In the

United States Court of Appeals

For the Seventh Circuit

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No. 04-3099

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

GARY R. GEORGE,

Defendant-Appellant.

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Appeal from the United States District Court

for the Eastern District of Wisconsin.

No. 03-CR-259—Rudolph T. Randa, Chief Judge.

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ARGUED FEBRUARY 17, 2005—DECIDED APRIL 4, 2005

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Before EASTERBROOK, RIPPLE, and MANION, Circuit

Judges.

EASTERBROOK, Circuit Judge. Gary George served in

Wisconsin’s Senate for 23 years, acquiring considerable

influence over public expenditures. He was indicted in 2003

on charges that he accepted kickbacks in exchange for

exercising that influence, which extended over federal

grants as well as programs financed by state revenues. He

pleaded guilty to violating 18 U.S.C. §371 (conspiracy to

defraud the United States) as part of a bargain in which the
2 No. 04-3099

prosecutor dismissed all other charges, and he was sentenced to 48 months’ imprisonment plus about $614,000 in

restitution.

Four months after pleading guilty, George moved to dismiss the single count of conviction under Fed. R. Crim. P.

12(b)(3)(B) for failure to state an offense. Relying on United

States v. Bloom, 149 F.3d 649 (7th Cir. 1998), George

contended that the events narrated in the indictment did

not violate 18 U.S.C. §1346 by depriving Wisconsin of his

honest services. This motion is more than a little odd. By

pleading guilty a defendant normally surrenders an opportunity to contest the merits, waiving (not just forfeiting) all

arguments that could have been raised earlier. See United

States v. Broce, 488 U.S. 563 (1989). And the plea agreement in this case made that explicit: ¶25 waives all matters

that could have been raised by pretrial motion. Failure of the

indictment to state an offense is such a matter.

Actual innocence might supply a “fair and just reason” to

withdraw a guilty plea, see Fed. R. Crim. P. 11(d)(2)(B), but

George did not move to withdraw his plea in order to set the

stage for a motion to dismiss—for withdrawal would have

allowed the prosecutor to reinstate the remaining charges,

including two counts under 18 U.S.C. §666 and one under 18

U.S.C. §1956(a)(1)(B)(i), none of which entailed honest-services fraud. (And George had pleaded guilty; his

contention that the district judge failed to accept his plea is

incorrect and need not be discussed.)

A district judge has discretion under Fed. R. Crim. P.

12(b)(3)(B) “at any time while the case is pending . . . [to]

hear a claim that the indictment or information fails to invoke the court’s jurisdiction or to state an offense”. A judge

might elect to use this discretion to treat a motion such as

the one George made as a request to withdraw the plea and

dismiss the contested charge—though relieving the defendant of the concessions he made would relieve the prosecu-
No. 04-3099 3

tor of the reciprocal concessions and reinstate the other

charges. The district judge did not abuse his discretion in

denying George’s motion, however. It was made late in the

day (only two weeks before sentencing) and rested on a

misunderstanding. The count to which George pleaded

guilty did not depend on §1346. It charged him with

conspiring to defraud the United States, not with depriving

Wisconsin of his honest services. Mail fraud was just one of

the means employed in the scheme. The district judge

sensibly perceived that George was trying to smuggle an

objection to the sufficiency of the evidence (which Rule

12(b)(3)(B) does not cover) into the proceeding under the

guise of a challenge to the charge’s statutory footing.

George submits that his sentence violates the

sixth amendment, as the Supreme Court explained it in

United States v. Booker, 125 S. Ct. 738 (2005). Yet the

district judge understood the sixth amendment problem, for

sentencing occurred after our opinion in United States v.

Booker, 375 F.3d 508 (7th Cir. 2004), which the Supreme

Court affirmed last January. The judge proceeded as if the

Sentencing Guidelines were defunct, so that he had discretion to select any term within the statutory limits of zero to

60 months. Had the court followed the Guidelines, it would

have sentenced George to the statutory maximum— for the

sentencing range was 63 to 78 months, and George does not

contend that there was any basis for a downward departure.

The Supreme Court’s decision in Booker shows that the

Guidelines continue to inform district judges’ decisions.

Judges need not rehearse on the record all of the considerations that 18 U.S.C. §3553(a) lists; it is enough to calculate

the range accurately and explain why (if the sentence lies

outside it) this defendant deserves more or less. That’s the

approach we have taken for decisions to reimprison a person after revoking supervised release, a subject on which

the Guidelines always have been advisory rather than binding. See United States v. Salinas, 365 F.3d 582, 588-90 (7th
4 No. 04-3099

Cir. 2004); United States v. Hale, 107 F.3d 526, 529-30 (7th

Cir. 1997). It makes sense to follow the same approach for

the Guidelines as a whole in Booker’s wake. Chief Judge

Randa explained his decision. Had he known that the

Guidelines continue to have substantial sway, he might

have imposed a sentence closer to 60 months; it is inconceivable that anticipation of the ongoing need to start from

and respect the Guidelines’ framework would have led to a

lower sentence. Any error therefore was harmless. See Fed.

R. Crim. P. 52(a).

George does not contend that his actual sentence is unreasonable, the post-Booker standard of appellate review. It

is hard to conceive of below-range sentences that would be

unreasonably high. George’s is not. The United States

would have better claim to be the party aggrieved by the

district judge’s disposition, and it has not appealed.

Restitution poses a more complex problem. George’s contention that Booker requires juries rather than judges to

assess restitution is misguided. There is no “statutory maximum” for restitution; indeed, it is not a criminal punishment

but instead is a civil remedy administered for convenience

by courts that have entered criminal convictions, see United

States v. Bach, 172 F.3d 520, 523 (7th Cir. 1999); United

States v. Newman, 141 F.3d 531, 537-42 (7th Cir. 1998), so

the sixth amendment does not apply. We have accordingly

held that Apprendi v. New Jersey, 530 U.S. 466 (2000), does

not affect restitution, see United States v. Behrman, 235

F.3d 1049, 1054 (7th Cir. 2000), and that conclusion is

equally true for Booker.

Still, restitution must be calculated in accord with statutory rules, and we cannot be confident that the district

judge did so. The presentence report and witnesses who

testified at a hearing offered different estimates of appropriate restitution, with the low end around $200,000 and

the high end around $900,000. Choice depended on a num-
No. 04-3099 5

ber of variables, such as whether to treat George’s gains as

a proxy for the sums diverted from the public programs and

what value to assign to time that public employees and

private contractors devoted to providing campaign aid,

accounting help, and other services to George personally.

George contended that the answer is zero because employees put in full days on the job, so that the public lost nothing; the prosecutor denied this and added that if workers

were willing to pull overtime they should have done so for

public rather than private benefit.

The district judge chose $613,746.36 as the amount of

restitution but did not make findings of fact or articulate

his reasons. Although Fed. R. Civ. P. 52(a) does not apply

directly to restitution, even though it is fundamentally a

civil remedy awarded after a bench trial, Circuit Rule 50 does

require an explanation for all appealable orders. When the

district judge omits findings about contested amounts of

restitution, it may be impossible to tell whether the legal

rules have been applied correctly. United States v. Menza,

137 F.3d 533, 538 (7th Cir. 1998), holds that a remand for

findings is essential when the reasoning may be important

yet cannot be recovered from the record. See also, e.g.,

United States v. Walton, 217 F.3d 443, 452 (7th Cir. 2000);

United States v. Minneman, 143 F.3d 274, 285-86 (7th Cir.

1998). A remand would be pointless if it were clear what the

award represents, see United States v. Ahmad, 2 F.3d 245,

246-47 (7th Cir. 1993); United States v. Mahoney, 859 F.2d

47, 49-50 (7th Cir. 1988), but this sum does not come from

any combination of items listed in the presentence report.

Both the presentence report and the testimony at the

hearing explore a number of possibilities, some of which

provide good bases of restitution and some of which do not.

We cannot tell which the judge selected and therefore

cannot tell whether all items (whatever they were) that

went into the award are legally appropriate.
6 No. 04-3099

Restitution must be based on the victim’s loss rather than

the offender’s gain. Compare United States v. Shepard, 269

F.3d 884 (7th Cir. 2001) (restitution based on victim’s loss),

with United States v. Genova, 333 F.3d 750 (7th Cir. 2003)

(forfeiture of offender’s gains). “Loss” means direct injury,

not consequential damages. See Shepard, 269 F.3d at 886-

87. Moreover, the only loss that counts is that caused by the

count of conviction, unless the defendant agrees to pay

more, which George did not. See 18 U.S.C. §3663A(a);

Hughey v. United States, 495 U.S. 411 (1990); United States

v. Peterson, 268 F.3d 533 (7th Cir. 2001). One scheme to

defraud may have multiple victims, and the statute allows

an award on account of all victims’ direct injuries, see

§3663A(a)(2); United States v. Mitrione, 357 F.3d 712, 721

(7th Cir. 2004), but Hughey requires the court to exclude

injuries caused by offenses that are not part of the scheme

of which George has been convicted.

The presentence report invited consideration of amounts

that are inappropriate under one or more of these rules. It

covered the events underlying all five counts of the indictment, even though George pleaded guilty to just one. It tried

to tote up George’s gains, though these may differ from the

victim’s losses. It assumed that the State of Wisconsin is

the victim, though the crime of which George has been convicted is conspiring to defraud the United States. Witnesses

at the evidentiary hearing likewise made one or more of

these errors. Perhaps Wisconsin should be treated as an

additional victim under §3663A(a)(2) because it lost the

benefit of funds provided by the United States, but this possibility must be explored with care rather than assumed to

be true.

Restitution of $614,000 may or may not be right; we just

cannot tell. Accordingly we vacate that portion of the

judgment and remand with instructions to receive written

submissions from the parties addressing the considerations

we have mentioned, and then make findings and conclu-
No. 04-3099 7

sions based on the existing record. The conviction and

sentence of imprisonment are affirmed.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—4-4-05