NONPRECEDENTIAL DISPOSITION To be cited only in accordance with Fed.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 , 201 7

Before

RICHARD A. POSNER

, Circuit Judge

MICHAEL S. KANNE

, Circuit Judge

DAVID F. HAMILTON

, Circuit Judge

No. 16

- 3984

UNITED STATES OF AME RICA, 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 disagree d and imposed a sentence at the low end of the guidelines ra nge. 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. B ecause 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 ge t 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

issu ed during the final six years of his employment. H e 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

un authorized 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 month s based on his relatively limited personal enrichment, the detrim ental 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 cond uct less “egre gious.” 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 off ense. 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, thi s 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 kee p a business [Windoor] alive.”

Th e 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

dam age 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 Longus t 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 tr ust.

On appeal

, Longust argues that the district court violated 18 U.S.C. § 3553(a)(1) by insufficiently considering his contention s that he engaged in fraud to keep Windoor in business and by refusing to consider his assertion that Windoor knew that t he 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 cond uct. T he 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’sNo. 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 s erious 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 n ot 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 di d 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.