United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 08-1092

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United States of America, *

*

Appellee, *

* Appeal from the United States

v. * District Court for the Eastern

* District of Missouri.

Karen Hartstein, *

*

Appellant. *

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Submitted: September 24, 2008

Filed: March 9, 2009

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Before RILEY, HANSEN, and MELLOY, Circuit Judges.

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MELLOY, Circuit Judge.

Defendant Karen Hartstein admitted to conducting a scheme to defraud

numerous victims. She pleaded guilty to Mail Fraud in violation of 18 U.S.C. § 1341

and Unauthorized Use of a Credit Card in violation of 18 U.S.C. § 1029(a)(2). We

discussed the details of her offense, initial sentencing hearing, and initial sentence in

United States v. Hartstein, 500 F.3d 790 (8th Cir. 2007). 

In that prior appeal, we remanded for resentencing after finding that the burden

of proof had improperly shifted to Hartstein to disprove loss amounts during the first

sentencing hearing. Id. at 796. We noted specifically that, at resentencing, Hartstein
1

The Honorable Carol E. Jackson, Chief Judge, United States District Court for

the Eastern District of Missouri.

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would be bound by concessions she had already made regarding amounts received

from her victims. Id. We also noted that Hartstein’s intent and the circumstances

surrounding her receipt of funds were relevant to the questions of loss amounts and

intended loss amounts in accordance with U.S. Sentencing Guidelines Manual, §

2B1.1 (2004). Hartstein, 500 F.3d at 797–98. 

At resentencing, the district court1

 addressed two main issues. First, the court

addressed the circumstances and intent surrounding Hartstein’s receipt of funds to

resolve the question of whether all funds Hartstein admitted to receiving were to be

included in the loss amount or whether she should receive credits for certain

repayments. Second, the court addressed the question of loss amounts above those

included in the concessions Hartstein previously had made. 

The court found Hartstein had conceded the receipt of over $2.2 million from

fraud victims during a period of time when there was no possibility of repayment

other than through the use of additional, ill-gotten funds. As a result, the district court

held all repayments were merely tools to perpetuate Hartstein’s scheme, and she was

entitled to no credits for repayments of any of this amount. The court further found

that the government adequately proved over $300,000 in additional losses related to

certain victims or related to Hartstein’s separate concessions as to her unauthorized

credit card use. 

Given these findings, the total loss amount exceeded $2.5 million. Applying

U.S.S.G. § 2B1.1(b)(1)(J), and applying several adjustments as approved in our prior

opinion, the resultant advisory Guidelines range was 108 to 135 months. The district

court imposed a sentence of 135 months to be followed by three years of supervised
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release. In addition, the district court ordered Hartstein to pay restitution in the

amount of $2,088,433.68.

Hartstein appeals arguing that she should receive credits for certain repayments

and that she should not be bound by prior concessions. In addition, she challenges the

amount of her restitution, arguing the restitution order violates United States v.

Booker, 543 U.S. 220 (2005). She also argues that the notice requirements of Federal

Rule of Criminal Procedure 11(b)(1)(K) necessarily limit any restitution solely to

funds owed to the two victims of the criminal conduct to which she pleaded guilty. 

Regarding credit for repayments, we addressed the relevant legal issues in depth

in our prior opinion. Hartstein, 500 F.3d at 797–99. The record following

resentencing adequately supports the district court’s findings. See United States v.

Boesen, 541 F.3d 838, 850 (8th Cir. 2008) (“A sentencing court calculates a

reasonable estimate of the loss based upon a preponderance of the evidence.”).

Regarding concessions, Hartstein alleges her attorney made representations to

the court during the initial sentencing hearing without obtaining her authorization to

make such representations or concessions. Because her present challenge as to

concessions is, in essence, an allegation of attorney error or ineffective assistance of

counsel, we may not address her arguments on direct review absent exceptional

circumstances. See United States v. Davis, 452 F.3d 991, 994 (8th Cir. 2006) (stating

that review of ineffective assistance claims may be proper on direct review “only

where the record has been fully developed, where counsel’s ineffectiveness is readily

apparent, or where to delay consideration of the claim would lead to a plain

miscarriage of justice”). Because such exceptional circumstances are not present in

this case, any challenge to counsel’s actions would be more properly raised in the

context of a collateral proceeding using 28 U.S.C. § 2255. 
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Finally, regarding restitution, Hartstein did not raise her Rule 11 challenge at

the first sentencing hearing or during the first appeal. As such, she has waived this

argument. United States v. Kress, 58 F.3d 370, 373–74 (8th Cir. 1995). Further, we

have repeatedly held “that the evidentiary standard in restitution cases is unchanged

by United States v. Booker,” United States v. DeRosier, 501 F.3d 888, 896 n.12 (8th

Cir. 2007), and we note that Hartstein renews her Booker challenge primarily as a

means of issue preservation.

We affirm the judgment of the district court.

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