United States v. Spitzer, No. 15-1278 (7th Cir. 2016)

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Spitzer pleaded guilty to 10 counts of mail fraud, based on a scheme that took in $106 million, which Spitzer promised to invest for clients. Less than $30 million was invested. The remainder was used to pay earlier investors or was siphoned off by Spitzer and others. The presentence report calculated a Guideline range of 292 to 365 months’ imprisonment. The base offense level was 7. A loss of approximately $34 million added 22 levels; the existence of more than 250 victims added six more. The PSR proposed two levels for use of sophisticated means, two because Spitzer personally took more than $1 million, and another four because Spitzer claimed to have acted as an investment adviser. Deducting three for acceptance of responsibility resulted in level 40. Spitzer’s lawyer asked that the loss be reduced to account for the fact that more than $70 million was returned to investors, some of whom were made whole, and $30 million was invested. The Seventh Circuit affirmed his 300-month sentence, noting that Spitzer owes restitution of $34 million to 458 people. Spitzer did not contend that the PSR was wrong in calculating the offense level to 40, so the abbreviated judicial explanation was not error.

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In the United States Court of Appeals For the Seventh Circuit ____________________ No. 15- 1278 UNITED STATES OF AMERICA, Plaintiff- Appellee, v. DANIEL SPITZER, Defendant- Appellant. ____________________ Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 10 CR 651 — James B. Zagel, Judge. ____________________ ARGUED FEBRUARY 8, 2016 — DECIDED FEBRUARY 10, 2016 ____________________ Before POSNER, EASTERBROOK, and HAMILTON, Circuit Judges. EASTERBROOK, Circuit Judge. Daniel Spitzer pleaded guilty to ten counts of mail fraud, confessing liability for a scheme that took in about $106 million—all of which Spitzer prom- ised to invest for his clients’ benefit—but returned only $72 million or so to investors. Less than $30 million ever was in- vested. The remainder was used, after the fashion of Ponzi 2 No. 15- 1278 schemes, to pay earlier investors, or was siphoned off by Spitzer and others. The presentence report calculated a Guideline range of 292 to 365 months’ imprisonment, which flowed from an of- fense level of 40 and a criminal history category I. The base offense level was 7. See U.S.S.G. §2B1.1(a)(1). A loss of ap- proximately $34 million added 22 levels, and the existence of more than 250 victims added a further six. The PSR pro- posed two levels for use of sophisticated means, two because Spitzer personally took more than $1 million out of the kitty, and another four because Spitzer claimed to have acted as an investment adviser. Take three off for acceptance of respon- sibility, and the result is level 40. At sentencing, Spitzer’s lawyer contested this calculation by asking that the loss be reduced to account for the fact that more than $70 million was returned to investors, some of whom were made whole, and $30 million of the $106 million was invested (at least for a time). But as $34 million repre- sents investors’ net loss, it is hard to see how any further re- duction could be taken. See United States v. Walsh, 723 F.3d 802, 807–09 (7th Cir. 2013). The loss for Guidelines purposes might have been reduced if some of the $34 million had been attributable to financial markets, rather than fraud, but Spitzer did not attempt to show how investors would have fared if the funds had been operated as he promised. Some investors got out without injury, and redemption requests were honored until near the end when the funds ran out of money, but Spitzer conceded that he owes restitu- tion of some $34 million to 458 specific persons, which made it hard to contest the enhancement for 250 or more victims. He also conceded drawing more than $1 million for himself No. 15- 1278 3 and claiming to be an investment adviser, and the elaborate details through which the scheme was operated attest to so- phisticated means. The district judge stated that he agreed with the calculation in the PSR and sentenced Spitzer to 300 months’ imprisonment. In this appeal, Spitzer does not contest the calculation of the Guideline range. Nor does he contend that a 300- month sentence is unreasonable, given that range. Spitzer also does not contend that, in selecting the 300- month sentence, the judge failed to address his principal arguments for a shorter term or overlooked any of the factors in 18 U.S.C. §3553(a). Instead, the sole appellate argument is that the judge did not explain in more detail why he agreed with the PSR’s conclu- sion that offense level 40 applies. Yet as Spitzer does not con- tend that the PSR is wrong in any of the steps that gets the offense level to 40, it is hard to see why an abbreviated judi- cial explanation could be error. A judge who agrees with the PSR’s calculations can say so, without the need to repeat or re- rationalize them; the adoption of the PSR means that it speaks for the court as well as the staff. See, e.g., United States v. O’Doherty, 643 F.3d 209, 219 (7th Cir. 2011). The task of determining the right sentence, given the statutory factors, demands more judgment than the task of calculating the offense level, which in a case such as this is close to mechanical. That is why we require the judge to evaluate, on the record, the defendant’s substantial argu- ments for lenience. See, e.g., United States v. Cunningham, 429 F.3d 673 (7th Cir. 2005); United States v. Ramirez- Fuentes, 703 F.3d 1038, 1047–49 (7th Cir. 2013). By contrast, a simple statement of agreement with the PSR shows why the judge 4 No. 15- 1278 approves the offense level that has been explained in the PSR: the judge thinks that the staff got it right. And what would be the point of a remand? Since Spitzer does not now contend that his offense level is less than 40, all a remand could do would be to produce empty words en route to an inevitable outcome. AFFIRMED

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