In the
United States Court of Appeals
For the Seventh Circuit
No. 10-2184
U NITED S TATES OF A MERICA,
Plaintiff-Appellee,
v.
M ARVIN P EUGH,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Western Division.
No. 08 CR 50014-1—Frederick J. Kapala, Judge.
A RGUED S EPTEMBER 20, 2011—D ECIDED M ARCH 28, 2012
Before R OVNER, W OOD and W ILLIAMS, Circuit Judges.
R OVNER, Circuit Judge. Marvin Peugh was convicted
after a jury trial of five counts of bank fraud, sentenced
to 70 months’ imprisonment, and ordered to pay nearly
two million dollars in restitution. He challenges his
conviction and sentence on the following grounds: that
his indictment was multiplicitous; that the prosecution
did not present sufficient evidence to prove his guilt
beyond a reasonable doubt; that his sentence violated
2 No. 10-2184
the ex post facto clause; that the district court miscalcu-
lated the loss and restitution amounts; that an enhance-
ment for obstruction of justice should not have been
imposed; and that the disparity between his sentence
and his co-defendant’s was improper. We affirm.
I.
In 1996 Peugh and his first cousin, Steven Hollewell,
formed two companies to do business with the farmers
of Illinois: the Grainery, Inc., which bought, stored, and
sold grain, and Agri-Tech, Inc., which provided custom
farming services to landowners and tenants. When the
Grainery began to experience cash-flow problems in 1999,
the cousins obtained bank loans from the State Bank of
Davis (later known simply as the State Bank) by falsely
representing that valuable contracts existed for future
grain deliveries from Agri-Tech to the Grainery. They
also inflated the balances of bank accounts under their
control by writing a series of bad checks between ac-
counts. As a result of these activities, Peugh and
Hollewell were charged with two bank-fraud schemes—
loan fraud and check kiting—in violation of 18 U.S.C.
§ 1344.
The indictment alleged that from January 1999 to
August 2000 Peugh and Hollewell executed both schemes
multiple times. Counts 1-3 charged the two men with
defrauding State Bank of more than $2.5 million by sup-
porting loan applications with materially fraudulent and
misleading information, specifically, financial reports
describing the sham grain-delivery contracts between Agri-
No. 10-2184 3
Tech and the Grainery. According to the indictment,
Peugh and Hollewell applied for the first loan in
January 1999 ($2,000,000), the second in February 2000
($200,000), and the third in June 2000 ($350,000). Counts 4-9
of the indictment charged Peugh and Hollewell
with five instances of check kiting by writing a series of
bad checks between business and personal accounts. This
scheme allowed the cousins to overdraw an account
at Savanna Bank by $471,000.
Peugh pleaded not guilty to all charges. Hollewell
pleaded guilty to one count of check kiting and agreed
to testify against Peugh in exchange for the other counts
being dropped.
At trial Hollewell testified that the grain-delivery
contracts between Agri-Tech and the Grainery were a
sham from the start: he and Peugh had never intended
for Agri-Tech to deliver grain to the Grainery and Agri-
Tech had no means to fulfill the contracts. Hollewell’s
admissions were supported by the testimony of Bernard
Reese, who was Agri-Tech’s secretary and a member of
its board of directors. Reese explained that Agri-Tech
did not own any grain, that the board had never ap-
proved the buying or selling of grain, and that he had
never seen the grain-delivery contracts before the
criminal investigation of Peugh and Hollewell began.
A representative from State Bank then testified that
approval of the Grainery loans depended on the ex-
istence of the Agri-Tech grain-delivery contracts, which
composed nearly half of the Grainery’s assets in contracts.
The jury also heard testimony about the check-kiting
scheme. An FBI expert on check kites described his
4 No. 10-2184
analysis of Peugh and Hollewell’s bank records and
testified that the cousins had engaged in a check kite
from April to August of 2000. Hollewell’s father, Harlan
Hollewell (“Harlan”), testified that his son and Peugh
came to him in August 2000 after officials from Savanna
Bank confronted them with an overdraft of approxi-
mately $471,000. According to Harlan, Peugh and
Hollewell implored him to cover this deficit—they told
him that the bank was demanding immediate payment
and that they could face jail time if he did not supply
the money—and he complied.
Peugh testified in his own defense. As to the grain-
delivery contracts between Agri-Tech and the Grainery,
he conceded that Agri-Tech had no grain to sell, but he
insisted that the contracts were nonetheless made in
good faith. Agri-Tech customers were to supply the
grain, he claimed, though he admitted that no Agri-Tech
customer had actually agreed to supply grain. Regarding
the check kite, Peugh maintained that he had not
intended to defraud Savanna Bank; the bank was
never in danger of loss, he said, because Harlan had
previously promised to cover any overdrafts. (Harlan
testified to the contrary.) Peugh could not explain, how-
ever, why he and Hollewell risked the check kite if
Harlan was willing to supply the funds they needed. The
jury found Peugh guilty of the charges in counts 3, 4, 5, 8,
and 9 and acquitted him of the rest.
At sentencing Peugh raised a number of objections to
the presentence report. He first argued that sentencing
him under the 2009 guidelines (then in effect) rather
No. 10-2184 5
than under the 1999 guidelines (in effect at the time he
committed his offenses) would violate the ex post facto
clause because it would result in a significantly higher
sentencing range. The court rejected this argument
based on United States v. Demaree, 459 F.3d 791, 795 (7th
Cir. 2006), in which we held that using the guidelines
in effect at the time of sentencing rather than the time
of the offense does not violate the ex post facto
clause because the guidelines are merely advisory.
Peugh also challenged the presentence report’s loss-
amount calculation, contending that the loss amount
should have been reduced by the interest he paid on
the loans. The court, however, agreed with the govern-
ment that the interest payments were irrelevant because
they did not reduce the loans’ outstanding principal
balance. Peugh similarly argued that the money
Harlan paid to cover the bank overdraft should be sub-
tracted from the loss amount, but the court explained
that Harlan made this payment after the bank had
detected the loss, and only money paid to a victim
before detection of an offense can be deducted.
Peugh next objected to the presentence report’s restitu-
tion calculation, arguing that he should not have to
pay restitution for the loans described in counts 1 and 2
because he was acquitted on those counts. But the court
concluded that the Mandatory Victim Restitution Act
required restitution to be made for all three loans
because a preponderance of the evidence showed all
three to have been part of the loan-fraud scheme alleged
in count 3, on which Peugh was convicted.
6 No. 10-2184
Finally, Peugh contended that he should receive the
same prison sentence as Hollewell—12 months—to
avoid an unwarranted disparity in sentences. The
district court rejected this argument because, unlike
Hollewell, Peugh went to trial, did not assist the gov-
ernment, and obstructed justice by perjuring himself.
The court sentenced Peugh within the guidelines to
70 months’ imprisonment and three years’ supervised
release and made Peugh and Hollewell jointly and sever-
ally liable for restitution in the amount of $1,967,055.30.
This was the total outstanding balance due on the
three loans, less what the bank was able to recover by
disposing of collateral. The check-kiting money was
not included in the restitution amount because it had
been repaid by Harlan.
II.
A. Multiplicity
On appeal Peugh argues for the first time that the
indictment in his case was multiplicitous. An indictment
is multiplicitous—and a violation of the Fifth Amend-
ment’s double jeopardy clause—if it charges a single
offense in more than one count. See United States v.
Hassebrock, 663 F.3d 906, 916 (7th Cir. 2011); United
States v. Allender, 62 F.3d 909, 912 (7th Cir. 1995). Ac-
cording to Peugh, counts 1-3 charged him three times
with fraudulently obtaining a single loan, and so his loan-
fraud conviction should be reversed. Because Peugh did
not raise this issue in the district court, we review for
plain error. See Hassebrock, 663 F.3d at 916.
No. 10-2184 7
There was no plain error in the district court’s failure
to strike counts 1-3 for multiplicity. The indictment did
not charge Peugh with fraudulently obtaining just one
loan; rather, counts 1-3 charged him with fraudulently
obtaining three loans in the course of a single bank-fraud
scheme. Each loan constituted a separate “execution” of
the scheme, and each execution of a bank-fraud scheme
can be charged in a separate count. See, e.g., Allender, 62
F.3d at 912; United States v. Longfellow, 43 F.3d 318, 323
(7th Cir. 1994); United States v. De La Mata, 266 F.3d 1275,
1287 (11th Cir. 2001); United States v. Colton, 231 F.3d 890,
909 (4th Cir. 2000). Conduct generally qualifies as an
“execution” rather than an “act in furtherance” when it
is chronologically and substantively distinct and subjects
the victim to additional risk of loss. Longfellow, 43 F.3d
at 323-24. Here, although one bank made all of the
loans, Peugh and Hollewell applied for each loan at a
different times with different supporting documents,
and each loan put the bank at additional risk of loss.
B. Sufficiency of Evidence
Peugh next contends that the prosecution failed to
prove one of the elements of his offense beyond a reason-
able doubt: his specific intent to defraud State Bank.
But intent need not be proved by direct evidence; the
jury was free to infer Peugh’s intent to defraud from his
actions—for instance his submitting on three occasions
fraudulent and misleading information to State Bank
in support of loan applications—and disbelieve his con-
trary testimony. See United States v. Howard, 619 F.3d 723,
8 No. 10-2184
727 (7th Cir. 2010). Because a rational jury could have
found beyond a reasonable doubt that Peugh intended
to defraud State Bank, the evidence of his intent was
sufficient to support his conviction. See United States v.
Durham, 645 F.3d 883, 892 (7th Cir. 2011).
C. Ex Post Facto/Demaree
Peugh renews his argument that the district court
violated the ex post facto clause by calculating his sen-
tence under the 2009 rather than the 1999 guidelines,
which were in effect at the time he committed his of-
fenses. Under the 2009 guidelines, Peugh’s advisory range
jumped by more than 20 months. Peugh acknowledges that
our holding in United States v. Demaree, 459 F.3d 791, 795
(7th Cir. 2006), undercuts his position, but he urges us to
reconsider that case and overrule it. We, however, stand
by Demaree’s reasoning—the advisory nature of the guide-
lines vitiates any ex post facto problem—and again decline
the invitation to overrule it, see, e.g., United States v. Robert-
son, 662 F.3d 871, 876 (7th Cir. 2011); United States v.
Holcomb, 657 F.3d 445, 448-49 (7th Cir. 2011); United States
v. Favara, 615 F.3d 824, 829 (7th Cir. 2010).
D. Loss Amount
Peugh maintains that the district court should have
reduced the loss amount by $213,000—the interest he
paid on the loans from State Bank—because he gave this
money to his victim before the fraud was discovered.
Under the guidelines, “money returned . . . to the victim
No. 10-2184 9
before the offense was detected” is to be credited
against loss. U.S.S.G. § 2B1.1, Application Note 3(E)(i);
United States v. Hausmann, 345 F.3d 952, 960 (7th Cir. 2003).
We have not had occasion to address whether
interest payments should be credited against loss in
fraudulent loan cases, but we conclude that the district
court correctly declined to deduct Peugh’s interest pay-
ments from the loss amount. These payments were not
money “returned” to State Bank: they did not reduce
the loans’ outstanding principal balance; instead they
were exchanged for value in the form of time holding the
bank’s money. See United States v. Johnson, 16 F.3d 166, 171
(7th Cir. 1994) (explaining that in fraudulent loan cases,
loss is measured “by the difference in value exchanged
rather than simply by the face value of the loan or by
the gross amount of money that changes hands”). More-
over, the guidelines specify that “interest of any kind” is
to be excluded from the loss amount. See U.S.S.G. § 2B1.1,
Application Note 3(D)(i). This implies that interest,
whether paid or unpaid, is to play no role in the loss
calculation. In other words, if interest accrued does not
increase the loss amount—and it did not here—then
interest paid should not reduce it either. See United
States v. Allen, 88 F.3d 765, 771 (9th Cir. 1996) (“[T]he
district court used only the loan principal to calculate
the ‘amount of the loan;’ it did not consider accrued
interest. Therefore, payments made toward interest
cannot be considered as repayments made on the loan.”);
United States v. Coghill, 204 Fed.Appx. 328, 330, 2006
WL 3327057 (4th Cir. Nov. 15, 2006) (unpublished)
(holding that neither interest accrued nor interest paid
10 No. 10-2184
should factor into the loss amount). Additionally, money
spent to facilitate fraud is not deductible from the loss
amount, see United States v. Spano, 421 F.3d 599, 607 (7th
Cir. 2005), and Peugh’s interest payments facilitated his
loan-fraud scheme by keeping him in good standing with
State Bank while he fraudulently obtained additional loans.
Peugh also contends, as he did in the district court,
that the loss amount should have been reduced by the
$471,000 that Harlan paid to cover the cousins’ check-
kiting overdraft. Harlan repaid this money to Savanna
Bank years before Peugh and Hollewell were charged
with a crime; according to Peugh, this means that the
money was returned “before the offense was detected” by
the victim. We disagree. A victim can detect an offense
without understanding its full scope, and “[t]he time to
determine [the] loss in a check-kiting scheme is the mo-
ment the loss is detected,” United States v. Mau, 45 F.3d
212, 216 (7th Cir. 1998). Savanna Bank officials may
have been unaware when they demanded repayment
that they had uncovered part of a scheme involving at
least 275 bad checks, but this does not undermine
the district court’s conclusion that the bank detected
Peugh’s offense as soon as it discovered its loss.
E. Restitution
Peugh renews his objection to paying restitution in the
amount of $1,967,055.30, which is the sum of the out-
standing balances of the three loans described in counts 1-
3, less collateral. He points out that the jury acquitted
him on counts 1 and 2 and that restitution can be
No. 10-2184 11
assessed only for losses related to a count of conviction;
thus, he reasons, he should only have to pay restitution
for the $350,000 loan described in count 3.
Peugh is correct that he can be required to pay restitu-
tion only for losses caused by crimes of which he was
convicted, see United States v. Frith, 461 F.3d 914, 920-21
(7th Cir. 2006); United States v. Belk, 435 F.3d 817, 819-20
(7th Cir. 2006), but he is wrong that the district court
should not have ordered him to pay restitution for all
three loans described in the indictment. When a “scheme”
is an element of the offense of conviction—as it is in
bank fraud, see 18 U.S.C. § 1344—the Mandatory Victim
Restitution Act requires restitution for the losses caused
by the entire scheme, even if the defendant is not con-
victed of all of the conduct that caused loss. See 18 U.S.C.
§ 3663A(a)(2); Belk, 435 F.3d at 819-20. Here, Peugh
was convicted on count 3—which alleged that he fraudu-
lently obtained a $350,000 loan as part of a broader
scheme to defraud State Bank of more than $2.5 mil-
lion—and the district court found by a preponderance
of the evidence that the loans described in counts 1 and 2
were part of that scheme. Because restitution is cal-
culated based on a preponderance of the evidence,
see 18 U.S.C. § 3664(e); United States v. Danford, 435 F.3d
682, 689 (7th Cir. 2006)—a lower standard than beyond a
reasonable doubt—Peugh’s acquittals on counts 1 and 2
had no bearing on the amount of restitution to be
ordered for his conviction on count 3.
12 No. 10-2184
F. Enhancement for Obstruction of Justice (Perjury)
Peugh also agues that the district court abused its
discretion by raising his offense level by two on the
basis that he obstructed justice. We disagree. The district
court explained that the obstruction-of-justice enhance-
ment under U.S.S.G. § 3C1.1 was appropriate in this case
because Peugh perjured himself at trial. The court cited
evidence of Peugh’s material, willful, and false state-
ments, see United States v. Ellis, 548 F.3d 539, 545 (7th
Cir. 2008), by discussing how his statements conflicted
with the testimony of Steven Hollewell, Harlan Hollewell,
and Bernard Reese. Peugh attributes these conflicts to
lies or outdated recollections on the part of the others—
noting for instance Harlan’s inability to remember all
the details of his business dealings with his son and
Peugh—but we see no reason to disturb the district
court’s assessment of the testimony.
G. Sentencing Disparity
Finally, Peugh argues that the disparity between
his six-year sentence and Hollewell’s one-year sentence
was improper under 18 U.S.C. § 3553(a)(6), which calls
for similar sentences for similarly situated defendants.
He points out that neither he nor Hollewell had prior
convictions and that both were charged with the
same offenses. That, however, is where the similarities
end. Only Hollewell pleaded guilty and cooperated with
the government. Peugh instead went to trial and ob-
structed justice by perjuring himself. Such distinctions
No. 10-2184 13
warrant disparate sentences. See United States v. Doe,
613 F.3d 681, 690-91 (7th Cir. 2010).
A FFIRMED.
3-28-12