## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 11

- 2683 U NI T ED S TATE SOF A MERI CA, P la intif f-A pp ellee, v . J OHN P S I H OS, D ef endant-Appellant. Appeal from the United States District Court fo r the N o rthernDi stricto f Illino is, Eas tern Div isi on. No . 08 CR 1026

—Blan ch e M. Mannin g, Judge .
A RG UE D D ECE MBE R 8, 2011

— D ECI DE D J UNE 15, 2012

Befo re M A NI ON, R OV NER, a nd T INDER, C ircu it Judges. M A NI ON, C ircu it Judge. J ohn Psi hos ple aded gui l ty to f o urc o unt s o fm aki ngf al se s ta te m en ts i n a t ax r etur n. The distr ict co urt deter m i ned that the t ax l oss was $8 37, 72 4 an d se nt en ce d Ps i ho s to 2 4 m o nths ’ i m pr i so nm en t, whi chwas the l o w end o fthe a ppl i cabl e g ui del i ne ra nge. The co urt al so or dered Psihos to pay $8 37, 724 i n re sti tuti on. Psi hos appeal s, ar gui ng that the tax l oss w as onl y $ 22, 292. 27; thatthe re sti tuti on a m ount was2 N o. 11

- 2683

er ro neous; and that the di str i ct c ourtpro c ed u ra l l y e rr ed i n s en te nc i nghi m wi th i n the g ui del i ne r an g e wi th out add re ssing hi s a rgum ent foran o utsi de-the- gui del i nes s e n t e n c e . We a ffi r m.

I. J ohn Psi hos i m m i gr ate d to the Unite d Sta tes fro m G re ece in hi s e ar l y tw enti es. H e e ventual l y o pened h is ow n r est aurantand l ate r w ent o n to o w n thr ee re sta urant s i n the Ch i cago ar ea: Fl anaga n’s ( the m ost su cc es sfulo fthe thr ee ) , Ca fé O cean a, a nd F ul lM o o n. Fl anaga n’s and Ful lM oo n w er e o rg ani zed to gether as one S- Corpor ati on a n d C afé Oceana was se t up as a separ ate S

- Corpor ati on. Psihos w as apparentl y a go od em p loy er, assisting em p loyees i n n eed ; he w as also very gener ous t o those i n the com m unity, hel ping w i th var i ous c hari tabl e ca uses. W hi l e har d-working and ge nero us, Psihos was al so op er ating i l l ega l l y, atl eas t when i t ca m e t o hi s t ax ob

l i g a t i o ns . P s i ho s k e ptt wo s e t s o fb o o k s f o r F l a na g a n’ s, and fo r ( at lea st) the f our tax y ear s o f20 01- 2004, he s ubst an ti al l y unde r r epo r te d hi s g r o ss r ec ei pts
. The g o ve r nm ent di sco ve red the t ax fra ud wh en Psihos l i ste d F l a n a g a n ’ s f o r s a l e th r o u g h a r e a le s t a t e b r o k e r a g e c o mpany. A f act sheetpre pared bythe bro kerca l cul ate d Fl an ag an ’ s a ver age m onthl y g ro ss re cei pts at$1 70, 000 an d av er ag e a n n u al g ro ss r e c e i p ts at$2 ,04 0,0 00 . Th is nette d an ave ra ge yea rl y o perat i ng p ro fit of$5 54, 840. Based on the di scr epancy be tw een Ps i hos’ s t ax fi l i ngsN o. 11

- 2683 3 and thi s info rm ati on, the I RS di spatched undercov er age nts t o pose as potenti albuye rs . T he un d ercove r agent s, p osin g as a hu sba nd and w ife i nter est ed i n purchasi ng F l anaga n’s , i nd i vi d u all y o r tog etherm et w i th Psihos thre e t i m es i n A pri land M ay of 20 05
. Dur i ngthe se meet i ng s, Ps i ho s ex pl ai ne d ho w he k eptt r ac ko fthe a ctua lr ece i pts a t F l an ag an ’ s. He e xp lain e d t h a t e ac h n igh t a t c los in g, th e m an ag er s w ou ld bring hi m enve lop es w i th al lo fthe m oney, r ecei pts, re gi ste r tapes, a n d payout info rm ati on. H e would then pr o vi de th i s m at er i alt o W en dy, o ne o f hi s m an ag er s, who w oul d prepare a w eek l y s um m ar y r epor t. Psihos showed th es e su m m ary r epo r ts t o the und ercov era g en ts , a l o ng w ith t h e env elopes from w hich thes e sum m aries w ere pr e pa r e d. P s i ho s s t a t e d tha th e h a d the s e r e c o r ds sh o wi ngwhathe was “ ac tu al l y g et ting ” fr o m the r es ta ura nt go i ng ba ck to 2001
. On M ay 31, 20 05, ag ents execu te d a sear ch w ar ra nt at one ofP s i ho s ’ s r e s t a ur a nt s a nd s e i z e d, a mon go the r i tem s, the w eek l y s um m ar y s heets

. Latertheyal so sei zed from a s t orage sh ed the en velop es d etailing Fl an agan ’s ni ghtl y s al es and cash payo u ts
. I RS r eve nue age nts r evi ew ed the w eek l y s um m ar y s heets and cr oss - re fer en ced thos e fi gure s with the ni ghtl y fi gure s l i ste d on the envel o pes . Ba se d o n the se r ec o r ds, the r ev en ue a g en ts c al culated th e gross receipt s actu all y coll ecte d at Flanagan ’s f orthe tax y ear s 2 00 1-2 00 4. I n cal cul ating the gr oss r ecei pts, the IR S m ade adj ustm ents base d on any cash o ve r ag es / sh o r ta g es no ted, a s wel la s ba se d o n the am ounts note d on t he enve l opes as i m proper l y e nter ed4 N o. 11

- 2683

orl i ste d as ca sh payo uts. Th e gover nm ent’ s ca l cul ati on w as as f ol l ows: Y e a r N e t R e ce ip ts

Pe r I RS G ross R e ce ip ts

P e r R e tu rn U n rep orted R e ce ip ts Pe r I RS 2001 $2, 021, 304. 37 $1, 420, 405. 00 $600, 899. 37 2002 $2, 003, 204. 59 $1, 323, 240. 00 $679, 964. 59 2003 $2, 007, 044. 71 $1, 298, 778. 00 $708, 266. 71 2004 $1, 867, 214. 82 $1, 320, 832. 00 $546, 382. 82 The I RS the n c onc l ude d tha t th e addi ti o na lt ax es due on Psih os ’s p er so n al t ax ret u rn s, b as ed onth es e u n re p orted re cei pts, were: $2 26, 752 f or20 01, $244, 799 f or20 02, $213 , 186 f or 2003 , and $ 152, 987 f or20 04. These unrepor ted re cei pts r es ult ed i n a t ota lta x l oss to the I RS o f$8 37, 724 f orthe peri od of20 01 thro ugh 200 4. Based on t he abo ve, a gr and j ury i nd i cted Psihos o n e i g htc o unt s. Co unt s 1- 4 ch ar g ed ta x e va si o n a nd co unts 5-8 cha r g ed Ps i ho s wi thf o urc o unt s o fmaking f al se sta tem ents i n a t ax r etur n. P si hos enter ed i nto a pl ea agr eem en t w i th the go ver nm ent a nd pl eaded gui l ty to the four counts ofm aking f al se sta te m en ts i n a t ax r etu r n. At se nt en cing, the g o ve r nm en t ar gue d tha t th e l oss was $83 7, 724, wh i l e Psihos counter ed that the g overnm en t’s figure d id not acc o untf o r numer o us ded uctibl e ex p enses . S peci fi cal l y, Psihos ar gued that the t ax l oss sho uld be r educed by: am ou n ts pai d to DJ/prom ote rs fro m door c h arges ; am ounts pai d i n cash wag es ; the c o sto fc o m pl i m entar y dr i nk s an d f o o d; the tot alh e tr ansfer re d to hi s o therr est aurantCafé Oceana;N o. 11

- 2683 5 and cash paym ents m ad e t o Café Oceana f orf oo d supp l i ed by Café Oceana to Fl anaga n’s
. Psihos subm i tted a chartsum m ari zi ng hi s pos i ti on o n the am ount o f th e tax l oss (attach ed to this opinion a s E xh ibi t A ). Ps ih o s th ena r g ue d tha t ba se d o n h i s ca l cul at i o ns , the tax l oss w ou l d be 2 8% o fthe tot alunrepor ted gr oss of$7 9, 615. 26, o r $22, 292. 27. Th e di s t r i c t c o ur t g a v e Ps i ho s c r e di t f o r the cash pay

outs l i ste d on the envel opes

— as h ad th e g ov er n m en t in i ts l oss cal cul ati on

—but r ej ect ed hi s r em ai ni ng cl ai m ed r edu ct i o ns , c o nc l ud in gtha t th e va r i o us o ff se ts he propos ed am ounted to “uncl ai m ed dedu cti ons” and that it c ou ld n otco n sid er su c h d ed u c tio n s b as e d on th is co ur t’s de ci si o n in U nite d States v. C hav in , 31 6 F
. 3d 666 ( 7th Ci r. 20 02)
. The co urt add ed that C hav in w as “p arti cul ar l y wel l

- tak en” in thi s ca se bec au se Psihos did not have any invoi ces supp or ti ng hi s purpor ted cas h payouts

. A fterthe dist ri ct c ourtr ej ected P si hos’ s a rgum ents co nc erni ngthe l o ss calc ul at i o n, Ps i ho s ar g ue d tha t he shoul d nonethel ess r ecei ve a s entence bel ow t h e guidel i ne ran ge be ca us e th e ca l cul at ed l o ss o ve r st at ed th e harm to the gov er nm ent. In sent en ci ng Psihos, the distr ict cour t di d not s peci fi cal l y di scuss thi s a rgum ent, butc o nc l ude d tha t a sen te nc e o f2 4 m o nths ( th e l o w end ofthe gui de lin e range , wh i ch w as 24- 30 m onths) was appropri at e i n thi s ca se. The di str i ct c ourtal so or dered Psi hos to pay r est i tuti on in the am ount o f$8 37, 724. Psi hos appeal s.6 N o. 11

- 2683 II. On app eal, Psihos ar gues that the di str i ct c ourter re d i n de term iningthe t ax l o ss fo r s en te nc i ngpur po se s an d th atthe t r ue l o ss was o nl y $ 22 , 29 2. 27. Rel at edly, he ar gu es th at th e d ist ric t c ou rterr ed in o rd er in g re st itu tio n of $8 37,72 4 b ec au se th e a c tu al los s w as on ly $22,292 .27. Fi na ll y, Ps ihos claim s tha t the district cou rt proce du ra l l y e rr ed i n sent enci ng hi m withi n the gui deline range w ithou t con side ring his argu m en t for a l o wers en te nc e. W e co ns i dere ac h i ss ue i n tur n.

A . Tax Los s Psi hos ar gues on a pp ealthatthe dist ri ct c ourter re d i n cal cul ating the ta x l oss f orse ntenci ng purpose s a t $837, 724. A s deta i l ed abov e, Psihos cl ai m s that the r eal loss t o the g o ve r nm en t was o nl y $ 22 , 29 2. 27b ec au se the g o ve r nm en t’ s ca l cul at i o n f ai l ed to t ak e i nt o a cc o unt c as h p ay m en ts for e x c lu d ab le ite m s a n d /or d ed u c tib le ex p en ses, inc lud ing cash pa ym en ts to D Js and prom oters fro m d oo r c h ar ge s, ca sh w ag es , t h e c os t o f co m p lim entar y dri nks and foo d, cash tr ansfer s to hi s oth er rest au ran t C afé Oc ean a, an d cash pa ym en ts to C afé Oceana f orf oo d supp l i ed by Café Oceana to Fl anaga n’s
. A s the di str i ct c ourtf ound, Psi hos’ s a rgum ent i s for ecl o se d b y thi s co ur t’ s dec i si o n in U nite d State s v . C hav in , 31 6 F
. 3d 66 6 ( 7th Ci r . 2 00 2)
. In C hav in , the de fe nd ant had ar gu ed th at th e t ax loss for s en te n c in g p u rp os es sh ou ld ta ke int o a c c ou n t a va ilab le d ed u c tio n s t h at h e c ou ld have tak en. Thi s co urt rej ecte d that a rgu m ent, fi rs tN o. 11

- 2683 7 noting tha t the “the go vern m ent [ had] c onte nd [ ed] that

‘ ta x l o ss ’ r efer s to the a m o unto fl o ss tha t th e defen dan t att em pted ori ntended to cre ate thr ough hi s t ax offense. [ A nd ] [ i ] fwe accept thi s inter preta ti on, then uncla i m ed ded ucti ons shoul d not be ta ken in to acco unt beca use th eyha ve no r el ev an ce t o the a m ounto fl o ss tha t th e schem e a tte m pted to produce. ” Id. at67 7. Thi s co urt then he l d: I t i s a pp a r e nt fr o m the de fi ni t i o n o f “ t a x l o s s” provi ded i n the g ui del i ne s th atth e g ove r nm en t ha s th e c or re c t p os itio n . Th e g u id elin es s t a t e t h at “t ax loss is th e to ta la m o unto fl o ss tha t wa s t he obj ec t o fthe o ffen se . ” § 2T 1. 1( c) ( 1)
. W e ta k e the p hras e “the obj ect ofthe offense” to m ean that the at tem pte d o r i ntende d l o s s , r a the r tha n the a c t ua ll o s s t o the g o ver nm ent, i s the pro per basi s o fthe tax- l oss fi gure . H er e, the o bj ect o fCha vin’ s o ffen se was the a m o unt by wh i c h he u nd e r r e po r t e d a nd fr a ud ul e nt l y s t a ted hi s t ax l i abi l i ty on hi s r eturn; r efer ence to othe r unrel at ed m i st ak es o n the r etur n s uc h as uncl ai m ed dedu cti ons tel l s us nothi ng ab out th e a m ount o fl oss to the g ove rnm ent that hi s s chem e int ended to cre ate
. Id. (em p h as is a d d ed ). C h a v in thus m ake s cl earthat Ps ihos’s all eged cash p a y m en ts are ir relevan t in det erm i ni ng the ta x l oss cause d by hi s fra ud ule nt st ate m ents. Psi hos counter s that C hav in i s di stingui shabl e be cause i t co ncer ned ded ucti on s and not “ abov e- the- l i ne” r educti ons fro m gr oss i nc om e. The go ver nm ent a nd Psihos then duel o verwh ether the va ri ous c ash paym ents w oul d be co nsi dered ded u c tio ns o r abov e- the- l i ne r e-8 N o. 11

- 2683 d u c tio n s fro m gro ss inc om e. T h e d is t i n c tio n, ho w ev er , i s i r r el ev an t

— th e po int of C hav in is th e s am e: ta x loss is base d on the objec t ofthe offense and shoul d not t ake i nto acco unt “unrel ate d m i sta kes

. ” Id. In f ac t, i n n o ting that “unrel ate d m i sta kes ” were i rr el evantto the l oss ca l cul at i o n, the c o ur t i n Chavi n sai d “such as uncla i m ed d ed uc tion s,” show ing tha t “u nc lai m ed de d uc tions” w ere m er ely i l l us tr at i ve o fthe ty pes o fmis takes oro m i ss i o ns w hi ch shoul d not be co nsi dered i n cal cul ating the l oss . A lte rn at ive ly, P sih os req u es ts th at t h is c ou rtov er ru le C hav in b a s e d o n a r e c e n tT e n th C i r c u i td e c i s i o n, U ni t e d S t at e s v. Hos ki ns , 654 F.3d 108 6 (10 th Cir. 2011). I n Hos ki ns , the Tenth Ci r cui t sa i d tha t th e se nt en cing gui del i nes do “n ot cate go ri cal l y pr eve nt a cour t fro m co n s i d e r i n gu n c l a i me d d e d u c t i o n s i n i t s s e n t e n ci ng anal ysi s. ” Id

. at 1094. Th e Hos ki ns c o u r ta l s o n o t e d , h o wev er, tha t th e g ui del i ne s do not r equi r e a se nt en cing cour t t o engag e in the “nebul ous and p ote nti al l y c om ple x exer ci se ofsp ecul ating ab out uncla i m ed dedu cti ons” w here the defendant “offer s w eaksup port ” forhi s t ax- l oss es tim at e. Id. ( i nter nalquotat i on o m i tte d). In thi s ca se, even i f w e w ere to fol low the reaso nin g of Hos k i ns , Ps ihos w ou ld n ot ben e fi t becau se, as th e d istri ct cou rt con clud ed , there w as an utte r l ack of su p p ort for Ps ihos’s cl ai m ed ca shpa y m en ts
. W hi le h e ha d k eptmeti cul o us re c or ds ofthe cash r ecei pts and al so kept detai l ed no te s o fs o m e c ash o ff se ts , Ps i ho s ha s ab so l ut ely no docum entat i on t o supp or t hi s o thercl aim ed cash paym ents. Fo r the s am e r eas on, Psihos’s re l i ance o n dict a fro m the Se cond Cir cui t ind i cating th at a tax l oss under th e g ui deli nes c o ul d b e adj us te d f o r “ l eg i ti m at e butN o. 11

- 2683 9 uncla i m ed dedu cti ons, ” U nit e d S ta tes v. M a rtinez -R io s, 14 3 F .3d 66 2 , 6 7 1 ( 2d C ir. 19 98 ); U ni t e d S t at e s v. Gor don , 291 F.3d 181, 18 7 ( 2d Cir. 2002), serves him no bett er. I n shor t, ev en i fthe sente nci ng guidelin es di d not “ cate
gor i cal l y pr eve nt a cour t fro m co nsi deri ng uncl ai m ed ded ucti ons, ” Hos ki ns , 65 4 F .3d a t 1094, the abse nce o f an y c o nt empor an eo us s uppo r tingdo cument ati o n o fthe pu rpor ted cas h ou tflo w s m ake s thi s ca se w el lsui ted to th e g en er al rul e es tabl i sh ed i n C hav in

— that othe r ded ucti ons ar e no t co nsi dered in dete rm i ni ng the ta x l oss . Underthe se c i r cumst an ce s, we se e no r ea so n t o r econsi dero urde ci si o n in C hav in
.
B. Rest i t uti on Psi hos next ar gues that eve n if the $ 837, 724 tax l oss cal cul ati on was perm i ssibl e forgui del i ne purpose s, the di str i ct c ourte rre d i n or deri ng r est i tuti on in that amoun t be ca us e th at was no t th e true l o ss the gove r nm en t su ff ered. Ps i ho s ac k no wl edg es tha t, b efo r e th e di st r i ctc o ur t, he di d no t di st i ng ui shb etwee n t ax l o ss a nd re sti tuti on; r ather, he t ol d the di str i ct c ourtthatthe tax l o ss woul d b e a g ui di ngpr i nc i ple i n de te r m i ni ngthe re st itu tio n am ou n t. A c c or d in gly , th is c ou rt ’s re vie w is for p lain err or . See U nited Sta tes v. Sa lem , 59 7 F
. 3d 877, 88 4 (7t h C i r . 2 0 10 ). A s w e h av e o ft re p ea te d , “u n d er th e p lain er r o r st andar d, the pa r tya ss er tingthe e r r o r b ea r s th e burden ofper suasi on o n the f ol l owing poi nts: ( 1) that th er e i s er r o r, ( 2) tha t th e er r o r i s pl ain, a nd ( 3) tha t th e er ro r ‘ affects subst anti alri ghts. ’ ” U ni t e d S t at e s v. Jum ah , 493 F. 3d 868, 875 (7th Ci r. 20 07) ( quoti ng U ni t e d S t at e s v.10 N o. 11

- 2683 O l ano, 5 0 7 U .S. 72 5, 73 2-3 4 (1 99 3)). “If th es e t h re e c on d iti ons ar e m et, the cour t m ay exer ci se i ts disc re tio n to noti ce a f or feite d e rror, but onl y i fi t ( 4) ‘ ser i ousl y a ffects the f ai rnes s, i ntegr i ty, o r pu bl i c r eputati on o fj ud i ci al p ro c eedi ngs. ’ ” U ni t e d S t at e s v. D ay, 4 1 8 F
. 3 d 74 6 , 7 5 0 ( 7 th Cir
. 20 05) ( quoti ng O l ano, 507 U
. S. at 732). Ps i ho s i s co r r ec t th atthe “ in te nde d l o ss ” f o r g ui del i ne pur po se s i s br o ade r tha n the loss f o r pur po se s o fr es ti tu
ti on; a re sti tution or der, unl i ke a ca l cul ati on o fl oss unde r the g ui del i ne s, mustb e ba se d o n the a m o unto fthe lo s s a c tu ally ca u se d by th e d efe n d an t. U ni t e d S t at e s v. D okich , 61 4 F
. 3d 314, 31 9 ( 7th Ci r. 20 10)
. But the dist ri ct cour t di d not pl ai n ly err i n or deri ng r est i tuti on o f $837, 724 be cau se, as th e d istri ct cou rt found , Psihos ’s c l a i med c a s h o ut f l ows we r e n o ta de qu a t e l y s up po r t e d. Psi h os kept detai l ed re cor ds f orFl anaga n’s and thos e r ec o r ds i nc l ude d a da i l y l isti ng o fc as h pa y o ut s, b ut th er e was no c o nt empor an eo us do cument at i o n o fthe p urp orted pa you ts to bou nc ers, p rom oters, for pu rpo r t e d c o mpl i men t a r y f o o d a nd dr i nkg i v e n t o c usto m er s, o r f o r t r an sfer s o r pa y m en ts t o Ca fé O ceana. The gov er nm ent ne ed onl y pr ove the am oun t ofr est i tuti on by a p rep ond eran ce of the e v id e nc e and w he re there ar e d et aile d re c or d s sh ow in g th e ac tu al l os s, it is e n tir ely re aso nabl e f or a cour t to concl ud e that al l ega ti on s of undo cument ed ex pen se s do no t o ve r co m e t he g o ve r nm en t’s proof. W h ile it w oul d have be en hel pfulhad the dist ri ct cour t e xpressly s tat ed t h at i t found that the $8 37, 724 r epr ese nt ed bo ththe i nt en ded l o ss f o r g ui del i neN o. 11

- 2683 11 pu rpos es and the ac tualloss f orr est i tuti on purpose s, giv en t hat Psihos did notar gue that there was a di stincti o n b etwee n the t wo, i t i s unde r st an dab l e th atthe dist ri ct c ourtwas not m or e e xp licit in i ts hol ding. But, aft er n ot in g t h at “t h e g ov er n m en t h ad giv en P sih os cr ed it f orpayo uts r efl ecte d i n sei zed r eco rds, ” the co urt sta ted th at it rejec te d “t h e d efe n d an t’s as se rt ion th at h e s h ou ld be gi ven cre dit f or hund re ds of thousands of dol l ar s of add i ti onalbut com ple tel y undocum ented cash payouts and tra nsfer s be tw een hi s r est aurant s. ” W h i l e Psihos po i nt s t o a ffi d a v i t s fr o m e mpl o y e e s i n d i c a t i n gth a tthe cl a i med p a y o ut s we r e ma de , b e c a us e the r e c o r d a l so supp or ts the c oncl usi on that $ 837, 724 i s the actual l oss , Psi hos cannot show that there was an er ro r w hi ch affe c te d h is s u b st an tia l righ ts
. Se eU ni t e d S t at e s v. Ar r oyo , 406 F. 3d 881, 89 0 ( 7th Ci r. 20 05) ( sta ti ng t h at “al though th e d i st r i ctc o ur t di d no t m ak e ex pl i ci t fi ndi ng s ty i ng defe nd ant’ s co cai ne di strib uti on t o hi s her oi n offense, th e r e c o r d c o u l d s u p p o r tth e c o n c l u s i o n th a tth e t wo o ffen se s wer e par t o fthe s ame c o ur se of c onduc t” a nd th erefore d efend an t cou ld n ot show an error w hich affec te d h is s u b st an tia l righ ts ). M or eov er, ev en i fwe w er e t o fi nd pl ai n er ro r, under the c i rcum sta nces ofthi s ca se, we w oul d decline to exer ci se ou r disc re ti on t o noti ce that for fei ted er ro r f or seve ral r eas ons. Fi rs t, ther e i s abso l utel y no bas i s t o deter m i ne the a m ount o fpurport ed cash paym ents because, ev en under Psihos’ s v er si on o fev en ts , he di d not k ee p t r ac ko fthe va r i o us c l ai m ed o ut l ay s. S ec o nd, a nd r el at edly, i f Ps i ho s ha d trul y sh i fte d ca shto Ca fé Oce an a

— the l ar ges t red ucti on he see ks

— th en h e w ou ld12 N o. 11

- 2683 be en titl ed to a redu ctio n i n r estitu tion only ifCa fé O c eana had repor ted tho se cash infl ows as re venues; yet Ps ihos lacks th e c orresp ond ing record s from Ca fé Oceana sho w i ng i ts re cei pt oftho se fund s, and i n turn i ts re port i ng the m oneyas r eve nue to the I RS. Thi rd, Psihos k eptno record o fthe c as h pa y m en ts t o b o unc er s an d prom ote rs , wh i ch i n turn cre ate s a nearcerta i nty that the g ove rnm ent s uffer ed a los s ofta xes o w ed by thos e re c ip ien ts . U n d er all of th es e c i rc u m st an c es , w e w ou ld not exerc ise our discret ion to notice th e clai m ed error.
C. Ch al l enge t o Sente ncing Fi nally, Psihos ar gues that the di str i ct c ourter re d p rocedural l y in sent enci ng hi m bec ause i t di d not co ns ider hi s r eque stf o r a s en te nc e be l o w the g ui del i ne r an g e ba se d o n h i s cl ai m tha t th e ta x l o ss o ve r st at ed th e ser i ousness o fthe offense. I t i s t rue that the di str i ct co ur t di d no t ex pr es sly di sc us s this argumenti n s en te nc i ngPs i ho s to 2 4 m o nths ’ i m pr i so nm en t

— th e l o w end of the rang e. B ut i n rej ectin g Psiho s’s argum e n ts for a l ower t ax l oss cal cul ati on, the dist ric t courtm ade cl ear that a l ower fi gure wa s n ot j usti fi ed beca use Psihos had no t provi ded adequate docum entat i on. U nd erth ese circum stan ces, there w as no reas on for the d istri ct cou rt to disc uss Psihos’ s a rgum en t i n m or e deta i lwh en se tt i ngthe s en te nc e a t 24 months

. And i n s en te nc i ng Psi hos, the d istri ct c ourtst ate d that i t had co nsi dered Ps ihos’s argum en ts, bu t tha t the n e ed to provid e d eterr en ce i n the a r en a o fs el f

- r epo r tingt ax es j us tifi ed th e sente nce. The d istr i ct c ourt ’ s 2 4- m onth s entence wasN o. 11

- 2683 13 pr es um pti ve l y r ea so nabl e be cause i t was wi th i n the g u i d e l i n e r a n g e a n d th e r e i s n o b a s i s f o r u s t o o v e r c o me th at p re su m p tio n . U nite d States v. M oreno-Pad il la , 60 2 F. 3d 802, 81 0 ( 7th Ci r. 20 10)
. A c c or d ingl y, the dist ri ct c ou rt ’s s en te n c e s ta n d s.

III. The di st r i ctc o ur t di d no t er r i n de te r m i ni ngtha t th e tax los s ca used by Psi hos’ s o ffense w as $837, 724. Other cash pay m ents t hat Psihos coul d have use d to re du ce h is t ax ab le in c om e c an n otbe co n si d er ed ba se d on th is c o u r t ’ s d e c i s i o n i n C hav in

— a deci si on we decl i ne to ov e r t urn. And e v e n i fthe t a x l o s s c o ul d b e r e du c e d b y s uc h c a s h pa y men t s, Ps i ho s , a s the di s t r i c tc o ur tf o un d, has no t e stabl i shed tha t he actual l y m ade the cl ai m ed paym ents. Fo r thi s r eas on, the dist ri ct c ourt d i d not com m i t pl ai n er ro r i n or deri ng r est i tuti on o f$8 37 ,724. Fin ally , th e d ist ric t c ou rtd id n oterr p ro c ed u ra lly in se nt en cingPs i ho s wi th i n the g ui del i ne r an g e wi th o ut disc ussi ng hi s a rgum ent fora low er s entence bas ed on a low eractual l oss . The 24

- m onth s entence , wh i ch w as at the l ow end o fthe gui d eline ra nge, was re aso nabl e. W e A FFIRM .14 N o. 11

- 2683

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