In the

United States Court of Appeals

For the Seventh Circuit

____________

Nos. 01-3248, 01-3491 & 01-3580

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

CLIFFORD J. LANAS, RICHARD A. HENDERSHOT,

and JAMES A. BATTISTA,

Defendants-Appellants.

____________

Appeals from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 99 CR 529—Rebecca R. Pallmeyer, Judge.

____________

ARGUED DECEMBER 4, 2002—DECIDED APRIL 4, 2003

____________

Before FLAUM, Chief Judge, and COFFEY and DIANE P.

WOOD, Circuit Judges.

FLAUM, Chief Judge. Richard Hendershot, James Battista,

and Clifford Lanas were convicted on mail fraud charges

stemming from a scheme to defraud Hendershot’s former

employer, Alexsis Risk Management, Inc. (“Alexsis”), of

its intangible right to his honest services. See 18 U.S.C.

§§ 1341, 1346. The defendants now challenge their convictions and sentences on numerous grounds. We affirm in all

respects. 
2 Nos. 01-3248, 01-3491 & 01-3580

I. BACKGROUND

We provide just a general description of the facts here;

where additional facts are relevant to particular arguments,

we mention them later. Alexsis is engaged in the business

of third-party claims administration, handling mostly

workers’ compensation claims for large corporations.

Defendant Hendershot worked in Alexsis’s Chicago office

from 1988 to 1994 as a claims adjuster. In this capacity he

was responsible for evaluating workers’ compensation

claims filed against Alexsis clients and determining

whether and to what extent the claims were compensable.

This sometimes entailed hiring outside vendors, such as

private investigators, to conduct surveillance on a given

claimant. 

The charges in this case stemmed from a scheme made

possible by the free hand Hendershot had in selecting the

vendors to perform Alexsis work. Basically, the scheme

worked like this: Hendershot sent surveillance work to a

number of vendors who in exchange agreed to give him a

cash kickback for each job. Per agreement with Hendershot,

these vendors oftentimes billed for two investigators when

only one was used or billed for services that were never

performed at all. Also, as an additional ploy, Hendershot

frequently hired multiple investigators to perform surveillance on the same claimant. Then, Hendershot approved

the invoices submitted by the vendors and sent the information necessary to process payment to Alexsis’s headquarters

in Michigan. Alexsis, totally unaware of the scam, cut and

mailed checks from its headquarters; the vendors then

deposited the checks while withdrawing enough cash to pay

Hendershot the agreed-upon kickback. 

According to Count 1 of the three-count indictment, from

1988 to 1994, Hendershot received kickbacks from the

following six private investigation or security firms: John

Herley and Associates, Thomas Herley and Associates,
Nos. 01-3248, 01-3491 & 01-3580 3

Professional Protection Services (“PPS”), Megco, Inc., Three

Star Detective and Security Agency (“Three Star Detective

Agency”), and Park Investigations and Detective Agency

(“Park Investigations”). Count 1 also alleged that Hendershot tried to solicit kickbacks from the law firm of Stevenson, Rusin & Friedman (“the Rusin law firm”), though his

attempts were ultimately unsuccessful. Defendant Battista,

a political associate of Hendershot, was alleged to be the

“bagman”—collecting the kickbacks for Hendershot while

retaining a portion for himself—with respect to all the

named vendors except John and Thomas Herley. Defendant

Lanas was the owner of both Three Star Detective Agency

and Park Investigations. 

Counts 2 and 3 incorporated by reference the description

of the scheme in Count 1, but each count listed a different

mailing that was allegedly used to further the scheme.

Count 1, which charged only Hendershot, alleged the

mailing of an Alexsis check to Thomas Herley on July 7,

1994. Count 2 also charged Hendershot alone and claimed

that a second Alexsis check was mailed to Thomas Herley

on July 7, 1994. Finally, Count 3 charged all three defendants and alleged the mailing of an Alexsis check to Park

Investigations on July 22, 1994. 

Prior to trial Battista and Lanas moved to sever Counts

1 and 2 from Count 3, claiming that the scheme to defraud

as it pertained to Lanas’s Three Star Detective Agency and

Park Investigations was separate from the scheme as it

pertained to the other vendors named in the indictment. In

addition all three defendants moved to strike as surplusage

any references to transactions not involving Lanas or

Thomas Herley—the vendors alleged to have received the

mailings charged in the respective counts. The district

court, however, agreed with the government that the indictment recited a single overarching scheme to defraud,

which was not limited to the mailings specifically identified

in the indictment, and so denied the motions. 
4 Nos. 01-3248, 01-3491 & 01-3580

The case proceeded to a joint trial, after which the jury

found the defendants guilty as charged. Though the trial

concluded in March 2000 and the presentence investigation

reports were filed four months later, the defendants were

not sentenced until August and September 2001. Still, the

district court relied on the 1998 version of the Sentencing

Guidelines, which gives courts discretion “in the atypical

case” to sentence a defendant under a guideline other than

the one referenced in the Statutory Index. Then, after

determining that the commercial bribery and kickbacks

guideline, U.S.S.G. § 2B4.1, was a better fit than the fraud

and deceit guideline, id. § 2F1.1, the court sentenced the

defendants as follows: Hendershot to 48 months’, Battista

to 27 months’, and Lanas to 5 months’ imprisonment.

In addition all three defendants were ordered to serve

36 months of supervised release and to pay $233,720,

$162,300, and $39,900 in restitution, respectively.

II. ANALYSIS

A. Joinder

The defendants claim on appeal that they should not have

been joined in a single indictment because they were not

“alleged to have participated in the same act or transaction

or in the same series of acts or transactions constituting an

offense or offenses.” Fed. R. Crim. P. 8(b). Whether there

was misjoinder under Rule 8 is an issue we review de novo.

United States v. Todosijevic, 161 F.3d 479, 483 (7th Cir.

1998). Further, in assessing whether joinder was proper, we

look solely to the face of the indictment and not to the

evidence adduced later at trial. United States v. Alexander,

135 F.3d 470, 475 (7th Cir. 1998). 

We have interpreted the language “same series of acts or

transactions” to mean “acts or transactions that are pursuant to a common plan or common scheme.” Todosijevic,
Nos. 01-3248, 01-3491 & 01-3580 5

161 F.3d at 484. The defendants maintain that the transactions involved here were not part of a common plan or

scheme because “the evidence at trial demonstrated the

evidentiary and temporal connections of the various ‘offenses’ listed in the indictment . . . ranged from moderate

to quite slim.” But as we have already said, whether there

was misjoinder under Rule 8 is determined by looking

solely at the allegations in the indictment; it is thus

irrelevant what was shown by the proof at trial. Alexander,

135 F.3d at 475. And the allegations in this indictment

demonstrate that joinder was proper. Each count recites

facts that establish one unified scheme to defraud the same

victim (Alexsis) through (1) the solicitation and receipt of

kickbacks by Hendershot and Battista, (2) fraudulent

tactics on the part of the six vendors named in the indictment, such as over-billing and billing for services that were

never performed, and (3) Hendershot’s hiring of each of the

six vendors to conduct surveillance on the same claimant.

See Todosijevic, 161 F.3d at 484 (joinder proper because

indictment set forth a “joint, systematic, integrated fraudulent venture on the part of each of the defendant[s] designed to defraud creditors”). Hendershot was at the core of

the scheme, and Battista was involved in every transaction

except for those pertaining to John and Thomas Herley.

Lanas’s involvement was more minimal, but this does not,

as the defendants would have us believe, negate the

existence of a single scheme; all it means is that Lanas’s

liability is limited to the extent of his participation in the

scheme. See United States v. Polichemi, 219 F.3d 698, 706

(7th Cir. 2000) (single wire fraud scheme despite fact that

each participant’s role varied from transaction to transaction).

The defendants also contend that Count 3 was misjoined

with Counts 1 and 2 under Fed. R. Crim. P. 8(a), which

permits joinder of offenses if they “are of the same or

similar character or are based . . . on two or more acts or
6 Nos. 01-3248, 01-3491 & 01-3580

transactions connected together or constituting parts of a

common scheme or plan.” This argument is a nonstarter—

one, because the indictment does allege a common scheme

or plan, and two, because the defendants concede in their

appeal brief that all three counts are “the same or similar

in type.” Despite this concession the defendants seem to

believe that the joinder can still be deemed improper because the “overall temporal proximity between [the offenses] was slight.” But the case the defendants cite in

support of their position, United States v. Coleman, 22 F.3d

126 (7th Cir. 1994), holds precisely the opposite. According

to Coleman, “the similarity of character of different offenses

does not significantly depend on their separation in time,”

id. at 133, so counts of like class may be joined even if they

are not temporally or evidentially related. Id. at 133-34;

accord Alexander, 135 F.3d at 476. 

Finally, to the extent the defendants are claiming that

the district court should have severed their trials under

Fed. R. Crim. P. 14, their argument fails. See United States

v. Rollins, 301 F.3d 511, 517 (7th Cir. 2002) (even when

joinder under Rule 8 is proper, Rule 14 authorizes district

court to grant severance when it appears that defendant

will suffer prejudice by joinder of either offenses or defendants). The defendants argue, in a rather conclusory

manner, that they were prejudiced by the “spillover” effect

of having the charges tried together. But the district court

instructed the jury to consider the evidence as to each

defendant and each count separately, and we agree with the

government that this was not such a complicated case that

the jury would have difficulty following the instruction. See

United States v. McClurge, 311 F.3d 866, 873 (7th Cir.

2002) (instruction directing jury to give separate consideration to each defendant was sufficient to cure any possibility of prejudice). Moreover, the defendants’ claim of prejudice is further undercut by the fact that much of the

evidence admitted at their joint trial would have been
Nos. 01-3248, 01-3491 & 01-3580 7

admissible against them in separate trials as well. See

United States v. Adeniji, 221 F.3d 1020, 1027 (7th Cir.

2000) (evidence of one participant’s actions in furtherance

of a mail fraud scheme is admissible against other participants in that scheme). 

B. Evidentiary Issues

Relying on Kotteakos v. United States, 328 U.S. 750

(1946), the defendants contend that there was a fatal

variance between the allegations in the indictment “that

there was a single conspiracy and the proof at trial of

multiple schemes/conspiracies with no connection to each

other.” This argument, which we treat as a challenge to

the sufficiency of the evidence, Polichemi, 219 F.3d at 706,

fails for two reasons. First, the defendants were not even

charged with conspiracy, which is a distinct offense, having

distinct elements, from mail fraud. Adeniji, 221 F.3d at

1027; see also United States v. Neely, 980 F.2d 1074, 1089-

90 (7th Cir. 1992) (rejecting claim of prejudicial variance

between indictment’s allegation of a “single conspiracy” and

the proof at trial, which allegedly established “multiple

schemes,” because defendant raising the challenge was

never charged or convicted of conspiracy). Second, the

evidence at trial proved exactly what the indictment

alleged: a single scheme to defraud Alexsis through the

solicitation and receipt of kickbacks by Hendershot and

Battista from vendors such as Lanas. The defendants again

make much of the fact that each participant’s role varied

from transaction to transaction and further assert that

many of the various participants did not even know each

other, but this is all irrelevant so long as the evidence

established each defendant’s own knowing participation in

the scheme, which it did. See Adeniji, 221 F.3d at 1026;

Polichemi, 219 F.3d at 706.
8 Nos. 01-3248, 01-3491 & 01-3580

The defendants also contend that the district court erred

under Fed. R. Evid. 404(b) in admitting “uncharged, other

acts evidence”—specifically, the evidence relating to the

Rusin law firm, PPS, and Megco. Because the defendants

did not raise this issue below, our review is for plain error

only, United States v. Graham, 315 F.3d 777, 782 (7th Cir.

2003), and we find no such error. The defendants’ argument

appears to be based on their belief that the scope of a mail

fraud scheme is limited by the mailings that are specifically

charged in the indictment; so in this case, since the indictment only charged mailings to Thomas Herley and Lanas,

the offense is limited to the portion of the scheme pertaining to them alone. This is wrong, however, because a

mailing in furtherance of a scheme to defraud is simply the

element that confers federal jurisdiction under the mail

fraud statute; but a fraud scheme can produce proceeds

long before the act that ultimately triggers jurisdiction.

United States v. Mankarious, 151 F.3d 694, 705 (7th Cir.

1998). As we have already said, the indictment in this case

set forth one overarching scheme to defraud. The evidence

relating to the Rusin law firm, PPS, and Megco was not

Rule 404(b) evidence at all but was properly admitted as

proof of that overall scheme.

The defendants’ last challenge to the evidence is that it

was insufficient to prove that the three mailings charged in

the indictment were in furtherance of the scheme to

defraud. First, the defendants claim that the mailings, all

of which occurred in July 1994, could not have been in

furtherance of the scheme because Hendershot had left

Alexsis by that time. It is true that one of the government’s

witnesses testified that Hendershot stopped working for

Alexsis in May 1994. But other evidence showed that

Hendershot’s resignation letter was actually dated July 25,

1994, and his effective termination date was not until

August 5. We will overturn a verdict only if no rational trier

of fact could have found the defendant guilty, Graham, 315
Nos. 01-3248, 01-3491 & 01-3580 9

F.3d at 781, and here, based on the date of Hendershot’s

resignation letter and his effective termination date, the

jury could easily have found that Hendershot was still at

Alexsis (and still soliciting and receiving kickbacks) at the

time of the July 1994 mailings. 

The defendants challenge the proof as to Count 3 on an

additional ground—that there was insufficient evidence to

show that the July 22, 1994, mailing to Park Investigations

was in furtherance of the fraud scheme because there was

no proof that Hendershot or Battista received any kickback

out of that mailing. On this point the government offered

the testimony of Richard Lantini, an employee of Lanas’s

Three Star Detective Agency and part-owner of Park Investigations. Lantini introduced Lanas to Battista in 1993,

and later, once Lanas had agreed to participate in the kickback scheme, Lantini was the one who went to Battista’s

home to pay him the kickback for each job. Lantini never

paid Hendershot directly, but Hendershot was named as the

claims adjuster on almost all of the invoices. Further,

Lantini testified that Battista told him that half of the

money was going to Hendershot. 

In April 1994 Lantini was convicted on a federal drug

charge. According to Lantini’s testimony, before he was

taken into custody, Lanas told him that he would “be taking

care of everything at the business. And any money that

would be coming . . . he would continue to put it in the

bank, and . . . he would take care of the payments to Mr.

Battista.” Then, in July 1994 after Lantini was already in

custody, he and Lanas had a phone conversation during

which Lanas stated that “he was taking care of everything

and he was meeting with Mr. Battista.” 

The defendants now claim that Lantini’s testimony was

insufficient to show that the fraud scheme continued after

his incarceration in April 1994, and therefore that there

was no proof that the July 22, 1994, mailing charged in
10 Nos. 01-3248, 01-3491 & 01-3580

Count 3 was in furtherance of the scheme. We disagree

with this characterization of the evidence. The defendants

attempt to portray Lanas’s statements that he was “taking

care of everything” and “was meeting with Mr. Battista” as

innocent remarks having nothing to do with the scheme,

but the jury could have easily inferred from those statements that Lanas was continuing, in Lantini’s place, to pay

kickbacks to Battista in exchange for Alexsis work. And

there was additional evidence to support the jury’s conclusion: Lantini’s testimony that Lanas told him, before he was

imprisoned, that Lanas would be “tak[ing] care of the

payments to Mr. Battista,” and bank records showing that,

after Lantini was imprisoned, Lanas continued to deposit

Alexsis checks while at the same time withdrawing cash in

the exact amount of the kickback owed. Viewing all this

evidence most favorably to the government, as we must, id.,

we conclude that a reasonable jury could have found that

the July 22, 1994, mailing to Lanas resulted in a kickback

to Battista. We likewise conclude that the jury could have

found that the mailing resulted in a kickback to Hendershot, based on the fact that he was named as the claims

adjuster on nearly all of Lanas’s invoices and on Lantini’s

testimony that Battista said that half of the kickback

money was going to Hendershot. 

In a last-ditch effort, the defendants attack Lantini’s

testimony as “inherently suspect” under the principles of

Lilly v. Virginia, 527 U.S. 116 (1999). The defendants have

come close to waiving this point by failing to develop it in

their appeal brief. Matthews v. Commonwealth Edison Co.,

128 F.3d 1194, 1197-98 (7th Cir. 1997). But even assuming

no waiver, their challenge fails. Lilly, which holds that it is

a violation of the Confrontation Clause to admit the blameshifting confession of a non-testifying accomplice, 527 U.S.

at 134, simply has no application here. And finally, to the

extent the defendants are attacking Lantini’s credibility, we

do not find his testimony to be “contrary to the laws of
Nos. 01-3248, 01-3491 & 01-3580 11

nature or unbelievable on its face,” United States v. Scott,

145 F.3d 878, 883 (7th Cir. 1998), and therefore reject their

argument. 

C. New Trial Based on Newly Discovered Evidence

At trial the government called Michael Rusin of the Rusin

law firm as one of its main witnesses. Rusin testified on

direct examination that in 1991 Hendershot and Battista

offered his firm the legal work for all of Alexsis’s clients in

exchange for a substantial kickback. At the time Rusin’s

firm was already handling some Alexsis clients, but Rusin

stated that, once he turned down the kickback offer, no new

Alexsis business came the firm’s way. On cross-examination, however, Rusin was more equivocal, stating that after

the 1991 meeting with Hendershot and Battista his firm

received new cases from Alexsis clients, but they were from

existing clients the firm had been handling since before the

meeting. As to whether the firm received business from new

Alexsis clients, Rusin said, “I can’t honestly say. . . . I know

I didn’t receive any more files from Mr. Hendershot.” Rusin

also testified that he could not produce the billing records

for the firm’s Alexsis clients because those records were not

available. 

 After trial the defendants learned that the billing records

were in fact available and showed that the Rusin law firm

did receive new Alexsis billings after Rusin turned down the

kickback offer. The defendants moved for a new trial on the

basis of this newly discovered evidence, but the district

court denied their motion. We review that decision for

abuse of discretion. McClurge, 311 F.3d at 874. A new trial

based on newly discovered evidence that discloses false

testimony should only be granted if (1) the court is reasonably satisfied that the witness testified falsely, (2) the jury

might have reached a different conclusion without the false

testimony, and (3) the moving party was taken by surprise
12 Nos. 01-3248, 01-3491 & 01-3580

by the false testimony and was unprepared to meet it.

United States v. Reed, 986 F.2d 191, 192-93 (7th Cir. 1993).

The defendants’ challenge fails on a number of grounds.

First, the district court properly found that Rusin’s testimony on cross-examination that he could not recall whether

he obtained new Alexsis business was sufficiently equivocal

to support a finding of no perjury. Also, the defendants fail

to show that the jury might have reached a different verdict

if the newly discovered information had been available at

trial. The defendants maintain that the evidence could have

been used to impeach Rusin’s credibility, asserting that the

government presented Rusin as its “golden” witness—“an

honest lawyer, who rejected kickbacks” and whose “unrebutted, ‘loss of business’ testimony was compelling evidence

that the kickback offer occurred.” But even assuming that

Rusin’s credibility could have been impeached in this

manner, the government presented so much additional

evidence—such as testimony from several other witnesses,

Alexsis business records, and various bank records—that

the jury could easily have found the defendants guilty even

without Rusin’s testimony. And finally, the defendants

cannot claim surprise because they had subpoenaed the

Rusin law firm’s billing records before trial, knew well in

advance of trial that Rusin did not intend to produce the

information, yet failed to seek judicial enforcement of the

subpoena prior to Rusin’s testifying. 

D. Juror Misconduct

Midway through trial the defendants became aware that

a regular spectator, Mr. Bell, had been in daily contact with

a juror, Mrs. Alexander. As a spectator Mr. Bell was privy

to sidebar conversations and other proceedings that were

not intended to be heard by the jury. Thus, at the request

of defense counsel, the district court questioned Mr. Bell to

determine whether he and Mrs. Alexander had ever dis-
Nos. 01-3248, 01-3491 & 01-3580 13

cussed the case. In response Mr. Bell stated that he had

been accompanying Mrs. Alexander to the courthouse each

day but had not discussed the case with her at all: “Not one

single time. I take this very seriously, very serious.” When

the court then asked the defendants whether they had any

further questions, counsel for Hendershot and Battista both

said, “Not at all,” while counsel for Lanas said nothing. At

no time did any of the defendants ask to have Mrs. Alexander questioned, nor did they ever invoke Fed. R. Evid.

606(b), which permits a juror to testify after the verdict

has been rendered “on the question whether extraneous

prejudicial information was improperly brought to the jury’s

attention” and on “whether any outside influence was

improperly brought to bear upon any juror.”

The defendants now claim that the district court erred in

failing to receive assurances from Mrs. Alexander herself

that she and Mr. Bell had not discussed off-the-record

proceedings. We agree with the government, however, that

Hendershot and Battista have waived this point by affirmatively representing that they were satisfied, based on the

questioning of Mr. Bell, that Mrs. Alexander had not been

improperly influenced. United States v. Walton, 255 F.3d

437, 441 (7th Cir. 2001). But this sort of affirmative relinquishment of rights is missing with regard to Lanas, who

has therefore merely forfeited, not waived, the issue. Id.

Accordingly, we review his challenge for plain error, id., and

we find that there was none. The district court is under no

obligation to investigate the possibility of extraneous

influence on a juror unless the defendants have made a

colorable showing of taint. United States v. Davis, 15 F.3d

1393, 1412 (7th Cir. 1994). Here, the court conducted an

adequate inquiry into any potential taint by questioning

Mr. Bell in open court regarding his communications with

Mrs. Alexander. Once Mr. Bell responded that he had not

discussed the case with her at all, there was no reason for

the court to continue to believe that Mrs. Alexander might
14 Nos. 01-3248, 01-3491 & 01-3580

have been improperly influenced. This is especially true

considering that defense counsel expressed satisfaction with

Mr. Bell’s responses and did not raise any further objection

at any other time. 

E. Sentencing 

We turn finally to the sentencing issues. The defendants

first assert that the district court erred by proceeding under

the commercial bribery and kickbacks guideline, U.S.S.G.

§ 2B4.1, rather than the guideline covering offenses involving fraud or deceit, id. § 2F1.1. This is an issue that we

review de novo. United States v. Serpico, No. 02-1702, 2003

WL 359634, at *5 (7th Cir. Feb. 20, 2003).

As an initial matter, we note that, because the defendants

were not sentenced until August and September 2001, the

district court erred by using the 1998 version of the Guidelines, rather than the 2000 version. See U.S.S.G. § 1B1.11

(“The court shall use the Guidelines Manual in effect on the

date that the defendant is sentenced.”). Under § 1B1.2 of

the 1998 Manual, the district court had discretion “in the

atypical case” to sentence a defendant under a guideline

other than the one recommended in the Statutory Index

(Appendix A) for the offense of conviction, provided the

charged conduct fit more closely within the other guideline.

But the 2000 amendments dropped this language in order

“to emphasize that the sentencing court must apply the

offense guideline referenced in the Statutory Index for the

statute of conviction unless the case falls within the limited

‘stipulation’ exception set forth in § 1B1.2(a).” United States

v. Gracia, 272 F.3d 866, 876 (7th Cir. 2001) (quoting

U.S.S.G. App. C Supp., amend. 591, at 32 (2000)). For the

offense of mail fraud, 18 U.S.C. § 1341, the Statutory Index

lists two possible guidelines: §§ 2C1.7 and 2F1.1. Neither

party claims that § 2C1.7 is applicable, which leaves
Nos. 01-3248, 01-3491 & 01-3580 15

§ 2F1.1, the guideline the defendants say the court was

mandated to apply.

But the application notes to § 2F1.1 lead us to a different

conclusion. Application Note 14 explains that “[i]n certain

. . . cases, the mail or wire fraud statutes, or other relatively broad statutes, are used primarily as jurisdictional

bases for the prosecution of other offenses.” U.S.S.G.

§ 2F1.1, comment. (n.14). Thus, in those situations the

court is allowed to use a guideline other than § 2F1.1 so

long as “the indictment or information setting forth the

count of conviction . . . establishes an offense more aptly

covered by another guideline.” Id. Applying the wrong

version of the Guidelines therefore had no practical effect

in this case; under either the 1998 or 2000 version, the

court had the discretion to choose the guideline that best

fit the defendants’ charged conduct. See United States v.

Poirier, No. 01-15989, 2003 WL 302262, at *6, n.8 (11th Cir.

Feb. 13, 2003) (noting that the 2000 amendments left intact

Application Note 14 to § 2F1.1). 

The question then is whether the defendants’ conduct is

“more aptly” covered by the commercial bribery and kickbacks guideline than by the fraud and deceit guideline.

With regard to Hendershot and Battista, we conclude that

the district court made the right choice. As we explained in

United States v. Hauptman, 111 F.3d 48 (7th Cir. 1997), in

the usual case of commercial bribery, “either the person

giving the bribe is being shaken down by a customer’s

purchasing agent, or, if the briber is the one taking the

initiative, his objective is merely to get ‘his share’ of the

customer’s business.” Id. at 50; see also Mantek Div. of NCH

Corp. v. Share Corp., 780 F.2d 702, 705 n.3 (7th Cir. 1986)

(“The essence of commercial bribery is that the seller is

secretly giving a bribe to the customer’s agent to induce the

agent to betray his principal (the customer) by purchasing

the seller’s product even though it is not in the customer’s
16 Nos. 01-3248, 01-3491 & 01-3580

best interest.”). We have the former situation here: the

essence of both Hendershot’s and Battista’s offense is that

they, the purchasing agents, solicited and accepted bribes

from various sellers and by doing so deprived Alexsis, the

customer, of Hendershot’s honest services. Granted, Hendershot and Battista were involved in straight fraud as

well—for instance by ordering multiple investigations on

the same claimant—but we agree with the district court

that the core of their crime more closely resembles fraud

achieved through bribery. We draw support for this conclusion from other cases that have applied bribery guidelines

to fraud convictions. E.g., Serpico, 2003 WL 359634, at

*5-*6; Poirier, 2003 WL 302262, at *6-*7; United States v.

Montani, 204 F.3d 761, 769-71 (7th Cir. 2000). 

With regard to Lanas, however, the commercial bribery

and kickbacks guideline is more of an awkward fit. True,

Lanas was one of the people paying bribes to Hendershot

and Battista, but was the paying of bribes the “essence” of

his offense? We believe that it was not. Lanas’s situation is

much like Hauptman, where we found that the bribery was

“the means used to defraud [the customer’s] employer of a

substantial amount of money.” 111 F.3d at 51. So is the

case here. Initially, Lanas refused Battista’s offer of surveillance work in exchange for kickbacks because Lanas

believed the kickback to be too high to make the proposition

worthwhile. Lanas only agreed to the offer once he and

Battista decided that he would bill Alexsis for two investigators on each job even though he was only using one. The

indictment and proof at trial establish that Lanas submitted a number of these “false and fraudulent” invoices and

thereby defrauded Alexsis out of a substantial sum of

money. Thus, as in Hauptman, this was not “merely a case

in which a bribe deprives the bribed employee’s employer of

the employee’s undivided loyalty,” id. at 50-51; it was a case

of straight, substantial fraud made possible by the bribe. 
Nos. 01-3248, 01-3491 & 01-3580 17

So we disagree with the district court’s decision to apply

the commercial bribery and kickbacks guideline to Lanas,

but we must of course decide whether the error was harmless. The base offense level for § 2B4.1 is two levels higher

than for § 2F1.1, but nonetheless, the government says that

it would not have made a difference which guideline was

used because a two-level enhancement for “more than

minimal planning” would have applied had Lanas been

sentenced under § 2F1.1. See U.S.S.G. § 2F1.1(b)(2)(A). The

defendants respond that this is merely speculation as the

district court did not make any specific findings regarding

such an enhancement. Instead, the court merely noted “its

uncertainty about whether selection of § 2F1.1 would make

a genuine difference in this case, where each Defendant is

likely to face a two-level increase for the specific offense

characteristic of ‘more than minimal planning.’ ”

Despite the lack of specific findings, however, we conclude

that the record itself is sufficient to show that an adjustment for more than minimal planning would have applied

had Lanas been properly sentenced under § 2F1.1. We have

said that the enhancement is appropriate where “criminal

acts, each of which are not purely opportune, are repeated

over a period of time.” United States v. Sonsalla, 241 F.3d

904, 907 (7th Cir. 2001). In this case the district court

found that Lanas was involved in no less than forty-eight

transactions with Hendershot and Battista. This clearly

suffices as more than minimal planning, and so whether

Lanas was sentenced under § 2B4.1 or § 2F1.1, his offense

level would have been the same. Further, we note that

Lanas is by now no longer in prison, and so the only

possible purpose remand would serve would be to give the

district court the opportunity to change his term of super-
18 Nos. 01-3248, 01-3491 & 01-3580

1 Because Lanas is still serving his term of supervised release, his

appeal is not moot. United States v. Trotter, 270 F.3d 1150, 1152-

53 (7th Cir. 2001).

USCA-02-C-0072—4-4-03

vised release.1 But because the court has already made the

decision to impose the statutory maximum term of three

years applicable to Class D felonies, see 18 U.S.C. § 3583(b),

remand for this purpose would almost certainly be fruitless.

Finally, the defendants claim that their offense level adjustment for the amount of loss should have been calculated

according to the loss to Alexsis and not by their gain. But

the defendants do not give any reasoning in support of

this argument (which appears to be totally meritless, see

U.S.S.G. §§ 2B4.1(b)(1), 2F1.1, comment. (n.9)), nor do they

explain what the loss figure should be and how it would

affect their sentences. For these reasons we agree with the

government that this issue has been waived. Matthews, 128

F.3d at 1197-98. 

III. CONCLUSION

The judgment of the district court is AFFIRMED in all

respects.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit