### In the



# United States Court of Appeals
f or the Seventh Circuit

____________________ No. 23

- 1410
U NITED S TATES OF A MERICA , Plaintiff

- Appell ee ,

v.

K EVIN S HIBILSKI , Defendant

- Appell ant

.

____________________ Appeal from the United States District Court for the Western District of Wisconsin

. No. 20

- CR

- 122

- JDP

— James D. Peterson , Chief Judge

.

____________________
A RGUED J ANUARY 10 , 202 4

— D ECIDED J UNE 10, 2024

____________________

Before S YKES , C hief Judge , and H AMILTON and L EE , Circuit Judges

. S YKES , C hief Judge

. A grand jury charged Kevi n Shibilski with environmental and wire

- fraud c rimes arising from his operation of three Wisconsin

- based companies engaged in the business of recycling electronic equipment. The indictment also included one count of conspiracy to defraud the United States relating to his willful nonpayment of payroll taxes for his employees

.2 No. 2 3

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Shibilski pleaded guilty to a single felony count of willful fail ure to pay employment taxes ; in exchange, th e government drop ped the other charges. Though the case had been dramatically simplified, s entencing proved to be protracted. Shibilski objected to the presentence report’s recommendations regarding relevant conduct under the Sentencing Guidelines

— notably, the recommendation to hold him responsible for the total amount of unpaid employment taxes for all three companies

. To address these objections, t he district judge held a seven

- hour sentencing hearing , most of which was consumed by the presentation of document s and testimony , including testimony from Shibilski himself

. During the evidentiary phase of the hearing , Shibilski’s attorney pursued irrelevant and redundant lines of inquiry , prompting the judge to s tep in to keep him on topic and on track to finish

on time.
In the end the judge found Shibilski responsible for the full amount of unpaid tax es

. The judge also declined to award credit for acceptance of responsibility under U.S.S.G. § 3E1.1(a) , finding that Shibilski had falsely denied responsibility for relevant conduct. After weighing the statutory sentencing factors , the judge imposed a sentence of 3 3 months in prison, the bottom of the advisory Guidelines range

. Shibilski argues that the judge violat ed Rule 32 (i)(4) (A) (i) of the Federal Rules of Criminal Procedure by unduly curtailing his attorney’s presentation of evidence

. He also c laims that the judge improperly denied credit for acceptance of responsibility under § 3E1.1(a)

. Finally , he c ontends that the judge committed procedural error by failing to meaningfully address the statutory se ntencing factors

. We reject t hese arguments and affirm.No. 2 3

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I. Background
Th is case has its roots in concurrent state and federal investigations into environmental and tax crimes occurring at 5R Processor s , Ltd. , a Wisconsin

- based company engaged in the business of recycling electronic equipment

. The environmental and tax inquir ies led to a broader investigation of the company’s operations. W hat follows is a condensed version of the facts and procedural history of the case ; a more detailed
account is not necessary to resolve this appeal

. F ounded in 1988 by Tom Drake , 5R grew over time to include recycling and storage facilities in Wisconsin and Tennessee. But the company was plagued by cash

- flow problems , so in 2011 Drake hired Keven Shibilski as a consultant to help the company find new sources of operating capital. Shibilski had spent most of his professional life in the public sector as
a county register of deeds , state senator, and (briefly) state tourism secretary ; he had limited relevant business experience. After two years of fruitless searching, Shibilski proposed
to purchas e 5R himself in a three

- year phased transaction in which he would incrementally acquire Drake’s ownership interest while he continue d to look for a secure source of operational financing

. Drake agreed. As the deal was structured , Shibilski paid nothing to acquire Drake’s share s but immediately began running the company

. I n March 2013 he assumed control of 5R as its CEO and CFO , with a starting salary of about $107,0 00, which increased to $15 6,5 0 0 by 2015 and $ 170,50 0 by 2016

. Drake temporarily stay ed on as chairman once Shibilski took over , but he had limited involvement because of serious health problems

. Shibilski gradually acquire d a majority of Drake’s shares in a phased buyout in which4 No. 2 3

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Drake received annual “salary” and lump

- sum payments from 5R itself

. The company’s financial prospects did not improve after Shibilski took the reins in March 2013

. H is search for operating capital failed , and cashflow problems worsened

. In the meantime, Shibilski began paying himself an extra $3,000 per month f or office space he leased to the company . He also put his wife on the payroll as a ghost employe e ; she never came to the office

. I n 2014 5R stopped pay ing required employment taxes to the Internal Revenue Service and the Wisconsin Department of Revenue . In essence , the company was using employees’ withheld income and payroll taxes to help stem the deteriorati on of its financial condition

. Th e nonpayment of taxes eventually drew the attention of state and federal taxing authorities. State tax agents commenced an enforcement action , and an IRS agent conducted a site visit

. In response to the company’s large looming liability for unpaid employment taxes , Shibilski created two spinoff companies t o carry on 5R ’s recycling and transportation operations : Pure Extractions Inc. , which assumed 5R’s recycling business , and Wisconsin Logistics Solutions LLC , which took

over 5R’s transportation operations

. But n othing changed as
a functional or operational matter

. 5R’s assets, employees , and operations were move d to the two new co mpanies , leaving 5R with the liabilities

. At some point along the way, state and federal environmental a gencies began investigatin g the companies for improper storage, transportation, and disposal of hazardous
waste from the recycling process

. The environmentalNo. 2 3

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in quir ies spawned an expanded financial investigation , and law enforcement stepped in . I n September 2020 a grand jury returned a 10

- count indictment charging Shibilski with environmental and wire

- fraud crimes and conspiracy to defraud the United States . The conspiracy c harge alleged that from July 2014 t hrough June 2016, Shibilski willful ly fail ed to remit payroll taxes to the IRS for the employees of 5R, Pure Extractions, and Wisconsin Logistics. In May 2021 a magistrate judge entered a scheduling order setting the case for trial on May 23, 2022 , with a final pretrial conference to be held on April 14, 2022. One week before the pretrial conference, the parties reached a pl ea agreement in which Shibilski agreed to plead guilty to a single felony
count

— willful fail ure to pay employment taxes in violation of 26 U.S.C. § 7202

— as charged in an information filed that same day

. In exchange, t he government agreed to dismiss all charges in the indictment . The government also agreed to recommen d that Shibilski receive credit for acceptance of responsibility under § 3E1.1 (a) of the Guidelines

— condition ed , of course , on Shibilski ’s actual accept ance of responsibility

. T he government reserved the right to withdraw th is recommendation if Shibilski engaged in conduct inconsistent with accept ance of responsibility. As a factual basis for the plea, t he agreement mentioned only a portion of the unpaid taxes

— $ 197,458 , which reflected the payroll tax es that had been withheld from the paychecks of employees at Pure Extractions and Wisconsin Logistics but not remitted to the IRS

. Shibilski ac knowledged responsibility for this portion of the tax loss as part of the factual basis for his plea ; the agreement reserved a more complete account ing6 No. 2 3

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of relevant conduct until sentencing

. Shibilski entered his guilty plea a month later. As expected, t he presen ten ce report (“PSR”) calculated a much larger tax loss as relevant conduct . The probation officer recommended that the court find Shibilski responsible for a total of $858,051 in tax losses. This figure included the
amount Shibilski had acknowledged in the plea agreement , plus (1) the employer ’s share of payroll taxes owed but never paid for employees of Pure Extractions and W isconsin L ogistics; and (2) all employment

- related taxes for 5R

— the unpaid employe e s ’ share , which had been withheld but never paid to the IRS, and the employe r ’ s s hare

. Shibilski object ed to th e PSR’s calculation of relevant conduct (among other objections)

. H e insisted , implausibly, that he had not been in control of financial matters for the business es

— particularly not 5R ’s financial operations

— and so should not be held responsible for the total amount of unpaid payroll t axes

. To resolve the objections, t he district judge s cheduled the sentencing hearing over two days in February 2023, setting aside four hours on the first day and three hours on the second day

. O n the first day , the judge began by discuss ing the timeframe and parameters for the evidentiary presentations to ensure that the parties would use the allotted tim e efficiently . The judge estimated that witness testimony and the introduction of exhibits would consume the entire ty of the first day

. Shibilski’s attorney told the judge that his client

w ould testify ; t he prosecutor said that he would trim his witness list to accommod ate the defendant’s testim ony and the court’s schedule

.No. 2 3

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Once the witness testimony was underway , Shibilski’s attorney immediately engaged in irrelevant and repetitious lines of inquiry

. After the first witness, the judge urged defense counsel not to waste time on irrelevancies

. From that point on , the judge periodic ally stepped in to instruct Shibilski’s attorney to avoid redundant questions or to move things along

. As the clock ticked down toward the end of the first day, t he judge said he would extend th at day’s session for an
extra 20 minutes or so , but he made it clear that he would not keep everyone in the courthouse beyond that time

. Shibilski took the stand late that afternoon with only 20 minutes of hearing time remaining

. The judge stuck to his timeline, halt ed Shibilski’s direct testimony when the time e xpired , and advised the parties that the hearing would continue with

cross

- examination on the morning of day two

. The hearing r esumed on day two with Shibilski’s cross

examination, redirect by defense counsel, and recross by the prosecutor . In all , Shibilski was on the witness stand for a little

over an hour. The judge then invited arguments from the attorneys about what the evidence had shown on the central dispute concerning Shibilski’s control of financial matters for the three companies

. After exhausting that subject, t he attorneys presented their sentencing arguments , uninterrupted by the judge except to the extent that he had questions

. The judge then turned to the defend a nt for allocution

. After cursory remark s about accept ing responsibility , Shibilski spent most of his allocution statement complain ing about the prosecution, shift ing blame to his codefendants and others, minimiz ing his role in the crime , and portray ing himself as a victim of character assassination by the government and fraud by others who were involved in the business

.8 No. 2 3

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T he judge ultimately rejected Shibilski ’s objections and found him responsible for the entire tax loss as described in the PSR , bas ing his ruling on the “unequivocal” evidence that Shibilski had been in contro l of the financial operations of all three companies during the relevant period

. Relying on th at same evidence, the government withdr ew its recommendation for an offense

- level reduction under § 3E1.1(a) . T he judgeagreed that credit for acceptance of responsibility was unwarranted notwithstanding the guilty plea. The judge found that Shibilski had falsely denied relevant conduct , blamed others, and otherwise minimized his role in the offense, all of which

w ere inconsistent with acceptance of responsibility . The judge th us declined to award the two

- point offense

- level reduction under § 3E1.1(a)

. The se rulings produce d a total offense level of 20 , which when combined with a criminal history category of I yielded

an advisory imprisonment range of 33 to 41 months. After weigh ing the sentencing factors listed in 18 U.S.C. § 3553 (a) , the judge imposed a sentence of 33 months in prison

. II. Discussion
Shibilski rais es three claims of sentencing error , argu ing that the judge (1) violated Rule 32 (i)(4)(A)(i) by unduly curtailing his attorney’s presentation of evidence; (2) wrongly denied credit for acceptance of responsibilit y under § 3E1.1(a) ; and (3) committed procedural error by failing to meaningfully address the § 3553 (a) sentencing factors

. The first argument misunderstands the rule and is unsupported by the record

. Rule 32(i)(4)(A)(i) states only that the judge “ must provide the defendant’s attorney an opportunity to speak on the defendant’s behalf.” F ED

. R. C RIM

. P.No. 2 3

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32(i)(4)(A)(i). The judge complied with this requirement

. On day two of the hearing, h e gave Shibilski’s attorney ample time to present a sentencing argument

. C ou nsel fully availed himself of the opportunity

— first by speaking at length when the judge invited the attorneys to discuss what the evidence had shown about Shibilski’s control of the three companies
, and later b y raising multiple arguments in mitigation when the judge entertained sentencing argument from each side

. The judge did not hing to curtail or cut off counsel’s opportunity to speak on Shibilski’s behalf

. The record conclusively refutes any argument to the contrary.
Shibilski’s argument appear s to rest on a fundamental misreading of the rule. His complaint is that the judge unduly restricted his present ation of evidence during the sentencing hearing

. A different part of Rule 32 pertains to evidentiary submissions at sentencing. Rule 32(i)(2) provides that the judge may permit the parties to introduce evidence on objections to the PSR

— not shall or must

. Submission of evidence at sentencing is thus entrusted to the district court ’s d iscretion. See United States v. Cunningham , 883 F.3d 690, 699 (7th Cir. 2018). C ontrolling the scope of witness testimony and setting reasonable time limits , as the judge did here, is perfectly consistent with the court’s exercise of this discretionary authority.
Shibilski next argues that the judge wrongly denied credit for acceptance of responsibility under § 3E1.1(a). A defendant may earn a two

- level reduction in his Guidelines offense level if he “clearly demonstrates acceptance of responsibility for his offense.” U.S

. S.G. § 3E1.1(a)

. T o de termine whether to apply th is adjustment , the judge may consider whether t he defendant has “ truthfully admit t [ ed ] the conduct compromising the10 No. 2 3

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offense(s) of conviction ” and “ truthfully admit t [ed] or not falsely den [ied ] any additional relevant conduct for which [he] is accountable. ” Id. cmt. n.1. A defendant who f alsely den ies or frivolously contest s relevant conduct “ has acted in a manner inconsistent with acceptance of responsibility.” Id. Moreover, a ttempts by the defendant to minimize his involvement in the offense are “ sufficient to deny a reduction for acceptance of responsibility, even when the defendant has pleaded guilty .” United States v. Major , 33 F.4th 370, 382 (7th Cir. 202 2 )

. It ’ s th e defendant ’s burden to prove by a preponderance of the evidence that he qualifies for the § 3E1.1(a) adjustment, and t he district judge’s findings in this regard are entitled to

“ great deference

. ” § 3E1.1 cmt. n.5. At its core th e § 3E1.1(a) credit is based on a credibility judgment that the sentencing judge is best equipped to make

. Id. We review the judge’s findings for clear error and will reverse only if we are left with the “definite and firm conviction” that a mistake was made. United States v. Collins , 796 F.3d 829, 835 (7th Cir. 2015) ( internal quotation marks omitted)

. We see no basis to disturb the judge’s § 3E1.1 (a) ruling here

. Shibilski spills much ink over whether his objections to the PSR were legal challenges or good

- faith factual challenges

. We do not n eed to parse the record on this point

. S hibilski’s own words

— both from the witness stand and in his allocution statement

— confirm th at t he judge had ample

reason to deny credit for acceptance of responsibility. Despite a lengthy paper trail and robust testimony establishing that he controlled financial matters for 5R and the two spinoff companies, Shibilski persisted in falsely denying responsibility for the total amount of unpaid employment taxes.No. 2 3

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Though he made passing reference to his “unequivocal” acceptance of responsibility during his allocution , h e focused mainly on minimiz ing his role, blaming his co

- defendants and the IRS , and painting himself as the victim of fraud by others. He assailed the prosecution as an attack on his character

. He suggest ed that he had taken t he fall for the misdeeds of his codefendants, complaining that they had not “pa [id] a nickel in

... back taxes

. ” He speculated that he had been charged b ecause he was the “last person standing

. ” He deflected responsibility f or his conduct , complaining that his code fendants and others “took money, they took the company, and they boogied, and they ’ re going to point their finger at me and [] say I behaved dishonorably? Not true. I did not behave dishonorably, Your Honor.”

He continued to cast aspersions , telling the judge that he and his wife were the only ones affiliated with 5R who “paid a price.” He walked this com ment back a bit w hen t he judge reminded him that his codefendants received prison time and

one was also ordered to pay $3 million in restitution for related environmental crimes

. But in the next breath Shibilski dismissed the codefendant’s r estitution obligation as insignificant

. Simply put, Shibilski ’s persistent refus al to take ownership of his own actions amply justified the denial of credit under § 3E1.1(a)

. As the judge explained , he “blamed everybody but himself. ” 1

1 Shibilski also complains that he lacked notice that the court might not award credit for acceptance of responsibility. This is a n ons tarter . The plea agreement and the guilty

- plea colloquy provided clear notice that the court would rule on all Guidelines questions and determine the appropriate sentence.12 No. 2 3

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Shibilski ’s final argument is a procedural claim that the judge failed to meaningfully consider his principal arguments in mitigation under § 3553(a)

— specifically, arguments concerning his lack of criminal history, his public service and reputation , his role as a caregiver for his aging mother , and the

sen tences of other § 7202 offenders

. This argument is frivolous.
The judge need not march through the § 3553(a) factors in a “checklist fashion” at sentencing. United States v. Banks , 828 F.3d 609, 618 (7th Cir. 2016). What’s required is a statement of

reasons show ing that the judge engaged in an individualized
assessment , considered the defendant’s principal mitigation arguments

— “ even if implicitly and imprecisely”

— and explained t h e sentencing decision in sufficient detail to permit meaningful appellate review. Id. (internal quotation marks omitted). The judge said more than enough to discharge these obligations. He carefully consider ed the mitigating aspects of Shibilski’s background , including his public service, reputation in his community , and the c ircumstances regarding his infirm mother

. The judge also addressed Shibilski’s argument about sentences for other § 7202 offenders, explain ing that he consistently impose d prison sentences in tax

- fraud cases. On this point specifically , it was not necessary for t h e judge to say more; indeed, he was not required to directly address and weigh the possibility of unw arranted sentencing disparities under § 3553(a)(6). We have repeatedly explained that t he Guidelines “are themselves an anti

- disparity formula

. ” United States v. Sanchez , 989 F.3d 523, 540 (7th Cir. 2021) (internal quotation marks omitted). A sentenc e within the Guideline sNo. 2 3

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range “necessarily complies with § 3553(a)(6).” Id. at 541 (internal quotation marks omitted). In short, n o procedural error occurred. The judge thoughtfully considered the § 3553(a) factors and Shibilski’s principal arguments in mitigation, and his explanation for the within

Guidelines sentence was clearly sufficient. 2
A FFIRMED

2 After we heard oral argument, Shibilski sought a sentenc e reductio n based on new, retroactive amendments to the Sentencing Guidelines. T he judge express ed a willingness to reduce the sentence by two months , and Shi bilski notified us of this indicative ruling. F ED

. R. A PP

. P. 12.1

. T he resolution of th is appeal clears the way for the proposed sentence modification

.