* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### MAR 19 1999 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff - Appellee, No. 98-3215

v. (D. Kansas) ERNEST DALE BLEAM,

Defendant - Appellant. (D.C. No. CR-97-10103-1)

ORDER AND JUDGMENT *

Before ANDERSON , KELLY , and BRISCOE , Circuit Judges.

After examining the briefs and appellate record, th is panel has determined unanimously that oral argument would not materiallyassist the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). T he case is therefore ordered submitted without oral argument. Ernest Dale Bleam pleaded guilty to one count of fr aud against the Department of Education in violation of 20 U.S.C. § 1097(a). He now appeals the-2-

sentence imposed, contending that the district court erred in finding that the total loss to the government exceeded $800,000. We affirm. Between 1992 and 1996, Bleam was a self-employed fi nancial aid consultant who helped students obtain Pell Grants f rom the Department of Education. In order to increase a student’s chance of receiving a grant, Bleam, who was paid a percentage of any award, would falsi fy tax returns and other forms used in the application process. As soon as the government arrested Bleam and seized his records, it began an audit of his fi les. By the time the Presentence Investigation Report (PSR) was prepared, the govern ment had already collected $746,580 from 217 of Bleam’s customers who quickly had settled the civil claims against them for making fraudulent financial submis sions. Noting the government’s representation that the recovery and l oss would easily surpass $800,000, the PSR recommended an eleven-point incre ase to Bleam’s offense level pursuant to U.S.S.G. § 2F1.1(b)(1). Bleam objected. He argued that, based on its actua l recoveries, the government had demonstrated less than a $800,000 lo ss, and that any amounts which it might recover in the future were simply sp eculative. Hence, he contended, the loss should be set between $500,000 and $800,000, which would result in an offense level increase of only 10 poin ts. In response, the probation officer pointed out that 498 of Bleam’s files had b een investigated so far, and that-3-

the government had determined that awards were granted based on fraudulent information in 44% of those cases. Then, the probation officer extrapolated that a similar percentage and average recovery amount woul d extend to the 196 files which were still under investigation, so that total losses and recoveries in excess of $800,000 could be reasonably anticipated. At se ntencing, the district court overruled Bleam’s objection. Noting that “loss,” a s used in U.S.S.G. § 2F1.1(b), is not equivalent to amount recovered, R. Vol. II at 11-12, the court found, “given the methodology used by the government here, as wel l as the number of pending cases, . . . it is reasonable to place the loss at in excess of $800,000.” Id. at 18. We review the district court’s findings regarding a§ 2F1.1 loss under the clearly erroneous standard, but we review the facto rs which the court may properly consider de novo. See United States v. Moore , 55 F.3d 1500, 1501 (10th Cir. 1995). Under the guidelines, the district court is directed to utilize the actual or intended loss, whichever is greater. See United States v. Henry , 164 F.3d 1304, 1310 (10th Cir. 1999); United States v. Janusz , 135 F.3d 1319, 1324 (10th Cir. 1998). However, the guidelines provide that “ loss need not be determined with precision. The court need only make a reasona ble estimate of the loss, given the available information.” U.S.S.G. § 2F1.1, comment. (n. 8); See United States v. McAlpine , 32 F.3d at 484, 488 (10th Cir. 1994). The govern ment bears the-4-

burden of proving by a preponderance of the evidenc e that a particular sentence enhancement is warranted. See Moore , 55 F.3d at 1501. At the time of the sentencing hearing, the governme nt referred to an updated collection record which indicated that actu al recoveries to date amounted to $793,000, and that other grant recipients had ag reed to repay an additional $9,000 (although that money had not yet been receiv ed), thereby bringing the total current recovery to $802,000. Additionally, the up date noted that 170 of the files were still under investigation with undetermined re solutions. Although the record is not entirely clear, the update appears to have b een in the form of a letter prepared by the government’s “collection person” an d provided to Bleam the day prior to the hearing. R. Vol. II at 2-3. Although he did not object to any of the letter’s particulars, Bleam continued his objection to calculations based on amounts not yet actually received by the government. Id. at 15. Before making its finding, the district court specifically noted that its estimate of loss would not be based on amounts actually recovered, but upon it s evaluation of all the factors the government used to determine loss. Id. at 16. The government then explained its methodology, and the district court made its ruling. Id. at 17-18. On appeal, Bleam has modified his objection, now ar guing that no proper foundation was laid for the information regarding r ecovery, and that the government’s update letter is insufficient evidence . We disagree. First, as to the-5-

probation officer’s reliance upon the letter, the s entencing court may rely upon hearsay if the evidence bears indicia of reliability. Moore , 55 F.3d at 1501. Having failed to object to the probation officer’s reliance upon the letter at sentencing, Bleam may not now argue that the supple mental information provided to the court at sentencing was unreliable. Further more, although Bleam cites United States v. Smith , 951 F.2d 1164, 1168-69 (10th Cir. 1991), for the proposition that the government must produce more than its own agents’ factually unsupported loss calculations, Smith is readily distinguished. In Smith the issue was whether any loss at all had occurred; the court concluded there was simply no evidence of any type to support any loss calculation, either actual or intended. By contrast, Bleam has never disputed that he intendedto defraud his victim, or that actual losses did occur. And although he contests the precise amount of the loss, he never objected to the statements, either in the PSR or in the update letter, regarding the amounts actually recovered and the nu mber of files remaining under investigation. Under the circumstances, the distri ct court properly relied on the factors set out in U.S.S.G. § 2F1.1, comment. (n.8) , to reasonably estimate that the loss would exceed $800,000. That finding is no t clearly erroneous.-6-

AFFIRMED.
ENTERED FOR THE COURT

Stephen H. Anderson Circuit Judge