Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-14-03716/USCOURTS-ca7-14-03716-0/pdf.json

Parties Involved:
Christian Peterson
Appellant
United States of America
Appellee

Document Text:

In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 14-3716

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

CHRISTIAN PETERSON,

Defendant-Appellant.

____________________

Appeal from the United States District Court

for the Western District of Wisconsin.

No. 12-cr-87-bbc — Barbara B. Crabb, Judge.

____________________

ARGUED SEPTEMBER 28, 2015 — DECIDED MAY 25, 2016

____________________

Before FLAUM, KANNE, and SYKES, Circuit Judges.

SYKES, Circuit Judge. Before running into legal trouble, 

Christian Peterson, an entrepreneur doing business in 

Madison, Wisconsin, owned several manufacturing and realestate development firms. He misused corporate finances, 

frequently making unauthorized intercompany loans and 

occasionally using corporate funds to pay off his personal 

gambling debts. Eventually all of his business ventures 

failed, his companies defaulted, and federal agents launched 

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an investigation. Peterson was indicted on thirteen criminal 

counts—bank fraud, making false statements to banks, 

money laundering, and pension theft—and a jury found him 

guilty of eight of those crimes. On Peterson’s motion the

district judge entered judgment of acquittal on two counts

and at sentencing imposed a within-guidelines prison term

of 84 months on the remaining six. 

Peterson has appealed, raising many issues for review.

His arguments for judgment of acquittal or a new trial have 

no merit; the evidence was easily sufficient to support the 

jury’s verdict. We also reject his claims of evidentiary and 

instructional error. Peterson next challenges the joinder of

the pension-theft count for trial with the others, but this 

claim too is meritless. Regarding the sentence, the judge

correctly calculated the gross receipts Peterson derived from

his fraud; because he was the sole perpetrator, all proceeds 

of the fraud were properly attributed to him. But Peterson 

repaid in full a $300,000 wire transfer prior to detection of 

his fraud, so that sum should not have been included in the 

total loss amount. We affirm the convictions but vacate the 

sentence and remand for resentencing.

I. Background

Two of Peterson’s businesses are relevant to this case. 

The first is Maverick, Inc., which supplied polyurethane 

scrap-foam material to carpet-pad manufacturers. Peterson 

originally was the sole owner of Maverick, but in 2006 he 

acquired a partner, Dr. James Shapiro, who owned a 25% 

interest in the company. The other business relevant here is 

Peterson Properties of Chicago, LLC, which Peterson created 

to develop a parcel of land in Fitchburg, Wisconsin. Peterson 

had two partners in this venture: his Maverick partner, 

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No. 14-3716 3

Shapiro, and James Spahr, each of whom held a one-third 

interest in the company. Maverick and Peterson Properties

each maintained lending agreements with different banks;

these loan agreements figured prominently in the charges 

the government brought against Peterson.

A. Maverick’s Line of Credit at Marshall & Ilsley Bank

Beginning in 2003, Maverick maintained a line of credit 

and a checking account at Marshall & Ilsley Bank (“M&I”). 

The credit line and checking account were linked through a 

“sweep” arrangement meant to provide flexibility for 

Maverick. Under this arrangement the credit line would 

automatically compensate for insufficient funds in the 

checking account. Conversely when the checking-account 

balance rose above a certain level, funds from that account 

were automatically applied to Maverick’s credit balance. By 

2008 Maverick’s line of credit at M&I had increased from 

$1.5 million to $6.25 million.

Although the M&I credit line was limited by its terms to 

use for Maverick’s business purposes, Peterson drew on it to 

fund his other companies. In March 2006 M&I banker Randy 

Paulson asked Peterson to discontinue this practice in light 

of the risks that it posed to M&I. Peterson agreed and promised to pay off any debts that his other companies owed to 

Maverick. However, when Peterson met with Paulson in 

May 2007 to discuss renewal of Maverick’s credit line, the 

debt owed to Maverick by Peterson’s other companies had 

increased by almost $2 million. Peterson again promised to

stop using Maverick’s credit line for anything other than 

purchasing scrap foam and to pay off all outstanding debts 

by the end of the year.

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Peterson also drew on the M&I credit line to support his 

gambling habit. On April 5, 2006, Peterson had his office 

assistant contact M&I to request a $300,000 wire transfer to 

the MGM Grand casino in Las Vegas. When Paulson questioned why he wanted money wired to a casino, Peterson 

forwarded an e-mail from a commercial real-estate broker 

listing properties that he and the broker planned to visit the 

next day. Peterson sent a follow-up e-mail to Paulson a few 

minutes later stating, “This is my itinerary. I would not use 

Maverick funds for personal use and I certainly wouldn’t 

spend $300k!!!” M&I wired the requested funds to the 

casino, and Peterson promptly used the money to pay off 

debts he had incurred at the blackjack tables.

All the while Maverick was experiencing a sharp downturn in business. It lost one of its main purchasers of scrap 

foam, and another of its major clients reduced its orders by 

87% between 2006 and 2007. Maverick eventually defaulted 

on its credit, went into receivership, and ceased operations. 

In February 2009 Peterson terminated the 401(k) plan that 

Maverick had maintained for its employees since 2002 and 

instructed the plan’s administrator to send him any remaining funds. Peterson subsequently received a check for just 

over $29,000, which he used for personal expenses. After 

learning that the plan had been terminated, one of the three 

participating employees confronted Peterson. Peterson

reimbursed the plan in full.

B. Loan from Greenwoods Bank to Peterson Properties

In late 2007 Peterson Properties, the other Peterson company relevant here, obtained a loan from Greenwoods State 

Bank in Lake Mills, Wisconsin. The company had previously 

borrowed approximately $7 million from a different bank to 

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No. 14-3716 5

purchase and develop a tract of land in Fitchburg. By fall of 

2007, the company was looking to refinance its existing loan

and obtain additional funds for development. 

To that end Peterson met with bankers at Greenwoods, 

giving them a personal financial statement. Greenwoods, in 

turn, offered Peterson Properties a $1.1 million loan. On 

Peterson’s behalf, Greenwoods president Michael Weber 

filled out a loan application identifying the loan’s purpose as 

land and site improvements for the Fitchburg property. On 

December 5, 2007, Peterson signed a closing statement and 

repayment note for the loan, both of which likewise identified land and site improvements as the loan’s purpose.

All three partners in Peterson Properties personally 

guaranteed the Greenwoods loan. Spahr’s guarantee was

conditioned on his company, Landmark Building Systems,

receiving the contract for any improvements that the 

Fitchburg tract required. On December 7, 2007, Peterson 

Properties entered into a contract with Landmark Building 

Systems to this effect. The contract, which Peterson signed 

on behalf of Peterson Properties, provided that Landmark 

would receive $893,580 to perform all site construction.

Peterson made three draws on the Greenwoods loan. The 

first occurred on December 6, 2007, and totaled $871,168.57.

Of this amount Peterson paid $155,000 to Spahr for the 

starting costs of site construction. Peterson used the rest of 

the first draw to pay debts owed by Peterson Properties, 

$300,000 of his personal gambling debts, and a $250,000 

developer’s fee to himself. A week later, Peterson made a 

second draw of $100,000, which he deposited into Maverick’s checking account at M&I. Another week later, Peterson 

made a third draw of $128,931.43 for legal fees associated 

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with the Fitchburg tract. This third draw completely exhausted the Greenwoods loan. Like Maverick, Peterson 

Properties soon collapsed and defaulted on its loan. 

C. Indictment and Trial 

After Peterson’s companies defaulted, federal agents began a criminal investigation, and he was eventually indicted 

on 13 counts: engaging in a scheme to defraud banks in 

violation of 18 U.S.C. § 1344 (Counts 1–4); making false 

statements to a bank in violation of 18 U.S.C. § 1014

(Counts 5–8); money laundering in violation of 18 U.S.C. 

§ 1957 (Counts 9–12); and pension theft in violation of 

18 U.S.C. § 664 (Count 13). The case was tried to a jury, 

which was instructed that a bank’s negligence is not a 

defense to fraud. The jury returned a verdict of guilty on 8 of 

the 13 counts.

Peterson filed a posttrial motion for judgment of acquittal, see FED. R. CRIM. P. 29(c), arguing that the evidence was 

insufficient to support the jury’s verdict. The judge granted

this motion in part, entering judgment of acquittal on one 

count of bank fraud and a related money-laundering count.

Peterson then moved for a new trial on the remaining

counts, see FED. R. CRIM. P. 33, and renewed an earlier motion regarding severance of the pension-theft count. The 

judge denied both motions. Peterson thus stood convicted of

6 of the 13 counts: the bank-fraud and false-statement counts

arising from M&I’s $300,000 wire transfer to the MGM 

Grand; the bank-fraud, false-statement, and moneylaundering counts arising from the Greenwoods loan to 

Peterson Properties; and the pension-theft count in connection with the Maverick 401(k) plan. 

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No. 14-3716 7

At sentencing the judge applied two guideline enhancements that are relevant here. First, she found that Peterson 

derived $1,116,169 in gross receipts from his fraud: $300,000 

from the M&I wire transfer to the MGM Grand and $816,169

from the Greenwoods loan. Based on this same calculation, 

the judge found that M&I and Greenwoods suffered losses 

in excess of $1 million as a result of Peterson’s fraud. Given a 

base offense level of 7, a 16-level increase for total loss

exceeding $1 million, and a 2-level increase for gross receipts 

exceeding $1 million, Peterson’s total offense level was 25. 

See U.S.S.G. § 2B1.1 (2014).1 Combined with Peterson’s 

criminal-history category of III, this yielded a guidelines 

sentencing range of 70 to 87 months. The judge imposed an 

84-month prison term on the M&I and Greenwoods fraud

counts and a concurrent term of 60 months on the pensiontheft count. This appeal followed.

II. Discussion

A. Rule 29(c) Motion for Judgment of Acquittal

Peterson first argues that the evidence on the M&I and 

Greenwoods fraud counts was insufficient for a reasonable 

jury to find guilt beyond a reasonable doubt. De novo 

review applies to the denial of a motion for judgment of 

acquittal; practically speaking, however, the standard of 

review is that for sufficiency of the evidence. United States v. 

Johns, 686 F.3d 438, 446 (7th Cir. 2012). We consider the 

evidence in the light most favorable to the government and

affirm the conviction if any rational trier of fact could find

the defendant guilty beyond a reasonable doubt. Id.; see also 

 1 All citations to the guidelines in this opinion are to the 2014 version 

under which Peterson was sentenced. 

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FED. R. CRIM. P. 29(c). Our task is not to “reweigh the evidence or invade the jury’s province of assessing credibility”; 

rather, we will “overturn the jury’s verdict only when the 

record contains no evidence, regardless of how it is weighed, 

from which the jury could find guilt beyond a reasonable 

doubt.” United States v. Pribble, 127 F.3d 583, 590 (7th Cir. 

1997) (quotation marks omitted). 

Four of the five counts challenged here were brought

under §§ 1014 and 1344(2), both of which require proof of a 

false or fraudulent statement.2 United States v. Doherty, 

969 F.2d 425, 428 (7th Cir. 1992). Regarding the M&I fraud 

counts, Peterson argues that the government failed to prove 

that the statements he made to the bank were false. Regarding the Greenwoods fraud counts, he argues that the government failed to prove that he made any statement to the 

bank. 

1. M&I Fraud Counts 

For the M&I fraud counts, the false statement at issue is 

Peterson’s e-mailed representation that the $300,000 wire 

transfer to the MGM Grand was not for personal expenses. 

Peterson does not dispute that he made this statement; he 

argues instead that the government failed to prove that it

was false. Peterson’s contention at trial was that the wire 

transfer was a distribution to himself in his capacity as a 

 2 The fifth count charged money laundering under 18 U.S.C. § 1957 in 

connection with the false statements that Peterson made to Greenwoods. 

Because the money-laundering count is derivative of the false-statement 

count, judgment of acquittal on the latter requires judgment of acquittal 

on the former. Peterson does not raise an independent challenge to the 

evidence on the money-laundering count.

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No. 14-3716 9

Maverick shareholder—a legitimate business expenditure 

under the terms of the M&I credit line. The jury rejected this 

claim, and reasonably so.

The government introduced substantial evidence that 

the wire transfer was not a shareholder distribution but 

instead was a direct use of Maverick funds to cover Peterson’s personal gambling debts. First, Peterson did not identify the transfer as a distribution when he requested it; to the 

contrary, he told the bank that the money would be used to 

purchase real estate on behalf of Maverick. Second, Peterson 

did not treat the requested funds as a distribution: instead of 

depositing the $300,000 into a personal account, he had the 

money wired directly from Maverick’s checking account to 

the MGM Grand. Finally, in a 2007 e-mail to Paulson, Peterson stated that Maverick did not make any shareholder 

distributions in 2006.

Peterson points to evidence that he claims supports his

contention that the wire transfer was really a shareholder 

distribution, notably later-prepared financial records purportedly showing a $900,000 distribution in April 2006, one 

component of which was a $300,000 wire transfer. But the

jury was entitled to disregard these financial records as a 

post hoc recharacterization intended to cover his tracks and 

rely instead on Peterson’s conduct and statements at the 

time of the transfer. At bottom, Peterson’s argument asks us 

to reweigh the evidence, which ignores the standard of 

review. See United States v. Johnson, 729 F.3d 710, 714 (7th Cir. 

2013) (“We will ‘overturn a conviction based on insufficient 

evidence only if the record is devoid of evidence from which 

a reasonable jury could find guilt beyond a reasonable 

doubt.’” (quoting United States v. Hill, 618 F.3d 619, 637 (7th 

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Cir. 2010))). A reasonable jury could easily conclude that 

Peterson lied when he assured M&I that he would not use 

the requested funds for personal expenses. The judge 

properly denied his motion for judgment of acquittal on the 

M&I fraud counts.

2. Greenwoods Fraud Counts

On the Greenwoods fraud counts, the false statement at 

issue is the representation contained in Peterson Properties’ 

loan application that the purpose of the loan was “land 

improvement and site improvement” for the Fitchburg tract. 

Peterson doesn’t argue that this statement was true; after all, 

he used nearly the entire loan for purposes other than land 

and site improvements, including paying off debts owed by 

Peterson Properties, debts owed by Maverick, and personal 

gambling debts. He argues instead that the government 

didn’t prove that he made any of the representations contained in the loan application. We disagree.

It’s true that Peterson didn’t fill out the loan application

himself; that was done by Greenwoods president Michael 

Weber. The government’s position at trial was that Weber 

did so at Peterson’s direction and based on Peterson’s oral 

representations. Weber testified to that effect, telling the jury 

that he filled out the application at Peterson’s behest and 

based on information Peterson provided. The government 

also pointed to the fact that Peterson signed the closing 

statement and the note setting forth the terms of repayment 

just one day after Weber filled out the loan application, 

supporting an inference that Peterson directed Weber to 

complete the application and gave him the information to do 

so. 

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Peterson argues that Weber’s testimony was too unreliable to support a finding of guilt because Weber admitted

that his memory of this time period was “very sketchy” and 

he “couldn’t remember any specific conversation with 

Peterson.” Weber also testified that Peterson’s business 

partner, Sweeney, could have been the person who provided 

the information he used to fill out the loan application. 

While these are plausible jury arguments, they don’t carry 

the day on appeal. The jury considered these arguments and 

instead chose to credit Weber’s testimony that it was Peterson who called the shots and provided the information for 

the loan application. Peterson’s argument on appeal simply

invites us to “second-guess the jury’s credibility determinations.” See United States v. Green, 648 F.3d 569, 578 (7th Cir. 

2011). That we won’t do. See id. (“We [will] overturn a 

conviction based on a credibility determination only if the 

witnesses’ testimony was incredible as a matter of law ... .”).

Finally, Peterson relies on the Fifth Circuit’s decision in 

United States v. Jobe, 101 F.3d 1046 (5th Cir. 1996), abrogated on 

other grounds by United States v. Ochoa-Gomez, 777 F.3d 278 

(5th Cir. 2015), but that reliance is misplaced. In Jobe the Fifth 

Circuit concluded that a defendant who guaranteed a loan 

and then endorsed and accepted loan proceeds on the 

pretense that the funds would be used to purchase commercial inventory had not himself made a false statement for 

purposes of § 1014. Id. at 1054, 1064–65. The stated purpose 

of the loan in Jobe was set forth in a “loan presentation” 

prepared by bank staff, which the defendant never signed. 

Critically, however, it was undisputed in Jobe that the defendant “made no direct representations concerning the 

loan.” Id. at 1064–65. Here, in contrast, Weber testified that 

Peterson provided the information contained in the loan 

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application. That testimony is sufficient to support the jury’s 

verdict.

B. Rule 33 Motion for a New Trial

Peterson next argues that the jury’s verdict on the M&I 

fraud counts was contrary to the manifest weight of the 

evidence, requiring a new trial. Rule 33 of the Federal Rules 

of Criminal Procedure permits a court to “vacate any judgment and grant a new trial if the interest of justice so requires.” See also United States v. Reed, 875 F.2d 107, 114 (7th 

Cir. 1989) (indicating that a new trial is warranted “where 

the evidence preponderates so heavily against the defendant 

that it would be a manifest injustice to let the guilty verdict 

stand”). Because the district judge is best positioned to make 

this determination, our review is highly deferential. United 

States v. Linwood, 142 F.3d 418, 422 (7th Cir. 1998). We review 

the judge’s decision for abuse of discretion, recognizing that 

“the exercise of power conferred by Rule 33 is reserved for 

only the most ‘extreme cases.’” Id. (quoting United States v. 

Morales, 902 F.2d 604, 606 (7th Cir. 1990)).

This is not “one of those rare cases in which consideration of the evidence leaves a strong doubt as to the defendant’s guilt of the charged offense.” United States v. Washington, 184 F.3d 653, 658 (7th Cir. 1999). As we’ve already 

explained, the government introduced substantial evidence 

from which the jury could conclude that Peterson lied when 

he told M&I that he would not use the $300,000 wire transfer 

for personal expenses. This evidence was neither incredible 

nor inherently unreliable. See id. (holding that the defendant 

was entitled to a new trial where the only evidence supporting his conviction was testimony that the district court had 

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No. 14-3716 13

expressly deemed incredible). We find no abuse of discretion.

C. Exclusion of Evidence/Right to Present a Defense

Alternatively, Peterson asks us to order a new trial on the 

M&I fraud counts because the judge deprived him of a 

meaningful opportunity to present a defense by limiting the 

testimony of Maverick’s accountant, Rick Vanden Heuvel. 

We review this constitutional claim de novo, “taking into 

account the permissible scope of the district court’s discretion in evidentiary matters.” United States v. Laguna, 693 F.3d 

727, 730 (7th Cir. 2012) (quotation marks omitted). The 

constitutional right to present a defense—guaranteed to all 

criminal defendants as a matter of due process, the Sixth 

Amendment confrontation right, or both, see Holmes v. South 

Carolina, 547 U.S. 319, 324 (2006)—is not absolute; a judge 

may exclude evidence that is cumulative or only marginally 

relevant, Laguna, 693 F.3d at 730.

The judge allowed Peterson’s counsel to question

Vanden Heuvel about Maverick’s 2006 financial records, and 

this examination included specific questions about a

$900,000 shareholder distribution recorded for that year. But 

counsel was not permitted to ask Vanden Heuvel about the 

breakdown of that distribution—specifically, whether the 

$900,000 figure included a $300,000 wire transfer—because 

this line of inquiry lacked foundation. Vanden Heuvel 

testified that he had never seen Maverick’s general ledger, 

which is the only record that would have identified the

individual components of the $900,000 distribution. 

Peterson’s counsel presented other evidence on this point, 

including the testimony of Monika Buhler (Maverick’s 

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14 No. 14-3716

bookkeeper who was responsible for maintaining the general ledger) and the general ledger itself.

The judge’s limitation on Vanden Heuvel’s testimony

was entirely appropriate; the witness had never seen the 

general ledger and had no first-hand knowledge of the 

distribution or its subsidiary parts. The limitation did not in 

any event deprive Peterson of his right to present a complete 

defense, not least because he was allowed to make his point

through another witness.

D. Jury Instruction on Bank Fraud

Over Peterson’s objection the judge gave the following 

jury instruction on bank fraud: “A bank’s negligence or lack 

of diligence in uncovering the fraud is not a defense to the 

crime charged.” Peterson renews his objection on appeal. We 

review de novo whether the jury instruction was an accurate 

statement of the law; the judge’s decision to give a particular 

instruction gets deferential review, for abuse of discretion

only. United States v. McKnight, 665 F.3d 786, 790–91 (7th Cir. 

2011). “If the instructions are adequately supported by the 

record and are fair and accurate summaries of the law, the 

instructions will not be disturbed on appeal.” Id. at 790 

(quotation marks omitted).

Peterson does not argue that the instruction inaccurately 

stated the law, nor could he. See, e.g., United States v. Berman, 

21 F.3d 753, 757 (7th Cir. 1994) (“[C]ontributory negligence is 

not a defense to fraud.”). Instead he claims the instruction 

was unnecessary because he never raised negligence as a 

possible defense to bank fraud. He insists that it was the 

prosecutor who put the conduct of the banks at issue by 

eliciting testimony from bank employees that they made

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No. 14-3716 15

mistakes in approving the various draw requests. To the 

extent that his own counsel also explored the circumstances 

surrounding the draw requests, Peterson says it was solely 

for the purpose of demonstrating that “he sought, and spent, 

loan money according to the rules, not that the bank officials 

were negligent in failing to discover otherwise.”

This argument rests on a distinction without a difference. 

Peterson put the conduct of the banks at issue throughout 

the trial, emphasizing the fact that his draw requests were 

routinely approved and suggesting that the bank’s approval 

showed that his conduct was proper. This implicitly left the 

impression that negligence was a possible defense. The 

judge was right to give the instruction.

E. Joinder of the Pension-Theft Count

Finally, Peterson challenges joinder of the pension-theft 

count for trial with the other counts in the indictment. He

claims that joinder was improper because pension theft is a 

distinct statutory offense and in this case involved different 

victims and occurred during a different time period than the 

other counts. He also argues that even if joinder were proper, the judge should have granted his motion to sever the 

pension-theft count because a joint trial risked undue prejudice. 

Whether joinder was proper is a question of law subject 

to de novo review. United States v. Quilling, 261 F.3d 707, 713 

(7th Cir. 2001). Rule 8(a) of the Federal Rules of Criminal 

Procedure permits joinder of two or more offenses in a 

single indictment if the offenses are “of the same or similar 

character, or are based on the same act or transaction, or are 

connected with or constitute part of a common scheme or 

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plan.” Offenses may be “of similar character” even if they 

are not connected in time or by evidence. United States v. 

Coleman, 22 F.3d 126, 133 (7th Cir. 1994) (“This language in 

Rule 8(a) is a rather clear directive to compare the offenses 

charged for categorical, not evidentiary similarities.”). Here

the pension-theft count—like each of the other counts

charged in the indictment—involved Peterson’s use of his 

business ventures to obtain money by dishonest means. This 

categorical similarity is sufficient to support joinder under 

Rule 8(a). 

When the initial joinder is proper, we review the district 

court’s denial of a motion to sever for abuse of discretion. 

United States v. Turner, 93 F.3d 276, 283 (7th Cir. 1996). 

Rule 14 of the Federal Rules of Criminal Procedure allows a 

district judge to order separate trials where joinder of charges would result in prejudice. The defendant “bears a heavy 

burden on appeal when arguing that ... prejudice warranted 

severance.” United States v. Ervin, 540 F.3d 623, 629 (7th Cir. 

2008). It is not sufficient that the defendant would have had 

a better chance of acquittal in separate trials; rather, the 

defendant must demonstrate actual prejudice by showing 

that he was unable to obtain a fair trial without severance. Id.

One way in which joinder may result in actual prejudice 

is “by creating a ‘spill-over effect’—that is, that the jury 

relies on evidence presented on one set of counts when 

reaching a conclusion on the other set.” Id. at 628. To show 

prejudicial spillover, a defendant “must overcome the dual 

presumptions that a jury will capably sort through the 

evidence and will follow limiting instructions from the court 

to consider each count separately.” Turner, 93 F.3d at 284. 

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No. 14-3716 17

Peterson cannot overcome either of these presumptions. 

The judge properly instructed the jury to separately consider 

each charge and the evidence supporting it. We have said 

that instructions of this type provide “an adequate safeguard 

against the risk of prejudice in the form of jury confusion, 

evidentiary spillover and cumulation of evidence.” United 

States v. Berardi, 675 F.2d 894, 901 (7th Cir. 1982). We have

also recognized that where, as here, the jury returns a guilty 

verdict on only some of the counts charged in the indictment, we can be confident that the jurors were able “to sift 

the evidence and to weigh the merits of each count separately.” Id. at 902. Accordingly, severance of the pension-theft 

count under Rule 14 was not necessary to avoid unduly 

prejudicial spillover effect.

F. Gross-Receipts and Total-Loss Calculations

Moving now to sentencing arguments, Peterson challenges the judge’s calculations of the gross receipts and total 

loss associated with his fraud for purposes of arriving at his 

recommended sentence range under the guidelines. We 

review the judge’s application of the guidelines de novo but 

defer to her findings of fact unless they are clearly erroneous. United States v. Irby, 240 F.3d 597, 599 (7th Cir. 2001).

1. Gross Receipts

Section 2B1.1(b)(16)(A) of the Sentencing Guidelines provides for a two-level enhancement where “the defendant 

derived more than $1,000,000 in gross receipts from one or 

more financial institutions as a result of the offense.” To 

calculate a defendant’s gross receipts, application note 12 

states that “the defendant shall be considered to have derived more than $1,000,000 in gross receipts if the gross 

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receipts to the defendant individually, rather than to all participants, exceeded $1,000,000.” (Emphasis added.)

Based on Peterson’s misappropriation of the $300,000 

wire transfer from M&I and $816,169 of the Greenwoods 

loan, the judge determined that Peterson’s gross receipts

from the fraud totaled $1,116,169. Peterson accepts that the 

money he used to pay off personal gambling debts (the 

entire $300,000 wire transfer from M&I and $300,000 of the 

Greenwoods loan) was properly attributed to him individually. He maintains, however, that the funds he used to pay 

debts owed by Peterson Properties and Maverick—$516,169

of the Greenwoods loan—should not have been included in 

his total gross receipts from the fraud.

This argument is flawed. By its terms application note 12 

contemplates a fraud with multiple participants. The policy 

underlying this note is that “each dollar count once” when 

allocating fraud proceeds between the defendants for sentencing purposes. See United States v. Castellano, 349 F.3d 483, 

487 (7th Cir. 2003). Here Peterson is the sole perpetrator of 

the fraud, so the application note doesn’t apply.

Peterson relies on Castellano, but the fraud in that case 

involved multiple participants. There three codefendants—

two individuals and their closely held corporation—were

charged with wire fraud. The defendants used fraudulently 

obtained loans to finance the construction costs necessary to 

keep their home-building business afloat. All loan proceeds

went directly to the corporation, and the individual defendant who challenged his sentence received less than $200,000 

of the funds as either salary or reimbursement of expenses 

from the corporation. The district court attributed all of the 

ill-gotten proceeds to the individual defendant solely beCase: 14-3716 Document: 41 Filed: 05/25/2016 Pages: 20
No. 14-3716 19

cause he was the founder and manager of the corporation. In 

vacating that defendant’s sentence, we emphasized that the 

district court improperly disregarded corporate formalities 

for purposes of calculating gross receipts while recognizing 

the corporation as a separately charged entity. Id. at 487.

Here, in contrast, Peterson was the sole participant in the 

fraud perpetrated on Greenwoods and maintained complete 

control over the distribution of all of the proceeds of his 

fraud. That he chose to spend some of the money he fraudulently obtained to pay off debts owed by Maverick and 

Peterson Properties is irrelevant for purposes of calculating 

his gross receipts. Cf. United States v. Edelkind, 467 F.3d 791, 

801 (1st Cir. 2006) (holding that fraud proceeds are attributable to a defendant who controls disbursement of those 

proceeds even if he causes legal ownership to be lodged in 

another person or entity). The judge correctly determined 

that Peterson’s gross receipts totaled more than $1 million

and thus appropriately applied a two-level sentencing 

enhancement under § 2B1.1(b)(16)(A). 

2. Total Loss

Under U.S.S.G. § 2B1.1(b)(1)(I), a 16-level enhancement 

applies to a fraud that results in total loss of more than 

$1 million. Application note 3(E)(i) explains that “[t]he 

money returned ... by the defendant or other persons acting

jointly with the defendant, to the victim before the offense 

was detected” should be subtracted from the total loss

amount. See also United States v. Hausmann, 345 F.3d 952, 960 

(7th Cir. 2003).

The judge applied the 16-level enhancement based on a 

total loss amount of $1,116,169—again, the sum of the 

Case: 14-3716 Document: 41 Filed: 05/25/2016 Pages: 20
20 No. 14-3716

$300,000 loss from the M&I wire transfer and the $816,169

loss from the Greenwoods loan. Peterson argues that the 

$300,000 wire transfer should not have been included because he repaid that amount in full prior to detection of his 

fraud.

The government now concedes that this repayment occurred before Peterson’s fraud was detected. Subtracting 

$300,000 from the total loss calculation leaves only $816,169. 

A 14-level enhancement applies to this total loss amount. See 

U.S.S.G. § 2B1.1(b)(1)(H). Peterson is entitled to resentencing.

Accordingly, we VACATE the sentence and REMAND for 

resentencing. In all other respects the judgment is AFFIRMED.

Case: 14-3716 Document: 41 Filed: 05/25/2016 Pages: 20