FILED

United States Court of Appeals

Tenth Circuit

October 27, 2009

Elisabeth A. Shumaker

Clerk of Court

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

DEBBIE L. GRIFFITH,

Defendant-Appellant.

No. 07-5156

Appeal from the United States District Court

for the Northern District of Oklahoma

(D.C. No. 4:06-CR-165-HDC)

Barry L. Derryberry, Assistant Federal Public Defender (Julia L. O’Connell,

Acting Federal Public Defender, with him on the briefs), Tulsa, Oklahoma, for

Defendant-Appellant Debbie L. Griffith.

Leena Alam, Assistant United States Attorney (David E. O’Meilia, United States

Attorney, with her on the brief), Tulsa, Oklahoma, for Plaintiff-Appellee United

States of America.

Before BRISCOE, BRORBY, and EBEL, Circuit Judges.

EBEL, Circuit Judge.

Debbie L. Griffith (“Griffith”) pled guilty to embezzling more than $1,000

from the U.S. Department of Veterans Affairs (“VA”), in violation of 18 U.S.C.
- 2 -

§ 641. Griffith misappropriated and converted to her own use VA benefit

payments belonging to David Norvell (“Norvell”), for whom she acted as

fiduciary and benefits payee. The district court sentenced Griffith to eighteen

months’ imprisonment and ordered her to pay Norvell restitution of $27,002. 

In this appeal, Griffith challenges both the district court’s calculation of

loss–and its consequent determination of her base offense level–under the

Sentencing Guidelines, U.S.S.G. § 2B1.1, and its calculation of restitution under

the Mandatory Victims Restitution Act (“MVRA”), 18 U.S.C.

§ 3663A(c)(1)(A)(ii). Exercising jurisdiction under 28 U.S.C. § 1291 and 18

U.S.C. § 3742(a), we AFFIRM the district court’s loss calculation, VACATE the

restitution order, and REMAND to the district court for re-calculation of

restitution.

I. FACTUAL AND PROCEDURAL BACKGROUND

Norvell, a veteran of the Korean War, began receiving VA disability

benefit payments in 1960, when he was rated 10% disabled for frostbite to his

feet. Griffith met Norvell at the V.F.W. in late 2000, shortly before the death of

Norvell’s wife of forty-five years. The two became friends, and after Norvell’s

wife died, Griffith began helping him to manage his daily affairs. By September

of 2001, Griffith was assisting Norvell with his personal finances. Griffith, who

had been married during the early days of her friendship with Norvell, was

divorced in July of 2002, and eventually the two began dating.
1

The pertinent VA document included in the record on appeal is undated,

but was sent to Griffith after she was “certified as legal custodian and payee on

behalf of [David] Norvell for . . . VA purposes.” (R. vol. I, tab 11, at Exh. 3, at

1.) Griffith did not become Norvell’s payee until March 12, 2003. However, VA

investigator and agent Bryan Sewell testified that the incompetency determination

was made on January 13, 2003, and Norvell’s stepson, James Stevens, likewise

testified that the VA’s determinations of both Norvell’s incompetency and his

60% disability rating were made on that date. 

2

The fiduciary was directed to follow the fiduciary agreement’s instructions

for setting up such a custodial checking account. Those instructions were

inexplicably crossed out on the form that Griffith signed. 

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By October of 2002, according to VA records, Norvell was suffering from

post-traumatic stress disorder (“PTSD”) in addition to frostbite, and his disability

rating was increased to 30% as a result of the combination of those conditions. 

The VA deemed Norvell “incompetent to handle [his] own financial affairs” on

January 13, 2003 (R. vol. III. at 69), at which time his “overall or combined

[disability] rating [was] 60%” (R. vol. I, tab 11, at Exh. 3, at 2.).1

 Two months

later, on March 12, 2003, Griffith signed a VA form entitled “Responsibilities of

a Federal Payee of VA Funds” (the “payee agreement”) and was appointed as

Norvell’s fiduciary and payee. (R. I, tab 11, at Exh. 2.)

As a federal payee for a VA beneficiary, Griffith was “responsible for

receiving all [Norvell’s] income and seeing that [Norvell’s] just debts [were]

paid.” (Id. at 1.) The payee agreement instructed Griffith that she “must

establish a custodial checking account and submit verification in writing from

[her] bank when this is done.” (Id.)

2

 It further instructed her as follows:
3

This document is not included in the record on appeal. However, Agent

Sewell had the document before him at Griffith’s sentencing hearing and testified

as to its contents. 

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3. All disbursements are to be made by check from the custodial

checking account. No checks for cash, no cash withdrawals,

no exceptions. You must keep accurate records at all times.

4. You must obtain prior approval from [the VA] office for

expenditures over $200. (However, this does not include

medical needs or normal monthly payments such as rent,

utilities, food.)

5. Funds are to be used for the beneficiary only. You cannot

borrow, loan, or give as gifts, funds belonging to the

beneficiary.

(Id.) Griffith also signed, at this time, a VA fiduciary form in which she

“agree[d] to furnish if requested” periodic accountings of Norvell’s VA benefit

funds.3

 The VA made its first payment to Griffith as payee, a lump sum of

$1,419, on March 24, 2003. Effective July 28, 2003, Norvell’s disability rating

was raised to 100%, based on his PTSD. As a result of this adjustment, Norvell’s

benefit payments increased from roughly $800 monthly to roughly $2200

monthly. 

In March of 2004, a VA field examiner visited Griffith and Norvell and

reported that Norvell appeared to be well cared-for. The field examiner also

reported that the “fiduciary[-]beneficiary relationship” was “good” and that “[t]he

veteran and payee plan[ned] to be married on April 3rd.” (R. vol. III at 79.) 

Griffith and Norvell married on April 3, 2004, and Griffith became Norvell’s VA
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“spouse-payee” soon thereafter. As a result of the marriage, Norvell’s disability

payments were increased to $2,366 monthly. In notifying Griffith of this change,

the VA informed her that “[t]he veteran’s monthly benefits include[d] an

additional allowance for [her], as a dependent of the veteran.” (R. vol. I, tab 11,

Exh. 5, at 1.) At the time of the marriage, Griffith was thirty-nine years old, and

Norvell was seventy-three. 

Within a month of the marriage, Norvell’s family began to suspect that

Griffith had been defrauding him before the marriage and was continuing to

defraud him. Norvell’s bank accounts, which typically had held moderate end-ofmonth balances in 2001 and low end-of-month balances in 2003, had been

depleted to near zero or negative balances by the spring of 2004. Indeed, Norvell

had declared bankruptcy on April 2, 2004, the day before his marriage to Griffith. 

After the family confronted Norvell with their suspicions, he moved out of the

couple’s home in June of 2004, aided by his son Tim and the Broken Arrow,

Oklahoma, police. Norvell then notified the VA that he was divorcing Griffith

because she had run off with his money. Norvell’s stepson, James Stevens,

replaced Griffith as Norvell’s fiduciary and VA benefits payee on July 19, 2004. 

The couple divorced in November of 2004. 

The VA’s investigation of Griffith’s handling of Norvell’s benefits covered

the period from March 24, 2003, when she received the first payment in her role

as payee, to April 1, 2004, when she received the last payment before she was
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designated as spouse-payee. Agent Sewell determined that during that period,

$22,870.27 in electronic deposits had been made to Norvell’s checking account. 

Griffith did not establish a custodial checking account, as required by the VA

fiduciary form, but instead added her name to one of Norvell’s existing accounts. 

Agent Sewell further determined that while she was acting as Norvell’s payee,

Griffith made unauthorized cash withdrawals of $17,520 from Norvell’s

benefits-holding account, and that she wrote on that account several checks “that

were clearly outside of [her] fiduciary duty.” (R. vol. III at 50.) On January 18,

2006, Griffith gave Agent Sewell a written statement admitting that while she was

acting as Norvell’s fiduciary and was “responsible for approximately $20k in VA

funds,” she “misus[ed]” those funds. (R. vol. I, tab 11, Exh. 6 at 1). 

Griffith was indicted on a single count of theft of U.S. property in violation

of 18 U.S.C. § 641, under a grand jury charge that she “did intentionally, willfully

and knowingly embezzle, steal, purloin, and convert to her own use money in

excess of $1,000.00.” (R. vol. I, tab 2.) The indictment charged that this money

was in the form of VA benefit checks “of a value of approximately $22,870.00.” 

(Id.) Griffith pled guilty to this single count but did not make a plea agreement. 

Under the 2006 edition of the Sentencing Guidelines, U.S.S.G.

§ 2B1.1(a)(2), Griffith’s base offense level was six. The offense level was

increased by two because the victim was vulnerable, id. § 3A1.1(b)(1), and

additionally by two because Griffith abused a position of private trust, id.
4

The original PSR, issued on January 26, 2007, was revised on March 21,

2007, and again on June 21, 2007. The probation office also issued a final,

undated, addendum to the PSR in response to Griffith’s objections to the June 21,

2007, document.

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§ 3B1.3. The final Presentence Investigation Report (“PSR”)4 calculated loss at

$83,739, which resulted in a further increase of eight offense levels. Id.

§ 2B1.1(b)(1)(E). The offense level was decreased by three because Griffith

accepted responsibility for her conduct. U.S.S.G. § 3E1.1. Coupled with

Griffith’s Criminal History Category of I, her resulting offense level of fifteen

produced an advisory sentencing range of eighteen to twenty-four months’

imprisonment. The PSR further calculated Griffith’s mandatory restitution at

$27,002, payable to Norvell. 

Griffith objected to the PSR’s calculation of both loss and restitution. 

Regarding the loss calculation, she argued both that the Government had not

proven contested facts regarding offense conduct, and that the PSR impermissibly

included non-criminal conduct as relevant conduct under U.S.S.G. § 1B1.3. 

Regarding restitution, she argued that the PSR’s calculation impermissibly

included losses caused by conduct outside the offense of conviction. 

The district court overruled each of Griffith’s objections. First, the district

court explained that the acts described as relevant conduct in the PSR “clearly

constitute law violations involving crimes [such] as larceny, embezzlement, [and]

unauthorized use of access devices,” and that those acts–including Griffith’s
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“sham” marriage to Norvell–were “part of the same course of conduct and a

common scheme or plan as the offense of conviction.” (R. vol. IV at 6, 8.) The

district court went on to find that the Government had proved by a preponderance

both the direct loss and estimated loss portions of the PSR’s loss calculation. 

Finally, the district court found that “[o]nly losses derived directly from Veterans

Administration funds” were used to calculate restitution, which thus was based

solely on “the specific conduct [underlying] the offense of conviction.” (Id. at

13.)

The district court sentenced Griffith to eighteen months’ imprisonment and

imposed restitution of $27,002. Griffith timely appealed.

II. Discussion

A. Griffith’s challenge to the district court’s loss calculation

1. Standard of review

“A district court’s loss calculation at sentencing is a factual question we

review for clear error.” United States v. Ary, 518 F.3d 775, 787 (10th Cir. 2008). 

Reversing for clear error “‘requires that, based on the entire evidence, we have a

definite and firm conviction that a mistake has been committed.’” United States

v. Hahn, 551 F.3d 977, 979 (10th Cir. 2008) (quoting O’Toole v. Northrop

Grumman Corp., 499 F.3d 1218, 1221 (10th Cir. 2007) (further quotation

omitted)). We review de novo any legal questions underlying the district court’s
5

“Intended loss,” which is not at issue in this appeal, means “the pecuniary

harm that was intended to result from the offense,” including “harm that would

have been impossible or unlikely to occur.” U.S.S.G. § 2B1.1, cmt. n.3(A)(ii).

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application of the Guidelines. United States v. Leach, 417 F.3d 1099, 1105 (10th

Cir. 2005). 

The Government bears the burden of proving loss by a preponderance of

the evidence. United States v. Sutton, 520 F.3d 1259, 1262 (10th Cir. 2008)

(citing United States v. Schild, 269 F.3d 1198, 1200 (10th Cir. 2001)).

2. Guidelines provisions

Under the Sentencing Guidelines, “loss” means “the greater of actual loss

or intended loss,” with “actual loss” defined as “the reasonably foreseeable

pecuniary harm that resulted from the offense.”5

 U.S.S.G. § 2B1.1, cmt. n.3(A). 

For cases involving government benefits, “loss” is further defined as “not less

than the value of the benefits obtained by unintended recipients or diverted to

unintended uses . . . . For example, if the defendant was the intended recipient of

food stamps having a value of $100 but fraudulently received food stamps having

a value of $150, loss is $50.” Id. cmt. n.3(F)(ii) (emphasis added). Where

evidence of direct loss is not available, the district court “need only make a

reasonable estimate of the loss.” Id. cmt. n.3(C); see Sutton, 520 F.3d at 1262-63. 

Further, the comments to the Guidelines instruct that we are to give “appropriate

deference” to the district court’s determination, because the “sentencing judge is
6

Section 3D1.2 dictates that

[a]ll counts involving substantially the same harm shall be grouped

together into a single Group. Counts involve substantially the same

harm within the meaning of this rule:

(a) When counts involve the same victim and the same act or

transaction.

(b) When counts involve the same victim and two or more acts or

(continued...)

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in a unique position to assess the evidence and estimate the loss based upon that

evidence.” U.S.S.G. § 2B1.1, cmt. n.3(C).

i. Relevant conduct under the Guidelines

In calculating loss under the Guidelines, the district court does not limit

itself to conduct underlying the offense of conviction, but rather may consider all

of the defendant’s “relevant conduct.” U.S.S.G. § 1B1.3; see id. § 1B1.2(b)

(directing the district court, “[a]fter determining the appropriate offense guideline

section,” to “determine the applicable guideline range in accordance with § 1B1.3

(Relevant Conduct)”). In pertinent part, the Guidelines define “relevant conduct”

as follows:

(1)(A) all acts and omissions committed, aided, abetted, counseled,

commanded, induced, procured, or willfully caused by the

defendant . . . that occurred during the commission of the

offense of conviction, in preparation for that offense, or in

the course of attempting to avoid detection or responsibility

for that offense; [and]

(2) solely with respect to offenses of a character for which

§ 3D1.2(d) would require grouping of multiple counts,6

 all
6

(...continued)

transactions connected by a common criminal objective or

constituting part of a common scheme or plan.

(c) When one of the counts embodies conduct that is treated as a

specific offense characteristic in, or other adjustment to, the

guideline applicable to another of the counts.

(d) When the offense level is determined largely on the basis of

the total amount of harm or loss, the quantity of a substance

involved, or some other measure of aggregate harm, or if the

offense behavior is ongoing or continuous in nature and the

offense guideline is written to cover such behavior.

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acts and omissions described . . . above that were part of the

same course of conduct or common scheme or plan as the

offense of conviction.

Id. § 1B1.3(a) (footnote added). The Guidelines commentary further explains that 

For two or more offenses to constitute part of a common scheme or

plan, they must be substantially connected to each other by at least

one common factor, such as common victims, common accomplices,

common purpose, or similar modus operandi. . . . 

. . . . Offenses that do not qualify as part of a common scheme or

plan may nonetheless qualify as part of the same course of conduct if

they are sufficiently connected or related to each other as to warrant

the conclusion that they are part of a single episode, spree, or

ongoing series of offenses.

Id. § 1B1.3, cmt. n. 9. “‘We have interpreted this language to mean that if the

conduct is sufficiently similar and within the same temporal proximity, it may be

considered relevant for purposes of determining the guideline range.’” United

States v. Williams, 292 F.3d 681, 685 (10th Cir. 2002) (quoting United States v.

McClelland, 141 F.3d 967, 973 (10th Cir. 1998)).
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Relevant conduct under the Guidelines thus “‘comprises more, often much

more, than the offense of conviction itself, and may include uncharged and even

acquitted conduct.’” United States v. Altamirano-Quintero, 511 F.3d 1087, 1095

(10th Cir. 2007) (quoting United States v. Allen, 488 F.3d 1244, 1254-55 (10th

Cir. 2007)). Nonetheless, relevant conduct “still must relate to the offense of

conviction.” Id. (quotation omitted). While we review for clear error the district

court’s factual findings in support of a determination of relevant conduct, we

“review the ultimate determination of relevant conduct de novo.” United States v.

Tran, 285 F.3d 934, 938 (10th Cir. 2002).

ii. Relevant conduct as criminal conduct

Six other circuits have held that relevant conduct under the Guidelines must

be “criminal” or “unlawful.” See, e.g., United States v. Chube, 538 F.3d 693, 702

(7th Cir. 2008) (explaining that relevant conduct must be unlawful); United States

v. Maken, 510 F.3d 654, 657-59 (6th Cir. 2007) (reciting 6th Circuit precedent to

the effect that relevant conduct must “amount[] to an offense for which a criminal

defendant could potentially be incarcerated”); United States v. Culverhouse, 507

F.3d 888, 895 (5th Cir. 2007) (“An offense need not have resulted in a conviction

to constitute relevant conduct under the guidelines, but the conduct must be

criminal.”); United States v. Dove, 247 F.3d 152, 155 (4th Cir. 2001) (concluding

that “relevant conduct under the Guidelines must be criminal conduct”); United

States v. Dickler, 64 F.3d 818, 830-31 (3d Cir. 1995) (same); United States v.
- 13 -

Sheahan, 31 F.3d 595, 600 (8th Cir. 1994) (same). Like this court, see

Altamirano-Quintero, 511 F.3d at 1095, the First, Second, and Ninth Circuits have

held that uncharged and even acquitted conduct may constitute “relevant conduct”

under the Guidelines, but have not explicitly held that such conduct must be

“criminal” or “unlawful,” see, e.g., United States v. Juwa, 508 F.3d 694, 700 (2d

Cir. 2007); United States v. Reyes-Echevarría, 345 F.3d 1, 7 (1st Cir. 2003);

United States v. Peyton, 353 F.3d 1080, 1089 (9th Cir. 2003).

Our description of relevant conduct as including “uncharged and even

acquitted conduct,” Altamirano-Quintero, 511 F.3d at 1095 (quotation omitted),

strongly suggests that the conduct at issue must at least be criminally chargeable. 

That suggestion comports with the reasoning of courts that have held that relevant

conduct must be criminal or unlawful. See, e.g., United States v. Peterson, 101

F.3d 375, 385 (5th Cir. 1996) (“To hold otherwise would allow individuals to be

punished by having their guideline range increased for activity which is not

prohibited by law but merely morally distasteful or viewed as simply wrong by

the sentencing court.”); Dove, 247 F.3d at 155 (explaining that if relevant conduct

need not be criminal, sentencing courts would become mired “in the impossibly

subjective task of determining the relative ‘benignness’ of various legally

permissible acts”).

Among those courts that have held that relevant conduct must be criminal,

those that have taken up the question have also held that the criminal violation
7

By holding that the defendant’s relevant conduct must constitute a state or

federal criminal offense, rather than that it must be criminally chargeable under a

state or federal law, we rely on our precedent holding that conduct may be

relevant under the Guidelines even when that conduct could not be separately

prosecuted because the statute of limitations has run. United States v. Neighbors,

23 F.3d 306, 311 (10th Cir. 1994). Nine other circuits have reached the same

conclusion regarding statutes of limitations and relevant conduct. See United

States v. Williams, 217 F.3d 751, 753-54 and 753 n.7 (9th Cir. 2000) (joining this

court and seven other circuits to hold that “a district court may consider as

relevant conduct for sentencing purposes actions which may be barred from

prosecution by the applicable statute of limitations,” and citing cases); United

States v. Ziskind, 491 F.3d 10, 16-17 (1st Cir. 2007).

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may be of either a federal or a state statute. See, e.g., Maken, 510 F.3d at 657-58;

Dickler, 64 F.3d at 831; United States v. Bell, 46 F.3d 442, 445 (5th Cir. 1995);

see also United States v. Newbert, 952 F.2d 281, 285 (9th Cir. 1991) (holding that

under U.S.S.G. § 1B1.3, “conduct which could be the basis of state prosecution

may be considered for sentencing purposes on a federal conviction for other

conduct which was part of the same common scheme or plan”). 

Agreeing with the reasoning of our sister circuits, and making explicit what

has been implicit in our own precedent, we hold that for a district court to

consider a defendant’s conduct as “relevant” under the Sentencing Guidelines, the

Government must prove by a preponderance of the evidence that the defendant (1)

engaged in conduct (2) related to the offense of conviction pursuant to U.S.S.G.

§ 1B1.3 and (3) constituting a criminal offense under either a federal or a state

statute.7

3. The district court’s calculation of loss
- 15 -

The district court calculated loss based on Griffith’s conduct underlying the

offense of conviction as well as her relevant conduct in “schem[ing] . . . to

defraud Mr. Norvell of his assets and income” before she became his VA

fiduciary. (R. vol. IV at 7.) At sentencing, the court explained that “all acts

committed by the defendant were part of the same course of conduct and a

common scheme or plan as the offense of conviction,” and that those acts “clearly

constitute law violations involving crimes [such] as larceny, embezzlement, [and]

unauthorized use of access devices.” (Id. at 6.) Further, “the acts determined to

be relevant conduct are acts of fraud or deceit, criminal conduct for which

[U.S.S.G. §] 3D1.2(d) would require grouping.” (Id.) 

The court then determined that Griffith’s fraudulent course of conduct

caused loss of $83,739, as follows:

1. $5,118.01 in direct loss conceded by Griffith, consisting of

$695 used to pay for Griffith’s bankruptcy filing; 

$100 used to pay off one of Griffith’s personal loans;

$160 in checks to Griffith’s mother, Betty Spencer;

$88.01 used to pay for women’s clothing;

$2,000 used as a down payment on a house in Griffith’s name; and

$2,075 in checks made payable to Griffith and deposited in her

personal account.

2. $32,495 in direct loss not conceded by Griffith, consisting of
8

Two thousand dollars of this money went to the down payment accounted

for as direct loss conceded by Griffith; therefore, that two thousand dollars is not

counted here. 

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$9,495 lost to Norvell when Griffith made numerous unauthorized

cash withdrawals in the amount of $15,985, occasionally noting on

checks that the cash would be used to pay bills. Griffith then failed

to pay bills totaling $9,495;

$7,000 lost to Norvell when Griffith induced him to sell a home he

owned, resulting in issuance of a $15,000 proceeds check to Norvell

and his son Ross; Griffith intercepted the check, forged Ross

Norvell’s name, and deposited the money into one of Norvell’s

accounts before causing a $9,000 cashier’s check to be made payable

to her from that account;8

 and

$16,000 lost to Norvell when he traded in his 1939 Hudson, valued at

$6,000, as a down payment on his purchase of a 2002 Pontiac, valued

at $16,000, for Griffith’s exclusive use, and financed the remainder

of the $16,000 purchase price with a $10,000 installment loan. 

Griffith later failed to make payments on that loan, leading to the

vehicle’s repossession.

3. Estimated loss of $46,126, consisting of 60% of $76,876 in the following

“questionable expenditures,” from which Griffith benefitted more than

did Norvell:

$15,960 (60% of $26,600) lost to Norvell when Griffith induced him

to obtain a $26,600 mortgage loan and then “dissipat[ed] this . . .

asset” (Addendum to PSR at 9-10);

$12,036 (60% of $20,060) lost to Norvell when Griffith dissipated

the $6,000 balance of the $15,000 proceeds of the sale of the home

referenced above, the $7,000 balance that had been in one of

Norvell’s accounts in 2001, and $7,060 in lump-sum VA payments;

and

$18,130 (60% of $30,216) lost to Norvell when Griffith misused his

credit to accumulate debts of $30,216.
9

With a total offense level of fifteen and a Criminal History Category of I,

Griffith’s advisory sentencing range was eighteen to twenty-four months. If the

district court had found loss to be more than $30,000 but less than $70,000, it

would have increased Griffith’s base offense level by six rather than by eight,

U.S.S.G. § 2B1.1(b)(1)(D), resulting in a total offense level of thirteen. 

Combined with Griffith’s Criminal History Category of I, an offense level of

thirteen would have produced an advisory sentencing range of twelve to eighteen

months’ imprisonment. Judge Cook thus made clear that while he was sentencing

Griffith at the low end of her advisory range based on a loss higher than $70,000,

he would have sentenced her at the high end of her advisory range based on a loss

lower than $70,000.

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Based on this loss calculation, and pursuant to Guideline § 2B1.1(b)(1)(E),

the district court increased Griffith’s offense level by eight, because the loss was

more than $70,000 but less than $120,000. The district court also stated, on the

record, that even if it had found the loss to be less than $70,000, it would have

imposed the same sentence of eighteen months’ imprisonment.9

4. Analysis

Griffith argues that the district court erred in two ways: by basing its loss

calculation on facts alleged in the PSR but not proven by a preponderance; and by

impermissibly including non-criminal conduct as relevant conduct under the

Guidelines. We consider each argument in turn.

i. Facts proven by a preponderance

Prior to sentencing, Griffith objected to all but $5,118.01 of the district

court’s loss calculation. See supra § II.A.3(1). 
10Norvell’s stepson testified that when he returned to Oklahoma to become

fiduciary for his stepfather in July of 2004, Norvell gave him a shoebox

containing unpaid, past-due bills. The shoebox also contained checks that had

been made out to pay the bills and even inserted in envelopes for mailing, but that

had never been mailed. 

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a. Direct loss 

The record contains evidence demonstrating by a preponderance that

beginning in mid-2003, while she was Norvell’s fiduciary, Griffith began making

unauthorized cash withdrawals (including checks made out to cash) from one of

Norvell’s bank accounts, sometimes making notations on the checks to the effect

that the money was for payment of bills. These withdrawals are substantiated by

copies of checks made payable to Cash or to Griffith, as well as by copies of cash

withdrawal slips. During the period that Griffith was making these withdrawals,

she failed to make payment on a number of Norvell’s bills, in the amount of

$9,495. The Government has provided copies of these bills, as well as clear

evidence that they were not paid.10 The Government thus proved the $9,495

direct loss by a preponderance.

The Government likewise proved by a preponderance the direct loss of

$7,000 from the sale of one of Norvell’s properties in December 2002, shortly

before the VA declared Norvell “incompetent to handle [his] own financial

affairs” (R. vol. III. at 67) on January 13, 2003. The Government put on evidence

that Griffith forged the signature of Norvell’s son Ross on the check for the
11Because Norvell did lose the 1939 Hudson in his transaction to purchase

the Pontiac, the district court did not err in including the Hudson’s $6,000 value

in its loss calculation.

- 19 -

proceeds of this sale, deposited the check into one of Norvell’s accounts, and then

had a cashier’s check issued to herself from that account. 

Far less compelling is the Government’s evidence that Griffith should be

held responsible for $16,000 in direct loss resulting from Norvell’s purchase of a

2002 Pontiac for her exclusive use. After Norvell traded in his 1939 Hudson,

valued at $6,000, for the down payment on the Pontiac, he financed the remainder

of the $16,000 purchase price with a $10,000 installment loan. When Griffith

failed to make payments on the installment loan, the vehicle was repossessed. 

Yet despite acknowledging the repossession of the Pontiac, which served as

collateral on the installment loan, the PSR held Griffith accountable for the

unpaid balance on that loan, and the district court adopted this element of the

PSR’s loss calculation. The Government failed to prove by a preponderance that

Griffith’s conduct caused a loss of $10,000 in unpaid loan debt where the

collateral on that debt was seized. Therefore, the district court clearly erred in

including this $10,000 debt in its direct loss calculation.11

b. Estimated loss

To arrive at its calculation of $46,126 in estimated loss, the district court

accepted the PSR’s finding that Griffith was responsible for 60% of $78,876 in

questionable expenditures made over the course of her relationship with Norvell. 
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The court explained that “the probation officer estimated loss by considering the

victim’s financial situation, his habits both prior to and after the involvement of

the defendant” in his life. (R. vol. IV at 10.) The probation officer then

determined “total funds available during the term of the defendant’s involvement

with Norvell,” with those “total funds” consisting of “income, loans, proceeds

from the sale of assets, and credit expenditures.” (Id. at 10-11.) “Based on

Norvell’s lifestyle, expenditures and credit history prior to Griffith’s involvement

in his affairs and his [financial] recovery since,” the PSR deemed it “reasonable

to conclude that Griffith profited more from [the questionable] expenditures than

[did] Norvell.” (PSR at 9.) The PSR thus estimated that Griffith benefitted from

60% of those expenditures, while Norvell benefitted from 40%. The district court

accepted this estimate, attributing to Griffith as loss 60% of the expenditures at

issue. 

“The [district] court need only make a reasonable estimate of the loss.” 

U.S.S.G. § 2B1.1, cmt. n.3(C); see Ary, 518 F.3d at 788. Having carefully

reviewed the record, we are satisfied that the district court’s method of estimating

loss in this case was reasonable. We are likewise satisfied that the Government

proved by a preponderance that Griffith should be held accountable for the

dissipation of 60% of $46,660 in Norvell’s funds. These funds included a

$26,600 mortgage loan, $6,000 in proceeds remaining from the sale of one of his

properties after Griffith diverted $9,000 of those proceeds, the $7,000 balance
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Norvell had held in one of his bank accounts in 2001, and $7,060 in lump-sum

benefit payments from the VA. 

We conclude that the Government failed to prove by a preponderance,

however, that Griffith caused Norvell “loss,” as that term is defined in § 2B1.1,

when she “misused [his] credit totaling $30,216.” (Addendum to PSR at 11.) In

short, the Government offered no evidence that this credit card debt was ever

paid, and the commentary to the Guidelines makes clear that loss must constitute

“pecuniary harm.” U.S.S.G. § 2B1.1, cmt. n.3(A)(i)-(iii). While we do not doubt

that Griffith’s conduct caused harm to Norvell’s credit rating, “pecuniary harm”

under the Guidelines “does not include . . . harm to reputation, or other noneconomic harm.” Id., cmt. n.3(A)(iii). Instead, such harm must be “monetary or

. . . otherwise . . . readily measurable in money.” Id. Here, the Government did

not put on evidence demonstrating that Griffith caused Norvell “pecuniary harm,”

and thus loss, when she misused his credit. Nor did it allege or put on evidence

that her conduct caused loss to victims other than Norvell, such as the credit card

companies. Consequently, the district court clearly erred when it included in its

loss calculation $18,130 attributable to Griffith’s misuse of Norvell’s credit.

c. Conclusion as to this issue

The district court clearly erred in including $28,130 in its calculation of

loss. Subtracting that amount from the court’s overall loss calculation of $83,739

leaves us with total loss of $55,609. Pursuant to Guideline § 2B1.1(b)(1)(D), the
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district court thus should have increased Griffith’s offense level by six, rather

than by eight, leaving her with an advisory sentencing range of twelve to eighteen

months rather than eighteen to twenty-four months.

However, because the district court stated on the record that it would have

sentenced Griffith to the same term of imprisonment–eighteen months–even if it

had found loss to be under $70,000, the court’s error here was harmless. See

Williams v. United States, 503 U.S. 193, 202-03 (1992) (explaining that remand

is not necessary “to rectify an ‘incorrect application’ of the Guidelines” where

“the error was harmless, i.e., [where] the error did not affect the district court’s

selection of the sentence imposed”); United States v. Graham, 466 F.3d 1234,

1239-40 (10th Cir. 2006). Here, had the district court properly calculated loss at

$55,609, Griffith’s sentence of eighteen months’ imprisonment would have

remained within her advisory Guideline range and thus would have been

presumptively reasonable on appeal, see United States v. Mumma, 509 F.3d 1239,

1243 (10th Cir. 2007). 

Because the district court’s error in calculating loss was harmless, we need

not remand for correction of that error.

ii. Inclusion of non-criminal conduct as relevant conduct

In calculating loss derived from Griffith’s relevant conduct, the district

court took into account what it found to be Griffith’s ongoing scheme to defraud
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Norvell of his money and assets, both before and after she became his VA

fiduciary and payee, and both before and after she became his wife. 

In challenging this element of the loss calculation, Griffith emphasizes that

in a case involving theft of government benefits, the Guidelines commentary

defines “loss” as “not less than the value of the benefits obtained by unintended

recipients or diverted to unintended uses.” U.S.S.G. § 2B1.1, cmt. n.3(F)(ii). 

Griffith misreads this commentary, eliding the phrase “not less than” and

asserting that “[t]o establish the appropriate loss amount, the government had to

establish the dollar amount of VA benefits that were diverted from Norvell’s

support, maintenance and benefit.” (Aplt. br. at 15.) Far from establishing a

ceiling on loss under § 2B1.1, however, the commentary Griffith cites instead

establishes a floor for that calculation. Therefore, the district court did not err in

factoring into its loss calculation harm caused by Griffith’s relevant conduct aside

from that underlying the offense of conviction, which was theft of Norvell’s VA

benefits. See U.S.S.G. § 1B1.3; Altamirano-Quintero, 511 F.3d at 1095.

Griffith further argues that even if the district court correctly considered

conduct outside the offense of conviction, it erred in considering conduct that was

not criminal. The gist of this argument is twofold: first, that in the brief period in

which Griffith was Norvell’s spouse-payee, she was legally entitled to use his VA

benefits for her own purposes; and second, that “[e]ven assuming that prior to
- 24 -

becoming his payee Griffith allowed or encouraged Norvell to be generous toward

her with his money, that conduct would not be criminal.” (Aplt. br. at 18.) 

As to the first claim, the district court found that Griffith’s marriage to

Norvell was a sham, “intended primarily, if not solely, to further [Griffith’s]

fraudulent plans.” (R. vol. IV at 7.) In other words, the marriage itself was “part

of the same course of conduct and a common scheme or plan as the offense of

conviction.” (Id. at 6.) Having reviewed the record evidence, we cannot say this

finding was clearly erroneous.

As to Griffith’s second claim, the district court found that the conduct

underlying her ongoing “scheme . . . to defraud Mr. Norvell of his assets and

income,” carried out both “while [she was] acting informally as a helper for his

financial affairs” and while she was “a formal Veterans Administration

fiduciary,” constituted criminal behavior. (Id. at 7.) The court explained that

Griffith’s repeated acts of fraud against Norvell “involv[ed] crimes [such] as

larceny, embezzlement, [and] unauthorized use of access devices.” (Id. at 6.) 

The district court did not identify the specific state and federal statutes under

which Griffith could have been charged for those crimes. However, the PSR,

which the court adopted in its entirety and without change, explained that

Griffith’s relevant conduct “involve[d] acts of Larceny by fraud and stealth, in

violation of 21 Okla. St[at]. Ann. § 1701[;] Embezzlement, in violation of 21
- 25 -

Okl[a]. St[at]. Ann. § 1451[;] and Fraud and Related Activity in Connection with

Access Device, contrary to 18 U.S.C. § 1029.” (Addendum to PSR at 4.) 

Based on our holding today that in order to consider non-offense conduct as

relevant conduct under the Guidelines, the Government must prove by a

preponderance of the evidence that the defendant (1) engaged in conduct

(2) related to the offense of conviction pursuant to U.S.S.G. § 1B1.3 and (3)

constituting a criminal offense under either a federal or a state statute, we

conclude that the district court did not err in characterizing as relevant conduct

Griffith’s attempts to defraud Norvell both before she became his VA fiduciary

and payee and after she became his wife.

For the foregoing reasons, we AFFIRM the district court’s loss calculation.

B. Griffith’s challenge to the restitution order

1. Governing law and standard of review

The MVRA mandates, in pertinent part, that the district court must impose

restitution when sentencing a defendant convicted of an offense “in which an

identifiable victim . . . has suffered a physical injury or pecuniary loss.” 18

U.S.C. § 3663A(c)(1)(B). Just as “the loss caused by the conduct underlying the

offense of conviction establishes the outer limits of a restitution order” under the

Victim Witness and Protection Act of 1982 (“VWPA”), Hughey v. United States,
12The MVRA “was passed in 1996 as a supplement to the Victim and

Witness Protection Act, 18 U.S.C. § 3663.” United States v. Barton, 366 F.3d

1160, 1165 (10th Cir. 2004).

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495 U.S. 411, 420 (1990), so are restitution orders under the MVRA12 limited to

“losses caused by the offense of conviction,” United States v. Gordon, 480 F.3d

1205, 1211 (10th Cir. 2007). Furthermore, restitution under the MVRA “must be

“based on actual loss,” which “[t]he government bears the burden of proving.”

United States v. Quarrell, 310 F.3d 664, 678, 680 (10th Cir. 2002). 

“[T]he purpose of restitution is not to punish defendants or to provide a

windfall for crime victims but rather to ensure that victims, to the greatest extent

possible, are made whole for their losses.” United States v. Serawop, 505 F.3d

1112, 1124 (10th Cir. 2007) (quotation omitted). “Consequently, a district court

that orders restitution in an amount greater than the total loss caused by the

offense thereby exceeds its statutory jurisdiction and imposes an illegal

sentence.” Id. (quotation, alterations omitted).

We review de novo the legality of a restitution order. Gordon, 480 F.3d at

1210. We review the district court’s underlying factual findings for clear error,

“and the amount of restitution for abuse of discretion.” Serawop, 505 F.3d at

1117.

2. Identity of VA benefits

Griffith’s offense of conviction was theft of U.S. property in violation of 18

U.S.C. § 641. In her Petition to Enter Plea of Guilty and Order Entering Plea,
- 27 -

Griffith admitted that “[f]rom March, 2003, to July, 2005, [she] embezzled more

than one thousand dollars . . . from the Department of Veterans Affairs . . . by

taking DAV benefits of David Norvell and converting them to [her] own use.” R.

vol. 1, tab 4, at 2.) She explained to the district court that the VA benefit checks

were deposited directly into Norvell’s checking account, and that he then would

sign checks for her so that she “would get the benefit of” the VA money. (R. vol.

VI at 11.) She further acknowledged that the “cumulative total of all these

checks” deposited into Norvell’s account was $22,870. (Id.)

Before we may consider episodes of putative actual loss of VA funds

caused by Griffith’s offense conduct, we must determine whether those funds,

once deposited into a beneficiary’s account and made available for withdrawal,

would retain their identity as VA funds. While the federal courts have not

addressed this question with reference to § 641, the Supreme Court and lower

courts have done so with reference to 38 U.S.C. § 5301 and its predecessor

statutes, which exempt veterans’ benefits “from taxation, . . . from the claim of

creditors, and . . . [from] attachment, levy, or seizure by or under any legal or

equitable process whatever, either before or after receipt by the beneficiary.” 38

U.S.C. § 5301(a)(1).

The World War Veterans’ Act of 1924, 38 U.S.C. § 454, provided that

“‘[t]he compensation, insurance, and maintenance and support allowance payable

[to veterans] shall not be assignable; shall not be subject to the claims of creditors
- 28 -

of any person to whom an award is made . . . ; and shall be exempt from all

taxation.’” Trotter v. Tennessee, 290 U.S. 354, 356 (1933) (quoting 38 U.S.C.

§ 454). In Trotter, the Supreme Court held open the question of whether

veterans’ benefits received under this statute retained their exempt character once

they were in the hands of the veteran or “on deposit in a bank.” Id. The Trotter

Court did conclude, however, that such benefits lost their exempt character once

they had “lost the quality of moneys and were converted into land and buildings.” 

Id. at 356-57. 

Congress then amended the statute, mandating both that veterans’ benefits

were to remain exempt “‘either before or after receipt by the beneficiary’” and

that the benefits’ exempt status “should not extend ‘to any property purchased in

part or wholly out of such payments.’” Lawrence v. Shaw, 300 U.S. 245, 249

(1937) (quoting 38 U.S.C. § 454, as amended by the World War Veterans’ Act of

1935). In Lawrence, the Court held that veterans’ benefits deposited in a bank

retained their exempt character so long as those “deposits are made in the

ordinary manner such that the proceeds of the collection are subject to draft upon

demand for the veteran’s use.” Id. at 250. “[A] mere allowance of interest upon

deposits,” the Court noted, would not “be enough to destroy an immunity [to

taxation and attachment] where it would otherwise attach.” Id. However, the

Court later explained in Carrier v. Bryant, 306 U.S. 545, 547 (1939), that
- 29 -

“[i]nvestments purchased with money received in settlement of benefits” do not

retain their exempt character. 

The statute assumed its current form in 1958, when it was amended to

provide that

[p]ayments of benefits due or to become due under any law

administered by the Veterans’ Administration shall not be assignable

except to the extent specifically authorized by law, and such

payments made to, or on account of, a beneficiary shall be exempt

from taxation, shall be exempt from the claim of creditors, and shall

not be liable to attachment, levy, or seizure by or under any legal or

equitable process whatever, either before or after receipt by the

beneficiary. The preceding sentence shall not apply to claims of the

United States arising under such laws nor shall the exemption therein

contained as to taxation extend to any property purchased in part or

wholly out of such payments.

38 U.S.C. § 3101(a) (1958) (quoted in Porter v. Aetna Cas. & Surety Co., 370

U.S. 159, 159 n.1 (1962)). In Porter, the Court extended Lawrence’s holding to

veterans’ benefit funds on deposit in federal savings and loan associations. 

Since legislation of this type should be liberally construed to

protect funds granted by the Congress for the maintenance and

support of the beneficiaries thereof, we feel that deposits such as are

involved here should remain inviolate. The Congress, we believe,

intended that veterans in the safekeeping of their benefits should be

able to utilize those normal modes adopted by the community for that

purpose–provided the benefit funds, regardless of the technicalities

of title and other formalities, are readily available as needed for

support and maintenance, actually retain the qualities of moneys, and

have not been converted into permanent investments.

370 U.S. at 162 (citations omitted). Congress gave the statute its current

numbering, 38 U.S.C. § 5301, in 1991.
13Pursuant to 42 U.S.C. § 407(a), social security benefits are similar to

veteran’s benefits in that they are exempt from “execution, levy, attachment,

garnishment, or other legal process, [and from] the operation of any bankruptcy or

insolvency law.”

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We think that Porter’s interpretation of § 5301 is equally applicable to VA

funds at issue under § 641. Therefore, as long as a veteran’s benefits are held in

an account making those funds “readily available as needed for support and

maintenance,” and the funds are not “converted into permanent investments” or

into property, Porter, 370 U.S. at 162; Lawrence, 300 U.S. at 249, they retain

their identity as “public money” under § 641. Furthermore, even if VA funds are

commingled in an account with other funds, they will retain their VA character as

long as they are readily traceable and may be accounted for with a standard

accounting method, such as first-in, first-out tracing. See S & S Diversified

Servs., L.L.C. v. Taylor, 897 F. Supp. 549, 552 (D. Wyo. 1995) (reasoning that

“social security benefits deposited in a joint bank account retain their exempt

status [pursuant to 42 U.S.C. § 407] if they are readily traceable”); NCNB Fin.

Servs., Inc. v. Shumate, 829 F. Supp. 178, 180-81 (W.D. Va. 1993) (“If the

recipient of social security benefits commingles the benefits with other funds, he

is entitled to protection as to those funds that are reasonably traceable to social

security income.”).13
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3. The district court’s calculation of restitution

The district court imposed $27,002 in restitution, based on Griffith’s

misappropriation of the following VA funds:

$3,118 directly diverted from Norvell’s funds-receiving account and

used for Griffith’s benefit;

$9,495 in bills left unpaid after Griffith’s unauthorized cash

withdrawals from Norvell’s funds-receiving account;

$4,236 (60% of $7,060) in lump-sum VA payments dissipated by

Griffith and used more for her benefit than for Norvell’s; and

$10,153 in VA funds “obligated” by Griffith’s misuse of Norvell’s

credit.

As to the VA funds obligated by Griffith’s misuse of Norvell’s credit, the district

court reasoned that because Griffith was responsible for loss to Norvell of

$18,130, or 60% of $30,216, in accumulated credit card debt, see supra §

II.A.4.i.b, and because VA benefits constituted roughly 56% of Norvell’s total

income during the period covered by the indictment, 56% of $18,130 had been

“obligated toward the repayment of this debt.” (PSR at 16.)

4. Analysis

As regards the $3,118 directly diverted from Norvell’s account and the

$9,495 in funds withdrawn to pay bills but which were not used to pay bills, the

record contains ample evidence demonstrating that the Government met its burden

of proving actual loss caused by the offense of conviction. As regards the $4,236

in lump-sum VA payments and the $10,153 in VA funds “obligated” by Griffith’s
14The Government cites Agent Sewell’s testimony–before he corrected

himself–in support of its claim that the district court accurately held Griffith

accountable for restitution of 60% of lump-sum payments of $7,060. Nowhere

did Sewell mention the figure $7,060, and nowhere did the PSR or district court

explain the source of that figure.

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misuse of Norvell’s credit, however, we conclude that the Government failed to

meet that burden.

i. Lump-sum payments

While we do not doubt that Griffith may be ordered to pay restitution for

her dissipation and misappropriation of lump-sum benefit payments to Norvell,

her offense of conviction is theft of U.S. funds during the period from March of

2003 to July of 2005. At Griffith’s sentencing hearing, VA Agent Sewell first

testified that during the period covered by the indictment, $7,543 in lump-sum

benefit payments were deposited into Norvell’s account.14 On cross-examination,

however, he corrected that figure, testifying, “as I’m looking at it now, one of

those payments was made–one of the lump sum payments was made before

[Griffith] was fiduciary.” (R. vol. III at 70.) According to Agent Sewell, that

payment, of $4,250, was made in August of 2002. 

Because the Government did not put on evidence demonstrating that

Griffith dissipated and misappropriated this payment of $4,250 during the period

of the offense of conviction, the district court erred in ordering Griffith to pay

restitution for the loss of 60% of that payment. Therefore, the restitution order

must be reduced by $2,550, or 60% of $4,250.
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ii. VA funds “obligated” by credit card debt

Because the Government did not put on evidence that the accumulated

credit card debt was ever paid and thus did not prove actual loss to Norvell from

that debt, see supra § II.A.4.i.b, the district court erred in ordering Griffith to pay

restitution for that debt. Furthermore, we note that because Griffith may be

ordered to pay restitution only for conduct underlying the offense of conviction,

she may be ordered to pay restitution only for Norvell’s loss of VA benefits; and

under 38 U.S.C. § 5301(a)(1), those benefits are “exempt from the claim of

creditors,” and “not . . . liable to attachment, levy, or seizure by or under any

legal or equitable process whatever.” Therefore, in the absence of evidence

demonstrating that Norvell actually repaid the credit card debt with VA funds, the

district court lacked authority to impose restitution upon Griffith for even a

portion of that debt. Consequently, the restitution order must be reduced by an

additional $10,153.

5. Conclusion as to restitution

Because the district court exceeded its authority and thus abused its

discretion in ordering Griffith to pay restitution for conduct not proven to

underlie the offense of conviction and conduct not proven to have caused actual

loss, the restitution order must be reduced by a total of $12,703.
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III. CONCLUSION

We AFFIRM the district court’s calculation of loss. We VACATE the

restitution order and REMAND to the district court with instructions to impose

restitution in the amount of $14,299.