Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-18-50268/USCOURTS-ca9-18-50268-0/pdf.json

Parties Involved:
Christopher Paul George
Appellant
United States of America
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

CHRISTOPHER PAUL GEORGE,

Defendant-Appellant.

No. 18-50268

D.C. No.

5:12-cr-00065-VAP-2

OPINION

Appeal from the United States District Court

for the Central District of California

Virginia A. Phillips, Chief District Judge, Presiding

Argued and Submitted September 11, 2019

Pasadena, California

Filed February 4, 2020

Before: John B. Owens, Ryan D. Nelson,

and Eric D. Miller, Circuit Judges.

Opinion by Judge Miller

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2 UNITED STATES V. GEORGE

SUMMARY*

Criminal Law

The panel affirmed a sentence for mail fraud, wire fraud, 

and conspiracy, in a case in which the defendant co-owned 

and operated companies that defrauded nearly 5,000 

homeowners out of millions of dollars.

The panel held that U.S.S.G. § 2B1.1(b)(2)(C), which 

provides for a six-level enhancement if the offense “resulted 

in substantial financial hardship to 25 or more victims,” 

requires the sentencing court to determine whether the 

victims suffered a loss that was significant in light of their 

individual financial circumstances. The panel held that the 

district court did not abuse its discretion in concluding that 

25 or more victims suffered substantial financial hardship. 

The panel wrote that the district court would not have been 

required to identify specific victims by name even if it had 

been asked to do so, and that it was sufficient for the 

government to produce evidence for enough of the victims 

to allow the sentencing court reasonably to infer a pattern. 

The panel held that both but-for and proximate causation 

were present.

The panel held that the district court did not abuse its 

discretion in imposing a sentence within the Sentencing 

Guidelines range. The panel wrote that, as the defendant 

recognizes, United States v. Green, 722 F.3d 1146 (9th Cir. 

2013), forecloses his argument that the restitution order 

violated Apprendi v. New Jersey, 530 U.S. 466 (2000), 

* This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.

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UNITED STATES V. GEORGE 3

because the judge, rather than a jury, determined the amount 

of the loss caused by the defendant.

COUNSEL

Benjamin L. Coleman (argued), Coleman & Balogh LLP,

San Diego, California, for Defendant-Appellant.

Aron Ketchel (argued) and Tritia L. Yuen, Assistant United 

States Attorneys; L. Ashley Aull, Chief, Criminal Appeals 

Section; Nicola T. Hanna, United States Attorney; United 

States Attorney’s Office, Los Angeles, California; for 

Plaintiff-Appellee.

OPINION

MILLER, Circuit Judge:

Christopher George co-owned and operated companies 

that defrauded nearly 5,000 homeowners out of millions of 

dollars. A jury found him guilty of mail fraud, wire fraud, 

and conspiracy, in violation of 18 U.S.C. §§ 1341, 1343, and 

1349. The district court originally sentenced him to 

240 months of imprisonment and ordered him to pay more 

than $7 million in restitution.

George appealed. We affirmed his conviction but 

vacated his sentence and remanded to the district court with 

instructions to recalculate the total offense level and to 

consider recent changes to the United States Sentencing 

Guidelines in determining a reasonable sentence. United 

States v. George, 713 F. App’x 704, 705 (9th Cir. 2018). At 

resentencing, George asked the district court to apply the 

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4 UNITED STATES V. GEORGE

newer version of the Guidelines (reflecting the November 

2015 amendments), and the government agreed. Using the 

new Guidelines, the district court applied many of the same 

enhancements and reduced George’s sentence by just five 

months, to 235 months. It also left the restitution order in 

place.

George again challenges his sentence. He focuses on the 

district court’s application of section 2B1.1(b)(2)(C) of the 

Guidelines, which provides for a six-level enhancement if 

the offense “resulted in substantial financial hardship to 25 

or more victims.” U.S.S.G. § 2B1.1(b)(2)(C) (2016). We 

review the district court’s interpretation of the Sentencing 

Guidelines de novo, its factual findings for clear error, and 

its application of the Guidelines to the facts for abuse of 

discretion. United States v. Gasca-Ruiz, 852 F.3d 1167, 

1170–72 (9th Cir. 2017) (en banc). We affirm.

George argues that the district court erred in finding that 

25 or more victims suffered substantial financial hardship. 

Addressing that argument requires us to examine the 

meaning of “substantial financial hardship,” a term we have 

not previously interpreted. We conclude that section 

2B1.1(b)(2) requires the sentencing court to determine 

whether the victims suffered a loss that was significant in 

light of their individual financial circumstances.

We begin by considering the first word in the operative 

part of the provision: the adjective “substantial.” The 

Supreme Court has recognized that “substantial” indicates 

“considerable” or “to a large degree.” Toyota Motor Mfg., 

Ky., Inc. v. Williams, 534 U.S. 184, 196 (2002) (citing 

Webster’s Third New International Dictionary 2280 

(1976)); see also Black’s Law Dictionary 1728 (11th ed. 

2019) (defining “substantial” as “material”); Webster’s 

Third New International Dictionary 2280 (1993) (“being of 

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UNITED STATES V. GEORGE 5

moment: important”). By including “substantial” before 

“financial hardship,” the provision excludes minor or 

inconsequential financial harms. That conclusion is 

supported by the noun “hardship,” which itself suggests 

something more than a mere inconvenience. See Webster’s 

Third New International Dictionary 1033 (1993) 

(“suffering, privation”). In other words, to be substantial, the 

victim’s financial hardship must be significant.

Significance and substantiality are relative concepts: to 

satisfy section 2B1.1(b)(2), financial hardship must be 

substantial in comparison to something else. Cf. United 

States v. Munster-Ramirez, 888 F.2d 1267, 1270 (9th Cir. 

1989) (examining the Guidelines’ reference to “a substantial 

portion of [the defendant’s] income” and concluding that it 

“must be defined in relative terms”). The most natural point 

of comparison is the financial condition of the victim.

The application notes in the commentary to the 

Guidelines point in the same direction. See Stinson v. United 

States, 508 U.S. 36, 38 (1993) (Guidelines commentary “is 

authoritative unless it violates the Constitution or a federal 

statute, or is inconsistent with, or a plainly erroneous reading 

of, that guideline.”). The notes provide:

In determining whether the offense resulted 

in substantial financial hardship to a victim, 

the court shall consider, among other factors, 

whether the offense resulted in the victim—

becoming insolvent;

filing for bankruptcy . . . ;

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6 UNITED STATES V. GEORGE

suffering substantial loss of a 

retirement, education, or other 

savings or investment fund;

making substantial changes to his or 

her employment, such as postponing 

his or her retirement plans;

making substantial changes to his or 

her living arrangements, such as 

relocating to a less expensive home; 

and

suffering substantial harm to his or 

her ability to obtain credit.

U.S.S.G. § 2B1.1 cmt. n.4(F). The notes reinforce the 

conclusion that our inquiry must consider how the loss 

affects the victim. For some victims, a loss of, say, $10,000 

might not have any of the listed effects. For others, a much 

smaller loss might have such effects. The provision thus 

requires a focus on the victims’ individual circumstances, a 

focus that is consistent with the Sentencing Commission’s 

goal in amending section 2B1.1 in 2015 to “place greater 

emphasis on the extent of harm that particular victims 

suffer.” Sentencing Guidelines for United States Courts, 

80 Fed. Reg. 25,782-01, 25,791 (May 5, 2015).

Our interpretation of section 2B1.1(b)(2) accords with 

that of other courts of appeals that have examined the 

provision. As the Seventh Circuit has explained, “whether a 

loss has resulted in a substantial hardship . . . will, in most 

cases, be gauged relative to each victim,” and “[t]he same 

dollar harm to one victim may result in a substantial financial 

hardship, while for another it may be only a minor hiccup.” 

United States v. Minhas, 850 F.3d 873, 877 (7th Cir. 2017); 

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UNITED STATES V. GEORGE 7

accord United States v. Castaneda-Pozo, 877 F.3d 1249, 

1252 (11th Cir. 2017) (per curiam) (“[T]he inquiry is 

specific to each victim.”); United States v. Brandriet, 

840 F.3d 558, 561 (8th Cir. 2016) (per curiam) (examining 

the impact of the conduct on “the cost of [the victim’s] living 

expenses”).

In advocating a narrower understanding of “substantial 

financial hardship,” George relies on our decision in United 

States v. Merino, 190 F.3d 956 (9th Cir. 1999). In that case, 

we examined a Guidelines enhancement for environmental 

offenses for which “cleanup required a substantial 

expenditure.” Id. at 958 (quoting U.S.S.G. § 2Q1.2(b)(3)). 

According to George, because we held in Merino that a 

$32,000 cleanup expenditure was not substantial, it follows 

that his victims’ losses, most of which were smaller than 

that, “would not be substantial.” In fact, we recognized in 

Merino that substantiality depends on context: “[W]hat is a 

‘substantial’ expenditure for one thing, such as buying 

furniture, is not very ‘substantial’ for another, such as if one 

were purchasing a dwelling for $32,000.” Id. Our 

interpretation of section 2B1.1(b)(2) is faithful to that 

principle.

So was the district court’s decision here. The court found 

that “[t]here was clear and convincing evidence here in the 

form of trial testimony from numerous victims that the 

victims experienced substantial financial hardship because 

of this offense.” George’s companies targeted distressed 

homeowners, falsely claiming to be operating under a loanmodification program sponsored by the federal government. 

Most of the victims paid fees of between $1,000 and $3,000, 

and, as the district court explained, “given the state that most 

of the victims were in, that was not an insubstantial sum at 

the time.” Victims were instructed to stop making payments 

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8 UNITED STATES V. GEORGE

on their mortgages, and some “lost their residences because 

they either made their payments to [George’s companies] 

instead of to their lender or, in some instances, their names 

were forged on documents which led to the foreclosure of 

their property.”

George concedes that his victims lost between $1,000 to 

$3,000 in fees paid to his companies, but he asserts that the 

loss of those amounts does not constitute substantial

financial hardship. George is right that, for some victims, 

causing the loss of a few thousand dollars would not be 

substantial enough to trigger the enhancement. But the 

district court did not clearly err in determining that “given 

the state that most of [George’s] victims were in,” a few 

thousand dollars was indeed substantial. And at least 

25 victims lost much more than that amount in fees—some 

lost their homes; some filed for bankruptcy; and many others

borrowed money to avoid foreclosure, fell further behind on 

mortgage payments, renegotiated their loans on worse terms, 

or paid additional penalties and fines. The district court did 

not abuse its discretion in concluding that 25 or more victims 

suffered substantial financial hardship.

George objects that the district court did not identify 

25 specific victims who suffered substantial hardship. We do 

not agree that the district court would have been required to 

identify specific victims by name even if it had been asked 

to do so. We have held that estimating losses does not require 

“absolute precision,” and a district court may “make a 

reasonable estimate . . . based on the available information.” 

United States v. Zolp, 479 F.3d 715, 719 (9th Cir. 2007). We

conclude that the same is true of counting victims. Other 

courts have rejected the suggestion that a sentencing court 

must “identif[y] which of the particular victims it [is] 

including in its calculation.” Minhas, 850 F.3d at 879; see 

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UNITED STATES V. GEORGE 9

also United States v. Poulson, 871 F.3d 261, 269 (3d Cir. 

2017). Instead, it was “sufficient for the government to 

produce evidence for enough of the [victims] to allow the 

sentencing court reasonably to infer a pattern.” United 

States v. Pham, 545 F.3d 712, 720 n.3 (9th Cir. 2008).

In any event, George conceded that at least 25 of his 

victims lost between $1,000 to $3,000 in fees and stopped 

paying their mortgages as a result of his scheme, and he 

merely raised legal challenges to the application of the 

section 2B1.1(b)(2)(C) enhancement. Because he never 

challenged any specific factual inaccuracies in the 

presentence report, the district court correctly accepted the 

report’s findings, which showed that more than 25 victims 

suffered significant losses. See Fed. R. Crim. P. 32(i)(3)(A); 

United States v. Christensen, 732 F.3d 1094, 1102 (9th Cir. 

2013). The district court had no obligation to identify each 

of the 25 victims by name.

Even if 25 or more victims suffered substantial financial 

hardship, George says, the district court still should not have 

applied the enhancement because his conduct was not the 

cause of the hardship. Section 2B1.1(b)(2) refers to conduct 

that “resulted in” substantial financial hardship, language 

that we have interpreted to impose a causation requirement. 

See United States v. Hicks, 217 F.3d 1038, 1048–49 (9th Cir. 

2000). As relevant here, that requirement embraces two 

distinct concepts: but-for causation and proximate causation. 

See Burrage v. United States, 571 U.S. 204, 210 (2014). Butfor causation is a relatively undemanding standard: a but-for 

cause of a harm can be anything without which the harm 

would not have happened. See Stephens v. Union Pac. R.R. 

Co., 935 F.3d 852, 855 (9th Cir. 2019). Proximate causation 

is a more restrictive requirement that excludes some of the 

improbable or remote causal connections that would satisfy 

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10 UNITED STATES V. GEORGE

a pure but-for cause standard. Generally, proximate 

causation exists only when a harm was a foreseeable result 

of the wrongful act. See United States v. Pineda-Doval, 

614 F.3d 1019, 1028 (9th Cir. 2010). The government 

suggests that section 2B1.1(b)(2) does not require 

foreseeability, but proximate cause is a well-established 

principle of the common-law, and we presume that the 

Sentencing Commission did not mean to dispense with it 

without saying so. Cf. Lexmark Int’l, Inc. v. Static Control 

Components, Inc., 572 U.S. 118, 132 (2014); Hicks, 

217 F.3d at 1049. We agree with the government, however, 

that both but-for and proximate causation were present here.

The district court expressly found but-for causation, and 

its finding was not clearly erroneous. George induced his 

victims to pay him money and, in some cases, to stop making 

mortgage payments. The court could reasonably infer that 

George’s conduct was the direct cause—and certainly a butfor cause—of the ensuing financial hardship. See United 

States v. Laurienti, 611 F.3d 530, 557 (9th Cir. 2010) 

(concluding that it was reasonable to infer that all of the 

victims who paid into the investment scheme were in fact 

“duped by the conspiracy”). Clear and convincing evidence 

supports the district court’s finding that the necessary 

number of victims suffered substantial financial hardship as 

a result of George’s offense.

George emphasizes that he targeted victims who had 

fallen behind on their mortgage payments, and he asserts that 

he did not cause them financial hardship because they were 

going to lose their homes anyway, even if he had not 

defrauded them. “I stole only from those who were already 

poor” is not often advanced as an argument in mitigation, 

and we find it unpersuasive. As we have explained, a 

defendant inflicts “substantial financial hardship” when he 

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UNITED STATES V. GEORGE 11

causes a significant adverse change in his victims’ financial 

situation—including, as George did, by increasing the 

desperation of those already struggling.

The proximate cause requirement is also satisfied here 

because the record leaves no doubt that the consequences of 

George’s actions were foreseeable. As the co-owner of the 

fraudulent businesses, George personally addressed his 

victims’ complaints, and he knew that his employees were 

supplying false information to victims and had instructed 

them to stop paying their mortgages. He has not suggested 

that any intervening event was a more direct cause of the 

victims’ losses. George notes that the district court did not 

make an explicit proximate-cause finding, but there was no 

need for it to do so. George’s arguments about proximate 

cause were derivative of his arguments about but-for cause. 

The district court fully explained its rejection of George’s 

arguments about but-for cause, and its reasoning applied 

equally to proximate cause.

In addition to disputing the application of section 

2B1.1(b)(2), George raises two other challenges to his 

sentence. We reject both.

First, George contends that his sentence was 

substantively unreasonable under 18 U.S.C. § 3553(a). The 

district court extensively discussed the applicability of the 

section 3553(a) factors, including the mitigating 

circumstances George presented. It also recognized the 

seriousness of George’s offense, noting that it was “a large 

scheme, national in scope” that had “affected thousands, 

most of them already in danger of losing their residences, 

including retired persons who had worked for decades, 

lacked formal education, and whose only asset was the house 

that they had acquired and lived in for decades.” And it 

emphasized George’s leadership role in the scheme. Based 

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12 UNITED STATES V. GEORGE

on its consideration of all the factors, the district court did 

not abuse its discretion in imposing a sentence within the 

Guidelines range. See United States v. Carty, 520 F.3d 984, 

993, 995 (9th Cir. 2008) (en banc).

Second, George argues that the restitution order violated 

Apprendi v. New Jersey, 530 U.S. 466 (2000), because the 

judge, rather than a jury, determined the amount of the loss 

George caused. As George recognizes, however, we have 

held that Apprendi does not apply to restitution orders. See 

United States v. Green, 722 F.3d 1146, 1149, 1151 (9th Cir. 

2013).

AFFIRMED.

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