In the

United States Court of Appeals

For the Seventh Circuit

No. 01-3593

United States of America,

Plaintiff-Appellee,

v.

 

Lisa Leonard,

Defendant-Appellant.

Appeal from the United States District Court

for the Eastern District of Wisconsin.

No. 01-CR-19--Rudolph T. Randa, Judge.

Argued February 20, 2002--Decided May 9, 2002

 Before Bauer, Ripple and Manion, Circuit

Judges.

 Bauer, Circuit Judge. Lisa Leonard was

charged with eleven counts of tax fraud.

She entered a guilty plea to Count Eleven

and the district court granted the

government’s motion to dismiss Counts One

through Ten without prejudice. At

Leonard’s sentencing hearing, the

district court sentenced Leonard to 30

months in prison. This sentence was

based, in part, on "relevant conduct,"

which was initially charged in the

dismissed counts of Leonard’s indictment.

Leonard appeals her sentence. We affirm

the sentence imposed by the district

court.

BACKGROUND

 In April of 1998, Lisa Leonard filed a

1997 federal income tax return with the

United States Treasury Department and

claimed wages of $11,657, purportedly

earned from a company named MOFOCO

Enterprises. A fraudulent W-2 Form

supposedly issued by MOFOCO showing

earned wages and withholding was attached

to Leonard’s tax form. Based on these

claimed wages, Leonard sought a tax

refund in the amount of $4,461. Leonard

was never employed at MOFOCO Enterprises.

A representative from the company

confirmed that no wages were ever paid to
Leonard and no withholding occurred. 

 In all, over the course of three years,

Leonard prepared a total of eleven false

income tax returns. In addition to

submitting her own fraudulent claim for a

tax refund for 1997, Leonard assisted

five others in preparing and submitting

false federal income tax returns to

obtain refunds to which they were not

entitled for the years 1995, 1996 and

1997. These five individuals testified

that Leonard approached each of them,

offered to complete their returns and in

formed them that they were entitled to a

refund for various reasons, all of which

she fabricated. Two of these individuals

were Leonard’s neighbors and the three

others were relatives of Leonard’s

boyfriend. Leonard met with each

individual and obtained their respective

social security numbers, dependant

information and, if available, a W-2

Form. For each of these returns, Leonard

prepared and included an altered or

completely fabricated W-2 Form. In some

cases, Leonard altered a legitimate W-2

Form to show additional wages and

withholding; in other cases, Leonard cre

ated an entirely false W-2 Form for

employment that never occurred. All of

these fraudulent tax returns falsely

claimed an earned income credit and a

refund of fictitious tax income withheld.

 At Leonard’s direction, the five

individuals took their completed federal

income tax returns to H&R Block for

filing. Leonard charged each individual a

fee ranging from $50 to $1,000 for her

work in preparing their returns. Payment

was usually made at the time the refund

check was cashed, although in some

instances, Leonard required a "down

payment" prior to the preparation of the

return. 

 On February 6, 2001, a federal grand

jury returned an eleven count indictment

against Leonard. Counts One through Ten

charged her with devising and executing a

scheme to assist others in obtaining

false refunds from the I.R.S. by filing

false federal income tax returns in

violation of 18 U.S.C. sec.sec. 287, 2.

Count Eleven charged her with making a

false tax claim to the I.R.S. for a

refund on her own behalf. On May 21,

2001, Leonard entered a guilty plea to

Count Eleven and the district court
granted the government’s motion to

dismiss the remaining ten counts.

 The district court conducted a

sentencing hearing in September of 2001.

The government offered various exhibits

and the testimony of witnesses to

establish that Leonard’s fraudulent

filing of tax returns on behalf of others

was "relevant conduct" for purposes of

sentencing. Each of the five individuals

for whom Leonard prepared returns

testified at the hearing. Each confirmed

that Leonard prepared his or her tax

return and that they relied upon her

expertise in seeking their refund. All

five testified that they had actually

observed Leonard prepare either their own

tax returns or the tax returns of others

in her apartment. Some also stated that

Leonard’s apartment contained papers, an

adding machine, a typewriter, white-out

and a notebook containing social security

numbers and phone numbers.

 The district court adopted the facts and

sentencing calculation set forth in the

Presentence Report (PSR). The court found

that the government established by a

preponderance of the evidence that

Leonard’s fraudulent filing of tax

returns on behalf of others constituted

"relevant conduct" to the offense in

Count Eleven for sentencing purposes.

Leonard’s offense level was adjusted

accordingly, and she was sentenced to 30

months imprisonment. This appeal

followed.

DISCUSSION

A. "Relevant Conduct" Adjustment

 Leonard first argues that the district

court erred when it considered the tax

frauds Leonard committed on behalf of

others as "relevant conduct" under

section 1B1.3(a) of the Sentencing

Guidelines. This conduct was initially

charged in the indictment, but dismissed

pursuant to the government’s motion. At

Leonard’s sentencing hearing, the

district court determined that she caused

a total financial loss of $46,497. This

figure was based on the loss of $4,461,

which resulted from the fraud to which

Leonard pled guilty, plus an additional

loss of $42,036, resulting from the false

income tax returns filed on behalf of the

five other individuals for 1995, 1996 and

1997. Leonard argues that the district
court’s calculation is flawed: that the

$42,036 should not have been included in

the total loss she caused because it does

not constitute "relevant conduct" under

the Guidelines. She asserts that this

conduct is not part of the "same course

of conduct" or "a common scheme or plan"

as the offense to which she pled guilty

in Count Eleven. We disagree.

 A district court’s determination that

certain behavior amounts to "relevant

conduct" for sentencing purposes under

the Guidelines is a factual finding and

will only be disturbed if clearly

erroneous. United States v. Nunez, 958

F.2d 196, 198 (7th Cir. 1992). Generally,

we will affirm the district court’s

finding of relevant conduct where "the

record reveals that the district court

relied on the recommendations of the PSR

and carefully considered the government’s

theory on the relationship between the

offense of conviction and the additional

conduct." United States v. Patel, 131

F.3d 1195, 1204 (7th Cir. 1997).

 The United States Sentencing Guidelines

permit a sentencing court to consider

certain "relevant conduct," with which

the defendant has not been charged, in

calculating a defendant’s base offense

level for sentencing purposes. United

States v. Taylor, 272 F.3d 980, 982 (7th

Cir. 2001). Pursuant to section

1B1.3(a)(2) of the Guidelines, "relevant

conduct" includes any acts or omissions

that were "part of the same course of

conduct or common scheme or plan as the

offense of conviction." Application Note

9(A) to section 1B1.3 defines "common

scheme or plan" as two or more offenses

that are "substantially connected to each

other by at least one common factor, such

as common victims, common accomplices,

common purpose, or similar modus

operandi." Further, Application Note 9(B)

provides that offenses that are not part

of a "common scheme or plan" may be part

of the "same course of conduct" if they

are "connected or sufficiently related to

each other as to warrant the conclusion

that they are part of a single episode,

spree or ongoing series of offenses."

Factors to be considered in this analysis

include the degree of similarity of the

offenses, the regularity (repetitions) of

the offenses, and the time interval

between the offenses. U.S. Sentencing

Guidelines Manual sec. 1B1.3(a), cmt. n.
9(b).

 In Leonard’s case, all the financial

transactions considered fall within the

scope of "relevant conduct" as defined in

section 1B1.3(a)(2). Although Leonard

pled guilty to filing a single false tax

return, the record clearly shows that she

engaged in additional fraudulent acts

that are most certainly relevant conduct

to her offense of conviction. First, all

the financial transactions in which

Leonard was involved establish a "common

scheme or plan," as defined in

Application Note 9(A). For example, each

transaction involved the filing of false

tax returns seeking a refund. The I.R.S.

was a common victim in every instance.

See, e.g., United States v. Brierton, 165

F.3d 1133, 1137 (7th Cir. 1999)

(affirming a relevant conduct enhancement

because a credit union was the common

victim where defendant was fraudulently

altering loans and falsifying other

financial records at the credit union).

Finally, Leonard’s modus operandi was the

same for every transaction in that

sheattached an altered or falsified W-2

Form showing false wages and withholdings

to each return. Accordingly, the several

common factors establish that Leonard’s

offenses are "substantially connected"

and give rise to a "common scheme or

plan."

 In addition, Leonard’s filing of her own

1997 false return and the preparation of

false returns for others in previous

years amounts to "the same course of

conduct" pursuant to the standards set

forth in Application Note 9(B). In

considering the similarity of the conduct

in question, a sentencing court must look

to the identity of the participants and

the nature, structure and location of the

allegedly related transactions. United

States v. Cedano-Rojas, 999 F.2d 1175,

1180 (7th Cir. 1993). As described above,

a distinct similarity among all of

Leonard’s financial transactions is

evident. These offenses occurred with a

degree of regularity and temporal

proximity; the false tax returns were

filed in consecutive years. Leonard

argues that temporal proximity is not

established in her case because the other

illegal conduct was at least a year

before the offense to which she pled

guilty. The fact that the transactions

were each a year apart does not affect
the proximity; a tax return is only filed

once a year. See, e.g., U.S. Sentencing

Guidelines Manual sec. 1B1.3(a), cmt. n.

9(b) (stating "a defendant’s failure to

file tax returns in three consecutive

years appropriately would be considered a

part of the same course of conduct

because such returns are only required at

yearly intervals"). Again, we are

satisfied that the prior transactions

here are sufficiently related to the

offense of conviction and their

consideration as relevant conduct is

warranted.

 Leonard argues that after the first ten

counts of the indictment were dismissed,

all that remained was a one count

indictment alleging her own fraudulent

claim, "a course of conduct which lasted

about one day." While this is true, the

guidelines permit the sentencing court to

make certain adjustments based on

offenses outside the four corners of the

indictment. The purpose for the "relevant

conduct" adjustment in sentencing "is to

allow the sentence to reflect the

seriousness of an offense rather than

being limited by the specific charge set

out in the indictment." Taylor, 272 F.3d

at 982. Accordingly, we conclude that the

district court’s conclusions were based

on ample evidence that Leonard’s prior

illegal acts were "relevant conduct" to

the offense of conviction. 

B. Apprendi

 Leonard next argues that the district

court acted contrary to the Supreme

Court’s holding in Apprendi v. New

Jersey, 530 U.S. 466 (2000), by enhancing

Leonard’s sentence based on prior tax

offenses that were not proved to a jury

beyond a reasonable doubt. We review a

district court’s interpretation of the

Sentencing Guidelines de novo. United

States v. Parolin, 239 F.3d 922, 928 (7th

Cir. 2001). 

 We find Leonard’s Apprendi argument to

be without merit. Under the Supreme

Court’s holding in Apprendi, any fact,

other than the fact of a prior

conviction, that increases the penalty

for a crime beyond the prescribed

statutory maximum must be submitted to a

jury and proved beyond a reasonable

doubt. Apprendi, 530 U.S. at 490.

However, it is well-settled in this
Circuit that Apprendi does not apply in

cases where the actual sentence imposed

is less severe than the statutory

maximum. United States v. Watts, 256 F.3d

630, 634 (7th Cir. 2001); United States

v. Jones, 245 F.3d 645, 649 (7th Cir.

2001) ("We have repeatedly held that when

a defendant is sentenced to a term of

imprisonment within the statutory maximum

for the crime of which he is convicted,

Apprendi is beside the point.") (internal

citations omitted). Put another way,

Apprendi is limited to situations in

which findings affect statutory maximum

punishment. United States v. Behrman, 235

F.3d 1049, 1054 (7th Cir. 2000). Where

the statutory maximum is not exceeded,

the sentencing court may adjust the

sentence after making the appropriate

findings by a preponderance of the

evidence. Id.

 Leonard pled guilty to one count of tax

fraud, in violation of 18 U.S.C. sec.sec.

287, 2, and the statutory limit on

imprisonment for this offense is five

years. The district court determined by a

preponderance of the evidence that

Leonard was responsible for prior tax

fraud and imposed a sentence of 30

months. Although Leonard’s sentence was

enhanced based on the prior fraudulent

acts, the sentence did not exceed the

statutory maximum for the offense of

which she was convicted. Accordingly,

Apprendi does not apply.

CONCLUSION

 For the foregoing reasons, we AFFIRM the

district court’s decision to sentence

Leonard to 30 months in prison.