In the 

United States Court of Appeals 

For the Seventh Circuit ____________________

No. 12‐1376

UNITED STATES OF AMERICA,

Plaintiff‐Appellee,

v.

GALE RACHUY,

Defendant‐Appellant.

____________________

Appeal from the United States District Court for the

Western District of Wisconsin.

No. 10‐CR‐141 — William M. Conley, Chief Judge.

____________________

ARGUED OCTOBER 4, 2013 — DECIDED FEBRUARY 14, 2014

____________________

Before EASTERBROOK, ROVNER, and WILLIAMS, Circuit

Judges.

WILLIAMS, Circuit Judge. By almost all accounts Gale Ra‐

chuy is a career criminal. Rachuy accumulated, over 40

years, nearly 30 convictions, mostly for fraud. He is a man

who has spent many years gaining people’s trust only to

turn around and betray them. In Rachuy’s most recent

scheme, he “purchased” six vehicles by writing bad checks

drawn on four bank accounts that he knew were closed or
2 No. 12‐1376

had no funds. Rachuy was indicted on five counts of trans‐

porting stolen vehicles across state lines, but pled guilty to

one count in exchange for a favorable sentencing recom‐

mendation. In exchange for his guilty plea, the government

agreed that it would: (1) recommend that the court calculate

the loss amount based only on the checks returned on the

four bank accounts involved in the purchase of the stolen

vehicles; (2) recommend a five‐year prison sentence; and (3)

not oppose Rachuy’s request for the return of his property

held by local and state authorities.  

On appeal, Rachuy raises a number of arguments. First,

he asserts that the government breached the plea agreement

by referencing his lengthy criminal history. But the govern‐

ment did not breach the agreement because it had to refer‐

ence Rachuy’s criminal history in order to justify an above‐

Guideline range sentence. Second, he argues that the gov‐

ernment failed to recommend that his loss amount be based

solely on the checks used to purchase the vehicles charged in

the superseding indictment. However, the government did

not breach the deal because it was authorized, per the

agreement, to include in the loss calculation any relevant

bad checks drawn on the accounts that Rachuy used to steal

cars. Third, he contends that the government breached the

agreement by opposing his request for the return of his

property. Here, too, the government did not breach the

agreement because it did not “oppose” his motion in the

formal sense, but simply reminded the court that it did not

have the power to command local and state authorities to

release Rachuy’s property. Fourth, he claims that the district

court abused its discretion by failing to hold an evidentiary

hearing on his request for the return of his property. But the

district court was not required to hold a hearing because his
No. 12‐1376 3

motion improperly asked the court to exceed its jurisdiction,

and the court properly dismissed the complaint on jurisdic‐

tional grounds. Finally, Rachuy asserts that the district court

failed to give him credit, pursuant to U.S.S.G. § 5G1.3(b)(1),

for time served on a sentence for a related state conviction.

However, Rachuy was not eligible to be sentenced under

§ 5G1.3(b)(1) since he did not meet the statute’s require‐

ments. Because the district court did not commit any errors,

we affirm the court’s judgment.

I. BACKGROUND

Between April and August 2010, Gale Rachuy “pur‐

chased” six cars by writing bad checks drawn on accounts

that he knew were either closed or had no funds, and then

drove the cars away. Ultimately, he was charged with five

counts of transporting a stolen vehicle across state lines, in

violation of 18 U.S.C. § 2312.  

On November 8, 2011, Rachuy entered into a written plea

agreement with the government where, in exchange for his

plea on one count of transporting a stolen vehicle, the gov‐

ernment made the following promises:

4. ... [T]o recommend that the court calculate loss

amount based only on the checks returned on the four

bank accounts involved in the purchase of the vehi‐

cles charged in the superseding indictment ...  

5. [T]o jointly recommend that the court impose a

five‐year sentence of imprisonment ...  

6. [N]ot to oppose any request by Rachuy for return

of any of his property currently held in the custody of

state or local authorities.
4 No. 12‐1376

On the same day, the district court accepted Rachuy’s guilty

plea.  

While he was represented by counsel, Rachuy filed a pro

se motion for the return of seized evidence and property

with the district court, asking for an order directing state

and local authorities to return the evidence they seized dur‐

ing searches of his homes and automobiles. The government

filed its own motion, arguing that Rachuy’s motion should

be denied because he: (1) was represented by counsel; (2) cit‐

ed no authority to support his request for the district court to

order local law enforcement agencies holding his property to

return it; and (3) was pursuing the same relief in state court

without the government’s opposition. The district court

agreed with the government’s position and denied Rachuy’s

motion.  

On February 3, 2012, the district court held a sentencing

hearing at which both sides made a joint recommendation of

60 months’ imprisonment. Although this was above Ra‐

chuy’s advisory Guidelines range of 37 to 46 months, the

government filed a sentencing memorandum explaining that

the upward variance was warranted because of Rachuy’s ex‐

tensive criminal history and likelihood of recidivism.

At the start of the hearing, the district court calculated

Rachuy’s Guidelines range and noted “that this defendant

has almost 30 convictions over some 40 years, most of which

involve fraud ... which is an extraordinary criminal history

for this court to consider, much less comprehend.” The dis‐

trict court then invited the government to present its posi‐

tion on sentencing.  
No. 12‐1376 5

The government stated that it “echo[ed] what the Court

ha[d] already said, that one would be hard‐pressed to find a

defendant with a longer criminal history for fraud than Mr.

Rachuy. He’s a perfect example of why perhaps there should

be a career offender provision for white‐collar defendants as

well.”

The government then urged the district court to accept

the parties’ joint recommendation, and sentence Rachuy to

60 months’ imprisonment. The defense attorney reiterated

the parties’ recommendation, but the district court judge

remarked, “I’m having substantial trouble arriving at 60

months given your client’s behavior here ... . My problem is,

I’m looking at 40 years of this same behavior. I’m just

astounded by this criminal record.”  

Ultimately, the district court concluded that Criminal

History Category VI significantly underrepresented the seri‐

ousness of his criminal history, and rejected the parties’ rec‐

ommendation. Instead of sentencing Rachuy based on the

parties’ joint recommendation, the court sentenced him to 90

months’ imprisonment based on its determination that he “is

the epitome of a career offender” and that “[his crime is] just

the latest in a string of fraudulent schemes spanning his en‐

tire adult life.” The court also stated that, “if federal law and

the guidelines recognize[d] [the] status [of] white‐collar

fraud, [Rachuy] could well be Exhibit A.” Even though the

court felt that 120 months’ imprisonment was justified given

Rachuy’s conduct, the court settled on 90 months based on

“the requests and the input of counsel.” Rachuy now ap‐

peals.
6 No. 12‐1376

II. ANALYSIS

A. The Prosecution Did Not Breach the Plea Agreement

Rachuy maintains that the government materially

breached the plea agreement in three ways, namely by: (1)

inducing the district court to impose a sentence above the

recommended 60 months by highlighting Rachuy’s criminal

history; (2) failing to recommend the agreed‐upon loss

amount at sentencing; and (3) opposing Rachuy’s pro se mo‐

tion for return of his property. Because Rachuy did not raise

the first two issues before the district court at sentencing, we

review for plain error. United States v. Winters, 695 F.3d 686,

689 (7th Cir. 2012). “Under the plain error standard, we will

reverse the district court’s sentencing determination only

when we find: (1) an error or defect; (2) that is clear or obvi‐

ous; (3) affecting the defendant’s substantial rights; (4) and

seriously impugning the fairness, integrity, or public reputa‐

tion of judicial proceedings.” United States v. Goodwin, 717

F.3d 511, 518 (7th Cir. 2013) (internal quotations omitted).

The parties dispute whether Rachuy raised the third pur‐

ported breach below, but we do not need to decide the mat‐

ter because Rachuy loses even under the most generous

standard.  

This court analyzes plea agreements using ordinary con‐

tract principles. United States v. Schilling, 142 F.3d 388, 394

(7th Cir. 1998). When the terms of the agreement are unam‐

biguous, we apply the plain meaning of those terms. United

States v. O’Doherty, 643 F.3d 209, 217 (7th Cir. 2011). To suc‐

ceed on a claim, the defendant must show a material breach;

a minor breach will not warrant resentencing or withdrawal

of a guilty plea. United States v. Diaz‐Jimenez, 622 F.3d 692,

694 (7th Cir. 2010).
No. 12‐1376 7

Rachuy contends that the government broke its promise

to recommend a sentence of 60 months’ imprisonment at

sentencing by paying “lip service” to the joint recommenda‐

tion, while simultaneously undermining it by citing his

lengthy criminal history. A prosecutor may breach the plea

agreement by making a sentencing recommendation pursu‐

ant to the agreement, and then attempting to augment the

ultimate sentence by referencing aggravating circumstances

of the defendant’s case. See United States v. Salazar, 453 F.3d

911, 914 (7th Cir. 2006). That is not what occurred here.  

During the sentencing hearing, the government unques‐

tionably mentioned Rachuy’s lengthy criminal history, and

even went so far as to say that “Rachuy’s a perfect example

of why perhaps there should be a career offender provision

for white‐collar defendants as well.” From the sentencing

transcript, it appears that the district court relied on the gov‐

ernment’s representations in imposing a higher‐than‐

recommended term of imprisonment—the court even par‐

roted the “career offender” characterization used by the

government.

However, simply because the government referenced Ra‐

chuy’s criminal history does not mean that the government

breached its agreement with him. Rachuy’s Guidelines range

was 37 to 46 months, but the government and Rachuy’s joint

recommendation of 60 months was an upward departure

that the government had to justify. The primary means for

the government to justify the upward departure was to ref‐

erence Rachuy’s criminal history. Moreover, the government

honored its obligation in that it never advocated for a higher

sentence. Instead, it urged the court to impose a 60‐month

sentence. See Salazar, 453 F.3d at 914–15 (finding no substan‐
8 No. 12‐1376

tial breach of plea agreement when the government made

necessary recommendation and “did not request a higher

sentence or remind the judge that he need not abide by the

agreement”). The government, on numerous occasions, rec‐

ommended that Rachuy receive the agreed‐upon 60‐month

sentence. Therefore, the government’s conduct did not con‐

stitute a breach of the plea agreement.

In his second breach‐related claim, Rachuy contends that

the government failed to recommend that his loss amount be

based solely on the checks used to purchase the vehicles

charged in the superseding indictment, but his claim rests on

a mischaracterization of the plea agreement. The govern‐

ment promised to recommend a loss amount “based only on

the checks returned on the four bank accounts involved in

the purchase of the vehicles charged in the superseding in‐

dictment.” So, the unambiguous terms of this clause do not

mandate that the loss calculation be based only on the four

checks upon which Rachuy’s criminal charges were based.

Instead, the government was authorized to include any rele‐

vant bad checks from the accounts that Rachuy used to steal

cars. As a result, both the checks that Rachuy issued to steal

the cars charged in the indictment as well as any other

checks he issued from those same accounts would be rele‐

vant conduct for sentencing purposes. The government’s

loss calculation was consistent with the terms of the plea

agreement, and because Rachuy cannot show a breach of

this provision, he cannot prevail on plain error review.

In his third breach‐related claim, Rachuy contends that

the government breached the plea agreement by opposing

his pro se Federal Rule of Criminal Procedure 41(g) motion

for the return of seized property. Rachuy argues that de no‐
No. 12‐1376 9

vo review is appropriate because, before filing his motion for

the return of his property with the district court, he made it

clear in his pro se motion and in several letters to the district

court that he would hold the government to its promise not

to oppose the motion. This, he alleges, preserved the argu‐

ment for appellate review because the district court was

alerted that any government opposition would breach the

plea agreement. As support, he points to a First Circuit case,

United States v. Gonczy, which states that an “objection is suf‐

ficiently raised as long as it brings the purported breach of

the plea agreement to the district court’s attention.” 357 F.3d

50, 52 (1st Cir. 2004). The government, on the other hand, ar‐

gues that plain error review is the appropriate standard be‐

cause Rachuy did not formally object at the district court

level.  

We do not need to decide which standard applies be‐

cause Rachuy loses under either standard. In the plea

agreement between the parties, the United States agreed not

to oppose Rachuy’s request for the return of his property

that was held by state or local authorities. On December 19,

2011, Rachuy filed a pro se motion in federal court for the

return of evidence seized by state and local authorities. In

response, the government filed a motion asserting that there

was no basis for making the claim in federal court because

the property was in the custody of the state authorities and

that the proper forum for his request was in state court. Af‐

ter considering the government’s response, the district court

denied Rachuy’s motion, partly for jurisdictional reasons.

We conclude that the government’s response to Rachuy’s

motion did not constitute a breach because the government

did not “oppose” Rachuy’s motion in a legal sense. Rather,
10 No. 12‐1376

the government simply alerted the court to the limits of its

jurisdiction, which this court has said that all parties should

do. See Hart v. Terminex Int’l, 336 F.3d 541, 544 (7th Cir. 2003)

(“We ... emphasize that this waste of federal judicial re‐

sources and delay of justice was avoidable and reiterate our

admonitions to future litigants to meticulously review the

limits of federal jurisdiction”). Rachuy’s request was not

made in the proper forum because he asked a federal district

court to order state authorities to turn over his property they

seized in connection with a state prosecution against him.

This is power that a federal district court does not have the

authority to exercise. See generally Smith v. Phillips, 455 U.S.

209, 221 (1982) (“Federal courts hold no supervisory authori‐

ty over state judicial proceedings.”).  

Rachuy’s claim would have merit if he alleged that the

government opposed the motions he made in state court.

However, the government did not file a motion in opposi‐

tion to the motion Rachuy filed in state court. When Rachuy

made appropriate requests for return of his property in state

court, the government lived up to its end of the bargain and

did not oppose those requests. Because the government did

not oppose Rachuy’s motion, but simply alerted the federal

court to the boundaries of its jurisdiction (something this

court encourages parties to do), the government did not

breach its agreement with Rachuy.  

B. No Abuse of Discretion in Denying Rachuy’s Re‐

quest for an Evidentiary Hearing

Rachuy contends that the district court abused its discre‐

tion because it failed to hold an evidentiary hearing on his

request for return of his property. We review a district

court’s denial of a Rule 41(g) motion for return of seized
No. 12‐1376 11

property for abuse of discretion. Stevens v. United States, 530

F.3d 502, 506 (7th Cir. 2008). A court abuses its discretion

when it makes an error of law or when it makes a clearly er‐

roneous finding of fact. United States v. Freeman, 650 F.3d 673,

678–79 (7th Cir. 2011).  

As we previously mentioned, Rachuy’s motion was

properly dismissed on jurisdictional grounds. When a court

finds that it lacks jurisdiction, it is improper for it to proceed

to the merits of the issue. “Without jurisdiction the court

cannot proceed at all in any cause. Jurisdiction is the power

to declare the law, and when it ceases to exist, the only func‐

tion remaining to the court is that of announcing the fact and

dismissing the cause.” Steel Co. v. Citizens for a Better Env’t,

523 U.S. 83, 94 (1998) (internal quotation marks omitted).

The district court did not abuse its discretion by denying the

motion without holding an evidentiary hearing because

there was no need to accept evidence.

C. No Plain Error Regarding Credit for Time Served  

Rachuy asserts that he should have been sentenced under

U.S.S.G. § 5G1.3(b) rather than under § 5G1.3(c), and given

credit for a sentence he received for a related fraud convic‐

tion in Minnesota. We do not agree. This court’s review of

sentencing decisions proceeds in two steps. United States v.

Jackson, 547 F.3d 786, 792 (7th Cir. 2008). First, we ensure that

the district court did not commit any “significant procedural

error,” including failing to calculate, or improperly calculat‐

ing, the applicable Guidelines range, treating the Guidelines

as mandatory, or failing to consider the § 3553(a) factors. Id.

Once convinced that the sentencing judge followed correct

procedure, we then consider the reasonableness of the sen‐

tence. Id. In conducting this review, we will generally set
12 No. 12‐1376

aside factual findings underlying the sentence only if they

are clearly erroneous, and review questions of law de novo.

United States v. Bothun, 424 F.3d 582, 586 (7th Cir. 2005).

However, because Rachuy did not raise this issue below, we

review the district court’s decision for plain error. United

States v. Martin, 692 F.3d 760, 763 (7th Cir. 2012).

Because Rachuy’s Minnesota conviction was not the basis

for an offense‐level increase, the option of being sentenced

under § 5G1.3(b) was not available to him. Under § 5G1.3(c),

a sentencing judge has the discretion to impose a sentence

that runs concurrently with a prior undischarged term of

imprisonment, which the court did here by ordering Ra‐

chuy’s federal sentence to run concurrently with his Minne‐

sota sentence. Rachuy would prefer to be sentenced under

§ 5G1.3(b) because when that provision applies, the court

may adjust the sentence “for any period of imprisonment

already served on the undischarged term of imprisonment if

the court determines that such period of imprisonment will

not be credited to the federal sentence by the Bureau of Pris‐

ons.” § 5G1.3(b)(1). A sentencing judge looks to § 5G1.3(b)

only if that “term of imprisonment resulted from another

offense that is relevant conduct to the instant offense of con‐

viction ... and was the basis for an increase in the offense

level for the instant offense.” United States v. Broadnax, 536

F.3d 695, 700 (7th Cir. 2008). Before a defendant can benefit

from this section, he must show that both elements of

§ 5G1.3(b) are met. Id. at 701.

Rachuy is not eligible to be sentenced under § 5G1.3(b)

because he does not meet both elements. Rachuy satisfies the

first condition set out in § 5G1.3(b) because his Minnesota

conviction was the relevant conduct in the instant offense.
No. 12‐1376 13

But, he fails to meet the second condition of § 5G1.3(b) be‐

cause his Minnesota conviction was not the basis for an of‐

fense‐level increase. In his plea agreement, Rachuy agreed

that the government would recommend that the court calcu‐

late loss“ based only on the checks returned on the four bank

accounts involved in the purchase of the vehicles charged in

the superseding indictment.” The loss amount associated

with these four accounts for both state and federal cases to‐

taled $136,398.63. The government subtracted $14,279.32—

the amount associated with his Minnesota state conviction—

from $136,398.63, to arrive at a loss amount of $122,119.71.

This $122,119.71 figure was the loss amount only associated

with the federal case and on which Rachuy’s offense level

was based.  

Therefore, we conclude that the district court correctly

calculated Rachuy’s Guidelines range. Pursuant to U.S.S.G.

§ 2B1.1(b)(1)(F), any monetary losses between $120,000 and

$199,999 result in a 10‐level increase in offense level. Even

without the $14,279.32 loss from the Minnesota conviction,

Rachuy’s total loss amount was still above the $120,000

threshold necessary to trigger the 10‐level increase. Ulti‐

mately, even though the state conviction was included as

relevant conduct, Rachuy received no criminal history points

for that offense, and the loss associated with it was not used

to calculate his offense level. Given that the state conviction

was not “the basis for an increase in the offense level” for

Rachuy’s federal transporting stolen vehicle conviction, he

was not eligible to be sentenced under § 5G1.3(b) and the

court did not err by sentencing him under § 5G1.3(c).

III. CONCLUSION

The judgment of the district court is AFFIRMED.