In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 05-2657

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

NICK S. BOSCARINO,

Defendant-Appellant.

____________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 02 CR 86-1—John F. Grady, Judge.

____________

ARGUED JANUARY 19, 2006—DECIDED FEBRUARY 8, 2006

____________

Before EASTERBROOK, MANION, and KANNE, Circuit

Judges.

EASTERBROOK, Circuit Judge. A jury concluded that an

insurance agency overcharged the City of Rosemont for

its services and kicked back part of the excess to Nick

Boscarino, who helped the agency secure the business.

Boscarino also helped Ralph Aulenta, one of the agency’s

managers, hide money that Aulenta had taken from the till.

To top it off, Boscarino failed to report as income much of

the ill-gotten gains and committed other tax offenses.

Aulenta pleaded guilty and testified against Boscarino, who

was convicted of mail fraud, money laundering, and tax

crimes. His sentence is 36 months’ imprisonment, 24

months’ supervised release, a $55,000 fine, restitution of
2 No. 05-2657

$288,670, special assessments of $1,700, and the costs of

prosecution, which the judge set at $4,692—for Boscarino is

the rare criminal defendant who has legitimate assets

sufficient to cover all of these monetary exactions.

Boscarino’s appellate lawyer has pursued almost every

contention that trial counsel raised and lost. The result is

that none of the issues has been developed in depth, and

strong contentions (if any) have been buried under anemic

ones. “Experienced advocates since time beyond memory

have emphasized the importance of winnowing out

weaker arguments on appeal and focusing on one central issue if possible, or at most on a few key issues.” Jones

v. Barnes, 463 U.S. 745, 751-52 (1983). We discuss only

three of the contentions; the rest have been considered

but are too feeble to call for exposition.

Every year that Rosemont placed its insurance through a

brokerage that the parties call ABI/Acordia, Aulenta caused

the firm to write a check to a corporation that Boscarino

controlled. Though the money supposedly was a referral fee

to compensate Boscarino for his assistance in persuading

Rosemont to give ABI/Acordia the business, the check was

never made out to Boscarino. He did not deposit the funds

into the corporate accounts; instead he endorsed the checks

to Aulenta, who returned half of the amount in monthly

dollops over the coming year and kept the rest. The prosecution’s theory was that Aulenta was stealing money from

ABI/Acordia and sharing half of the takings with Boscarino,

in part for his assistance in disguising the transaction; the

brokerage did not miss the money because Aulenta simultaneously was overbilling Rosemont, so that ABI/Acordia’s

books balanced. A jury was entitled to find that Boscarino,

who has considerable experience in business, recognized

that these transactions had the hallmarks of fraud rather

than above-board referral fees. Corporate insiders don’t

keep half of bona fide referral fees, nor are such fees paid
No. 05-2657 3

from an insider’s personal account after such a roundabout

transaction.

Because many of the payments passed through the mails,

the indictment included a charge of mail fraud. 18 U.S.C.

§1341. And because Aulenta owed ABI/Acordia a fiduciary

duty of loyalty, the indictment alleged that one aspect of the

scheme was to defraud ABI/Acordia of Aulenta’s honest

services. 18 U.S.C. §1346. This sets up Boscarino’s challenge to his conviction for money laundering, in violation of

18 U.S.C. §1956. Section 1956 makes it a crime to engage in

financial transactions with the proceeds of “specified

unlawful activity.” That phrase, a defined term, includes

“any act or activity constituting an offense listed in section

1961(1) of this title”. 18 U.S.C. §1956(c)(7)(A). Section

1961(1) in turn refers to mail fraud, in violation of §1341,

but does not mention §1346. Because the mail fraud charge

in this case included a reference to §1346, Boscarino

contends, it cannot serve as a predicate offense for money

laundering—at least not unless the jury was instructed to

disregard the honest-services aspect of the scheme, and his

jury was not so instructed.

Whether a mail-fraud scheme that was carried out, in

part, by depriving one person of another’s honest services

may be a predicate offense for a money-laundering conviction is a question of first impression among the

courts of appeals. But the answer is not difficult. Section

1346 does not create a separate crime. It is a definitional clause, reading in full: “For the purposes of this

chapter, the term ‘scheme or artifice to defraud’ includes a

scheme or artifice to deprive another of the intangible right

of honest services.” The scheme to defraud itself violates

§1341, which is a listed predicate offense for the moneylaundering statute.

Boscarino observes that only “proceeds” can be laundered,

and depriving one’s employer of honest services need not
4 No. 05-2657

yield “proceeds.” That’s true enough, but when the offense

does create proceeds, which are laundered to hide detection,

it is sensible to treat them the same as any other proceeds

of mail or wire fraud. Consider, for example, the bribery of

public officials, as in United States v. Murphy, 768 F.2d

1518 (7th Cir. 1985). Judge Murphy took money from

litigants in cases over which he presided. Doing this

deprived the public of his honest services. He did not take

money from the public coffers, but the bribes were “proceeds” of the scheme to defraud, and if he had engaged in

financial transactions with these proceeds Judge Murphy

could have been convicted of money laundering as well as

the scheme to defraud the public. Just so here. Aulenta

deprived ABI/Acordia of both his honest services and the

firm’s money; the cash, which he shared with Boscarino,

was “proceeds” that the two could (and did) launder to

disguise the money’s origin.

Boscarino’s jury was instructed that it could convict

him of the §1956 charge only if it found that he engaged

in financial transactions with the “proceeds” of a fraud.

There is no chance that the jury thought that Boscarino

laundered Aulenta’s chicanery. One launders money (or

clothes) but not “services,” honest or otherwise. Anyway,

Boscarino did not ask for an instruction that would have

made it pellucid that “proceeds” means money and other

things of value to third parties, rather than Aulenta’s

duty of loyalty.

Restitution is the second subject we must cover. The

district court ordered Boscarino to repay ABI/Acordia

what Aulenta had extracted during the scheme. That’s

inappropriate, Boscarino contends, because Rosemont

rather than ABI/Acordia is the victim; after all, Aulenta

obtained that money for the brokerage in the first place

by bilking the City. One response is that even a thief can be

the victim of a crime. See, e.g., Levin v. United States, 338

F.2d 265 (D.C Cir. 1965). ABI/Acordia was not entitled to
No. 05-2657 5

this money vis-à-vis Rosemont, but it has rights superior to

those of Aulenta and Boscarino. See, e.g., Anderson v.

Gouldberg, 51 Minn. 294, 296, 53 N.W. 636, 637 (1892);

Ward v. People, 3 Hill 395 (N.Y. 1842). Another, and more

functional, response is that ABI/Acordia is just a way

station for the funds. Once Boscarino reimburses the

immediate victim, ABI/Acordia will be able to repay

Rosemont. Instead of determining the ultimate incidence of

costs created by criminal activity, judges should direct

restitution to the immediate victim; other persons’ rights in

the funds then may be sorted out under normal rules of

contract and property law. See United States v. Shepard,

269 F.3d 884, 886-87 (7th Cir. 2002).

Finally, we consider Boscarino’s contention that his

sentence is unreasonably high. Thirty-six months falls

within a properly constructed range under the Sentencing Guidelines. (For the loss involved, the range is 33 to

41 months.) Instead of comparing his sentence to the range,

however, Boscarino wants us to compare it to Aulenta’s

sentence. Had Aulenta not pleaded guilty, his range would

have been 41-51 months. His guilty plea cut the range to

30-37 months. Because Aulenta assisted the prosecution by

testifying against Boscarino, the United States proposed a

reduction under U.S.S.G. §5K1.1, and Aulenta’s actual

sentence was 20 months. District judges are supposed to

reduce disparity in sentencing, see 18 U.S.C. §3553(a)(6),

and Boscarino contends that it is unacceptably disparate to

give the lower sentence to the more culpable offender.

Until recently we refused to address arguments by

criminal defendants who sought below-Guideline sentences,

at least when district judges recognized their authority to

depart. See United States v. Franz, 886 F.2d 973 (7th Cir.

1989). United States v. Booker, 543 U.S. 220 (2005), which

abolished “departures” by making the Guidelines advisory,

abolished this rule too. See United States v. Vaughn, No. 05-

1518 (7th Cir. Jan. 6, 2006); United States v. Arnaout, 431
6 No. 05-2657

F.3d 994 (7th Cir. 2005). We held in Franz that a request

for a below-guideline sentence did not fit any of the categories in 18 U.S.C. §3742(a), which authorizes appellate

review of sentences at defendants’ behest. After Booker,

however, an “unreasonable” sentence is an unlawful

sentence, and §3742(a)(1) authorizes the correction of any

illegal sentence. Because sentences within the Guideline

range are presumptively but not conclusively reasonable,

we are authorized to entertain contentions that a particular

Guideline sentence is unreasonably high.

This is as far as Boscarino gets, however. His argument

misunderstands what §3553(a)(6) means when saying

that district judges must consider “the need to avoid

unwarranted sentence disparities among defendants

with similar records who have been found guilty of similar conduct”. Boscarino and Aulenta had similarly clean

records before these convictions, and they engaged in

similar conduct, but a sentencing difference is not a forbidden “disparity” if it is justified by legitimate considerations,

such as rewards for cooperation. Indeed, before Booker a

district judge was forbidden to reduce one defendant’s

sentence because of a discount properly given to another.

See United States v. Meza, 127 F.3d 545 (7th Cir. 1997). See

also, e.g., United States v. Joyner, 924 F.2d 454 (2d Cir.

1991). The norms of sentencing are no longer so unyielding;

Booker turns rules into standards, and the rule of Meza is

one of those that have been transfigured. See United States

v. Newsom, 428 F.3d 685, 688-89 (7th Cir. 2005).

Still, Booker is about the allocation of fact-finding authority between judge and jury, and about the burden

of persuasion. It does not change rules of law. See, e.g.,

United States v. Duncan, 413 F.3d 680, 683 (7th Cir. 2005);

United States v. Rivera, 411 F.3d 864, 866-67 (7th Cir.

2005); United States v. Lee, 399 F.3d 864, 866 (7th Cir.

2005); McReynolds v. United States, 397 F.3d 479, 481 (7th

Cir. 2005). A reason bad before Booker (e.g., alienage, race,

sex) is bad today. One rule of law that preceded Booker, and
No. 05-2657 7

retains vitality after it, is that a sentencing difference based

on one culprit’s assistance to the prosecution is legally

appropriate.

There would be considerably less cooperation—and thus

more crime—if those who assist prosecutors could not

receive lower sentences compared to those who fight to

the last. Neither Booker nor §3553(a)(6) removes the

incentive for cooperation—and because this incentive

takes the form of a lower sentence for a cooperator than

for an otherwise-identical defendant who does not cooperate, the reduction cannot be illegitimate. After all,

§3553(a)(6) disallows “unwarranted sentence disparities”

(emphasis added), not all sentence differences.

Another way to put this point is to observe that the

kind of “disparity” with which §3553(a)(6) is concerned is an

unjustified difference across judges (or districts) rather than

among defendants to a single case. If the national norm for

first offenders who gain $275,000 or so by fraud is a

sentence in the range of 33 to 41 months, then system-wide

sentencing disparity will increase if Boscarino’s sentence is

reduced so that it comes closer to Aulenta’s. Instead of one

low sentence, there will be two low sentences. But why

should one culprit receive a lower sentence than some

otherwise-similar offender, just because the first is “lucky”

enough to have a confederate turn state’s evidence? Yet that

is Boscarino’s position, which has neither law nor logic to

commend it.

Sentencing disparities are at their ebb when the Guidelines are followed, for the ranges are themselves designed

to treat similar offenders similarly. That was the main goal

of the Sentencing Reform Act. The more out-of-range

sentences that judges impose after Booker, the more

disparity there will be. A sentence within a properly

ascertained range therefore cannot be treated as unreasonable by reference to §3553(a)(6).

AFFIRMED
8 No. 05-2657

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—2-8-06