NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with Fed. R. App. P. 32.1

United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Argued April 25, 2017

Decided May 17, 2017

Before

RICHARD A. POSNER, Circuit Judge

MICHAEL S. KANNE, Circuit Judge

DAVID F. HAMILTON, Circuit Judge

No. 16-3984

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

THEODORE J. LONGUST

Defendant-Appellant.

Appeal from the United States District 

Court for the Southern District of Illinois.

No. 3:15-CR-30165-SMY-1

Staci M. Yandle,

Judge.

ORDER

Theodore Longust, a former commercial-loan officer at Scott Credit Union, pled

guilty to engaging in bank fraud that saddled the credit union with more than $13 

million in losses and personally enriched him by an amount just under $200,000. At 

sentencing, he argued that he deserved a below-guidelines sentence because, in issuing 

fraudulent loans, he sought not to enrich himself but to keep a struggling business 

afloat. The district court disagreed and imposed a sentence at the low end of the 

guidelines range. Longust argues that the district court violated 18 U.S.C. § 3553(a)(1) 
No. 16-3984 Page 2

by insufficiently considering his mitigation argument. Because the district court 

adequately addressed it, we affirm. 

Longust worked for nearly a decade as a Business Relationship Manager at Scott 

Credit Union, a not-for-profit financial cooperative. In this position, he had to meet 

various requirements when issuing loans. For loans of more than $100,000, he had to get 

approval from the credit union’s Business Loan Committee. And he had to document 

all business loans through various applications, guarantees, credit approvals, and tax 

returns. But Longust disregarded these requirements for some of the loans that he 

issued during the final six years of his employment. He fraudulently issued loans that 

caused roughly $13.7 million in losses to Scott Credit Union (of which he kept for 

himself an amount less than $200,000).1 Roughly $1.7 million of these losses arose from 

unauthorized loan advances that Longust gave Windoor—a window-and-door 

company.

Longust pled guilty to one count of financial institution fraud, 18 U.S.C. 

§ 1344(1), four counts of misapplication of funds, id. § 657, three counts of money 

laundering, id. § 1956(a)(1)(B)(i), and one count of making a false loan document, id. 

§ 1006. 

The parties disputed the appropriate length for his sentence. The district court 

calculated a guideline range of 121 to 151 months’ imprisonment, and the government 

recommended a sentence at the bottom of that range. Longust proposed 84 months

based on his relatively limited personal enrichment, the detrimental effect that his 

conviction will have on his future work prospects, and his desire to help keep Windoor 

in business by funneling fraudulent loans to it. He asserted that Windoor knew that the

loans were fraudulent and that this knowledge made his conduct less “egregious.” But 

the district court brushed aside this argument as irrelevant:

The Court: Does it matter whether they were aware of the lines of credit? 

Does it matter to the point that your client was charged with, pled guilty 

to, misapplication of funds? Does it matter, does it matter to the offense of 

misapplication of funds? That- - does it matter? 

 

1 Besides the $13.7 million in losses stemming from Longust’s criminal conduct, 

Scott Credit Union lost another $12 million from defaulted loans that he had lawfully 

issued but were supported by insufficient collateral. 
No. 16-3984 Page 3

Mr. Schultz [Longust’s attorney]: No, Your Honor.

The Court: Then it doesn’t matter to this Court as to the nature and 

circumstances of the offense. Now, you can make your record, Mr. 

Schultz, and I - - and I’m asking you to, to do that and can we do that - -

can we get there? But I’m just letting you know and let the record reflect, 

this Court does not consider any part of your presentation, this part of 

your presentation as at all relevant to my consideration of Section 3553(a) 

factors. 

(R. 43 at 34.)

At his allocution, Longust told the judge that he engaged in this fraudulent activity 

“[m]ostly . . . to keep a business [Windoor] alive.”

The district court sentenced Longust to 121 months’ imprisonment and 3 years’ 

supervised release. In response to Longust’s point that he kept less than $200,000 for his 

personal use, the court stated that his offense was still very serious because of the 

damage he had caused to the credit union’s finances and reputation. The judge further 

justified this sentence by underscoring the “sophistication of the scheme and the degree 

of fraud and deception involved” over six years, as well as the need to deter Longust 

from “future criminal conduct.” The court acknowledged his lack of criminal history 

but emphasized the significant losses of the credit union (whose CEO, Frank Padak, had 

submitted a compelling victim-impact statement) and Longust’s betrayal of public trust. 

On appeal, Longust argues that the district court violated 18 U.S.C. § 3553(a)(1) 

by insufficiently considering his contentions that he engaged in fraud to keep Windoor 

in business and by refusing to consider his assertion that Windoor knew that the loans 

he had issued were fraudulent. According to Longust, these circumstances warranted a 

lighter sentence and undermined the need for deterrence. 

Longust is incorrect that the district court did not sufficiently consider the intent 

behind his conduct. The court acknowledged that his personal gain from the fraud may 

have been limited but stressed that the consequences of his crimes for the credit union 

were substantial: 

I think it’s the defendant’s position that beyond the funds that, Mr. 

Longust, you received for your own personal gain of, I believe it’s 
No. 16-3984 Page 4

approximately $150,000, that the remainder of the other part of the 

offense, the other counts, don’t seem to be real serious or significant 

because there was no personal gain. I disagree. The nature and 

circumstances of the offense also include the impact of that conduct. 

We’ve heard, and I’ve heard, the impact that your conduct has had on the 

credit union. I have read it. And I heard it today in Mr. Padak’s statement. 

And it is relevant. And I think it reflects, helps to reflect the seriousness of 

this offense as well. 

(R. 43 at 38–39.)

Further, the district court properly rejected Longust’s assertion that Windoor 

knew of his fraud on grounds that any such knowledge did not affect the court’s 

assessment of his “background, character, and conduct.” 18 U.S.C. § 3661. Even if 

Windoor’s knowledge were relevant, the court permissibly refused to consider it 

because Longust did not support his assertion with evidence. Sentencing judges may 

reject mitigation arguments that lack factual support. See United States v. Chapman, 

694 F.3d 908, 913–14 (7th Cir. 2012); United States v. Diaz, 533 F.3d 574, 578 

(7th Cir. 2008). 

AFFIRMED.