Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-14-02701/USCOURTS-ca7-14-02701-0/pdf.json

Parties Involved:
Gloria Harper
Appellant
United States of America
Appellee

Document Text:

In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 14-2701

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

GLORIA HARPER,

Defendant-Appellant.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 11 CR 479-1 —Sharon Johnson Coleman, Judge.

____________________

ARGUED OCTOBER 6, 2015— DECIDED NOVEMBER 6, 2015

____________________

Before WOOD, Chief Judge, and POSNER and WILLIAMS,

Circuit Judges.

POSNER, Circuit Judge. The defendant pleaded guilty to 

fraud consisting of her having abused her position as a

member of a Chicago public-school board by accepting kickbacks of more than $500,000 from bus companies to which 

she steered transportation contracts worth $21 million. The

parties stipulated that the value of the benefit received from 

the fraud was between $7 and $20 million, and so the guideCase: 14-2701 Document: 34 Filed: 11/06/2015 Pages: 8
2 No. 14-2701

lines range would have been 360 months to life. The guidelines in effect at the time required a 20-level enhancement for 

honest services fraud when “the value of the payment, the 

benefit received or to be received in return for the payment, 

the value of anything obtained or to be obtained by a public 

official or others acting with a public official, or the loss to

the government from the offense, whichever is greatest,”

was between $7 and $20 million. U.S.S.G. §§ 2C1.1(b)(2), 

2B1.1(b) (2012). “The value of ‘the benefit received or to be 

received’ means the net value of such benefit.” U.S.S.G. 

§ 2C1.1, comment 3. But the statutory maximums for the two 

counts were 20 years and 3 years respectively, and that 

changed the range to 276 months (23 x 12) pursuant to

U.S.S.G. § 5G1.1(a). The judge imposed a below-guidelines 

sentence of 120 months, ordered the defendant to pay restitution to the school district in the amount of $7.2 million, 

and imposed a year of supervised release, which the judge 

may have thought mandatory.

The appeal challenges the length of the sentence and the 

conditions of supervised release. At sentencing the government argued that the value of the benefit received by the 

fraudsters in exchange for the kickbacks was nearly $9.7 million. An accountant testifying as an expert witness for the 

defendant estimated the value of the benefit as only $7.6 million, and therefore near the lower end of the benefit estimate. 

But the judge rejected his testimony because it lacked “specifics”: “the government has laid out its case for how it 

comes to the figure. The defense just says, well, we don’t 

think that’s the figure. We think that estimate is too broad, 

but there’s no specifics that the defendant is really able to 

give the Court. And the Court’s going to rely on the government’s figures on the loss amount here and the governCase: 14-2701 Document: 34 Filed: 11/06/2015 Pages: 8
No. 14-2701 3

ment’s figures about what was involved here based on the 

presentations that were made. Who knows. It may be low. It 

may be low. We don’t know what was going on here.”

The defendant’s expert witness had deducted, from the 

value of the benefit estimated by the government, salaries 

received by managers of the bus companies; he assumed that 

those salaries, though derived from payments to the companies by the school board, were not benefits received in exchange for a kickback but instead compensation for legitimate managerial services. But no evidence was presented 

that these executives rendered legitimate managerial services commensurate with the fees they received from the 

school board. The accountant also deducted from the benefit 

amount consulting fees paid to persons complicit in the 

fraud. That was an improper deduction.

So probably the judge’s conclusion that the defendant’s 

estimate of the benefit should be rejected was correct. But it 

was not true that the defense had failed to present “specifics” concerning the amount—the expert witness for the defense had been specific—and the judge’s closing statement—

“Who knows. It may be low. It may be low. We don’t know 

what was going on here”—indicates indecision about the 

value of the benefit.

The defense argued that the guidelines sentence, which 

had provided the starting point for the judge’s determination of the sentence to impose, overstated the seriousness of 

the defendant’s offense because the value of the benefit of

her crime had been near the low end of the $7-to-$20 million 

range. See U.S.S.G. § 2B1.1, comment 20(C); United States v. 

Kappes, 782 F.3d 828, 864 (7th Cir. 2015) (sentencing judge 

must address the defendant’s principal arguments in mitigaCase: 14-2701 Document: 34 Filed: 11/06/2015 Pages: 8
4 No. 14-2701

tion). But the argument was premised on the defense expert 

witness’s estimate that the value of the benefit had been only 

$7.6 million, and the judge didn’t accept that, and her rejection of the figure suggested that she was accepting the government’s much higher figure—$9.7 million—instead. But 

this is not certain, for the judge did concede that the value of 

the benefit might have been “low” and said “we don’t know 

what was going on here.” Yet she pointed to factors that

made the offense “serious” regardless of the exact amount of 

the value of the benefit caused by the defendant: there had 

been vulnerable victims of the fraud (the impoverished 

school district and children of North Chicago), there was the 

defendant’s history of fraud, there was the social problem of

public corruption, and there were the defendant’s attempts 

to make excuses for her criminal conduct. But even so, remember that the judge sentenced the defendant far below 

the guideline range. 

Since the parties had stipulated that the value of the benefit from the fraud was between $7 and $20 million, it may 

seem odd that the parties spent so much time at the sentencing hearing arguing over what the actual amount was. But as 

the defendant’s brief explains, “While Ms. Harper did not 

persist in her argument that the guideline enhancement for 

the value of the benefit received was wrong, she made her 

arguments regarding the value of the benefit received as a 

mitigating factor for the district court to consider when imposing a sentence using the § 3553(a) factors. Ms. Harper’s 

argument was that the 20-level enhancement significantly 

overstated the seriousness of the offense and the district 

court should consider that overstatement when imposing 

sentence.” The judge did consider as we noted the possibility 

that the value of the benefit received may have been lower 

Case: 14-2701 Document: 34 Filed: 11/06/2015 Pages: 8
No. 14-2701 5

than the $9.7 million proposed by the government, but as we 

also explained she enumerated proper reasons for concluding that the defendant’s fraud was nevertheless a serious 

crime.

Her sentencing statement does, however, contain an incomplete discussion of a separate issue concerning the prison sentence that she imposed on the defendant. She said that 

“this Court [meaning the judge] is going to find that the sentence that the Court exerts [she meant ‘imposes’] today is 

consecutive to the sentence from the Louisiana Court, not 

concurrent.” The defendant had been sentenced by a court in 

Louisiana for a crime unrelated to the crime in the present

case though apparently of a similar character. The judge in 

this case did not explain why she thought the sentence she 

was imposing should run consecutively to rather than concurrently with the Louisiana sentence. Some reason needed

to be given. The transcript of the sentencing hearing contains 

discussion of the issue by the lawyers, but the discussion is 

inconclusive.

We don’t mean to prejudge the issue. In giving the defendant a sentence far below the guideline range the judge 

may for all we know have been motivated by the Louisiana 

sentence and thus have intended that the defendant serve 

the remainder of that sentence with no offset to her federal 

sentence as an alternative to a longer federal sentence. But a 

judge who must choose between imposing a sentence consecutively to or concurrently with another sentence should 

state the reason for her choice, as for the other choices made 

in sentencing.

The other grounds for ordering resentencing relate to the 

conditions of supervised release. The sentence was imposed 

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in July of last year, and since then several decisions of this 

court have clarified the analysis required to decide what 

conditions to impose in what circumstances. See, e.g., United 

States v. Thompson, 777 F.3d 368, 373 (2015). Supervised release was discussed in the following section of the judge’s 

sentencing statement:

Upon release from the Bureau of Prisons, you will have the 

one year of mandatory supervised release. And you will be 

expected, Mrs. Harper, to comply with all the conditions of 

the Court upon that release, which will include no unlawful use of illegal substances and the cooperation with Probation of any random drug testing. No firearm, destructive

device possession. Cooperating with DNA samples. Complying with all of the rules and regulations of the law under the state and federal law. You will also not incur any 

new credit charges or open lines of credit without the approval of Probation. And you will provide the Probation 

Office with any—access to any requested financial information.

You will also do in addition 40 hours of community service in North Chicago community to be arranged by Probation during that year. And the Court is also going to ask 

both within and if it’s still needed outside, you get some 

type of mental health counseling or at least have an assessment as to whether that counseling is needed.

This—the judge’s entire discussion at the sentencing 

hearing of the conditions of supervised release that she was 

imposing—contains a number of problematic statements:

that the imposition of supervised release was mandatory (it 

was not, although perhaps she simply meant that some of 

the conditions were required by statute); that the conditions 

of supervised release would “include” the listed conditions, 

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No. 14-2701 7

suggesting that other conditions would be imposed as well

(as they were—but improperly as we’ll see); the ambiguity 

of the phrase “all of the rules and regulations of the law under the state and federal law” (no one knows all the rules 

and regulations promulgated by the states and the federal 

government); the ambiguity of “both within and ... outside”; 

and the failure to identify each condition by number in order 

to help the defendant locate its full text.

Supervised release is mandatory for certain crimes, see, 

e.g., 18 U.S.C. § 3583(k); 21 U.S.C. § 841(b), but not for the 

ones the defendant in this case was convicted of. And when 

as in this case some of the conditions are discretionary the 

sentencing judge must give a reason for the imposition of 

each such condition that he or she imposes. See 18 U.S.C. 

§§ 3583(c), (d)(1)–(3); United States v. Thompson, supra, 777 

F.3d at 373. The judge didn’t do that. Moreover, the written 

judgment imposes 13 conditions of supervised release that 

she didn’t mention at the sentencing hearing. That was a 

mistake; the entire sentence is the sentence stated orally by 

the judge at the sentencing hearing. Fed. R. Crim. P. 35(c);

United States v. Kappes, supra, 782 F.3d at 862; United States v. 

Alburay, 415 F.3d 782, 788 (7th Cir. 2005). Several of the written conditions in the judgment, moreover, have been criticized in recent decisions of ours. United States v. Sandidge, 

784 F.3d 1055, 1068–69 (7th Cir. 2015); United States v. Thompson, supra, 777 F.3d at 376–80.

Finally, prison and supervised release can “be substitutes 

as well as complements,” United States v. Downs, 784 F.3d 

1180, 1182 (7th Cir. 2015), since, realistically, supervised release is a form of custody (like parole, which it largely replaced in the federal system of criminal justice) because it 

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can and often does impose severe limitations on a defendant’s post-release liberty. We are therefore ordering a full 

resentencing of the defendant. After correcting the conditions of supervised release to conform to the analysis in this 

opinion, the judge may decide that the prison sentence she 

imposed was too long or too short and if so she will have to 

revise it. We also remind the judge that the entire sentence 

must be delivered orally.

REVERSED AND REMANDED

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