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# United States Court of Appeals For the Seventh Circuit

No. 15-3474

U NI T E D S TAT E S OF A ME RI CA , Plaintiff-Appellee ,

v.

P RE CI OUS W. H OUS E, 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.

A RGUE D D E C E M

B E R 1, 2017

— D E CID E D F E B R UAR Y 27, 2018

Before B AUE R

, F L AUM , and R OVN E R

, Circuit Judges

. B AUE R , Circuit Judge. On March 19, 2 015, a jur y c onv icted defendant-appellant Precious House of six counts of bank fraud, in violation of 18 U.S.C. § 1344, as a result of his inv o lv ement in a fraudulent a u tomobile l oan scheme. At sentencing, the district court determined the a ppropriate Sentencing Guidelines r ange w a s 108 to 135 months’ imprisonment, and2 No. 15-3474
sentenced House to serve 1 0 8 mo nth s. H o use a ppeals from that sentence, arguing that the district court improperly applied a three-lev el enhancement by finding that House w as a manager
or supervisor of the scheme, pursuant to § 3 B1.1(b) of the Sentencing Guidelines. W e affirm. I. BACKGROUND From approximately February to December 2013, House and his co-defendants participated in a scheme t o secure automobile loans—and retain a percentage of the proceeds—by falsifying income and v ehicle information for individuals who were seeking personal loans. House owned a wholesale car dealership called Rolling Auto. In S eptember 2012, he approached co-defendant Crystal Williams, who w as w orking for a l ending consulting company at the time, and p roposed a plan in which they w o uld seek loans by falsely stating that Rolling Auto intended to sell cars to loan a pplicants. H e picked an unreliable partner; Williams entered into a plea agreement with the gov ernment and provided the core testimony at trial against Hou se and codefendants Brian Hughes and Murchael T urner
. She testified that, as part of the scheme, she p repared loan applications for 19 d ifferen t bo r r o wer s, n o n e o f wh o m w o ul d a ctually purchase

a v ehicle from Rolling Auto. On those loan applications, Williams falsified d etails such a s registration f e es , balances due, taxes ow ed, and the names of salespersons. House provided her with the details of vehicles she could use on false purchase orders that w o uld correspond with the amounts sought by the borrow ers. Specifically , House supplied her with the make, model, color , y ear , v ehicle identification nu mbers,No. 15-3474 3 mileage, and price for v ehicles that n either he nor Rolling Auto owned. Williams w ould ensure that the loan checks w ere m a de pay able to Rolling Auto, and instructed the borrow ers to send the loan checks to Rolling Auto’ s a ddress. In some cases, House depos ited the checks in Rolling Auto’s business checking account a t TCF Bank, retaining a certain pe r c e ntage of the funds, and dis tr ib u ted the remainder to Williams and the borrow er

, based on the amounts Willia ms provided. In other cases, House cashed the checks a t a currency exchange before r etaining hi s p er cent a g e an d d i stributing the remainder

. House signed the checks in his role as owner of Rolling Auto. In M arch 2013, TCF returned one of the checks House had deposited, which caused the Rolling Auto business account t o go into the negativ e. Williams anticipated that the bank might close the account as a result, so s he s u ggested that they open another account with Bank of America. H ouse pr ovided her with Rolling Auto’s employ er identification number and o ther information, and she opened a new a ccount in Rolling Auto’s
name. House continued to deposit checks int o th a t a cco unt and distribute the funds as he had done previously

. In July 2013, credit unions began denying loans to Rolling Auto. In response, Williams p roposed creating a new business to use as a front for the car loans. Williams d r afted articles of incorporation, which she sent to House for review , for a company called Xpress Automotiv es; the business w as n o t operational, nor did it own a car lot or any cars. After Williams filed the paperw ork, House used Xpress Automotiv es to apply for and receiv e nine additional loan checks.4 No. 15-3474
House w as p ersonally inv olv ed in a pplying for 51 loans t o credit unions for fictitious auto sales in 2013. Thirty-six of those

w ere approv ed, resulting in total loan proceeds of $1.1 million. House personally ke pt $105,589.96 of that money , which w as the most in r elation to his co-defendants. Williams took approximately $60,000, Hughes took approximately $68,000, and T urner approximately $2,500. On March 19, 2 015, a jury found House guilty of a ll six counts of bank fraud against him. Prior to his sentencing, the United S t a t es Pr oba ti o n O ffi ce fi l e d a P r esent en ce Investi g a ti o n Report (PSR), which recommended a total offense lev el of 31, combined with a criminal histor y category of II, to reach a Sentencing Guidelines range of 121 to 151 months’ i mprisonme nt. A s p art of its calculation, the PSR included a four-lev el enhancement for being the organiz e r or leader of criminal activity , pursuant to § 3B1.1(a) of the Sentencing Guidelines. House and the gov ernment each filed a sentencing memorandum in response to the PSR. The g ov ernment r ecommended a three-lev el enhancement for being a manager or superviso r

, p ursuant to § 3 B1.1(b). Among his other objections, House contended that no enhancement under that section w as
w arranted, as there w as no hierarchy among the participants, and ev ery one 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
sc he me. It found that House w as inv olv ed 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 HouseNo. 15-3474 5
used his business, Rolling Auto, as the cov er , which meant that he w as necessarily inv olv ed in the key aspects of p lanning the scheme. It also highlighted the fact that House earned the most money and touched the highes t nu mb e r of t ransactions of all the co-defend ant s
. The co ur t a ckn o wl ed g ed that House did n o t recruit participants to the same extent as the others, but the totality of his c onduct qualified him for the three-lev el enhancement for being a manager or supervisor of the scheme. The court accepted the r emainder o f the PSR’s recommendations and calculated a t otal offense lev el of 3 0, r esulting in a Sentencing Guidelines range of 108 to 1 31 months. Af te r
ev aluating the requisite factors under 18 U.S.C. § 3553(a), the court sentenced House to 108 months’ imprisonment. Hou se timely appealed. II. DISCUSSION When considering a challenge to an enhancem e nt under § 3B1.1 of the Sentencing Guidelines, w e review the dis trict court’s factual determinations for c le ar error , and w e review whether those facts support the enhancement d e novo
. United States v
. Harris , 791 F .3d 772, 780 (7th Cir

. 2015) (citations omitted). “ W

e rev er s e a district court’s application of a Guidelines enhancement only if w e are left with a ‘definite and firm conviction th at a mistake h as been m a d e.’” 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 inv olv es fiv e or more participants “or is otherwise extensiv e,”
a defendant receiv es a four-lev el enhancement if he is an “organizer or leader” of the scheme, and a three-lev el enhance-6 No. 15-3474

ment if he is a “ mana ger or supervisor .” U.S.S.G. § 3B1.1(a) and (b). House concedes that his crime inv olv ed fiv e or more participants o r w as “otherwise extensiv e.” He argues o nly that he sh o ul d n o t h a ve r eceived a th r ee-l evel enh an c ement because his inv olv ement did not rise to the lev el of a m a na ger or supervisor

. The Sentencing Guidelines do not d irectly define the terms organizer

, l eader , manager

, or supervisor

. The Application Notes, h ow ev er

, provide a list of factors for courts to use “[i]n distinguishing a l eadership and organizational role from one of mere management or supervision.” Id. § 3 B1 .1 cmt. n .4. Those factors include the exercise of decision making author

ity , 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 ov e r others. Id. While those factors w ere clearly meant to draw contrasts betw een the categories in subsections (a) and (b), they hav e a ls o b een 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 S tate v
. Figueroa, how ev er , w e f ou nd that the factors may be unhelpful in determining whether the three-lev el manager/supervisor enhancement applied. 6 82 F .3d 694, 6 97 (7th Cir

. 2012) (“If a judge

... doesn’t know what a ‘manage r ’ or ‘supervisor’ i s, Applic ation Note 4 isn’t going to help him—especially since it’s about organizers and leaders and not middle managers and low-lev el supervisors.”). As a result of these differing v ie w s regarding the helpfulness and applicability of the Note 4 factors, w e hav e shiftedNo. 15-3474 7

our focus to a more practical analysis and explained that “a manager or supervisor shou ld be straightforw ardly under

stood a s s im ply 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 , w e affirmed that the primary goal in applying § 3B1.1 should be t o make a “c ommonsense judgment about the defendant’s relativ e culpability giv en his status in the criminal hierarchy .” United States v
. Dade, 7 8 7 F .3d 1165, 1167 (7th Cir

. 2 015) (quoting United States v
. W e aver, 716 F .3d 439, 443 (7th Cir

. 2013)). That does not mean, how ev er , that the factors are to be disregarded completely

. Indeed, the district court found them helpful to its analysis in this case. “T o the extent those factors help t o straightforw ardly identify whether a defendant helps manage or supervise a criminal scheme, courts may continue to consider them. ” W

e a v er, 716 F .3d at 443 (internal quotation

m a r ks omitted). Still, w e must bear in mind that none of the factors, individually

, is a prerequisite to the a pplication o f a § 3B1.1 enhancement. Id. ; see also Bennett, 708 F

. 3 d at 891 (explaining that “ slavish adherence to [the factors] is unnecessary: the ultimate question is what r elativ e role the defendant play ed”) (internal quotation marks and citation omitted). With that a s the operativ e framew ork, w e find no err or in the district court’s application o f the three-lev el enhancement. The facts the court cited at the sentencing h earing support the “straightforw ard” conclusion that House “help[ed] manage or supervise th e criminal scheme.” W eaver, 716 F .3d at 443. House used his own business as the cover for obtaining the loans and

w a s ins trumental in the design of the ov erall scheme. He8 No. 15-3474 provided the necessary (albeit, f alsified) vehicle information used to secure the loans. He w a s also integral in the d i stribution of proceeds to the scheme’s participants, including the borrow ers, and he retained a significantly greater amount of those funds than any one else inv olv ed. Giv e n tha t the court w as tasked with making a “commons ens e judgment about [House’s] relativ e culpability ,” there w as no error in its determina tion th at House had a managerial or supervisory role. S ee Dade, 787 F .3d at 1167. Hou s e ’ s main contention on appeal is that without an explicit finding that he exercised direct control or authority
ov er a nother participant, the § 3B1.1 enhancement cannot apply

. T o s u pport that argument, he cites a number of our opinions that hav e suggested the enhancement r equires such

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

. 2001) (“All factors need not be present, but the defendant must hav e ‘exercised some control ov er others inv olv ed in the offense.’”) (quoting United States v
. Pag a n , 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 h av e control
ov er any other participants). In Dade, how ev er

, w e clarified that application of § 3B1.1 is not limited in that w ay

, and that control is simply one measure. 787 F .3d at 1167. “In addition to exercising control, a defendant also fits into o ne o f § 3B1.1's aggrav ating role s if he w as responsible for organizing others for the purpose of carrying out the crime.” Id. (internal quotation marks and cita tions omitted). House’s role in devising the plan, using his business
as the front, providing the necessary v ehicle inf or m a tion,No. 15-3474 9 coordinating with his co-conspirators and the borrow ers, and receiving and distributing the funds meets that standard. All of those actions required organizational efforts sufficient t o satisfy § 3B1.1(b)'s threshold.

III. CONCLUSION For the foregoing r easons, the district court’s sentence is AFFIRMED.