In the

United States Court of Appeals

For the Seventh Circuit

No. 12-2153

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

LORI HARGIS,

Defendant-Appellant.

Appeal from the United States District Court for the 

Southern District of Indiana, Evansville Division.

No. 3:11CR00001-001 — Richard L. Young, Chief Judge.

ARGUED SEPTEMBER 7, 2012 — DECIDED APRIL 3, 2014

Before CUDAHY, ROVNER, and TINDER, Circuit Judges.

ROVNER, Circuit Judge. Lori Hargis solicited Leslie Vashaun

White to burn down her house so that she could collect a

settlement from her insurance company. Hargis was charged

with conspiracy to use fire to commit wire fraud, see 18 U.S.C.

§ 844(m), and unlawful structuring of cash withdrawals to

avoid financial reporting requirements, see 31 U.S.C. §§ 5313,

5324(a)(3), 5322(a). She pleaded guilty to the conspiracy charge

in exchange for the government dismissing the structuring
2 No. 12-2153

charge, and the district court imposed an above-guidelines

sentence of 60 months imprisonment. She asserts on appeal

that the district court erred when it applied upward

adjustments for obstruction of justice, see U.S.S.G. § 3C1.1, and

her aggravating role in the offense, see id. § 3B1.1(c). She also

challenges the reasonableness of her above-guidelines

sentence. Because the facts justify the district court’s decision

to apply the upward adjustments, and the district judge

adequately explained his rationale for imposing the 60-month

sentence, we affirm the district court’s judgment.

I.

Hargis put her house in Henderson, Kentucky, on the

market, and when it proved difficult to sell she solicited White

to burn down the house. She agreed to pay him $10,000 from

the money that she anticipated receiving from her

homeowner’s-insurance policy. White burned down the house

in December 2007, and Hargis and White were each charged

with conspiracy to use fire to commit wire fraud, see 18 U.S.C.

§ 844(m), and unlawful structuring of cash withdrawals, see 31

U.S.C. §§ 5313, 5324(a)(3), 5322(a). 

Hargis initially intended to plead guilty, but at the changeof-plea hearing she testified that, after arranging for White to

burn down the house, she changed her mind and called White,

telling him not to go through with the plan. She told the district

court that she never again discussed the idea with White, but

he nevertheless burned down the house three months later.

After hearing this testimony, the court rejected Hargis’s plea,

reasoning that she was unable to admit guilt if she claimed to

have withdrawn from the conspiracy. 
No. 12-2153 3

The case was set for a jury trial, but a few days before trial

Hargis notified the court that she wished to plead guilty after

all. At the change-of-plea hearing this time, Hargis testified

that after she solicited White’s help, she spoke to him several

times about the plan, and instructed him to set the house afire

after she ensured that her children were not inside. The court

accepted Hargis’s guilty plea on the conspiracy charge, and the

government dismissed the remaining charge. 

At sentencing the district court calculated a total offense

level of 14. This calculation reflected an upward adjustment of

two levels for obstruction of justice, see U.S.S.G. § 3C1.1, two

more levels up for her aggravating role in the offense as an

organizer or leader, see id. § 3B1.1, and a reduction of two

levels for acceptance of responsibility, see id. § 3E1.1(c). With a

criminal history category of I, the court calculated a guidelines

range of 15 to 21 months and sentenced Hargis above that

range, to 60 months in prison. The above-guidelines sentence

was warranted, the court reasoned, because the sentencing

guideline that applies to Hargis’s offense, see id. § 2K1.3, does

not adequately account for the seriousness of her actions in the

arson-for-profit scheme. And when he addressed the 18 U.S.C.

§ 3553(a) factors, the district judge noted that Hargis had

burned down her own children’s home, inflated her insurance

claim, and filed a frivolous lawsuit against her insurance

company, costing the company $100,000 in attorney’s fees. The

court also emphasized that Hargis’s actions involved“a brazen

disregard for the law, for the truth, and for the harm to others.” 
4 No. 12-2153

II.

Hargis appeals, first asserting that the district court clearly

erred when it concluded that she was an organizer or leader of

the offense and imposed a two-level upward adjustment under

U.S.S.G. § 3B1.1(c). She insists that the court impermissibly

relied on only one factor—that she recruited White—in

concluding that she was a leader or organizer, and that factor

alone is insufficient to support the adjustment. But we have

told district courts to “make a commonsense judgment about

the defendant’s relative culpability” when deciding whether to

impose an aggravating role adjustment, United States v. Weaver,

716 F.3d 439, 443 (7th Cir. 2013); see United States v. Figueroa,

682 F.3d 694, 697 (7th Cir. 2012), and the facts here show that

Hargis led the conspiracy: She hatched the idea to burn down

her house and collect the insurance proceeds; recruited White

to carry out the plan; told White which day to set the house

afire; planned to keep most of the profits from the offense; and

attempted to maximize the money that she hoped to receive

from the insurance company by inflating the insurance claims,

filing a frivolous lawsuit against the company, and lying under

oath at her deposition in that case. See United States v. Golden,

954 F.2d 1413, 1418–19 (7th Cir. 1992) (concluding that

defendant was organizer in arson offense because he recruited

co-conspirator and distributed proceeds from the offense,

keeping most for himself); United States v. Paccione, 202 F.3d

622, 624 (2d Cir. 2000) (reasoning that defendants organized

arson because they recruited co-conspirators and gave them

access to property to be set on fire). The district court therefore

did not clearly err when it concluded that Hargis led the

conspiracy.
No. 12-2153 5

Hargis next challenges the district court’s conclusion that

she obstructed justice when she testified at the first change-ofplea hearing that she had changed her mind and told White

not to burn down the house. See U.S.S.G. § 3C1.1. She contends

that her testimony, although false, was nonetheless insufficient

to support a defense that she had abandoned the conspiracy;

therefore, she concludes, she did not willfully attempt to

obstruct justice by attempting to exonerate herself. 

We disagree with Hargis and conclude that her testimony

would have allowed her to advance a withdrawal defense.

See United States v. Walker, 721 F.3d 828, 840 (7th Cir. 2013)

(explaining that conspirator withdraws from conspiracy when

he communicates to co-conspirators that he has abandoned the

conspiracy’s goals); United States v. Emerson, 501 F.3d 804, 811

(7th Cir. 2007) (same). Hargis falsely testified that, after she

told White to burn down the house, she called him and told

him not to go through with the plan. If that testimony were

believed, then White burned down the house of his own,

independent volition. Because this testimony could allow a

reasonable factfinder to conclude that Hargis may have

withdrawn from the conspiracy, it is not an admission of the

crime of conspiracy, so the district court could not accept her

guilty plea to that crime. See United States v. Bahena-Navarro,

678 F.3d 492, 495 (7th Cir. 2012) (explaining that district court

must identify factual basis for guilty plea); United States v. ReaBeltran, 457 F.3d 695, 700–01 (7th Cir. 2006) (noting that factual

basis requirement is designed to protect defendant who may

not realize “that his conduct does not actually fall within the

charge”) (internal citation and quotation marks omitted). As a

result of her lies to the district court, it scheduled the case for
6 No. 12-2153

trial, forcing the government to prepare for trial and the

possibility of an abandonment defense. 

Even if Hargis’s false testimony did not put her guilt as a

co-conspiratorinto question, it had the effect of minimizing her

role in the offense, and that alone is sufficient to warrant the

adjustment. See United States v. White, 582 F.3d 787, 797 (7th

Cir. 2009). By stating that she told White not to go through

with the arson, she could have led the court to believe that

White took it upon himself to burn down the house. And if

believed, her testimony could have then influenced the court

to apply a minor role reduction, giving her a shorter sentence.

See id.; United States v. Sharp, 436 F.3d 730, 738 (7th Cir. 2006).

Because Hargis’s false testimony related to her guilt and role

in the offense, the district court correctly imposed the

adjustment for obstruction of justice. 

Hargis also raises two challenges to the reasonableness of

her above-guidelines sentence. She first asserts that the district

court erred when, in sentencing her on the conspiracy

conviction, it considered evidence that she had committed the

underlying offense of arson. But in sentencing for conspiracy,

it is well within the court’s discretion to consider the

defendant’s commission of the underlying offense, see U.S.S.G.

§ 1B1.4. 

She also argues that the district court did not explain or

justify its above-guideline sentence. But the court adequately

considered the factors under 18 U.S.C. § 3553(a), see United

States v. Hodge, 729 F.3d 717, 721 (7th Cir. 2013), and offered

compelling justifications for the sentence, see United States v.

Bradley, 675 F.3d 1021, 1025 (7th Cir. 2012); United States v.

Johnson, 612 F.3d 889, 896 (7th Cir. 2010). The district judge
No. 12-2153 7

acknowledged that Hargis has no criminal history and is

unlikely to commit future crimes, see 18 U.S.C. § 3553(a)(2)(C).

He also considered several letters from Hargis’s family and

friends attesting to her good character. But the judge identified

several aggravating circumstances. The applicable guideline,

see U.S.S.G. § 2K1.3(a)(5), the judge observed, deals with

explosive materials and does not appear to be designed to

account for arson-for-profit cases like Hargis’s. The judge also

remarked that Hargis’s crime was “incredible” because she

had schemed and lied to the court, her insurance company,

and her own family. See id. § 3553(a)(1). As further evidence of

the seriousness of Hargis’s offense, see id. § 3553(a)(2)(A), the

judge noted that: She burned down the house that she shared

with her two children and contained many of their personal

belongings; the fire posed a substantial risk of harm to a

neighbor who entered the house in fear that Hargis’s children

were inside, as well as the firefighters who responded; and

finally, Hargis inflated the amount of loss from the fire,

committed perjury, and filed a frivolous lawsuit against her

insurance company. Because the district judge discussed

factors “sufficiently particularized” to Hargis’s individual

circumstances and adequately justified the sentence, we find

no error. See United States v. Stinefast, 724 F.3d 925, 932–33 (7th

Cir. 2013) (quotation marks and citation omitted).

AFFIRMED.