In the

United States Court of Appeals

For the Seventh Circuit

No. 15-3474

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

PRECIOUS W. HOUSE,

Defendant-Appellant.

Appeal from the United States District Court for the 

Northern District of Illinois, Eastern Division.

No. 14 CR 00010 — Andrea R. Wood, Judge.

ARGUED DECEMBER 1, 2017 — DECIDED FEBRUARY 27, 2018

Before BAUER, FLAUM, and ROVNER, Circuit Judges.

BAUER, Circuit Judge. On March 19, 2015, a jury convicted

defendant-appellant Precious House of six counts of bank

fraud, in violation of 18 U.S.C. § 1344, as a result of his involvement in a fraudulent automobile loan scheme. At sentencing,

the district court determined the appropriate Sentencing

Guidelines range was 108 to 135 months’ imprisonment, and
2 No. 15-3474

sentenced House to serve 108months. House appeals from that

sentence, arguing that the district court improperly applied a

three-level enhancement by finding that House was a manager

or supervisor of the scheme, pursuant to § 3B1.1(b) of the

Sentencing Guidelines. We affirm.

I. BACKGROUND

From approximately February to December 2013, House

and his co-defendants participated in a scheme to secure

automobile loans—and retain a percentage of the proceeds—by falsifying income and vehicle information for

individuals who were seeking personal loans. 

House owned a wholesale car dealership called Rolling

Auto. In September 2012, he approached co-defendant Crystal

Williams, who was working for a lending consulting company

at the time, and proposed a plan in which they would seek

loans by falsely stating that Rolling Auto intended to sell cars

to loan applicants. He picked an unreliable partner; Williams

entered into a plea agreement with the government and

provided the core testimony at trial against House and codefendants Brian Hughes and Murchael Turner. She testified

that, as part of the scheme, she prepared loan applications for

19 different borrowers,none of whom wouldactually purchase

a vehicle from Rolling Auto. On those loan applications,

Williams falsified details such as registration fees, balances

due, taxes owed, and the names of salespersons. House

provided her with the details of vehicles she could use on false

purchase orders that would correspond with the amounts

sought by the borrowers. Specifically, House supplied her with

the make, model, color, year, vehicle identification numbers,
No. 15-3474 3

mileage, and price for vehicles that neither he nor Rolling Auto

owned.

Williams would ensure that the loan checks were made

payable to Rolling Auto, and instructed the borrowers to send

the loan checks to Rolling Auto’s address. In some cases,

House deposited the checks in Rolling Auto’s business

checking account at TCF Bank, retaining a certain percentage

of the funds, and distributed the remainder to Williams and

the borrower, based on the amounts Williams provided. In

other cases, House cashed the checks at a currency exchange

before retaining his percentage anddistributing the remainder.

House signed the checks in his role as owner of Rolling Auto.

In March 2013, TCF returned one of the checks House had

deposited, which caused the Rolling Auto business account to

go into the negative. Williams anticipated that the bank might

close the account as a result, so she suggested that they open

another account with Bank of America. House provided her

with Rolling Auto’s employer identification number and other

information, and she opened a new account in Rolling Auto’s

name. House continued to deposit checks into that account and

distribute the funds as he had done previously. 

In July 2013, credit unions began denying loans to Rolling

Auto. In response, Williams proposed creating a new business

to use as a front for the car loans. Williams drafted articles of

incorporation, which she sent to House for review, for a

company called Xpress Automotives; the business was not

operational, nor did it own a car lot or any cars. After Williams

filed the paperwork, House used Xpress Automotives to apply

for and receive nine additional loan checks. 
4 No. 15-3474

House was personally involved in applying for 51 loans to

credit unions for fictitious auto sales in 2013. Thirty-six of those

were approved, resulting in total loan proceeds of $1.1 million.

House personally kept $105,589.96 of that money, which was

the most in relation to his co-defendants. Williams took

approximately $60,000, Hughes took approximately $68,000,

and Turner approximately $2,500.

On March 19, 2015, a jury found House guilty of all six

counts of bank fraud against him. Prior to his sentencing, the

UnitedStates ProbationOffice filedaPresentence Investigation

Report (PSR), which recommended a total offense level of 31,

combined with a criminal history category of II, to reach a

Sentencing Guidelines range of 121 to 151 months’ imprisonment. As part of its calculation, the PSR included a four-level

enhancement for being the organizer or leader of criminal

activity, pursuant to § 3B1.1(a) of the Sentencing Guidelines.

House and the government each filed a sentencing memorandum in response to the PSR. The government recommended a three-level enhancement for being a manager or

supervisor,pursuant to § 3B1.1(b). Among his other objections,

House contended that no enhancement under that section was

warranted, as there was no hierarchy among the participants,

and everyone played an equal role.

The district court held a sentencing hearing on August 10,

2015. As to the arguments regarding the § 3B1.1 enhancement,

the court found that the co-defendants had distinct roles in the

scheme. It found that House was involved in the planning of

the scheme, particularly with the idea to use fictitious car sales

as a front for obtaining the loans. The court noted that House
No. 15-3474 5

used his business, Rolling Auto, as the cover, which meant that

he was necessarily involved in the key aspects of planning the

scheme. It also highlighted the fact that House earned the most

money and touched the highest number of transactions of all

the co-defendants.The court acknowledgedthat House did not

recruit participants to the same extent as the others, but the

totality of his conduct qualified him for the three-level enhancement for being a manager or supervisor of the scheme.

The court accepted the remainder of the PSR’s recommendations and calculated a total offense level of 30, resulting in a

Sentencing Guidelines range of 108 to 131 months. After

evaluating the requisite factors under 18 U.S.C. § 3553(a), the

court sentenced House to 108 months’ imprisonment. House

timely appealed.

II. DISCUSSION

When considering a challenge to an enhancement under

§ 3B1.1 of the Sentencing Guidelines, we review the district

court’s factual determinations for clear error, and we review

whether those facts support the enhancement de novo. United

States v. Harris, 791 F.3d 772, 780 (7th Cir. 2015) (citations

omitted). “We reverse a district court’s application of a

Guidelines enhancement only if we are left with a ‘definite and

firm conviction that a mistake has been made.’” Id. (quoting

United States v. Johnson, 489 F.3d 794, 796 (7th Cir. 2007)).

Sentencing Guidelines § 3B1.1 provides for enhancements

based on a defendant’s role in his offense. Where a crime

involves five or more participants “or is otherwise extensive,”

a defendant receives a four-level enhancement if he is an

“organizer or leader” of the scheme, and a three-level enhance-
6 No. 15-3474

ment if he is a “manager or supervisor.” U.S.S.G. § 3B1.1(a)

and (b). House concedes that his crime involved five or more

participants or was “otherwise extensive.” He argues only that

he shouldnothave receiveda three-level enhancement because

his involvement did not rise to the level of a manager or

supervisor.

The Sentencing Guidelines do not directly define the terms

organizer, leader, manager, or supervisor. The Application

Notes, however, provide a list of factors for courts to use “[i]n

distinguishing a leadership and organizational role from one

of mere management or supervision.” Id. § 3B1.1 cmt. n.4.

Those factors include the exercise of decision making authority, the nature of the defendant’s participation, the recruitment

of accomplices, the share of the fruits of the crime, the degree

of participation in planning or organizing, the nature and

scope of the crime, and the degree of control or authority

exercised over others. Id. While those factors were clearly

meant to draw contrasts between the categories in subsections

(a) and (b), they have also been used in determining whether

§ 3B1.1 applies at all. See United States v. Bennett, 708 F.3d 879,

891 (7th Cir. 2013) (collecting cases). In United State v. Figueroa,

however, we found that the factors may be unhelpful in

determining whether the three-level manager/supervisor

enhancement applied. 682 F.3d 694, 697 (7th Cir. 2012) (“If a

judge ... doesn’t know what a ‘manager’ or ‘supervisor’ is,

Application Note 4 isn’t going to help him—especially since

it’s about organizers and leaders and not middle managers and

low-level supervisors.”).

As a result of these differing views regarding the helpfulness and applicability of the Note 4 factors, we have shifted
No. 15-3474 7

our focus to a more practical analysis and explained that “a

manager or supervisor should be straightforwardly understood as simply someone who helps manage or supervise a

criminal scheme.” United States v. Grigsby, 692 F.3d 778, 790

(7th Cir. 2012) (citing Figueroa, 682 F.3d at 697-98). Recently, we

affirmed that the primary goal in applying § 3B1.1 should be to

make a “commonsense judgment about the defendant’s

relative culpability given his status in the criminal hierarchy.”

United States v. Dade, 787 F.3d 1165, 1167 (7th Cir. 2015)

(quoting United States v. Weaver, 716 F.3d 439, 443 (7th Cir.

2013)).

That does not mean, however, that the factors are to be

disregarded completely. Indeed, the district court found them

helpful to its analysis in this case. “To the extent those factors

help to straightforwardly identify whether a defendant helps

manage or supervise a criminal scheme, courts may continue

to consider them.” Weaver, 716 F.3d at 443 (internal quotation

marks omitted). Still, we must bear in mind that none of the

factors, individually, is a prerequisite to the application of a

§ 3B1.1 enhancement. Id.; see also Bennett, 708 F.3d at 891

(explaining that “slavish adherence to [the factors] is unnecessary: the ultimate question is what relative role the defendant

played”) (internal quotation marks and citation omitted).

With that as the operative framework, we find no error in

the district court’s application of the three-level enhancement.

The facts the court cited at the sentencing hearing support the

“straightforward” conclusion that House “help[ed] manage or

supervise the criminal scheme.” Weaver, 716 F.3d at 443. House

used his own business as the cover for obtaining the loans and

was instrumental in the design of the overall scheme. He
8 No. 15-3474

provided the necessary (albeit, falsified) vehicle information

used to secure the loans. He was also integral in the distribution of proceeds to the scheme’s participants, including the

borrowers, and he retained a significantly greater amount

of those funds than anyone else involved. Given that the

court was tasked with making a “commonsense judgment

about [House’s] relative culpability,” there was no error in its

determination that House had a managerial or supervisory

role. See Dade, 787 F.3d at 1167.

House’s main contention on appeal is that without an

explicit finding that he exercised direct control or authority

over another participant, the § 3B1.1 enhancement cannot

apply. To support that argument, he cites a number of our

opinions that have suggested the enhancement requires such

a finding. See United States v. Gracia, 272 F.3d 866, 877 (7th Cir.

2001) (“All factors need not be present, but the defendant must

have ‘exercised some control over others involved in the

offense.’”) (quoting United States v. Pagan, 196 F.3d 884, 892

(7th Cir. 2000)); see also United States v. Fones, 51 F.3d 663, 670

(7th Cir. 1995) (holding that the enhancement did not apply

where the district court found defendant did not have control

over any other participants).

In Dade, however, we clarified that application of § 3B1.1 is

not limited in that way, and that control is simply one measure.

787 F.3d at 1167. “In addition to exercising control, a defendant

also fits into one of § 3B1.1's aggravating roles if he was

responsible for organizing others for the purpose of carrying

out the crime.” Id. (internal quotation marks and citations

omitted). House’s role in devising the plan, using his business

as the front, providing the necessary vehicle information,
No. 15-3474 9

coordinating with his co-conspirators and the borrowers, and

receiving and distributing the funds meets that standard. All

of those actions required organizational efforts sufficient to

satisfy § 3B1.1(b)'s threshold.

III. CONCLUSION

For the foregoing reasons, the district court’s sentence is

AFFIRMED.