PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 19-3033

_____________

UNITED STATES OF AMERICA

v.

SCOTT CAPPS,

 Appellant 

_______________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. No. 2-18-cr-0572-001)

District Judge: Hon. Michael M. Baylson

_______________

Argued

June 16, 2020

Before: JORDAN, MATEY and ROTH, Circuit Judges.

(Filed: October 8, 2020)

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2

Abigail E. Horn [ARGUED]

Leigh M. Skipper

Federal Community Defender Office

 For the Eastern District of Pennsylvania

601 Walnut Street – Suite 540

Philadelphia, PA 19106

 Counsel for Appellant

David J. Ignall [ARGUED]

Office of United States Attorney

615 Chestnut Street – Suite 1250

Philadelphia, PA 19106

 Counsel for Appellee

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OPINION OF THE COURT

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JORDAN, Circuit Judge.

While working for The Vanguard Group (“Vanguard”), 

Scott Capps fraudulently caused funds from dormant accounts 

to be mailed to co-conspirators, one of whom then wrote 

checks conveying back to him some of the proceeds. Capps 

was eventually charged with, and pled guilty to, conspiracy to 

commit mail fraud, money laundering, and tax evasion. At 

sentencing, he did not raise any objections to the Presentence 

Report (“PSR”) that had been prepared, and the District Court 

adopted its calculation of the applicable guidelines range. 

Capps now contends that the District Court plainly erred 

in applying two upward adjustments in calculating his 

guidelines range. First, he says that, in setting the offense level 
3

for the money laundering, the District Court wrongly applied

an adjustment for abuse of a position of trust (“the abuse of 

trust adjustment”). Second, he makes two arguments that the 

District Court erred in applying an adjustment for deriving 

more than $1 million from a financial institution (“the gross 

receipts adjustment”). More specifically, he says that the gross 

receipts adjustment should not have been applied because the 

account holders, not Vanguard, were the source of the funds, 

and he further argues that the District Court made contradictory 

statements about whether he met the threshold for the 

adjustment to apply. 

As to the offense calculation for money laundering, we 

agree that the District Court plainly erred in applying the abuse 

of trust adjustment. As to the application of the gross receipts 

adjustment, we conclude that, while the District Court did not 

plainly err in deciding the adjustment could be applicable, it is 

not clear on this record whether Capps met the threshold for 

the adjustment to actually apply. We will therefore vacate 

Capps’s sentence and remand for resentencing. 

I. BACKGROUND

Vanguard is “an investment management group that 

manage[s] trillions of dollars in assets for account holders 

throughout the world.” (Indictment, App. at 16.) Through his 

employment there, Capps was able to identify accounts that 

were due for escheatment because of, for example, the death of 

an account holder with no heirs or the abandonment of funds 

in an account. Capps drew the money from such accounts by 

surreptitiously using subordinates’ passwords and causing 

Vanguard to mail checks drawn on the accounts to his friend, 
4

Lance Tobin, and others. He concealed his actions by 

falsifying documents and deleting records. 

Tobin deposited the stolen funds into his bank accounts 

and then wrote checks back to Capps to pay him a portion of 

the criminal proceeds. As stated in the indictment, Capps 

received at least two checks from Tobin, one for $555,200 and 

one for $29,750. Capps deposited those checks in his bank 

account and did not report the income on his federal tax returns. 

When the scheme came to light, Capps was charged 

with conspiracy to commit mail fraud in violation of 18 U.S.C. 

§ 1349, money laundering in violation of 18 U.S.C. 

§§ 1956(a)(1)(B)(i) and 2, and filing a false tax return in 

violation of 26 U.S.C. § 7206(1). He pled guilty to all charges. 

A PSR was prepared, employing the United States 

Sentencing Guidelines. It calculated Capps’s offense level for 

money laundering, though not for conspiracy to commit mail 

fraud, and included two separate 2-level adjustments that 

Capps now disputes: the abuse of trust adjustment and the 

gross receipts adjustment. At the time of sentencing, however, 

neither party raised any objections to the PSR, and the District 

Court adopted its recommendations without change. The 

resulting guidelines range was 63 to 78 months. The Court

varied downward and sentenced Capps to 48 months’ 

imprisonment and 3 years’ supervised release. It also ordered 

Capps to pay $2,137,580.81 in restitution to Vanguard. Capps

now appeals.
5

II. DISCUSSION1

Capps argues that the District Court erred in applying 

both the abuse of trust adjustment and the gross receipts 

adjustment. We address each in turn.

Before turning to the merits, however, we first note the

standard of review and how it marks our analytical path. 

Because Capps did not at sentencing raise any objections to the 

application of the adjustments, we review for plain error. The 

plain-error standard requires, first, an error, second, that the 

error be plain – “that is to say, clear or obvious[,]” and third, a

“reasonable probability that, but for the error, the outcome of 

the proceeding would have been different.” Molina-Martinez 

v. United States, 136 S. Ct. 1338, 1343 (2016) (citation and 

internal quotation marks omitted). This third prong of the 

standard is sometimes described as requiring that the plain 

error has affected the defendant’s substantial rights. United 

States v. Olano, 507 U.S. 725, 732 (1993). “Once these three 

conditions have been met,” there is a fourth prong to the test, 

which advises that “the court of appeals should exercise its 

discretion to correct the forfeited error if the error ‘seriously 

affects the fairness, integrity or public reputation of judicial 

proceedings.’” Molina-Martinez, 136 S. Ct. at 1343 (quoting

Olano, 507 U.S. at 736). 

The Supreme Court has given directly pertinent 

guidance on how the third and fourth prongs of the plain-error 

test apply in cases like this. As to the third prong, the Court 

1 The District Court had jurisdiction under 18 U.S.C. 

§ 3231, and we have jurisdiction pursuant to 28 U.S.C. § 1291 

and 18 U.S.C. § 3742(a). 
6

has explained that “[i]n most cases a defendant who has shown 

that the district court mistakenly deemed applicable an 

incorrect, higher Guidelines range has demonstrated a 

reasonable probability of a different outcome.” Id. at 1346. 

And, concerning the fourth prong, the Court has said that, 

where the guidelines have been miscalculated, a “reasonable 

citizen” would “bear a rightly diminished view of the judicial 

process and its integrity.” Rosales-Mireles v. United States, 

138 S. Ct. 1897, 1908 (2018). Of course, “any exercise of 

discretion ... inherently requires a case-specific and factintensive inquiry.” Id. at 1909 (internal quotation marks 

omitted). But, “[i]n the ordinary case ... the failure to correct 

a plain Guidelines error that affects a defendant’s substantial 

rights will seriously affect the fairness, integrity, and public 

reputation of judicial proceedings.” Id. at 1911. 

Nothing in this case suggests that we should stray from 

those general principles, so we take the third and fourth prongs 

of the plain-error test as being met here and are only left to 

determine whether the District Court erred in applying the 

adjustments and, if so, whether those errors were plain. In 

short, we are examining prongs one and two. 

A. The Adjustment for Abuse of Trust

Capps first argues that the District Court erred in 

applying the abuse of trust adjustment to his money laundering 

conviction. That adjustment, set forth in Chapter 3 of the 

Sentencing Guidelines, tells a sentencing court that, “[i]f the 

defendant abused a position of public or private trust, or used 

a special skill, in a manner that significantly facilitated the 

commission or concealment of the offense, increase [the 

offense level] by 2 levels.” U.S.S.G. § 3B1.3. Importantly, 
7

however, Note 2(c) of § 2S1.1, the guideline applicable to 

money laundering convictions, directs that adjustments

contained in Chapter 3 are to be applied based on the money 

laundering behavior alone, not on the underlying offense from 

which the laundered funds were derived. In other words, the 

abuse of a position of trust has to be manifested in how the 

money is laundered, not in how the money was gained. 

According to Capps, the District Court plainly erred because, 

in applying the adjustment, it relied on his position at Vanguard 

and his conduct related to the conspiracy to commit mail fraud, 

not on any position he had or anything he did in laundering the 

stolen funds. We agree. 

1. Calculating the Offense Levels

To explain the error, we need to walk through the 

guidelines calculations for both Capps’s mail fraud and money 

laundering convictions,

2 as the guidelines require a sentencing 

court to group those convictions by choosing the highest 

offense level calculation after calculating the level for each 

offense separately. See U.S.S.G. § 2S1.1 cmt. n.6 (“In a case 

in which the defendant is convicted of a count of laundering 

funds and a count for the underlying offense from which the 

laundered funds were derived, the counts shall be grouped 

pursuant to subsection (c) of §3D1.2[.]”); U.S.S.G. § 3D1.3(a)

2 For ease of reference, we speak in terms of Capps’s 

“mail fraud” conviction, recognizing that the conviction was, 

more precisely, for conspiracy to commit mail fraud. The 

distinction has no bearing on our analysis. See U.S.S.G. 

§ 2X1.1(a) (providing that the offense level for conspiracy is 

the same as the offense level for the substantive offense).
8

(“In the case of counts grouped together pursuant to §3D1.2(a)-

(c), the offense level applicable to a Group is the offense level 

... for the most serious of the counts comprising the 

Group, i.e., the highest offense level of the counts in the 

Group.”). 

Mail fraud has a base offense level of 7. U.S.S.G. 

§ 2B1.1(a)(1). 16 levels must be added for a loss between 

$1,500,000 and $3,500,000. U.S.S.G. § 2B1.1(b)(1)(I). 

Assuming for the moment the applicability of the gross receipts 

adjustment, an additional 2 levels are added.3

 U.S.S.G. 

§ 2B1.1(b)(17)(A). And a further 2-level abuse of trust 

adjustment applies because Capps’s position of trust at 

Vanguard significantly facilitated his mail fraud offense. 

U.S.S.G. § 3B1.3. Capps agrees that, had the PSR calculated 

the guidelines range for his mail fraud conviction, the 

adjustment for abuse of a position of trust would have applied 

to that offense level. The total adjusted offense level, then

(before any reduction for acceptance of responsibility), is 27. 

The base offense level for money laundering is the 

“offense level for the underlying offense from which the 

laundered funds were derived[.]” U.S.S.G. § 2S1.1(a)(1). 

Here, that is mail fraud, so the base offense level is, again, 7. 

U.S.S.G. § 2B1.1(a)(1). As with the mail fraud calculation, 16 

levels must be added for a loss between $1,500,000 and 

$3,500,000, U.S.S.G. § 2B1.1(b)(1)(I), along with an 

additional 2 levels under the gross receipts adjustment, 

U.S.S.G. § 2B1.1(b)(17)(A), assuming it applies. For the 

3 Capps challenges the application of the gross receipts 

adjustment, and we address that challenge infra.
9

money laundering calculation, an additional 2 levels are added 

because Capps was convicted under 18 U.S.C.§ 1956.4

 

U.S.S.G. § 2S1.1(b)(2). That adds up to an adjusted offense 

level of 27, the same as the mail fraud offense level. But the 

PSR also added the 2-level adjustment for abuse of a position 

of trust, pursuant to U.S.S.G. § 3B1.3, bringing the total 

offense level (before any reduction for acceptance of 

responsibility) to 29. Consequently, the offense level for the 

grouped counts became that higher number, and his guidelines 

range was correspondingly increased. That’s the problem. If 

the abuse of trust adjustment is inapplicable, the range is 

wrong.

In determining whether to apply the abuse of trust

adjustment, we use a two-step inquiry. United States v. 

Douglas, 885 F.3d 124, 130 (3d Cir. 2018) (en banc). “First, 

we must determine whether the defendant actually occupied a 

position of public or private trust.” Id. at 130. At that step, we 

“ask whether the defendant had the power to make decisions 

substantially free from supervision based on (1) a fiduciary or 

fiduciary-like relationship, or (2) an authoritative status that 

4

 Section 1956 of Title 18 is the money laundering 

statute that Capps pled guilty to violating. Specifically, he pled 

to violating 18 U.S.C. § 1956(a)(1)(B)(i), which provides, in 

pertinent part, that whoever launders funds “knowing that the 

transaction is designed in whole or in part ... to conceal or 

disguise the nature, the location, the source, the ownership, or 

the control of the proceeds of specified unlawful activity” shall 

face various penalties. The guideline for money laundering 

instructs that 2 levels should be added in calculating the 

guidelines range for defendants convicted under that statute. 

U.S.S.G. § 2S1.1(b)(2).
10

would lead his actions or judgment to be presumptively 

accepted.” Id. at 133. “[I]f we conclude that the defendant did 

hold such a position,” we reach the second step, where the 

question is “whether the defendant abused this position in a 

manner that significantly facilitated his crime.” Id. at 130. 

(citation and internal quotation marks omitted). In answering 

that question, “courts should consider, among other things, 

whether the defendant’s position allowed him to commit a 

difficult-to-detect wrong, and the defendant’s authority vis-àvis the object of the wrongful act. Courts may also consider 

whether the victim relied on the defendant’s integrity, such that 

the victim became a more susceptible target for the defendant.” 

Id. at 134.

 Capps argues that the guidelines calculation contained

in the PSR and adopted by the District Court violated 

Commentary Note 2(c) to the money laundering guideline, 

§ 2S1.1, by incorrectly basing the application of the abuse of 

trust adjustment on his conduct in the underlying offense, the

mail fraud. He insists that he had no position of trust with 

respect to the money laundering and so could not have abused

it. On this record, he is correct. 

Supporting the abuse of trust adjustment, the PSR said:

As a supervisor at Vanguard, the defendant stole 

the passwords of subordinates and used those 

passwords to access the Vanguard system used 

to issue checks and submit requests to have 

checks issued on certain dormant accounts, all in 

an effort to conceal his conduct. Capps then 

deleted and attempted to delete the record 

transactions in Vanguard’s system related to the 
11

falsely submitted requests and improper 

approvals for checks issued by Vanguard on 

certain dormant accounts. The defendant abused 

a position of public or private trust in a manner 

that significantly facilitated the commission or 

concealment of the offense; therefore, the 

offense level is increased by two levels, pursuant 

to USSG §3B1.3.

(Presentence Report at 7.)

That justification for the adjustment would make perfect 

sense, if the count at issue were the mail fraud conviction. But 

it isn’t. The PSR did not calculate the mail fraud guidelines 

range, though it should have.5

 It only calculated the range for 

the money laundering. According to the indictment, the factual 

basis for the money laundering charge is that Capps caused two 

checks to be issued to him by a co-conspirator, knowing that 

the property involved in those financial transactions 

represented the proceeds of the mail fraud.

6

 His position at 

Vanguard was indeed “a position of public or private trust” that 

he abused to commit the fraud, but it was irrelevant to the 

5 The government does not contest that the PSR should 

have calculated the guidelines for both money laundering and 

mail fraud. (See Answering Br. at 10 (“Much of the analysis 

presented in the appellant’s brief is correct: With the fraud and 

money laundering counts grouped, the court must determine 

the offense level applicable to each type of offense, and then 

apply to the group the higher of the two offense levels.”).)

6 The money laundering was charged in two counts, one 

for each check. 
12

commission or concealment of the money laundering as

charged in the indictment. 

The government responds that the money laundering 

could not have happened but for the fact that Capps was able 

to direct the disbursement of funds from Vanguard. This is 

perfectly true, but beside the point. It is always the case with 

money laundering that the money came from some unlawful 

activity. By definition, that is a feature of money laundering. 

There is always an underlying crime. In Capps’s case, the only 

abuse of a position of trust occurred in the fraud that generated 

the money to be laundered. The point of Commentary Note 

2(c) is to keep the adjustments applicable to the criminal 

activity that generated the money from being applied to the 

conceptually distinct money laundering offense. In relying on 

the flawed PSR, the District Court failed to heed that 

separation, just as the government’s argument invites us to 

make the same mistake now.

The government believes that United States v. Sokolow, 

91 F.3d 396 (3d Cir. 1996), supports its position. The 

defendant there, the president and CEO of a corporation, 

collected money in premiums from insurance clients through a 

fraudulent scheme. Id. at 400. He converted some of those 

premiums for his personal benefit and laundered them through 

a number of bank and brokerage accounts, real property, and 

mortgages. Id. at 400-01. On appeal, we affirmed the 

application of the 2-level abuse of trust adjustment because 

“[i]t was within [the defendant’s] authority to withdraw funds 

from [the corporation] and that authority was necessary for the 

commission of the money laundering offenses.” Id. at 413. 

But Sokolow predates the adoption of U.S.S.G. § 2S1.1’s 

Commentary Note 2(c) in 2001, so we had no occasion to 
13

consider the question we do today. The separation between the 

underlying offense and the money laundering was simply not 

at issue. 

It is at issue here, though, and the District Court erred 

in applying the 2-level abuse of trust adjustment to the money 

laundering offense calculation. Given the text of Commentary 

Note 2(c), we think the error is plain.

7

 

7 The other circuits that have addressed Commentary 

Note 2(c) have all explained that it dictates that any Chapter 3 

adjustment must be based on the defendant’s conduct in 

relation to the money laundering charge, not the underlying 

offense. See United States v. Salgado, 745 F.3d 1135, 1138 

(11th Cir. 2014) ( “[The] application note’s meaning for this 

case is straightforward: When the district court calculated [the 

defendant’s] offense level under § 2S1.1(a)(1), it could base a 

role adjustment on his conduct in the money laundering 

conspiracy but not on his conduct in the underlying drug 

conspiracy.”); United States v. Rushton, 738 F.3d 854, 859 (7th 

Cir. 2013) (“[T]he 2-level enhancement for abuse of trust ... is

permissible in a money laundering case—but only when the 

abuse of trust relates to the money laundering itself rather than 

to the underling offense (the offense that generated the money 

that the defendant laundered).”); United States v. Keck, 643 

F.3d 789, 800-01 (10th Cir. 2011) (holding that a defendant’s 

conduct in an underlying drug conspiracy cannot be used to 

apply Chapter 3 adjustments); United States v. Byors, 586 F.3d 

222, 226-28 (2d Cir. 2009) (implicitly adopting the same 

interpretation); United States v. Anderson, 526 F.3d 319, 328 

(6th Cir. 2008) (defendant ineligible for offense level reduction 

to money laundering guideline calculation based on her 

minimal role in the underlying drug conspiracy); United States 
14

Without application of the abuse of trust adjustment to 

the offense level for the money laundering count, the offense 

level (again, before any reduction for acceptance of 

responsibility) for both the money laundering conduct and the 

mail fraud conduct is 27, not 29 as the District Court 

concluded. Thus, the sentencing range is different and, in 

keeping with the guidance of the Supreme Court and the record 

here, resentencing is in order. See Molina-Martinez, 136 S. Ct.

at 1346 (“In most cases a defendant who has shown that the 

district court mistakenly deemed applicable an incorrect, 

higher Guidelines range has demonstrated a reasonable 

probability of a different outcome.”); Rosales-Mireles, 138 S. 

Ct. at 1908 (explaining that a “reasonable citizen” would “bear 

a rightly diminished view of the judicial process and its 

integrity.”) (quotation marks and citation omitted).

8

B. The Gross Receipts Adjustment

In calculating the money laundering offense level, the 

District Court also applied the gross receipts adjustment, which 

calls for a 2-level adjustment when “the defendant derived 

v. Cruzado-Laureano, 440 F.3d 44, 49 (1st Cir. 2006) 

(“[A]pplication note 2(C) to the money-laundering guideline 

provides that Chapter Three adjustments should be determined 

with reference to the money-laundering offense and not to the 

underlying offense[.]”).

8 Capps received a sentence well below the range the 

District Court had calculated. How, if at all, a resentencing 

affects his final sentence is a matter for the District Court on 

remand and our opinion today implies nothing about that.
15

more than $1,000,000 in gross receipts from one or more 

financial institutions[.]” U.S.S.G. § 2B1.1(b)(17)(A). Gross 

receipts “includes all property, real or personal, tangible or 

intangible, which is obtained directly or indirectly as a result 

of such offense.” U.S.S.G. § 2B1.1 cmt. n.13(B). Capps 

advances two arguments in his effort to persuade us that the 

District Court erred in making that adjustment. First, he asserts

that, in light of United States v. Stinson, 734 F.3d 180 (3d Cir. 

2013), Vanguard should not be viewed as the source of the 

funds. Second, he says that a remand is appropriate because 

the District Court made inconsistent statements about the 

amount of the gross receipts, making it unclear whether his

gross receipts met the $1 million threshold. He’s wrong on the 

first point but right on the second.

1. The Source of the Funds

The sentencing guidelines’ definition of “financial 

institution” is broad and expressly includes investment 

companies.9 U.S.S.G. § 2B1.1 cmt. n.1. Vanguard is, as the 

9 “‘Financial institution’ includes any institution 

described in 18 U.S.C. § 20, § 656, § 657, § 1005, § 1006,

§ 1007, or § 1014; any state or foreign bank, trust company, 

credit union, insurance company, investment company, mutual 

fund, savings (building and loan) association, union or 

employee pension fund; any health, medical, or hospital 

insurance association; brokers and dealers registered, or 

required to be registered, with the Securities and Exchange 

Commission; futures commodity merchants and commodity 

pool operators registered, or required to be registered, with the 

Commodity Futures Trading Commission; and any similar 
16

indictment recognizes, one of the world’s largest investment 

companies. No contention has been made to the contrary. It 

thus clearly fits within the definition of a “financial 

institution,” for purposes of § 2B1.1 of the guidelines.

It is also true that Vanguard has a property interest in 

the accounts it manages. Although its customers, the account 

holders, obviously have property rights in their funds, 

Vanguard too has a possessory property interest in them. The 

Supreme Court’s decision in Shaw v. United States, 137 S. Ct. 

462 (2016), explains that both account holders and financial 

institutions have property interests in funds held by the 

institutions. The context in Shaw was the theft of a depositor’s 

funds in a scheme “to defraud a financial institution” in 

violation of 18 U.S.C. § 1344(1), and the Court explained that, 

even when a bank merely assumes possession of a customer’s 

funds, “the bank is like a bailee, say, a garage that stores a 

customer’s car. And as bailee, the bank can assert the right to 

possess the deposited funds against all the world but for the 

bailor (or, say, the bailor’s authorized agent). This right, too, 

is a property right.” Id. at 466 (citations omitted). Vanguard

is not a bank, but it holds its account holders’ funds in a fashion 

similar enough to a bank to warrant following the reasoning in 

Shaw. We thus conclude that, for purposes of § 2B1.1, 

Vanguard had a property interest in the funds in its possession. 

Capps points to Stinson to argue that Vanguard’s 

interest in the funds was nevertheless insufficient to apply the

entity, whether or not insured by the federal government.” 

U.S.S.G. § 2B1.1 cmt. n.1.
17

gross receipts adjustment.

10 But his understanding of that case 

is misguided. In Stinson, we explained that 

a financial institution is a source of the gross 

receipts when it exercises dominion and control 

over the funds and has unrestrained discretion to 

alienate the funds. A financial institution is not 

the source of all funds that have passed through 

the institution, as might occur during a simple 

wire transfer. Accordingly, mere tangential 

effects on financial institutions will not support 

application of the enhancement.

734 F.3d at 186. 

Although that language indicates the need for a 

significant degree of control over the funds at issue, we do not 

read it to mean that a financial institution’s having less than the 

unrestrained right to treat the funds as its own means that 

crimes against the institution lie outside the reach of the gross 

receipts adjustment. Here, Vanguard possessed the funds. Its

control of them was much more than the tangential control 

exercised by a bank handling a wire transfer. See Stinson, 734 

F.3d at 186. In fact, Vanguard’s dominion and control over the

abandoned funds is what allowed Capps to commit his fraud: 

it was through his employment at Vanguard that he was able to 

identify and draw checks on abandoned accounts. 

Stinson, rightly understood, asks for nuanced factfinding. The defendant in that case had a fraudulent scheme in 

10 At the time, the provision was U.S.S.G. 

§ 2B1.1(b)(15)(A); now, it is U.S.S.G. § 2B1.1(b)(17)(A).
18

which he set up a sham fund and used investors’ money for a 

variety of personal business ventures. 734 F.3d at 181-82. As 

part of the fraud, the defendant entered into agreements with 

two independent financial advisory firms whereby the firms 

would refer investors to his sham fund in exchange for referral 

fees. Id. at 182. We said that, while some investors exercised

“individual decisions to invest with [the sham fund] on the 

advice of their investment advisors at each firm[,] ... some of 

the victim impact statements suggest that [the independent 

financial advisory firms] retained control over the assets of 

certain clients and invested in [the sham fund] on their behalf.” 

Id. We remanded to the district court because, while the funds 

from individuals who made the decision to invest should not 

be considered under the adjustment, “we [we]re unable to 

conclude definitively that the enhancement d[id] not apply 

because the record [wa]s unclear as to whether [the 

independent financial advisory firms] invested any money on 

behalf of their clients.” Id. at 187. We therefore recognized 

that a firm that invests client funds can exercise sufficient 

dominion and control over the funds to justify application of 

the gross receipts adjustment, even though the clients also had 

control over those funds.

Capps argues that Vanguard’s control over the funds 

here was especially weak because the funds were due to 

escheat. He points to the Supreme Court’s statement in 

Delaware v. New York that “[f]unds held by a debtor[, here,

Vanguard, the holder of the funds,] become subject to escheat 

because the debtor has no interest in the funds[.]” 507 U.S. 

490, 502 (1993). But, if anything, the fact that the money

Capps stole was due to escheat strengthens the argument that 

Vanguard exercised the necessary dominion and control over 

them for the gross receipts adjustment to apply. Delaware v. 
19

New York focused on which sovereign could lay claim to 

abandoned property. Id. The observation that the holder of the 

property, without an ownership interest in it, does not get to 

keep it was a statement about the relative rights of a sovereign 

and the holder of the abandoned property. It does not mean

that, as the holder of funds before they escheat, institutions like 

Vanguard lack the ability to exercise dominion and control 

over them. On the contrary, Vanguard was the only one 

exercising dominion and control over the abandoned funds at 

issue here, until they escheated. Thus, it was not error – let 

alone plain error – for the District Court to conclude that the 

funds were derived from Vanguard.

2. The $1 Million Threshold

Commentary Note 13(A) to money laundering 

guideline § 2B1.1, states that “[f]or purposes of [the gross 

receipts adjustment], the defendant shall be considered to have 

derived more than $1,000,000 in gross receipts if the gross 

receipts to the defendant individually, rather than to all 

participants, exceeded $1,000,000.” U.S.S.G. 

§ 2B1.1(b)(17)(A) cmt. n.13(A) (emphasis added). Capps 

argues that we should remand to the District Court for 

clarification of inconsistent statements about whether he met 

the $1 million threshold on an individual basis. 

The government does not try to say that the District 

Court’s comments were clear but argues that the Court must 

have found that Capps met the threshold because “the loss in 

this case (which Capps was ordered to repay to Vanguard) is 

$2,137,580.81.” (Answering Br. at 21 n.4.) According to the 

government, “[t]here is no question that the ‘gross receipts’ in 

this case – not Capps’ personal receipts after dividing the 
20

proceeds – was far over $1 million.” (Id.) Even if true, that 

assertion manages to explicitly avoid the relevant question. It

ignores the requirement from the commentary that the 

threshold must be applied in terms of what Capps himself 

received, individually. 

The District Court’s statements did not answer the 

relevant question either. During sentencing, the Court said,

“Mr. Capps himself admitted just now that he took 

approximately one half of [approximately $2 million] or a 

million dollars” (App. at 96) (emphasis added), and that Capps 

stole “almost over a million dollars, or receiving a million 

dollars,” (App. at 97) (emphasis added). Accordingly, we will 

remand so that the District Court can clarify whether the gross 

receipts that Capps received individually exceeded the milliondollar threshold.

III. CONCLUSION

For the foregoing reasons, we will remand for 

resentencing.