FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

SEPT 2, 2008

THOMAS K. KAHN

CLERK

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 06-15365

________________________

D. C. Docket No. 05-20381-CR-FAM

UNITED STATES OF AMERICA, 

Plaintiff-Appellee, 

versus 

PEDRO B. GONZALEZ, 

Defendant-Appellant. 

________________________

Appeal from the United States District Court

for the Southern District of Florida

_________________________

(September 2, 2008)

Before BIRCH, PRYOR and KRAVITCH, Circuit Judges.

PER CURIAM:
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Pedro Gonzalez (“Gonzalez”) was convicted of several counts of mail and

wire fraud. On appeal, he challenges both his convictions and his sentence. We

conclude that Gonzalez’s conviction is supported by the evidence and that the

district court did not commit any reversible error at trial. Accordingly, we

AFFIRM Gonzalez’s conviction. However, because the fine imposed by the

district court is not supported by the evidence in the record, we must VACATE the

sentence in its entirety and remand this case to the district court for resentencing.

I. BACKGROUND

Gonzalez, the owner of Nations Capital Credit Corporation (“Nations”) and

Excel Investment Group, Corporation (“Excel”), was indicted on five counts of

mail fraud, in violation of 18 U.S.C. § 1341, and six counts of wire fraud, in

violation of 18 U.S.C. § 1343. The indictment described the alleged scheme as

follows. Gonzalez advertised his companies as specializing in obtaining

equipment financing, and he solicited at least 50 small businesses and individuals

throughout the United States to submit credit applications, financial information,

and up-front deposits with the hope of obtaining financing. Gonzalez did not

provide the customers with financing and did not return their deposits as he had

promised. 
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At trial, Keith Bauer (“Bauer”) testified that he worked for Gonzalez as an

account executive at Nations. Nations distributed promotional material, and

customers would contact the company with the understanding that Nations could

finance “hard deals.” R4 at 195. Bauer would contact or “cold call” companies

and individuals who would then refer other individuals to Nations for financing. 

R5 at 13. When Bauer began working at Nations, Gonzalez instructed him how to

make calls to potential customers. R4 at 189. A typical call would consist of the

following: “I am Keith Bauer from NCC. We can fund you guys. If you have bad

or low credit sources, with a good interest rate . . . .” Id. at 189-90. If the

customer was interested, Nations would start the process, including “pulling the

credit and things like that.” Id. at 190. Gonzalez often told Bauer to request

financial information from potential customers. Before receiving a commitment

letter from Nations, the customers sent a credit application to Nations, and based

on the results of a credit report, Gonzalez would determine whether to attempt to

obtain financing for the customer. Very few applications were denied. If

customers had bad credit, Bauer would tell them that they could probably get

funding with a high interest rate. If a client was interested in obtaining funding

from Nations, he would be required to send in a commitment letter with a deposit

for the first and last month’s payments. The customer was told that the deposits
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would be refunded if financing could not be obtained. Jose Espino (“Espino”) had

bad credit and contacted Nations seeking financing, and Bauer informed him that

they could probably obtain financing. Id. at 207-08. At trial, Espino testified that

he needed financing to purchase a trailer for his truck delivery business, but was

unable to obtain financing. Gonzalez claimed to have a funding source that could

get financing for “tough deals” like Espino’s. Id. at 208. After filling out an

application and sending in a requested credit report, Bauer called and told Espino

he was approved. Espino sent Bauer a check for over $1,400, which he was told

would be refunded if financing was not obtained. Nations never financed Espino’s

trailer and never refunded his money. 

Several other victims testified to similar dealings with Gonzalez and

Nations. Martin Cherenacov (“Cherenacov”) testified that he contacted Gonzalez

at Nations after he had failed to obtain financing from a “million places” to build a

movie theater. R5 at 100. Cherenacov never obtained the promised financing

from Gonzalez and he was unsuccessful in obtaining the promised refund. Gina

Woodring (“Woodring”) testified that, after being referred to Nations in order to

finance an expensive piece of equipment for her and her husband’s logging

company and placing a $7,500 deposit, her company began to have financial

difficulties. Woodring never received financing or a refund of her deposit, and she
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was forced to close down her company. Mitchell Gerstenblith (“Gerstenblith”)

testified that his start-up printing company, which was in debt, was referred to

Excel after failing to obtain financing from traditional leasing companies and

banks. He was forced to cancel on a major equipment lease after he failed to

receive the promised financing, and he never received a refund. Gordon Peterson

(“Peterson”) testified that he sent Gonzalez over $3,000 as deposit to obtain

financing, and he never received a refund after financing was denied. Nesthalis

Perez (“Perez”) testified that, after working in a factory, he attempted to obtain

financing from Gonzalez in order to buy a truck and start his own business

because his “life was very hard.” R8 at 42. He sent Gonzalez over $4,600 and

received a refund of only $1,000. Woodring, Gerstenblith, and Peterson all

testified that they provided Gonzalez with their financial information. Gonzalez

did not testify at trial. The court dismissed Count Eight of the indictment, and the

jury found Gonzalez guilty on the remaining ten counts.

The pre-sentence investigation report (“PSI”) calculated Gonzalez’s

guideline range as follows. The base offense level for all ten counts grouped

together was six pursuant to U.S.S.G. § 2B1.1(a). The probation officer applied a

14-level enhancement pursuant to § 2B1.1(b)(1)(h) because the amount of loss

was more than $400,000 but less than $1,000,000. The probation officer applied a
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four-level enhancement pursuant to § 2B1.1(b)(2)(B) because the offense involved

more than 50 victims. The probation officer then applied a two-level enhancement

pursuant to § 3A1.1(b)(1) because Gonzalez knew or should have known that a

victim of the offense was vulnerable based on poor credit history and an inability

to obtain conventional financing. The probation officer also applied a four-level

enhancement pursuant to § 3B1.1(a) for Gonzalez being an organizer or leader of a

criminal activity involving five or more persons. This resulted in an offense level

of 30. Gonzalez earned zero criminal history points, for a criminal history

category of I. An offense level of 30 and a criminal history category of I gave

Gonzalez a guideline range of 97 to 121 months of imprisonment. 

After interviewing Gonzalez, examining his financial records, and

investigating other sources, the probation officer analyzed Gonzalez’s financial

condition and his ability to pay a fine. The probation officer determined that

Gonzalez had a net monthly cash deficit and concluded that he did not have the

ability to pay a fine in addition to mandatory restitution. The probation officer

determined that, pursuant to § 5E1.2(c)(3), Gonzalez’s fine range under the

Guidelines was $15,000 to $150,000 and determined that he owed restitution in

the total amount of $993,277.12 to 207 victims. Gonzalez objected to the PSI’s

factual account of his offense conduct, the amount of monetary loss attributed to
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him, the role enhancement, the enhancement for the number of victims, and the

vulnerable-victim enhancement.

At sentencing, the court sustained in part Gonzalez’s objection to the

amount of monetary loss attributed to him, finding that an 8-level enhancement, as

opposed to a 14-level enhancement, was appropriate, sustained Gonzalez’s

objection to the role enhancement, and sustained in part Gonzalez’s objection to

the number of victims, finding that a two-level enhancement, as opposed to a

four-level enhancement, was appropriate. The court then discussed the

vulnerable-victim enhancement and analyzed the financial circumstances of the 14

victims who testified at trial. The court found the following six victims to be

vulnerable within the meaning of § 3A1.1(b)(1): Espino, Cherenacov, Woodring,

Gerstenblith, Peterson, and Perez. After resolving these objections, the court

found Gonzalez’s base offense level to be 18, resulting in a revised guideline

range of 27 to 33 months of imprisonment.

Defense counsel requested that Gonzalez’s family members be permitted to

testify before the court imposed its sentence. The court declined the request,

stating:

I know their support is very important. . . . I infer that they want me

to give the lowest sentence possible. He’s a good man, a good father,

a good husband, a good citizen. But I do not [want to] have a parade
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of family members saying the obvious and putting them through that

trauma. 

R10 at 35. The court requested defense counsel to proffer the substance of the

proposed testimony of each family member – Gonzalez’s wife, father, and sisters –

which generally consisted of the fact that Gonzalez had strong family support and

was likely to reintegrate himself into society. The court accepted that the

proposed testimony was in fact what the family members believed. After

Gonzalez requested, without success, that the court impose a sentence below the

applicable guideline range, the court assured defense counsel that it would

consider Gonzalez’s strong family background and his ability to reintegrate back

into society. Gonzalez then personally apologized to the court, asking the court to

consider his family background and lack of criminal history. After summarizing

the resolution of the objections, the court stated:

I will note that, of course, he apologizes, as he mentioned today. I

will not inquire of him as to exactly what he means by that, because

he did not take the stand during the trial, and I suspect that there may

be an appeal, as he has every right to do.

Id. at 41. 

The court then discussed each of the 18 U.S.C. § 3553(a) sentencing factors. 

The court first considered sentencing for white-collar crime and found that, as is

typically the case, the history and characteristics of Gonzalez “kind of even out,”
9

because he came from a good home, but that fact should have allowed him to

avoid his criminal conduct. Id. at 42-43. Considering the nature and

circumstances of the offense, the court found that this inured to the detriment of

Gonzalez because of the desperation of the victims and the persistence of the

fraud. Considering the need to reflect the seriousness of the offense, to promote

respect for the law, and to provide just punishment, the court found that people

who commit fraud should be punished severely because of the harm to the victims. 

With regard to deterrence, the court found that the only way to prevent future

white collar crime was to issue severe punishments, as opposed to a house arrest

or a fine, which could be considered the cost of doing business. The court found

that providing Gonzalez with training or education was not a factor in this case. 

With respect to the kinds of sentences available, the court found that it had “all

kinds of sentences available” after United States v. Booker, 543 U.S. 220, 125 S.

Ct. 738 (2005). R10 at 44. The court then acknowledged that the applicable

guideline range was “very important,” and noted that the court’s calculation of the

guideline range, after resolving objections, was ten years less than the original

guideline range presented in the PSI. Id. The court found that the need to avoid

unwarranted sentencing disparities was not a factor because Gonzalez was the

only defendant and “the guidelines kind of take care of that.” Id. at 45. With
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respect to restitution, the court found that Gonzalez owed approximately $116,000

but had only paid back $7,000, which was “nothing to brag about.” Id. at 46. The

court then stated:

I think in this particular case, here is what I perceive to be, and I

didn’t hear the defendant testify, of course, though he has not

accepted responsibility and what he said, I apologize. I don’t know. 

Does he apologize without accepting responsibility?

But his demeanor during the trial, as I sat here as a Judge, showed in

my mind, while the witnesses that were testifying, particularly the

ones I have found vulnerable because I took into consideration that,

he had what I perceive to be a very callus attitude. It seemed to me

that this was just a business dealing. It was just mugging, I didn’t

want to hit anybody. . . .

There really was absolutely no showing of remorse. Because of that,

I think a reasonable sentence would include a sentence above the

guidelines, and it is my intention to go above the guidelines . . . .

But in this particular case, because [of] what I perceive to be the

callus attitude of the defendant, his lack of remorse, the suffering of

the victims, I disagree with defense counsel saying, well, he’s going

to reintegrate into society. I think he would if he were sufficiently

punished.

Id. at 46-48. Finding a 33-month sentence to be insufficient punishment, the court

imposed a sentence of 66 months of imprisonment and restitution in the amount of

$116,300. The court also stated, “[b]ecause you are able to pay a fine, a fine will

be imposed in the amount of $250,000.” Id. at 48. Defense counsel renewed the

previous objection to the vulnerable victim enhancement, and objected to the
 Gonzalez raised several arguments regarding the district court’s decisions to exclude 1

demonstrative exhibits prepared by the defense for use at trial, to admit the testimony of Barry

Longwater, and to allow the government to introduce evidence under Federal Rule of Evidence

404(b). Gonzalez also contends that the evidence adduced at trial was insufficient to support his

conviction and the government’s closing argument contained prejudicial remarks. Upon our

review of the record, we discern no reversible error relating to the district court’s rulings on the

admissibility of evidence, and we conclude that sufficient evidence supports Gonzalez’s

conviction. In addition, Gonzalez challenged the district court’s imposition of a “vulnerable

victim” enhancement to his sentence, and the constitutionality and reasonableness of Gonzalez’s

prison sentence. Because we vacate Gonzalez’s sentence in its entirety based upon the fine

imposed by the district court, we do not discuss or resolve Gonzalez’s other objections to his

sentence.

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above-guideline sentence and the fine imposed by the district court. This appeal

followed.

II. DISCUSSION1

Gonzalez argues that the court erred in imposing a $250,000 fine because he

lacks the ability to pay a fine. Gonzalez maintains that he met his burden

regarding his inability to pay, and that the court did not consider his inability to

pay the fine in light of his mandatory restitution, as it was required to do. The

government responds that, during trial, the district court learned of Gonzalez’s

bank records and his lavish lifestyle, and therefore, the fine was supported by that

information, but the government conceded that the fine was otherwise unsupported

by the record. 

“We review the district court’s decision that [the] [d]efendant is able to pay

the fine for clear error.” United States v. McGuinness, 451 F.3d 1302, 1307 (11th
12

Cir. 2006) (per curiam). The “[d]efendant has the burden of proving inability to

pay.” Id. The Guidelines require the court to “impose a fine in all cases, except

where the defendant establishes that he is unable to pay and is not likely to

become able to pay any fine.” U.S.S.G. § 5E1.2(a). “If the sentencing court

concludes that a fine is appropriate, the Guidelines Manual lists several factors it

should consider in determining the amount of the fine.” United States v.

Hernandez, 160 F.3d 661, 665 (11th Cir. 1998). These factors are:

(1) the need for the combined sentence to reflect the seriousness of

the offense (including the harm or loss to the victim and the gain to

the defendant), to promote respect for the law, to provide just

punishment and to afford adequate deterrence;

(2) any evidence presented as to the defendant’s ability to pay the fine

(including the ability to pay over a period of time) in light of his

earning capacity and financial resources;

(3) the burden that the fine places on the defendant and his

dependents relative to alternative punishments;

(4) any restitution or reparation that the defendant has made or is

obligated to make;

(5) any collateral consequences of conviction, including civil

obligations arising from the defendant’s conduct;

(6) whether the defendant previously has been fined for a similar

offense;

(7) the expected costs to the government of any term of probation, or

term of imprisonment and term of supervised release imposed; and
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(8) any other pertinent equitable considerations.

The amount of the fine should always be sufficient to ensure that the

fine, taken together with other sanctions imposed, is punitive.

 

U.S.S.G. § 5E1.2(d). “[W]e do not require the sentencing court to make specific

findings of fact with respect to the Sentencing Guideline factors as long as the

record reflects the district court’s consideration of the pertinent factors prior to

imposing the fine.” Hernandez, 160 F.3d at 665-66 (quotations and alteration

omitted). If the record does not reflect the district court’s reasoned basis “for

imposing a fine, we must remand the case so that the necessary factual findings

can be made.” Id. at 666.

In Hernandez, the defendant argued that the sentencing court erred by

imposing a fine upon him after the PSI concluded that he did not have the ability

to pay. Id. at 665. However, because the defendant did not object to the fine at

sentencing, we reviewed his claim for plain error and stated that “the district court

had no notice of the need to make further findings with respect to the fine.” Id. at

666. Nonetheless, we concluded that the record supported the fine because he

owned a home and a yacht before seeking bankruptcy relief, and he failed to

answer the probation office’s financial questions, thus implying that he was

concealing assets. Id.
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 By contrast, in this case, the PSI provided a detailed financial analysis of

Gonzalez’s assets and concluded that he lacks the ability to pay a fine in addition

to mandatory restitution. At sentencing, however, the court stated, without

explanation, that Gonzalez was able to pay a fine and imposed a $250,000 fine. 

R10 at 48. At the time that the court imposed the fine, it had reduced Gonzalez’s

base offense level to 18 after sustaining Gonzalez’s objections to some of the

enhancements in the PSI. Under the Guidelines, a base offense level of 18 would

give Gonzalez a new Guidelines fine range of $6,000 to $60,000. U.S.S.G. §

5E1.2(c)(3). Thus, the court imposed a fine of more than three times the

maximum fine provided for in the Guidelines without providing any reasoned

basis and without explaining why the PSI’s conclusion with respect to Gonzalez’s

inability to pay was incorrect. Unlike Hernandez where the defendant failed to

object to the fine, Gonzalez objected at sentencing and the court therefore had

notice of the need to provide some reasoned basis for imposing the fine. See 160

F.3d at 665-666. Because the record provides no explanation regarding the basis

upon which the court imposed the fine, we vacate the sentence imposed by the

district court and remand this case for resentencing. United States v. Yost, 185

F.3d 1178, 1181 (11th Cir.1999) (“. . . we have held that when we vacate a

sentence and remand for resentencing, the sentence becomes void in its entirety
15

and the district court is free to revisit any rulings it made at the initial

sentencing.”); United States v. Stinson, 97 F.3d 466, 469 (11th Cir.1996) (per

curiam) (“A criminal sentence is a package of sanctions that the district court

utilizes to effectuate its sentencing intent consistent with the Sentencing

Guidelines.”).

III. CONCLUSION

On appeal, Gonzalez challenges both his conviction and his sentence. We

conclude that Gonzalez’s conviction is supported by the evidence and that the

district court did not commit any reversible error at trial. Accordingly, WE

AFFIRM GONZALEZ’S CONVICTION. However, because the fine imposed

by the district court is not supported by the record, we must vacate the sentence in

its entirety and remand this case to the district court for resentencing.

VACATED IN PART AND REMANDED