In the

United States Court of Appeals

For the Seventh Circuit

No. 12-1499

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

ANTHONY BANAS,

Defendant-Appellant.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 09 CR 976-2—Ruben Castillo, Judge.

ARGUED JANUARY 25, 2013—DECIDED MARCH 14, 2013

Before EASTERBROOK, Chief Judge, and BAUER and

KANNE, Circuit Judges.

KANNE, Circuit Judge. Anthony Banas committed extraordinary crimes—he bilked investors out of more than

$70,000,000 and lined his own pockets with the health

care savings of people who trusted him. Anthony Banas

also showed extraordinary contrition—he admitted his

guilt, accepted responsibility for his actions, and he

has worked hard to secure some degree of restitution
2 No. 12-1499

for his victims. Faced with the ancient tension between

justice and mercy, the district judge sentenced Banas to

160 months of imprisonment. That was a significant

sentence, but one well below the Guidelines range.

Banas appealed, challenging his sentence on both procedural and substantive grounds. Because Banas’s sentence

was reasonable and free of procedural error, we affirm.

I. BACKGROUND

The facts of this case, which we draw from the

Presentence Investigation Report (“PSR”), Banas’s plea

agreement, and the plea agreement of his co-defendant,

are largely undisputed. The story begins in 2003, when

Congress created Health Savings Accounts. See Medicare

Prescription Drug, Improvement, and Modernization

Act of 2003, Pub. L. 108-173, § 1201, 117 Stat. 2066, 2469-79

(2003). These accounts help people with high-deductible

health plans save for health care costs by providing taxpreferred treatment for money saved for future medical expenses. See 26 U.S.C. § 223. In 2004, defendant

Anthony Banas, along with Jeremy Blackburn and

Vikram Kashyap, started a company called Canopy

Financial, Inc. The company created a suite of software

products that allowed savers to manage their Health

Savings Accounts online. Blackburn served as Canopy’s

president, Kashyap as its CEO, and Banas as its Chief

Technology Officer.

Canopy’s innovative software won praise throughout

the industry. Business grew, and, by 2009, Canopy had

over a hundred employees. Its success also attracted
No. 12-1499 3

the attention of venture capital and private equity firms.

Before deciding to invest, these firms required Canopy

to turn over various financial documents. Canopy provided them, including financial statements audited by

KPMG, a respected international accounting firm. Satisfied that Canopy was a solid investment, a group called

Spectrum Equity Investors bought $62,400,000 in preferred stock. Investors at other firms bought another

$12,500,000 in preferred stock.

There was only one problem: Canopy had cooked the

books. For starters, there never was a KPMG audit.

Instead, Blackburn concocted financial statements out of

thin air and put them on fake KPMG letterhead. These

counterfeits suggested—falsely—that Canopy’s revenue

exceeded its expenses. Banas played a part, too; he reviewed the phony papers to make sure they looked

like real KPMG documents. Banas also sent emails,

drafted by Blackburn, that falsely suggested Canopy

was in contact with KPMG auditors.

The two men took other steps to further their fraud.

Banas recruited a Canopy employee to pose as a

customer on calls with investors. Banas and Blackburn

used this fake “customer” to funnel more false information to Spectrum. Blackburn also concocted fake bank

statements in Canopy’s name, and Banas knowingly

forwarded these statements on to Spectrum.

Worse, Blackburn and Banas started raiding their

clients’ Health Savings Accounts. Given the nature of its

business, Canopy had access to millions of dollars in

client funds. Eventually, the allure of that cash proved too
4 No. 12-1499

great, and Banas and Blackburn started using it to pay

Canopy’s operating expenses and to feather their own

nests. At the same time, they made fraudulent misrepresentations to induce their clients to keep the money

coming. Banas, for instance, falsely represented to a

corporate customer (who represented roughly 700 individual clients) that the clients’ deposits were earning

4.25% interest. In fact, they were earning far less.

By the time Banas and Blackburn were stopped, they

had misappropriated more than $18,000,000 in client

funds. Blackburn spent roughly $6,000,000 in client

funds on home renovations, fancy watches, a fleet of

luxury cars, and a lease on a corporate jet. Banas stole

less—somewhere in the area of $700,000—but he still

lived the high life. He rented a mansion in California for

$20,000 a month, drove a Lamborghini, and threw lavish

parties. Of the $700,000 in client money that he stole,

Banas invested about $300,000 in a nightclub and another

$400,000 for his own “personal expenditures.” (Plea

Agreement at 8.) The people he stole from were less

fortunate. Victims who lost their health savings included retirees, working families, and a breast cancer

patient who “desperately needed” the lost money to pay

for surgery and chemotherapy. (PSR at 6-8.)

In early 2009, Canopy’s board of directors started to

get suspicious and ordered an internal investigation.

The FBI also got involved after an insurance provider

noticed that Canopy’s customers were bouncing checks

for health care services. When the FBI confronted Banas

on December 20, 2009, he gave a full confession. Once

the fraud came to light, Canopy went bankrupt.
No. 12-1499 5

Following his confession, Banas consented to several

civil judgments against him and cooperated with the

FBI, IRS, SEC, and Canopy’s bankruptcy trustee. He also

scaled back his lifestyle and turned over almost all of his

assets as restitution to his victims. On March 1, 2010,

the government returned an information against Banas

for two counts of wire fraud under 18 U.S.C. § 1343.

Banas waived indictment, and on September 8, 2010,

pled guilty to one count of wire fraud. Blackburn also

pled guilty. On January 24, 2012, the district court sentenced Blackburn to 180 months of imprisonment.

Blackburn will not serve that sentence; he was found

dead the day before he was to report to prison.

Banas appeared before the same district judge for

sentencing a few weeks later. The probation office calculated Banas’s Guidelines sentencing range at 188-235

months, and the government asked for a 180-month

sentence. Banas, on the other hand, argued that his sentence should be “significantly less than Mr. Blackburn’s”

180-month sentence. (Sentencing Tr. at 24.) Ultimately,

the district judge sentenced Banas to 160 months of imprisonment. Banas now appeals, arguing that this sentence was both procedurally improper and substantively

unreasonable. For the reasons that follow, we disagree.

II. ANALYSIS

A. Procedural Error

District judges, not appellate judges, are best positioned to determine criminal sentences. See United States
6 No. 12-1499

v. Gammicchia, 498 F.3d 467, 469 (7th Cir. 2007). As a

result, we generally defer to a sentencing court’s judgment and review the substance of criminal sentences only

for abuse of discretion. See United States v. Leiskunas, 656

F.3d 732, 736-37 (7th Cir. 2011). But whenever “a district

judge is required to make a discretionary ruling that is

subject to appellate review, we have to satisfy ourselves,

before we can conclude that the judge did not abuse

his discretion, that he exercised his discretion, that is,

that he considered the factors relevant to that exercise.”

United States v. Robertson, 662 F.3d 871, 880 (7th Cir. 2011).

In other words, we will not defer to a sentencing court

until we are satisfied, under de novo review, that the

court followed proper sentencing procedure. United

States v. Jones, 696 F.3d 695, 699 (7th Cir. 2012).

That procedure begins with calculating the advisory

range under the Sentencing Guidelines. Id. at 700. Following that, “the defendant must be given the opportunity to bring to the court’s attention any factors under

[18 U.S.C.] § 3553(a) that might warrant a sentence

below the Guidelines range.” Id. The sentencing judge

is then required to consider these statutory factors.

United States v. Williams, 425 F.3d 478, 480 (7th Cir. 2005).

That said, “the judge need not discuss and make

findings as to each of these factors,” id., and “we regularly affirm sentences where the district judge does

not explicitly mention each mitigation argument raised

by the defendant,” United States v. Paige, 611 F.3d 397,

398 (7th Cir. 2010). Instead, it “is enough that the

record confirms that the judge has given meaningful

consideration to the section 3553(a) factors.” Williams,

425 F.3d at 480.
No. 12-1499 7

Banas raises additional procedural arguments in his reply 1

brief. Because Banas did not raise these arguments in his

opening brief, they are forfeited, and we will not address them.

See United States v. Carter, 695 F.3d 690, 701 n.6 (7th Cir. 2012).

Banas’s opening brief contends that the district court

made a procedural mistake by failing to consider two of

his arguments in mitigation. Banas acknowledges that 1

the district court “referenced” his “main arguments” that

(1) Blackburn manipulated him; and (2) Banas fully

cooperated with the government. (Appellant’s Br. at 12.)

But, Banas continues, the district judge did not “provide

any insight into how those items were considered in

calculating Banas’[s] sentence.” (Id.) Thus, Banas concludes, the district court “provided no reasoned basis

for the chosen sentence.” (Id.)

We disagree. The district judge specifically stated that

he had weighed “all of the 3553 factors” both in mitigation and in aggravation. (Sentencing Tr. at 29.) Moreover,

it is clear from the face of the record that the judge

gave “meaningful consideration,” Williams, 425 F.3d at

480, to both of Banas’s key arguments. Regarding

Banas’s manipulation argument, the district judge had

this to say:

I could see how there was some manipulation

by Mr. Blackburn of Mr. Banas and a long-term

friendship. Mr. Blackburn is certainly a character

in and of himself, as shown by not only the financial fraud and his ability to sell himself and his

company but also in his personal lifestyle. Some

would refer to Mr. Blackburn as a bad seed. 
8 No. 12-1499

But, Mr. Banas, when you run into a bad seed,

you are ultimately left with a choice. You either

help the bad seed succeed or you walk away

from the whole thing. Or the best choice of all is

to stop the bad seed. And there is no doubt, your

attorney Mr. Roadman points out, that you

could and should have stopped this fraud. And

you did not. And I wish you had because that

would make sentencing you so much easier.

(Sentencing Tr. at 28.)

And regarding Banas’s cooperation, the district judge

stated:

I certainly credit your cooperation. Your efforts

with the Trustee [appointed to recover assets for

the victims of the fraud] are very commendable.

The letters that have been written on your behalf

I think are somewhat different than the letters

that have been—were written for Mr. Blackburn.

I think there is much more character to you. And

in particular I will tell you the letters written by

your parents are heartbreaking. It is heartbreaking for a son to have to have letters like

that from his parents.

But I will tell you, just as heartbreaking are the

letters from victims in this case who are

searching for those funds to take care of their

medical needs.

(Id. at 28-29.)
No. 12-1499 9

There is little for us to add. The record clearly shows

that the district judge meaningfully considered Banas’s

arguments. As a result, there was no procedural error.

See Williams, 425 F.3d at 480.

B. Substantive Error

Banas also argues that his sentence was substantively

unreasonable because it (1) failed to account for

various mitigating factors; and (2) is disproportionately

long compared to Blackburn’s sentence. Our review is

deferential, and we will reverse only if the district court

abused its discretion. United States v. Matthews, 701

F.3d 1199, 1203 (7th Cir. 2012). Where, as here, the sentence is below the Guidelines range, we presume that it

is reasonable. United States v. Klug, 670 F.3d 797, 800

(7th Cir. 2012). Moreover, where, as here, the district

court “has correctly calculated a Guidelines range, we

assume that significant consideration has been given to

avoiding unwarranted disparities between sentences.”

United States v. Statham, 581 F.3d 548, 556 (7th Cir. 2009).

This assumption also applies “with added force” in this

case because Banas does not challenge “the technical

accuracy of the district court’s Guidelines calculation”

and “the district court imposed a sentence well below

the suggested Guidelines range.” United States v. Dean, ___

F.3d ___, No. 12-1539, 2013 WL 362781, at *3 (7th Cir.

Jan. 31, 2013).

The district court sentenced Banas to 160 months of

imprisonment. Banas acknowledges, as he must, that

this sentence is below the Guidelines range of 188-235
10 No. 12-1499

Banas also argues that an earlier release would allow him to 2

earn more money to pay as restitution to his victims. (Appellant’s Br. at 19-20.) But Banas did not present this argument

to the district court. (See R. 84); (Sentencing Tr. at 12-24). As a

result, the argument is forfeited, and we review it only for

plain error. See United States v. Taylor, 628 F.3d 420, 424 (7th Cir.

2010). We do not think that a plain error occurred here. A

plain error is (1) an error (2) that is “clear” or “obvious” and

(3) affected the defendant’s “substantial rights.” United States

v. Olano, 507 U.S. 725, 734 (1993). We do not think it would

have been a “clear” or “obvious” error to conclude that the

value of the extra restitution Banas might earn was outweighed by the need to punish Banas for his crimes.

months. He also acknowledges that this sentence was

below the 180-month sentence given to Blackburn, his codefendant. Nevertheless, Banas argues that his sentence

was objectively unreasonable because it was not even

lower.

We disagree. True, many facts weigh in favor of mitigation. Banas is a first-time offender and is unlikely to

recidivate. To his great credit, he admitted his guilt,

took responsibility for his actions, and has worked to

provide restitution to his victims. Arguably, he was

less involved in planning the fraud than Blackburn. And,

even if Banas was greedy and unscrupulous when he

looted Canopy, at least he did not manage to loot quite

as much as Blackburn did.

But the district judge heard and considered all of

these facts. And set against them, the district judge also 2

had to consider the extraordinarily serious nature of the

underlying crime. Banas was a key player in more than
No. 12-1499 11

$90,000,000 of theft and fraud. That fact alone could

reasonably justify a significant sentence. See United

States v. Vallone, 698 F.3d 416, 497-98 (7th Cir. 2012) (in

sentencing defendant for tax crimes, mail fraud, wire

fraud, and conspiracy, the district judge could reasonably

consider the $50,000,000 loss amount as a “significant

factor” in favor of a longer sentence).

Even worse was Banas’s choice of victims. Banas stole

medical savings from his clients and used them to

finance his own high-rolling lifestyle. Surely stealing

health care money from sick people also justifies a

lengthy sentence. Cf. United States v. Schlueter, 634 F.3d

965, 967 (7th Cir. 2011) (“an above-range sentence was

appropriate because Schlueter . . . took advantage of

personal relationships to cheat them out of significant

sums they needed at critical stages of their lives”); United

States v. Tockes, 530 F.3d 628, 634 (7th Cir. 2008) (approving

above-range sentence for defrauding an elderly couple);

United States v. King, 506 F.3d 532, 536-37 (7th Cir. 2007)

(approving above-range sentence for defendant who

“pocket[ed] funds set aside for victims of Hurricane

Katrina”). And the district judge here reasonably recognized this fact; he stated that he had “never seen another

financial crime this aggravated” in eighteen years as a

federal judge. (Sentencing Tr. at 27.) Given the severity

of the crime, and the fact that Banas still received a belowGuidelines sentence, we do not think that the district

judge’s sentence was unreasonably harsh.

Finally, Banas argues that he was entitled to “a far

lesser sentence than Blackburn” because he was less
12 No. 12-1499

culpable than Blackburn. (Appellant’s Br. at 17.) This

argument borders on frivolous. Banas received a lower

sentence than Blackburn; Banas got 160 months, and

Blackburn 180 months. And, because that sentence

was below-Guidelines, we presume it to be reasonable.

See Klug, 670 F.3d at 800. Banas has not overcome that

presumption. It was not unreasonable—or an abuse

of discretion—for the district court to decline to give

an even lower sentence for such a serious crime.

III. CONCLUSION

We AFFIRM Banas’s sentence.

3-14-13