plea hearing nor his arguments at sentencing created real
doubt as to the reliability of the information that the
actual loss was $88,895. Panice had the opportunity to
present additional information at his sentencing hearing
No. 08-3323 25

regarding the amount of restitution that should be
made. And the court specifically asked the parties
whether there was anything of a factual nature in the PSR
that they took exception to, and Panice’s counsel said
there was not.
Panice’s claim that the district court violated Federal
Rule of Criminal Procedure 32(i)(1)(C) and (D) and U.S.S.G.
§ 6A1.3 is incorrect.3 The loss to the Receiver victims
was not reasonably in dispute, and Panice had a suf-
ficient opportunity to present information to the court
regarding the amount of restitution outstanding in the
Receiver case. But Panice points out a discrepancy in
the amount of restitution ordered to the Receiver vic-

3
Rule 32 provides in part: “At sentencing, the court: . . . (C)
must allow the parties’ attorneys to comment on the probation
officer’s determinations and other matters relating to an
appropriate sentence; and (D) may, for good cause, allow a party
to make a new objection at any time before sentence is im-
posed.”
Section 6A1.3 provides in part:
(a) When any factor important to the sentencing
determination is reasonably in dispute, the parties shall
be given an adequate opportunity to present informa-
tion to the court regarding that factor. . . . [T]he court
may consider relevant information . . . provided that
the information has sufficient indicia of reliability to
support its probable accuracy.
(b) The court shall resolve disputed sentencing factors
at a sentencing hearing in accordance with Rule 32(i),
Fed. R. Crim. P.
26 No. 08-3323

tims. The judgment orders Panice to pay $89,325 to the
Receiver victims; however, Volz’s judgment in the
Receiver case ordered restitution of $88,895—a difference
of $430. The government has not offered an explanation
for the difference, and we presume it is a typographical
error which can be corrected on remand.
As for Panice’s objection to the restitution ordered to
Bank Watch victims, the government responds that the
investors whose funds were frozen had not yet been
reimbursed at the time of Panice’s sentencing. The gov-
ernment represents that once the funds are disbursed
to the victims, Panice will get credit and the amount of
restitution owed will be reduced accordingly. But the
government does not respond to Panice’s argument
regarding the $607,509.39 of investor funds for which
payment was stopped or the investors were reimbursed.
It would be improper to order Panice to make restitu-
tion for amounts that already were returned to victims
or for which payments were stopped.
We note, too, that there is a discrepancy in the amount
to be paid. A document attached as Exhibit 5 to the Gov-
ernment’s Version of Events, entitled “Appendix A Sum-
mary of Investors,” prepared by Special Agent Mark
Lischka, shows that $582,509.39 of investor funds were
stopped or returned. The PSR relied on the Government’s
Version in asserting that the actual loss from the
Bank Watch scheme was $4,822,494.61. At sentencing,
the district court ordered restitution to the Bank
Watch victims in the sum of $4,822,494.61, presumably
in reliance on the PSR and Government’s Version.
No. 08-3323 27

Yet, Government’s Exhibit 43, a document entitled, “Ac-
counting for Disposition of Funds Bank Watch,” also
prepared by Agent Lischka and presented at sentencing,
reflects that $607,509.39 in investor funds were stopped
or returned. Thus, it seems that $25,000 in additional
funds were returned to investors between the time
Agent Lischka prepared Exhibit 5 and Exhibit 43, and
the district court inadvertently relied on the earlier docu-
mentation. This error can be corrected on remand as well.
Moreover, the order of restitution in Panice’s Judgment
includes a total of $4,826,358.52 for Bank Watch victims,
which is $3,863.91 more than the amount in the PSR
and the Government’s Version. The reason for this dis-
crepancy is not explained. Assuming the inclusion of the
additional sum is an error, this, too, can be corrected
on remand.

E. Presumption of Reasonableness and
Consideration of § 3553(a) Factors
Finally, Panice argues that the district court treated the
Guidelines as presumptively reasonable and appropriate
and failed to adequately consider the § 3553(a) sentencing
factors. In our post-Booker world, see United States v. Booker,
543 U.S. 220 (2005), the Guidelines are advisory. The
district court may not presume that a within-Guidelines
sentence is reasonable. Nelson v. United States, 129 S. Ct.
890, 892 (2009) (per curiam) (“The Guidelines are not
only not mandatory on sentencing courts; they are also not
to be presumed reasonable.”); Gall v. United States, 552
28 No. 08-3323

U.S. 38, 50 (2007). When sentencing, the district court
“must first calculate the Guidelines range, and then
consider what sentence is appropriate for the individual
defendant in light of the statutory sentencing factors, 18
U.S.C. § 3553(a).” Nelson, 129 S. Ct. at 891-92. We are
not confident based on the record that the district court
did not treat a within-Guidelines sentence as presump-
tively reasonable.
The seasoned district judge obviously knew that the
Guidelines are advisory. He first noted that the Guide-
lines “are advisory in nature, and Section 3553 guides
my determination of the appropriate sentence.” The
judge said that when he thinks the Guidelines do not
provide a fair sentence, he is not advised by them and
he was “quite aware of the discretion” that he had. The
judge said, “if I could articulate reasons where I could
ignore the Guidelines, I will do that.”
However, the judge also said a few things that suggest
that he may have inadvertently slipped into the mode of
applying a presumption of reasonableness to the Guide-
lines range. He said:
. . . I guess I just keep talking because I do not
want to get to where I have to go here, but I have to go
there. I have to.
I am going to apply the Guidelines in this case.
The low end, yes, but the low end is awfully high.
And I make no pretense that it is not. But I do not
know what else to do here because you gave me no
choice.
(Emphasis added). Then the judge said:
No. 08-3323 29

And he [Panice’s attorney] had to deal with the
statutory scheme that is presumptively reasonable. Even
the cases that have been cited to me say that. So,
that is where we start; and, in this case, that is
where we end.
So, it is with my own personal anguish that I am
going to impose the following sentence, but I have
to do it because the facts and circumstances of
this case and justice compels it. . . .
Your sentence will be . . . 360 months . . . .
(Emphasis added).
The government acknowledges that the judge’s remarks
are subject to a variety of interpretations. And we are
unsure precisely what the judge meant. The government
asserts that the record as a whole reveals that the judge
was well aware that the Guidelines were not mandatory,
but advisory. It is correct that the judge stated the
premise that the Guidelines are merely advisory, but that
is beside the point. See Nelson, 129 S. Ct. at 892 (reversing
Fourth Circuit’s judgment upholding defendant’s sen-
tence where the sentencing court stated that the Guide-
lines are advisory but presumptively reasonable). While
the judge’s comments show that he knows the Guidelines
are advisory (of which we had no doubt because he is
an able and experienced district judge), some of his
remarks, noted above, leave us to wonder whether he
treated them as presumptively reasonable in this case.
And we have the additional concern that the judge did
not give adequate consideration to the § 3553(a) sentencing
30 No. 08-3323

factors in deciding the appropriate sentence. Panice
contends that he argued subsection (a)(1)—the nature
and circumstances of the offense and the history and
characteristics of the defendant—and tried to argue
subsection (a)(6)—the need to avoid unwarranted sen-
tence disparities among defendants with similar records
who have been found guilty of similar conduct—but was
cut off by the court. Of particular concern is whether the
judge gave meaningful consideration to § 3553(a)(6). The
transcript of the sentencing hearing does reflect that the
judge did not seem receptive to considering the need
to avoid unwarranted sentence disparities. He stopped
Panice’s lawyer short as he was trying to make a compari-
son to Conrad Black, who was convicted by a jury of mail
and wire fraud and obstruction of justice.4 Black’s fraud
resulted in a loss of $6.1 million. Black’s case came out
of the same district as Panice’s, and Black was sentenced
to 78 months’ imprisonment. Panice also asserted that the

4
At sentencing, the court quickly rejected the comparison,
saying that “he [Black] paid back $30 million. Okay? . . . [T]his
is a fundamental factual feature which distinguishes this case
from that case.” Courts can consider whether a defendant has
accepted responsibility and his cooperation with the govern-
ment in deciding on an appropriate sentence. Such conduct
can lead to a warranted sentencing disparity. See, e.g., United
States v. Bartlett, 567 F.3d 901, 907-08 (7th Cir. 2009) (addressing
disparities in sentences of codefendants), cert. denied, 78 U.S.L.W.
3113 (U.S. Jan. 19, 2010) (No. 09-302). But here, it is unclear
whether the court gave meaningful consideration to the
§ 3553(a)(6) factor or simply rejected the comparison out
of hand.
No. 08-3323 31

district court should consider the likely sentence for his
codefendant, Brian Jines, which the parties anticipated
would be approximately 90 months. (Jines pled guilty to
one count of mail fraud and one count of unlawful struc-
turing of transactions related to Bank Watch and, like
Panice, stipulated to the offenses charged in the Receiver
case. In October 2008, Judge Kocoras sentenced Jines to
89 months’ imprisonment. Jines had received a reduction
for acceptance of responsibility and apparently co-
operated with the government and assisted in the
recovery of victims’ funds.)
In addition, on appeal Panice identified several defen-
dants convicted of conduct similar to his to show the
alleged unwarranted sentencing disparities:
(1) John and Timothy Rigas, convicted by a jury of
18 counts including fraud and conspiracy; loss
in excess of $100 million; sentenced in 2005 to 15
and 20 years, respectively (following appeal,
reversal on one count, and remand, they were
resentenced in 2008 to 12 and 17 years);
(2) Jeffrey Skilling, former CEO of Enron Corpora-
tion, convicted by a jury of 29 counts of conspiracy,
fraud and other offenses; sentenced in 2006 to 24
years and 4 months’ imprisonment and ordered
to pay $45 million in restitution; and
(3) Bernard Ebbers, former CEO of WorldCom,
Inc.; largest accounting scandal in the United States
that pre-dated Bernard Madoff; convicted in 2005
of 9 felonies including conspiracy and securities
32 No. 08-3323

fraud; over $1 billion loss to investors; sentenced
to a below-Guidelines sentence of 25 years.5
Other comparators are found in United States v. Parris, 573
F. Supp. 2d 744, 747, 748 (E.D.N.Y. 2008) (defendant
brothers were convicted by a jury of conspiracy,
securities fraud, and witness tampering and sentenced
to 60 months; the amount of the loss was approximately
$4.9 million and there were more than 500 victims), and
the Exhibit A thereto, id. at 756-62.
Of course, we can appreciate the difficulty faced by a
sentencing judge in addressing “the need to avoid unwar-
ranted sentence disparities.” But a careful review of the
sentencing materials and transcript leaves us with the
impression that the court did not give adequate consider-
ation to the disparities between Panice’s sentence and
those given to other white collar criminals such as Conrad
Black, the Rigas brothers, and even codefendant Jines. (We
understand that Jines cooperated and assisted in the
recovery of funds, but the judge did not explain why
Panice’s sentence needed to be four times longer than
Jines’.) The amount of loss caused by Skilling and Ebbers
is much, much greater than that caused by Panice, yet their
sentences are significantly shorter than Panice’s.6 In

5
These defendants and their sentences were identified by the
government in its sentencing memorandum and attached
exhibit.
6
Bernard Madoff is in a league of his own. He pled guilty to
eleven counts of fraud, money laundering, perjury, and other
(continued...)
No. 08-3323 33

addition, the district court may have been thinking in
“either/or” terms: either Panice would get a Guidelines
sentence, or he would get the 60 months for which he
advocated. The judge’s comments at sentencing make it
difficult for us to know whether he gave meaningful
consideration to whether the sentencing factors justified
a sentence between these two extremes. Our concern
about whether the judge treated the Guideline range as
presumptively reasonable and whether he approached
the sentence from an “either/or” perspective is illustrated
by his sentencing comments quoted above.
Although a sentencing judge need not articulate the
§ 3553(a) factors in a checklist fashion, United States v.
Perez, 581 F.3d 539, 548 (7th Cir. 2009), the judge “is
required to consider the § 3553(a) factors and to address
any substantial arguments the defendant made,” United
States v. Mendoza, 576 F.3d 711, 721 (7th Cir. 2009). Here,
it is not clear that the judge gave meaningful considera-
tion to the factors argued by Panice—his history and
characteristics, including his lack of criminal history,
his offense was nonviolent, and other positive charac-
teristics supported by the testimony of Professor Gerald
Hills, Ph.D. and Panice’s teaching and lecturing of
other inmates at the Metropolitan Correctional Center
in Chicago.

6
(...continued)
offenses; he defrauded thousands of investors of approximately
$65 billion over seventeen years; and he was sentenced to
150 years.
34 No. 08-3323

As noted in Parris, defendants “who were not coopera-
tors and were responsible for enormous losses were
sentenced to double-digit terms of imprisonment (in
years); those whose losses were less than $100 million
were generally sentenced to single-digit terms.” Parris, 573
F. Supp. 2d at 753. Panice didn’t cooperate with the
government in recovering money for investors, but he did
plead guilty and took some responsibility. And the
losses he caused, even when viewed in the light least
favorable to him, were less than $5 million. The govern-
ment points out that Panice committed the Bank Watch
fraud while he was out on bond awaiting trial for the
fraud in the Receiver case. This certainly weighs in favor
of a lengthier sentence in order to promote respect for the
law and protect the public. See 18 U.S.C. § 3553(a)(2)(A),
(C). Nonetheless, and despite the loss and pain to many
victims caused by Panice’s greed, a 360-month sentence
seems out of line with the sentences imposed on other
defendants convicted of similar conduct.
The government cited United States v. Tucker, 232 Fed.
Appx. 597 (7th Cir. 2007), in urging us to affirm. The
district court in that case made a similar misstatement
about the Guidelines range being presumptively reason-
able. We affirmed, finding that the court “thoroughly
discussed several of the factors listed under” § 3553(a),
including the seriousness of the offense and the defen-
dant’s extensive criminal history, and noted his medical
condition. We cannot say that the district court “thor-
oughly discussed” several of the § 3553(a) factors in
Panice’s case. Instead, the court focused on the pain that
Panice had caused so many people and the fact that
No. 08-3323 35

millions of dollars remained uncovered; these are
worthy concerns, no doubt. However, in addressing
only the effect of the losses, the court did not demon-
strate that the chosen sentence was “sufficient, but not
greater than necessary, to comply with the purposes” of
18 U.S.C. § 3553(a)(2).
A within-Guidelines sentence is entitled to a rebuttable
presumption of reasonableness. But the sentencing record
here leaves too much doubt about whether the judge
impermissibly started with that presumption and whether
he completed adequate consideration of all the relevant
§ 3553(a) factors, as we have discussed. Therefore, we
cannot affirm this sentence on that presumption. On
remand the district judge may still conclude that a 360-
month sentence is reasonable when considered in light
of all of the relevant § 3553(a) factors. But such a stiff
sentence would need to be justified by the articulation
of sufficient reasons.

III. Conclusion
For the foregoing reasons, we V ACATE Panice’s sen-
tence and R EMAND for resentencing consistent with this
opinion.

3-17-10