Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca5-13-10409/USCOURTS-ca5-13-10409-0/pdf.json

Parties Involved:
Jeffrey David Gunselman
Appellant Cross-Appellee
United States of America
Appellee Cross-Appellant

Document Text:

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 13-10409

UNITED STATES OF AMERICA, 

 Plaintiff - Appellee Cross-Appellant

v.

JEFFREY DAVID GUNSELMAN, Individually, doing business as Absolute 

Fuels, L.L.C., 

 Defendant - Appellant Cross-Appellee

Appeals from the United States District Court

for the Northern District of Texas

USDC No. 5:12-CR-78

Before HIGGINBOTHAM, SOUTHWICK, and HIGGINSON, Circuit Judges.

PER CURIAM:*

Jeffrey Gunselman appeals his conviction and sentence for wire fraud, 

money laundering, and violations of the Clean Air Act, alleging several 

interrelated constitutional violations below. He also claims that his guilty plea 

was not knowing and voluntary, that the court erred in calculating the loss 

amount underlying his sentence and restitution obligation, and that the court 

 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

April 8, 2016

Lyle W. Cayce

Clerk

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erroneously enhanced his sentence. The government cross-appeals to correct 

an error in the written judgment. We VACATE the offset condition in the 

written judgment below, and AFFIRM in all other respects.

I

Federal law requires energy companies producing or importing fossil 

fuels to introduce a certain amount of renewable fuels, such as corn-based 

ethanol and other biodiesels, into the fuel supply each year. They can do this 

by purchasing renewable fuel credits from companies that produced renewable 

fuels. These credits are called Renewable Identification Numbers, or RINs. 

Gunselman represented to the EPA and to fuel companies seeking to purchase 

RINs that he manufactured renewable fuels when, in fact, he did not. Between 

January 2010 and October 2011, Gunselman produced no commercially usable 

renewable fuel, but he sold over 46 million RINs for more than $40 million. He 

admitted he “falsely represented that he was in the business of producing biodiesel fuel, although he did not produce any bio-diesel fuel that met the biodiesel fuel standard tests and that was accepted by a purchaser,” and that “his 

business operation consisted solely of falsely generating RINs and marketing 

them to brokers and oil companies.”

Gunselman was indicted on and ultimately pled guilty to seventy-nine

counts, including fifty-one counts of wire fraud, twenty-four counts of money 

laundering, and four counts of making a false statement under the Clean Air 

Act. His plea included the following provision:

Except as otherwise provided, Gunselman hereby expressly waives 

the right to appeal his conviction and/or sentence on any ground, 

including any appeal right conferred by 18 U.S.C. § 3742, and 

Gunselman further agrees not to contest his conviction and/or 

sentence in any post-conviction proceeding, including, but not 

limited to, a proceeding under 18 U.S.C. §§ 2241 and 2255. 

Gunselman, however, reserves the right to appeal the following: 

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(a) any punishment imposed in excess of the statutory maximum, 

and (b) any claim based on ineffective assistance of counsel.

Gunselman also stipulated that his misconduct caused $41,762,236.87 

in losses, and agreed that

[n]otwithstanding this stipulation regarding the loss amount, 

Gunselman fully understands that he will not be allowed to 

withdraw his plea of guilty if, after a presentence report has been 

prepared, the amount of loss is found to be higher than the abovestated amount. Gunselman understands that the above-referenced 

stipulation is not binding upon the Court or upon the probation 

office, and he will not be allowed to withdraw his guilty plea should 

the stipulation not be followed by the Court. 

After an uneventful plea hearing, elements of which are described in 

greater detail below, the judge accepted Gunselman’s plea and ordered a 

presentence investigation. The resulting presentence report (“PSR”) calculated

that Gunselman had in fact caused $58,301,877.55 in losses, most of which 

were incurred when his victims, fuel producers or importers who purchased 

fraudulent RINs from Gunselman, were forced to buy valid RINs to replace 

them. It determined that Gunselman’s offense level was 34 and his criminal 

history category was I, yielding a guideline sentence range of 151 to 188 

months.1 Finally, it calculated that Gunselman owed over $53 million in 

restitution to his victims pursuant to 18 U.S.C. § 3663A; a subsequent 

addendum adjusted this sum upward to $54,973,137.50. 

Gunselman objected to the PSR’s loss calculation, sentence calculation, 

and restitution analysis. The judge overruled the objections, sentenced him to 

188 months in prison, and ordered him to pay $54,973,137.50 in restitution 

pursuant to the Mandatory Victims Restitution Act (MVRA).2

 

1 The PSR indicated that if the loss amount were found to match the one stipulated in 

the plea agreement, Gunselman’s guideline sentence range would be 121 to 151 months. 

2 Specifically, following the PSR’s analysis, the judge sentenced Gunselman to 188 

months for the wire fraud counts, 120 months for the money laundering counts, and 24 

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Gunselman now appeals his plea and sentence. In addition, the 

government appeals the district judge’s order that Gunselman’s restitution “be 

offset by funds already seized and in the hands of the Government, as well as 

any additional funds garnered by the Government from loan payments, sale of 

items, and any other cash flows.” The district judge included this provision in 

his written judgment, apparently mistakenly, and then tried to rescind it on 

the government’s motion pursuant to Rule 35(a), but his attempt to amend was 

untimely.3

II

Gunselman’s fourteen purported points of error can be condensed into a 

handful of distinct claims. We address each in turn, beginning with his 

challenge to the validity of his plea.4 A guilty plea must be knowing and 

voluntary to be enforced.5 To that end, Rule 11 of the Federal Rules of Criminal 

Procedure sets forth procedures for the district judge to follow in reviewing a 

plea with a defendant.6 Gunselman argues that his plea hearing was 

inadequate, that he did not voluntarily and knowingly plead guilty, and that 

the plea and the appellate waiver it contained cannot be enforced. We review 

these questions de novo.7

Gunselman’s plea agreement listed each of the rights he was forfeiting 

by entering into the agreement and the maximum penalties for each count. By 

signing the agreement, Gunselman represented that the plea was “freely and 

 

months for the false statement counts, each to run concurrently, for a total sentence of 188 

months.

3 See discussion infra notes 40-43 and accompanying text.

4 Gunselman also raised a host of new issues in his reply brief (which doubles as a 

response to the government’s cross-appeal). They are waived. See Casas v. American Airlines, 

Inc., 304 F.3d 517, 526 (5th Cir. 2002); Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir. 1994). 5 See Boykin v. Alabama, 395 U.S. 238, 244 (1969).

6 See FED. R. CRIM. P. 11(b); United States v. Vonn, 535 U.S. 55, 62 (2002).

7 United States v. Baymon, 312 F.3d 725, 727 (5th Cir. 2002); United States v. Amaya, 

111 F.3d 386, 388 (5th Cir. 1997).

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voluntarily made and [was] not the result of force or threats, or of promises 

apart from those set forth in this Plea Agreement.” He admitted that he had 

reviewed all legal and factual aspects of his case with his attorney and was 

satisfied with his legal representation, and that his attorney had satisfactorily 

explained to him each paragraph of the plea agreement, all of his rights 

affected by the plea agreement, and the alternatives available to him other 

than pleading guilty. He acknowledged that it was “in his best interest to enter 

into this plea agreement and all its terms.” 

At the plea hearing, the Government read the entire indictment in open 

court, and Gunselman acknowledged that he understood the allegations in the 

indictment. He also confirmed that he had read over and signed the plea 

agreement and understood and agreed to its terms and conditions. The court 

specifically asked whether he understood that he was waiving the right to 

appeal except for very limited reasons, and Gunselman said that he did. He 

acknowledged that he was forfeiting the right to a jury trial, that he was 

pleading guilty because he was guilty, and that his plea was not “the result of 

any force, threats, or promises on behalf of the government.”

The court reviewed the statutory maximum penalties for each offense, 

and it explained that the guidelines were advisory only and that the court could 

impose a sentence up to the statutory maximum. Gunselman stated that he 

understood. The court asked if Gunselman had read the factual resume and 

whether it accurately reflected the facts on which his guilty plea was based, 

and Gunselman responded in the affirmative. The court then inquired, “After 

reviewing your rights, the nature of the charges presented, and the potential 

penalties, do you still wish to plead guilty to this indictment?” Gunselman 

replied in the affirmative. The district court found that Gunselman was “fully 

competent and capable of entering an informed plea and that his plea of guilty 

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is a knowing and voluntary plea supported by an independent basis in fact 

containing each of the essential elements of the offenses charged.”

These facts show that Gunselman’s plea was knowing and voluntary and 

that the district judge fulfilled Rule 11 in reviewing it with him. We recently 

described the knowing-and-voluntary standard as follows:

To enter a knowing and voluntary guilty plea, the defendant must 

have a “full understanding of what the plea connotes and of its 

consequence.” The defendant must have notice of the nature of the 

charges against her, she must understand the consequences of her 

plea, and must understand the nature of the constitutional 

protections she is waiving. For a guilty plea to be voluntary, it 

must “not be the product of ‘actual or threatened physical harm, or 

... mental coercion overbearing the will of the defendant’ or of stateinduced emotions so intense that the defendant was rendered 

unable to weigh rationally his options with the help of counsel.”8

Gunselman does not claim coercion, and the record shows that he 

received the requisite notice and understood the relevant consequences and 

protections to be waived. His plea, and the appellate waiver he executed as 

part of it, are therefore enforceable absent some other invalidating defect.9

III

Gunselman further alleges that his indictment was duplicitous and that 

the duplicity undermines his sentence and conviction in several ways.10

 

8 United States v. Urias-Marrufo, 744 F.3d 361, 366 (5th Cir. 2014) (quoting Boykin,

395 U.S. at 244, and Matthew v. Johnson, 201 F.3d 353, 365 (5th Cir. 2000)). 9 In an attachment to his appellate brief, Gunselman claims that he was “on mindaltering drugs” when he pled guilty. Nothing in the record supports this claim, and it is 

waived in any case because it was not included in the brief. See United States v. Thames, 214 

F.3d 608, 611 n.3 (5th Cir. 2000). Gunselman also argues that the district judge should have 

offered a more elaborate plea hearing because his case had been designated “complex” for 

purposes of the Speedy Trial Act. However, he cites no authority for the notion that such a 

designation triggers additional obligations under Rule 11, and we have found none. Also, 

Gunselman’s case was declared “complex” because of the extent and quality of the relevant 

evidence, not because the charges he faced were especially complicated.

10 A duplicitous indictment “improperly joins two or more offenses in . . . single 

count[s].” United States v. Lampazianie, 251 F.3d 519, 525 (5th Cir. 2001).

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Specifically, he claims that certain wire fraud counts in the indictment were 

duplicitous and therefore invalid; that because of this, the money laundering 

counts in the indictment, which derived from the wire fraud counts, were also

invalid; that the judgment and plea agreement, which relied on the indictment, 

were also invalid; that the duplicity resulted in a higher sentence and 

restitution obligation than were warranted; that his counsel was ineffective for 

failing to address the issue; and that his plea hearing was inadequate (and the 

resulting plea agreement unenforceable), because a judge conducting an 

adequate hearing “would have noticed the duplicitous charges.” 

The government concedes that four counts were duplicitous. However, 

Gunselman waived this issue by pleading guilty. A “voluntary and 

unconditional plea waive[s the] right to appeal any nonjurisdictional defects in 

the prior proceedings,” and duplicity is a nonjurisdictional defect.11 Gunselman 

did not condition his plea on being able to challenge the duplicitous charges.12

Therefore, his duplicity claims are waived except insofar as they affect the 

validity of the plea itself.

A plea is invalid if it was not knowing and voluntary, but as discussed 

above, Gunselman’s plea was knowing and voluntary. The fact that some of the 

charges were duplicitous, and that this issue was not aired at the plea hearing, 

does not alter this conclusion, since the record shows that Gunselman still 

understood the nature of the charges. Neither Rule 11 nor our case law 

required anything more.13

 

11 Lampazianie, 251 F.3d at 525-56 & n.19.

12 See FED. R. CRIM. P. 11(a)(2) (“[A] defendant may enter a conditional plea of guilty 

or nolo contendere, reserving in writing the right to have an appellate court review an 

adverse determination of a specified pretrial motion.”).

13 See id. 11(b)(1)(G); United States v. Bachynsky, 924 F.2d 561, 565 (5th Cir. 1991) 

(“We agree with Bachynsky that the charges to which he pled guilty were complex and that 

the district court did not explain every facet of each charge. But the purpose of Rule 11 is not 

to have every detail of the charge read aloud to the defendant; rather, its purpose is to ensure 

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A plea may also be invalid if it was tainted by ineffective assistance of 

counsel in such a way that the plea cannot be considered truly voluntary.14

Gunselman alleges that his counsel was ineffective for failing to notice and 

object to the duplicitous charges, and for advising him to enter a plea 

agreement based on duplicitous charges. This claim is foreclosed: “Sixth 

Amendment claims of ineffective assistance of counsel should not be litigated 

on direct appeal, unless they were previously presented to the trial court.”15

And even if we were to consider this claim on the merits, it would fail, as 

Gunselman could not have suffered prejudice from his attorney’s failure to spot 

the duplicity. To prevail on an ineffective assistance of counsel claim relating 

to a guilty plea, “the defendant must show that there is a reasonable 

probability that, but for counsel's errors, he would not have pleaded guilty and 

would have insisted on going to trial.”16 Gunselman appears to think that the 

affected charges would have been dismissed upon objection, such that he would 

have been entitled to a more lenient plea deal or a lower sentence and would 

 

that the defendant adequately understands the charge to which he is pleading guilty, and to 

have that understanding documented on the record.”). We have recognized that there is no 

“simple or mechanical rule” to guide the district judge in deciding how extensively to describe 

charges to a defendant in order to fulfill Rule 11(b)(1)(G), and that the inquiry is highly 

context-specific and ultimately “commit[ted] . . . to the good judgment of the court.” United 

States v. Dayton, 604 F.2d 931, 937-38 (5th Cir. 1979) (en banc). The contextual factors here, 

including the fact that Gunselman was represented by counsel and the fact that he is 

intelligent enough to have produced a lengthy and fairly sophisticated pro se brief on appeal, 

strongly suggest that the judge’s description was adequate.

14 See United States v. Henderson, 72 F.3d 463, 465 (5th Cir. 1995); Murray v. Collins, 

981 F.2d 1255 (5th Cir. 1992) (“A valid guilty plea waives all nonjurisdictional defects 

including an ineffective assistance of counsel claim, unless the ineffective assistance claim 

goes to the voluntariness of the plea.”). Gunselman reserved the right to appeal his conviction 

on the basis of ineffective assistance of counsel.

15 United States v. Isgar, 739 F.3d 829, 841 (5th Cir.), cert. denied sub nom. Aldridge 

v. United States, 135 S. Ct. 123 (2014) (quoting United States v. Aguilar, 503 F.3d 431, 436 

(5th Cir. 2007) (per curiam)). Although this rule is lifted in “rare cases in which the record 

allows a reviewing court to fairly evaluate the merits of the claim,” id. (quoting Aguilar, 503 

F.3d at 436), the record before us suggests little about Gunselman’s counsel’s approach to the 

issues relevant here.

16 Hill v. Lockhart, 474 U.S. 52, 59 (1985).

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therefore have had reason to reject the plea offered. But a duplicitous charge 

need not be dismissed.17 Indeed, the government could simply have divided up 

the duplicitous counts and reindicted, thus subjecting Gunselman to more

charges. Moreover, even if the duplicitous charges had been dismissed, this 

would not have affected the length of his sentence or his restitution obligation, 

because under the sentencing guidelines, the loss amount from which those 

figures were to be calculated was to be based on the entire course of conduct 

underlying the charges – not only on the conduct alleged in the charges 

themselves.18

IV

Gunselman also alleges prosecutorial misconduct. He claims the 

prosecution lied in alleging in the indictment that he sold RINs produced at 

his Anton, Texas plant to Marathon Petroleum, when government documents 

actually indicated that he had purchased them from another biodiesel 

company. He also claims that the prosecution intercepted a payment from 

Tesoro Refining to Gunselman for fake RINs, then charged him anyway for 

receiving the money.19

Again, Gunselman has waived these claims, because they do not 

implicate the jurisdiction of the trial court; as noted above, Gunselman’s

“voluntary and unconditional plea waived his right to appeal any 

 

17 See Lampazianie, 251 F.3d at 526.

18 See U.S. Sentencing Guidelines Manual § 1B1.3(a), (a)(2) (“[S]pecific offense 

characteristics . . . with respect to offenses of a character for which § 3D1.2(d) would require 

grouping of multiple counts” “shall be determined on the basis of” “all acts and omissions . . . 

that were part of the same course of conduct or common scheme or plan as the offense of 

conviction.”) (emphasis added), § 3D1.2(d) (counts for offenses covered by § 2B1.1, which 

addresses crimes of fraud and deceit, are to be grouped).

19 Gunselman further claims that his counsel was ineffective for failing to address the 

alleged prosecutorial misconduct. This claim is foreclosed because Gunselman did not present 

it to the trial court. See supra note 15 and accompanying text.

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nonjurisdictional defects in the prior proceedings.”20 Both claims also fail on 

the merits. As part of his plea, Gunselman admitted that the allegations in the 

indictment were true, including the allegation that the Marathon RINs in 

question were produced in Anton.21 In addition, the Tesoro wire fraud charge 

is unaffected by the government’s purportedly having intercepted the relevant 

payment, because “wire fraud is complete when a defendant makes a 

communication to advance what he knows to be a fraudulent scheme,” not 

when he receives money.22

V

In other points of purported error, Gunselman objects, as he did below, 

to the loss amount on which his sentence and restitution obligation are based.23

He notes that the roughly $54 million loss for which he was ultimately held 

responsible differs from the roughly $41 million loss he stipulated to in the plea 

agreement, and argues that the difference indicates that his restitution 

obligation and sentence are excessive.

In the plea agreement, Gunselman stated that he “fully underst[ood] 

that he [would] not be allowed to withdraw his plea of guilty if, after a 

presentence report has been prepared, the amount of loss [were] found to be 

higher than the [stipulated] amount” and that he “underst[ood] that the . . . 

stipulation [was] not binding upon the court or upon the probation office, and 

he [would] not be allowed to withdraw his guilty plea [if] the stipulation [were] 

not be followed by the Court.” The fact that he stipulated to a lower loss amount 

 

20 Lampazianie, 251 F.3d at 526. 21 Gunselman also affirmed, at the plea hearing, that the factual resume in the plea 

agreement was accurate. See United States v. Cervantes, 132 F.3d 1106, 1110 (5th Cir. 1998) 

(“Solemn declarations in open court carry a strong presumption of verity.”) (quoting 

Blackledge v. Allison, 431 U.S. 63, 73-74 (1977)).

22 United States v. Neal, 294 F. App’x 96, 101 (5th Cir. 2008).

23 Strictly speaking, Gunselman objected to the loss amount calculation only insofar 

as it affected restitution; however, the arguments as to the sentence are the same.

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is therefore immaterial in isolation. Gunselman must show that the use of the 

higher loss amount caused a “punishment in excess of the statutory 

maximum.” He claims that it did, for two reasons.

First, Gunselman claims that the loss amount reflects losses incurred 

before the transactions listed in the indictment. Specifically, he argues that 

the loss amount includes losses arising from transactions with BioUrja 

Trading that occurred before September 2010, the starting point for the 

charges outlined in the indictment.24 He objected to the initial version of the 

PSR on the same ground. In response, an addendum to the PSR noted that “the 

pre-September 2010 transactions were not considered in the restitution 

request for BioUrja Trading, LLC., though they were considered as loss.” 

Gunselman does not allege that the evidence belies this assertion, so his 

argument fails insofar as restitution is at issue. Moreover, it was permissible 

to consider the transactions in question in calculating his sentence, because as 

discussed above, the sentence was to be calculated based on “all acts and 

omissions . . . that were part of the same course of conduct or common scheme 

or plan as the offense of conviction.”25

Second, Gunselman objects to the method the court used to appraise his 

victims’ losses. Following the PSR, the court determined that each victim’s loss 

was the greater of the amount each paid for the fraudulent RINs and the 

amount each paid to replace the fraudulent RINs with legitimate ones. 

Gunselman objects to the use of replacement costs in any capacity and to the 

 

24 See United States v. Sharma, 703 F.3d 318, 323 (5th Cir. 2012) (under the MVRA, 

“[a]n award of restitution cannot compensate a victim for losses caused by conduct not 

charged in the indictment or specified in a guilty plea, or for losses caused by conduct that 

falls outside the temporal scope of the acts of conviction.”). Under Sharma, Gunselman’s 

argument alleges that his restitution obligation exceeds the statutory maximum, so his 

appellate waiver does not foreclose the argument. See id. at 321 n.1.

25 See supra note 18.

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use of the higher of the two figures in determining each victim’s awards.26 We 

construe these as arguments that the restitution award exceeds the statutory

maximum, rendering Gunselman’s appellate waiver inapplicable, at least as 

far as restitution is concerned.27 However, Gunselman’s argument is waived 

insofar as it implicates the length of his sentence.28

“A restitution award is reviewed for an abuse of discretion[;] ‘[a] trial 

court abuses its discretion when its ruling is based on an erroneous view of the 

law or a clearly erroneous assessment of the evidence.’”29 We have held that 

the MVRA does not allow restitution for consequential damages, such as 

amounts expended as legal fees or in order to recover stolen property.30

Gunselman claims that replacement costs are consequential damages akin to 

penalties, since the victims had to buy legitimate RINs in order to comply with 

the law.31 As other circuits have recognized, the MVRA “contemplate[s] the 

exercise of discretion by sentencing courts in determining the measure of value 

appropriate to restitution calculation in a given case.”32 “‘[V]alue’ as used in 

the MVRA [is] a flexible concept to be calculated by a district court by the 

 

26 Gunselman also claims that the restitution award included victims’ “other costs,” 

such as legal fees. However, the calculation in the PSR appears to derive solely from amounts 

paid to Gunselman or expended in replacing the fraudulent RINs.

27 Recall that “Gunselman . . . reserve[d] the right to appeal . . . any punishment 

imposed in excess of the statutory maximum” in his plea agreement. See United States v. 

Jones, 616 F. App'x 726, 727-29 (5th Cir. 2015) (unpublished) (where appellant executed an 

appellate waiver reserving the right to appeal a sentence exceeding the statutory maximum, 

addressing his valuation-method challenge on the merits).

28 The exception in Gunselman’s appellate waiver for a punishment in excess of the 

statutory maximum does not apply in this context, since his sentence (as distinct from his 

restitution obligation) was lower than the statutory maximum.

29 United States v. Crawley, 533 F.3d 349, 358 (5th Cir. 2008) (citation omitted) 

(quoting United States v. Yanez Sosa, 513 F.3d 194, 200 (5th Cir. 2008). 30 United States v. Onyiego, 286 F.3d 249, 256 (5th Cir. 2002).

31 Gunselman’s argument is not entirely accurate. It appears that at least one of 

Gunselman’s victims had to buy legitimate RINs after the fraud was uncovered because it

had already sold the RINs to third parties, not because it needed to come into compliance 

itself. 32 United States v. Boccagna, 450 F.3d 107, 114 (2d Cir. 2006).

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measure that best serves Congress's statutory purpose.”33 That purpose is 

“essentially compensatory: to restore a victim . . . to the position he occupied 

before sustaining injury.”34 Accordingly, other circuits have sanctioned the use 

of replacement cost when that measure appears best suited to make victims 

whole.35

In implementing the MVRA’s statutory purpose in this case, we find the 

federal sentencing guidelines instructive.36 They advise the district court to 

appraise victims’ injuries according to “the fair market value of the property 

unlawfully taken” – unless that value “inadequately measures the harm.”37 In 

this case, Gunselman injured his victims by taking their money under false 

pretenses. Naturally, the default measure of their injury, i.e., the “fair market

value of the property” he unlawfully took, is equal to those sums. However, 

some of Gunselman’s victims apparently had to scramble, after his fraud was 

uncovered, to obtain replacement RINs in order to meet obligations to 

customers and regulators.38 In the process, they were forced to pay more for 

the valid RINs than they had paid Gunselman for the fraudulent ones. To 

restore to these victims only the amounts they paid Gunselman would 

 

33 Id. at 114-15.

34 Id. at 115.

35 See, e.g., United States v. Wilfong, 551 F.3d 1182, 1184 n.2 (10th Cir. 2008); 

Boccagna, 450 F.3d at 116; United States v. Rhodes, 330 F.3d 949, 953 (7th Cir. 2003); United 

States v. Simmonds, 235 F.3d 826, 832 (3d Cir. 2000); United States v. Shugart, 176 F.3d 

1373, 1375 (11th Cir. 1999). Notably, the federal sentencing guidelines expressly allow courts 

to use replacement cost in assessing victims’ losses in “product substitution cases.” U.S.

SENTENCING GUIDELINES MANUAL § 2B1.1 cmt. n.3(A)(v)(I) (U.S. Sentencing Comm’n 2015). 36 Although the MVRA itself, and not the guidelines, governs our restitution analysis, 

see, e.g., United States v. Ferdman, 779 F.3d 1129, 1138 (10th Cir. 2015), other courts have 

found the guidelines’ commentary instructive in calculating MVRA restitution. See, e.g., 

Rhodes, 330 F.3d at 953-54. 37 Accord Boccagna, 450 F.3d at 115 (fair market value is the default measure of 

MVRA restitution). 38 Cf. Rhodes, 330 F.3d at 953 (upholding a restitution award equivalent to “the 

amount of money [the victim] had to dole out in order to make its customers whole as a result 

of Rhodes' fraud”).

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disregard the difference between the two sums – an additional amount that 

came out of the victims’ pockets as a direct and entirely foreseeable result of 

Gunselman’s fraud. Given this, and mindful of the discretion afforded the court 

below, we find no error in the district court’s use of replacement cost in 

calculating Gunselman’s restitution obligation to certain victims.39

VI

Finally, Gunselman claims that the district court erroneously applied an 

enhancement for sophisticated means. He waived this argument; none of the 

exceptions in his appellate waiver apply. Moreover, the record contains ample 

evidence to support the factual finding that Gunselman employed 

sophisticated means, for example, by creating a corporation, purchasing 

multiple facilities, disseminating false information to other businesses, and 

hiring and manipulating employees to perpetuate the scheme. His claim fails.

VII

The government asks us to modify the judgment below by eliminating its 

restitution offset condition.40 This condition was not part of the oral sentence, 

issued on March 29, but was included in Gunselman’s written sentence, issued 

on April 12. The government filed a timely Rule 35(a) motion to eliminate the 

condition.41 The district court assented and ordered the modification on April 

 

39 See United States v. Simpson, 741 F.3d 539, 556-57 (5th Cir. 2014); United States v. 

Crawley, 533 F.3d 349, 358 (5th Cir. 2008); see also United States v. Spencer, 700 F.3d 317, 

323 (8th Cir. 2012) (discussing the MVRA’s causation requirement). 

40 The judgment ordered that Gunselman’s restitution “be offset by funds already 

seized and in the hands of the Government, as well as any additional funds garnered by the 

Government from loan payments, sale of items, and any other cash flows.” 41 See FED. R. CRIM. P. 35(a) (“Within 14 days after sentencing, the court may correct 

a sentence that resulted from arithmetical, technical, or other clear error.”), (c) (“As used in 

this rule, “sentencing” means the oral announcement of the sentence.”).

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30 – more than fourteen days after sentencing.42 The modification was 

therefore ineffective for lack of jurisdiction.43

We may “affirm, modify, vacate, set aside or reverse any judgment, 

decree, or order of a court lawfully brought before it for review, and may 

remand the cause and direct the entry of such appropriate judgment, decree, 

or order, or require such further proceedings to be had as may be just under 

the circumstances.”44 We see no reason not to make the requested 

modification.45 The oral sentence is legally sound.46 In addition, when a written 

sentence conflicts with an oral sentence, the latter controls.47 Therefore, we do 

not disturb the status quo in reforming the written sentence to match the oral 

sentence in this case.48

VIII

We VACATE the portion of the written judgment below ordering that 

Gunselman’s restitution “be offset by funds already seized and in the hands of 

 

42 The sentence was orally pronounced March 29, the motion to correct judgment was 

filed on April 12, and the modification was ordered on April 30. 43 See, e.g., United States v. Gonzalez, 509 F. App'x 356, 357 (5th Cir. 2013)

(unpublished). 44 28 U.S.C. § 2106; see United States v. Hermoso, 484 F. App'x 970, 973 (5th Cir. 2012) 

(our choice to either reform a judgment or remand to the district court for the same purpose

is discretionary).

45 Gunselman claims that the government waived the issue by failing to raise it in the 

plea agreement or at sentencing, but the government persuasively argues that it had no 

reason to raise the issue until the offset provision appeared in the written sentence, since the 

inclusion of the offset provision was the deviation from the status quo. Gunselman also claims 

that the government violated the plea agreement by moving for modification; however, the 

plea agreement did not address the offset issue, whether implicitly or explicitly.

46 See United States v. Taylor, 582 F.3d 558, 568 (5th Cir. 2009) (a defendant is not 

entitled to have the district court “offset[ a] restitution obligation by the amount [the 

defendant] was required to forfeit,” at least where “there is no evidence that the victims of 

[the] criminal conduct have received any of the forfeited funds or other restitution 

payments”). As of the PSR, no forfeited funds had been disbursed to victims. 47 United States v. Martinez, 250 F.3d 941, 942 (5th Cir. 2001).

48 Gunselman claims that his counsel was ineffective because he “specifically [and 

erroneously] counseled [Gunselman] that collected monies would be applied toward 

restitution.” This claim is foreclosed because Gunselman did not present it to the trial court.

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the Government, as well as any additional funds garnered by the Government 

from loan payments, sale of items, and any other cash flows.” In all other 

respects, we AFFIRM the judgment of the district court.

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