United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 99-2390

___________

United States of America, *

*

Appellee, *

* Appeal from the United States

v. * District Court for the Eastern

* District of Arkansas.

Ben R. Bush, Jr., *

*

Appellant. *

___________

Submitted: November 16, 2000

Filed: June 7, 2001 

___________

Before LOKEN, JOHN R. GIBSON, and MORRIS SHEPPARD ARNOLD, Circuit

Judges.

___________

MORRIS SHEPPARD ARNOLD, Circuit Judge.

After Ben Bush pleaded guilty to conspiring to commit securities fraud, see

15 U.S.C. § 78j(b), 18 U.S.C. § 371, the district court sentenced him to 33 months

imprisonment and ordered him to pay restitution in the amount of approximately

$985,500 to the victims of his crime. Mr. Bush appeals his sentence, arguing that the

district court miscalculated the amount of loss attributable to him in determining his

offense level, erroneously increased his offense level pursuant to U.S.S.G. § 3B1.3, and

ordered him to pay excessive restitution. We affirm the district court's finding of the
-2-

amount of loss and the district court's decision to increase Mr. Bush's offense level

under § 3B1.3, but vacate and remand for recalculation of the order for restitution.

I.

Mr. Bush contends first that the district court determined his criminal offense

level incorrectly because it miscalculated the amount of loss attributable to him. During

sentencing, the district court found that Mr. Bush had caused a loss in excess of

$800,000 and was thus subject to an eleven-level increase in his offense level. See

U.S.S.G. § 2F1.1(b)(1)(L). Mr. Bush argues that losses that Carolyn Cowden, Bob

Warden, and Sue Warden suffered should not have been included in the district court's

calculations because those losses resulted from dealings unrelated to the offense for

which Mr. Bush was convicted.

As relevant here, the conspiracy with which Mr. Bush was charged involved his

sale of unregistered promissory notes issued by his company, Global Productions, Inc.

According to the indictment, Mr. Bush diverted the money generated by these sales and

never used it for Global's business purposes. Mr. Bush maintains that since he never

sold unregistered promissory notes for Global Productions, Inc., to either Ms. Cowden

or the Wardens, their losses should not be counted in calculating the loss attributable

to him. We disagree.

Under § 1B1.3, a district court is authorized to take into account certain relevant

conduct, in addition to offense conduct, when determining the sentencing range of an

offender. Because Mr. Bush's crime was of a character that could have permitted

grouping for his multiple transactions, see § 3D1.2, the pertinent guideline with respect

to relevant conduct is § 1B1.3(a)(2). The district court therefore was allowed to take

into account all acts and omissions by Mr. Bush that constituted "the same ... common

scheme or plan as the offense of conviction," see § 1B1.3(a)(2); see also United States

v. Ballew, 40 F.3d 936, 943-44 (8th Cir. 1994), cert. denied, 514 U.S. 1091 (1995).
-3-

Mr. Bush borrowed money from Ms. Cowden promising that it would be used

to further the business of Global Productions, Inc. He took money from the Wardens

purportedly to buy stock in Global Productions, Inc., and gave them a handwritten note

promising repayment. In both of these instances he diverted the proceeds to other uses.

It is plain that the dealings with Ms. Cowden and the Wardens bear a strong

resemblance to the sales of unregistered promissory notes with which the indictment

charged Mr. Bush. In all of these transactions, Mr. Bush used Global Productions, Inc.,

as an investment lure, and a promise of repayment to convince his victims to give him

money, and then diverted the money rather than devoting it to the purposes that he

originally proposed. The district court thus found that Mr. Bush's dealings with

Ms. Cowden and the Wardens were part of "the same ... common scheme or plan" as

the offense conduct, see § 1B1.3(a)(2), and therefore constituted relevant conduct for

sentencing purposes. We do not think that this conclusion was error. These

transactions share a "common purpose" and a "similar modus operandi," see § 1B1.3,

application note 9(A), and so could be deemed part of a common scheme or plan. See

also Ballew, 40 F.3d at 943-44.

II.

Mr. Bush also argues that the district court erred when it added two levels to his

offense level because it determined that he had used a special skill to further his

fraudulent scheme. See U.S.S.G. § 3B1.3. We give "great deference" to the district

court's factual determinations regarding the use of a special skill and review those

findings under the clearly erroneous standard. United States v. Roggy, 76 F.3d 189,

193 (8th Cir. 1996), cert. denied, 517 U.S. 1200 (1996).

A district court may order a two-level sentencing enhancement for a defendant

if it believes that "the defendant ... used a special skill, in a manner that significantly

facilitated the commission or concealment of the offense," see § 3B1.3. " 'Special skill'
-4-

refers to a skill not possessed by members of the general public and usually requiring

substantial education, training or licensing," id., application note 3.

The district court found that Mr. Bush, as a former investment counselor and

manager at a major national brokerage firm, had a special skill that helped him defraud

his victims. Mr. Bush maintains, however, that no special skill was required to sell

unregistered promissory notes and that anyone, even an unskilled person, could have

carried out the transactions involved in this case. This argument is without merit. "The

legal question is not whether the task could be performed by a person without special

skills, but whether the defendant's special skills aided him in performing the task,"

United States v. Covey, 232 F.3d 641, 647 (8th Cir. 2000). See also United States v.

Graham, 60 F.3d 463, 469, 469 n.3 (8th Cir. 1995).

In this case, the district court reasoned that Mr. Bush's extensive training and

experience allowed him to draw victims into his fraud much more easily than someone

without his skill could have. It also found that Mr. Bush's understanding of the

intricacies of executing promissory notes and collateralizing them helped him establish

a scheme that an otherwise unskilled person might have found more difficult to set up.

We do not think that the district court's finding was clearly erroneous, and we thus hold

that it did not err in applying the two-level enhancement. See Roggy, 76 F.3d

at 193-94.

III.

Mr. Bush maintains finally that the district court ordered him to pay an excessive

amount of restitution. Under 18 U.S.C. § 3663(a)(1)(A), a district court has the

authority to order a defendant to "make restitution to any victim" of the offense of

conviction. We review the district court's application of the restitution statute de novo.

See United States v. Ross, 210 F.3d 916, 924 (8th Cir. 2000), cert. denied, 121 S. Ct.

405 (2000).
-5-

During his sentencing hearing, Mr. Bush presented copies of personal checks

supposedly documenting his partial repayments to some of the victims of his fraud.

The district court, however, declined to give Mr. Bush credit for the amount of these

checks because it was unable to determine what the checks were for. Mr. Bush insists

that he should have received credit, and that the amount of the restitution that he was

ordered to pay should be reduced pro tanto.

We disagree. A defendant ordered to make restitution is not entitled to credit if

he fails to offer proper proof of his repayments. See United States v. Bartsh, 985 F.2d

930, 933 (8th Cir. 1993), cert. denied, 510 U.S. 1170 (1994); see also United States v.

Baker, 200 F.3d 558, 561 (8th Cir. 2000). In this case, the district court was unable

to determine whether Mr. Bush had repaid some of his victims because the checks that

he provided as proof contained no facial indication of their purpose. The district court

offered to hold a hearing to consider the evidence further, but Mr. Bush turned down

the opportunity to substantiate his allegations. Because the district court was presented

only with ambiguous evidence of repayment, we hold that it did not err in denying

Mr. Bush credit when it calculated the amount of restitution that he owed.

Mr. Bush also contends that the district court should not have ordered him to pay

restitution to Ms. Cowden, the Wardens, Lorenzo Stigger, and Herbert Sudbury,

because his transactions with them were not part of the conduct laid in the indictment.

He points out that, in his dealings with these individuals, he never once sold them

unregistered promissory notes issued by Global Productions, Inc., or any other

securities. Mr. Bush therefore argues that the district court lacked the authority to

order him to pay restitution to these individuals because they did not qualify as victims

of the charge of which he was convicted.

For purposes of sentencing, the term "victim" includes any "person directly and

proximately harmed as a result of the commission of an offense for which restitution

may be ordered including, in the case of an offense that involves as an element a
-6-

scheme, conspiracy, or pattern of criminal activity, any person directly harmed by the

defendant's criminal conduct in the course of the scheme, conspiracy, or pattern," see

18 U.S.C. § 3663(a)(2). We have previously interpreted this statute to mean that a

district court may award restitution to individuals who suffered from a defendant's

criminal activity beyond what was described with particularity in the indictment, so

long as the indictment "details a broad scheme encompassing transactions 'beyond

those alleged in the counts of conviction,' " United States v. Manzer, 69 F.3d 222, 230

(8th Cir. 1995), quoting United States v. Welsand, 23 F.3d 205, 207 (8th Cir. 1994),

cert. denied, 513 U.S. 1045 (1994). We therefore " 'look to the scope of the

indictment' to determine whether an award is 'within the outer limits of a permissible

restitution order,' " United States v. Ramirez, 196 F.3d 895, 900 (8th Cir. 1999),

quoting United States v. Jackson, 155 F.3d 942, 949, 950 (8th Cir. 1998), cert. denied,

525 U.S. 1059 (1998).

In this case, we think that Mr. Stigger can fairly be considered a victim of

Mr. Bush's offense conduct. Mr. Stigger was an investment counselor who encouraged

some of his clients to do business with Mr. Bush. Many of these clients eventually

became victims of Mr. Bush's fraud when they purchased unregistered promissory

notes issued by Global Productions, Inc., from him. Although Mr. Stigger never

directly gave any money to Mr. Bush for the notes, he paid money from his own pocket

to cover some of the losses that his clients incurred from their dealings with Mr. Bush.

The district court determined that he was entitled to restitution of the amount he paid

out. We find no error in this conclusion since it appears to us that this situation simply

involves a substitution of one victim for others: Any other result would allow Mr. Bush

to escape paying restitution that he quite obviously owed.

We conclude, however, that the district court erred in ordering Mr. Bush to pay

restitution to Ms. Cowden, the Wardens, and Mr. Sudbury because we do not think that

they were "victims" within the meaning of the relevant statute. The conduct for which

Mr. Bush was indicted had to do with the sale of unregistered promissory notes issued
-7-

by Global Productions, Inc. Therefore, for an individual to be a victim of the

conspiracy with which Mr. Bush was charged, he or she must have been a party to a

transaction of this description.

Ms. Cowden, the Wardens, and Mr. Sudbury did not participate in any

transaction with Mr. Bush that corresponded with the conduct laid in the indictment,

because Mr. Bush did not sell them any promissory notes that Global Productions, Inc.,

issued. While the transactions with Ms. Cowden, the Wardens, and Mr. Sudbury were

fraudulent and constituted crimes on Mr. Bush's part, and the conduct involved in those

transactions was, as we have said, relevant for sentencing purposes, we cannot say that

these crimes were committed pursuant to the conspiracy for which Mr. Bush was

charged and of which he was convicted. Although similar in purpose and design, these

offenses were different from the offense laid in the indictment. We thus hold that

Ms. Cowden, the Wardens, and Mr. Sudbury were not "directly harmed," see 18

U.S.C. § 3663(a)(2), by Mr. Bush's conspiracy and were not entitled to restitution. See

Ramirez, 196 F.3d at 900.

IV.

For the reasons indicated, we affirm the district court's judgment in part and

remand the case for recalculation, consistent with our holdings, of the order for

restitution.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.