* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-11047

UNITED STATES OF AMERICA

Plaintiff – Appellee

v.

ROBERT DAVID NEAL also known as, Albert Davis also known as, Michael

Skinner

Defendant – Appellant

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 3:06-CR-335-ALL

Before KING, DeMOSS, and PRADO, Circuit Judges.

PER CURIAM:*

Robert David Neal appeals his 327-month sentence for wire fraud, alleging

(1) that his offense was “partially completed,” see U.S.S.G. § 2X1.1, and (2) that

the sentence is unreasonable under 18 U.S.C. § 3553(a). For the reasons stated

herein, we affirm the district court’s sentence.

United States Court of Appeals

Fifth Circuit

F I L E D

September 24, 2008

Charles R. Fulbruge III

Clerk
No. 07-11047

2

I. FACTUAL AND PROCEDURAL BACKGROUND

Neal concocted a scam through which he intended to collect millions in

worker’s compensation insurance premiums from employers, and then bilk the

workers when it came time to pay claims. To pull this off, Neal claimed to be a

legitimate broker from an established company with adequate funding and

reinsurance. He created shell companies to further his fraud, aliases for

fictitious individuals who supposedly ran such companies, and through these

companies, underbid legitimate competitors. He created forms for the “policies”

he issued and collected premiums. Neal hired a third-party administrator,

ostensibly to pay claims, but provided it with token funding. Neal also had in

place an exit strategy: in the event of a catastrophic claim, he intended to take

the money he had collected as premiums and flee the country.

Additionally, Neal forged the signature of U.S. District Judge Barbara

Lynn. Neal had previously been convicted of filing false tax returns, for which

he served a twenty-seven month term of imprisonment. At the time of the

instant offenses, Neal was serving a three-year term of supervised release. A

special condition of release prevented Neal from working in the insurance

business. To circumvent this, Neal drafted a court document indicating that the

condition had been vacated, and affixed Judge Lynn’s signature.

Neal sold his bogus worker’s compensation policies to several professional

employment organizations (“PEOs”). PEOs provide outsourced employee-related

services to businesses, including personnel management, health benefits, and

worker’s compensation coverage. In 2006, Neal convinced Employers Consortium

Inc. (“ECI”), a PEO, to purchase worker’s compensation insurance through him.

At the sentencing hearing, Andrew Cory, the former president of ECI, testified

that his company had cancelled the worker’s compensation for many of its clients

and was in the process of enrolling them in Neal’s worker’s compensation

scheme. Specifically, ECI intended to enroll a large client, Doctors Community
No. 07-11047

3

Health Care (“Doctors Community”), in Neal’s insurance programs. Negotiations

were at an advanced stage, but a final contract had not been signed. Had the

FBI not informed ECI of the nature of Neal’s fraud, Cory testified that the

company would have begun paying premiums on behalf of Doctors Community

within days. Prior to the FBI interceding, Neal had collected some $401,170.51

in premiums from the victims of his frauds.

On October 26, 2006, Neal was indicted for the scam. He was charged with

wire fraud and aiding and abetting in Counts 1 through 4, and wire fraud in

Counts 5 and 6. Count 7 was a forfeiture charge which was later dropped.

Following indictment, Neal sent numerous letters from prison in which he

attempted to coerce testimony from witnesses concerning the scope of the deal

with ECI and Doctors Community. Neal wrote to Lawrence Hoover, who had

helped Neal to incorporate his bogus companies, stating that if they were able

to “lift [the ECI deal] off of us, the dollar amount of fraud they have on us is

minimal.” According to the testimony of FBI Special Agent Jody Windle, Neal

also threatened the life of the Assistant U.S. Attorney prosecuting the case,

attempted to recruit people to continue the scheme after he was arrested, and

planned to engage in insurance fraud after serving his sentence. His letters

detailed plans to have his fingerprints permanently altered, so that he could flee

the country and commit frauds with impunity from an offshore location.

Neal pleaded guilty—without a plea agreement—to Counts 1 through 6 on

April 27, 2007, three days before his trial was to begin.

The presentence investigation report (PSR) attributed to Neal an actual

and intended loss of $11,205,034.66. The PSR took the $401,170.51 which Neal

had received at the time the FBI interceded, and added to that amount the

projected premiums that would have been paid by the PEOs over the course of

their one-year policies. The PSR also attributed a loss of $8,000,000 to Neal

arising from the insurance policies with ECI on behalf of Doctors Community.
No. 07-11047

4

At sentencing, Neal objected to the loss calculation. After hearing the

testimony of Cory and various FBI agents concerning the scope of the fraud and

the probable loss had the fraud continued unimpeded, the district court

overruled Neal’s objections. The court adopted the PSR and stated:

I am persuaded . . . on the basis of testimony presented today as

well as the sentencing exhibits thatthe intended loss should be used

and that the amounts of intended loss used by the probation officer

in calculating the Guidelines in the [PSR] are an accurate

calculation of the intended loss with the information that is

currently available in the record.

The PSR yielded an offense level of 37 and a criminal history category of

III, for a Guideline range of 262–327 months. Neal contended that a sentence in

this range would be unreasonable in light of the factors of 18 U.S.C. § 3553(a).

The district court noted that it had considered each of the § 3553(a) factors and

sentenced Neal to the statutory maximum of 240 months on each count. The

court ordered that the counts were to run consecutively, so as to produce an

aggregate sentence of 327 months.

II. STANDARD OF REVIEW

Sentencing issues raised for the firsttime on appeal are reviewed for plain

error. United States v. Peltier, 505 F.3d 389, 391-92 (5th Cir. 2007). At

sentencing, a defendant need not cite specific Guideline provisions, so long as a

general objection alerts the sentencing court of the defendant’s disagreement

with a particular application. See United States v. Ocana, 204 F.3d 585, 589 (5th

Cir. 2000). Nevertheless,this circuit adheres to the requirement that defendants

must objectto error, in order to “encourag[e] informed decisionmaking and giv[e]

the district court an opportunity to correct errors before they are taken up on

appeal.” Peltier, 505 F.3d at 392. In Ocana, the defendant filed an objection to

the use of unadjudicated “relevant conduct” as a basis for an upward adjustment

in her offense level. 204 F.3d at 589. The court held that the defendant’s

objection “clearly notified” the sentencing court of her disagreement with an
No. 07-11047

1 The 2006 edition of the Guidelines was used in the preparation ofthe PSR. Therefore,

all references to the Guidelines in this memorandum are to the 2006 edition.

5

upward adjustment under § 1B1.3 ofthe Guidelines, notwithstanding her failure

to provide a citation to that provision. Id.

Neal argues that the district court should have applied a three-level

downward adjustment to his offense level because his fraud was a “partially

completed offense.” See U.S.S.G. § 2X1.1.1 However, Neal did not make this

argument in his objections to the PSR or at sentencing. The government argues

that because Neal first raises this issue on appeal, the court should review for

plain error. Neal acknowledges that he did not previously raise the argument.

However, he contends that because the sentencing hearing largely focused on the

fairness of holding him accountable for the $8,000,000 intended loss to ECI and

Doctors Community, he preserved the issue. In the alternative, in the event he

has not preserved the issue, he asks the court to apply a “more searching

standard than plain error.”

Loss calculation and the “partially completed” nature of an offense are

distinct matters. Compare U.S.S.G. § 2B1.1 (loss calculation), with U.S.S.G. §

2X1.1 (partially completed offense). It is not reasonable to contend that by

challenging the relevance and accuracy of loss calculation under § 2B1.1, Neal

gave the district court an opportunity to consider whether the crime should be

treated as a “partially completed offense” under § 2X1.1, and correct errors in its

calculation of the Guideline range. Cf. Peltier, 505 F.3d at 392. This is not a case

where the defendant merely failed to provide a citation to a given provision, but

the district court was “clearly notified” of the substance of the objection. Cf.

Ocana, 204 F.3d at 589. Therefore, Neal did not raise this objection.

Neal does not persuade when he argues that a “more searching” standard

of review than plain error is appropriate when reviewing a sentence. First, he

cites United States v. Brown for the proposition that “closer scrutiny may also
No. 07-11047

6

be appropriate when the failure to preserve the precise grounds for error is

mitigated by an objection on related grounds.” 555 F.2d 407, 420 (5th Cir. 1977)

(quotation and internal punctuation omitted). Brown concerned constitutional

errors and therefore its ruminations on the level of scrutiny are of diminished

salience in the sentencing context. Second, the basic principle of Brown is

evident in Ocana: an objection may preserve error despite being phrased in

general or non-technical terms, so long as the substance of the objection is

reasonably apparent. As discussed above, Neal’s objections to loss calculation

simply did not alert the district court to potential arguments under § 2X1.1.

Neal also cites United States v. Saro, in which a circuit court noted that

the interests of finality and judicial economy are lessened when a defendant

seeks re-sentencing, as opposed to a new trial. 24 F.3d 283, 287-88 (D.C. Cir.

1994). However, in Saro the district court had misapplied the Guidelines, and

the appellate court considered only how to apply the plain error standard. See

id. As will become apparent, the district court in this case did not misapply the

Guidelines—there was simply no error. Therefore Saro is not on point.

In sum, Neal did not adequately present his § 2X1.1 objection to the

sentencing court. Our review is for plain error. Under this standard, the court

“may correct the sentencing determination only if (1) there is error (and in light

of Booker, an ‘unreasonable’ sentence equates to a finding of error); (2) itis plain;

and (3) it affects substantial rights.” Peltier, 505 F.3d at 392. If Neal makes this

showing, this court may correct the error, but should not exercise its discretion

to do so unless the error “seriously affect[s] the fairness, integrity or public

reputation of judicial proceedings.” Id. (quoting United States v. Olano, 507 U.S.

725, 732 (1993)). In determining whether the district court committed an error,

the court reviews the application of the Guidelines de novo, and will overturn

findings of fact only if they are clearly erroneous. United States v. Ikechukwu,

492 F.3d 331, 333 (5th Cir. 2007); United States v. Smith, 440 F.3d 704, 706 (5th
No. 07-11047

2 Neal does not appeal loss calculation or the upward adjustments which initially

yielded an offense level of 37, nor his criminal history category of III.

7

Cir. 2006). The court treats Guidelines commentary as authoritative, applying

the plain, ordinary and commonly understood meaning of the words. United

States v. Gonzalez-Ramirez, 477 F.3d 310, 312 (5th Cir. 2007).

III. DISCUSSION

A. Partially Completed Offense

Neal argues that his fraud against ECI and Doctors Community was a

“partially completed offense,” and therefore, the district court should have

applied a three-point downward adjustment in his offense level under § 2X1.1

of the Guidelines.2

Neal notes that he never obtained a cent of the $8,000,000 in premiums

attributed to him under the deal with ECI and Doctors Community. He admits

that negotiations were at an advanced stage, but emphasizes that no contract

was signed. He also contends that several important events had not yet occurred

which would have been essential to Neal’s ability to obtain the premiums:

Doctors Community had not signed the deal with ECI; Neal had not yet provided

certain documentation to ECI; and “most importantly, Mr. Neal could have

changed his mind and elected not to continue with the fraudulent activity.” The

government responds that because Neal pleaded guilty to the completed offense

of wire fraud, the adjustment under § 2X1.1 is per se inapplicable, despite the

fact that Neal never received funds under the deal with ECI and Doctors

Community. Alternately, the government contends that, under the plain

language of § 2X1.1, this particular fraud was too far along to be considered

“partially completed.”

Wire fraud is complete when a defendant makes a communication to

advance what he knows to be a fraudulent scheme. 18 U.S.C. § 1343; see United

States v. Nguyen, 504 F.3d 561, 568 (5th Cir. 2007), cert. denied, 128 S. Ct. 1324
No. 07-11047

3 Similar rules apply to conspiracies and solicitations. See U.S.S.G. § 2X1.1(b)(2)-(3).

8

(2008); United States v. Lemons, 941 F.2d 309, 317-18 (5th Cir. 1991); United

States v. Tulaner, 512 F.3d 576, 580 (9th Cir. 2008). Because the actus reus is

the communication, whether the defendant actually obtains the funds or

property he sought is immaterial to his criminal liability. See United States v.

Wharton, 320 F.3d 526, 538 (5th Cir. 2003); Tulaner, 512 F.3d at 580. For

sentencing purposes, the offense level for wire fraud is to be determined in

accordance with § 2B1.1 of the Guidelines. When a defendant is prosecuted

before realizing the fruits of his frauds, courts must grapple with the proper loss

calculation. See § 2B1.1, app. n. 3(A) (stating that “loss is the greater of actual

loss or intended loss”). Additionally, application note 17 directs the sentencing

court to apply § 2X1.1 in the case of a “partially completed offense (e.g. an

offense involving a completed theft or fraud that is part of a larger, attempted

theft or fraud).” § 2B1.1, app. n. 17. This rule applies “whether the conviction is

for the substantive offense, the inchoate offense . . . or both.” Id.

The basic rule of § 2X1.1 is that inchoate offenses (conspiracies, attempts,

and solicitations) receive the same base offense level as the substantive offense,

“plus any adjustments from such guideline for any intended offense conductthat

can be established with reasonable certainty.” § 2X1.1(a). To illustrate: when a

defendant is convicted of an attempt, the court shall decrease the offense level

by three points, “unless the defendant completed all the acts the defendant

believed necessary for successful completion of the substantive offense or the

circumstances demonstrate that the defendant was about to complete all such

acts but for apprehension or interruption by some similar event beyond the

defendant’s control.” § 2X1.1(b)(1).3 Thus, the language of § 2X1.1 contemplates

situations in which a substantive fraud offense is complete, but is a part of a

“larger, attempted theft or fraud.” In such a case, loss is calculated under §
No. 07-11047

4 Neal contends that Cory’s statements are not reliable because Cory had a “significant

financial interest” in this case—presumably because he was a victim. However, Neal has not

demonstrated that reliance on Cory’s testimony was clearly erroneous.

9

2B1.1, with a three-level downward adjustment under § 2X1.1. Conversely, even

if the defendant has been convicted ofthe inchoate offense for theft or fraud (and

not the substantive offense), a downward adjustment under § 2X1.1 is

inappropriate if the defendant was close to completing the substantive offense.

The Background Commentary to § 2X1.1 confirms the inference that this

adjustment is to be used sparingly:

In most prosecutions for conspiracies or attempts, the substantive

offense was substantially completed or was interrupted or prevented

on the verge of completion by the intercession of law enforcement

authorities or the victim. In such cases, no reduction of the offense

level is warranted. Sometimes, however, the arrest occurs well

before the defendant or any co-conspirator has completed the acts

necessary for the substantive offense. Under such circumstances, a

reduction of 3 levels is provided under § 2X1.1(b)(1) or (2).

The Fifth Circuit has never addressed the application of § 2X1.1 to a wire

fraud conviction. The Circuit has applied this particular provision in the context

of bank fraud, which, like wire fraud, does not require that a defendant actually

obtain any of the targeted money or property. See 18 U.S.C. § 1344; United

States v. Oates, 122 F.3d 222 (5th Cir. 1997); United States v. Blackburn, 9 F.3d

353 (5th Cir. 1993). However, in this appeal we expressly decline to address

whether, and under what circumstances, substantive wire fraud convictions

should be eligible for a reduction under § 2X1.1. Rather, the facts of this case

demonstrate that the offense was not “partially completed” for purposes of §

2X1.1. Cory’s undisputed testimony demonstrated that Neal was within days of

receiving the first premium payment on the deal with ECI and Doctors

Community.4 Neal places great weight on the absence of a final signed contract,

as well as the assertion that due diligence had not ended when the FBI alerted
No. 07-11047

10

ECI of the fraud. However, this is of little consequence: Neal had convinced ECI

to cancel its clients’ existing worker’s compensation insurance in anticipation of

switching over to Neal’s “insurance.” Moreover, Neal’s suggestion that he might

have pulled out of his fraud rings hollow: he attempted to recruit others to

continue his scheme after arrest and indictment.

The evidence at sentencing amply demonstrated that Neal was “on the

verge of completion” of his fraud, see § 2X1.1 cmt. background, and would have

begun receiving worker’s compensation premiums from ECI “but for

apprehension or interruption” by the FBI, see § 2X1.1 app. n. 4. Thus, Neal’s

conduct falls short of meeting the plain language of the application notes to §

2X1.1. Because there was no error on the part of the district court, we reject

Neal’s argument that he is entitled to a three-level reduction in his offense level.

B. Reasonableness

We now turn to Neal’s argument that his 327-month sentence is

unreasonable under 18 U.S.C. § 3553(a). Following the Supreme Court’s

decisions in Rita v. United States, 127 S. Ct. 2456 (2007), and Gall v. United

States, 128 S. Ct. 586 (2007), this court applies a two-step procedure when

reviewing a sentence for substantive reasonableness. UnitedStates v. RodriguezRodriguez, 530 F.3d 381, 384-85 (5th Cir. 2008). First, the court determines

whether the sentencing court has committed a significant procedural error, such

as miscalculating the proper Guideline range, treating the Guidelines as

mandatory, or failing to consider the factors of 18 U.S.C. § 3553(a) when making

an individualized assessment of the proper sentence. See Gall, 128 S. Ct. at 597.

If the first step reveals no error and the sentence is within the Guideline range,

the courtthen applies a presumption of reasonableness and reviews the sentence

under a deferential abuse-of-discretion standard. See Rodriguez-Rodriguez, 530

F.3d at 384-85, 389; see also Gall, 128 S. Ct. at 597 (“The fact that the appellate
No. 07-11047

11

court might reasonably have concluded that a different sentence was appropriate

is insufficient to justify reversal of the district court.”).

For a within-Guidelines sentence, the court may “infer that the judge has

considered all the factors for a fair sentence set forth in the guidelines.” United

States v. Mares, 402 F.3d 511, 519-20 (5th Cir. 2005). A presumption of

reasonableness may normally only be overcome ifthe sentence “falls so far afoul”

of the following standards as to demonstrate that the sentencing court abused

its broad discretion: the sentence “(1) does not account for a factor that should

have received significant weight; (2) gives significant weight to an irrelevant

factor; or (3) represents a clear error of judgment in balancing the sentencing

factors.” United States v. Nikonova, 480 F.3d 371, 376 (5th Cir.) (quoting Smith,

440 F.3d at 708), cert. denied, 128 S. Ct. 163 (2007).

First, Neal contends that the sentence grossly overstates the seriousness

of the offense. He argues that holding him accountable for over $11,000,000 in

actual and intended loss is wholly disproportionate with the true loss he caused,

which he calculates to be $151,392.91. He emphasizes that $8,000,000 ofthe loss

attributed to him arises from the deal with ECI and Doctors Community, and is

a “speculative amount.” Neal notes that withoutthe $8,000,000 added to the loss

calculation, his Guideline range would have been 210–262 months. Neal argues

that because this one figure vastly increased his Guideline range,the 327-month

sentence, the maximum under the Guidelines, is unreasonable. Neal provides

no authority to show how inclusion of the loss can be proper under § 2B1.1 of the

Guidelines but yield an unreasonable result in light of the seriousness of the

offense. It was proper to increase the offense level in light of Neal’s audacious

scheme, which had the potential to leave thousands without worker’s

compensation insurance. The sentencing court’s consideration of these matters

is amply reflected in the record of the sentencing hearing; therefore, the court’s
No. 07-11047

12

decision to sentence Neal to the high end of the Guideline range was not an

abuse of discretion for this reason.

Second, Neal contends that the sentence is greater than necessary to

incapacitate him, to deter future crimes (by Neal or others), or to promote

respect for the law. He notes that he will be well over eighty before he serves his

full sentence. He contends that the length of his sentence disregards any chance

or hope of rehabilitation. Neal notes that he first became involved in criminal

enterprises after the age of fifty, when his marriage dissolved and he became

severely depressed. While the government agrees that recidivism might

generally decline with age, it posits that Neal is different: his criminal activities

have all come after age fifty, he demonstrated no intent to give up unlawful

activity after indictment, and he even devised future frauds to carry out after he

served his sentence.

Advanced age does not preclude a long sentence. See U.S.S.G. § 5H1.1

(“Age (including youth) is not ordinarily relevant in determining whether a

departure is warranted. Age may be a reason to depart downward in a case in

which the defendant is elderly and infirm . . . .”) (emphasis added); United States

v. Simmons, 470 F.3d 1115, 1130-31 (5th Cir. 2006) (holding that a sentencing

court must explain a decision to grant a downward departure based solely on

advanced age), cert. denied, 127 S. Ct. 3002 (2007). Here, it is not clear whether

the district court considered Neal’s age. However, the court heard evidence not

only regarding Neal’s pre-indictment conduct, but also his efforts to obstruct

justice, coerce witnesses, and continue his scheme after he was indicted. While

Neal might spend the rest of his life incarcerated, his flagrant disregard for the

law suggests that a long sentence is the best way to incapacitate him. His

sentence also makes clear that wire fraud is not a victimless crime, but here, had

the potential to disrupt the lives of thousands of individuals. Neal’s lengthy

sentence demonstrates that such behavior is intolerable.
No. 07-11047

13

Finally, Neal contends that the sentencing judge did not consider the fact

that his guilty plea saved resources by avoiding a lengthy trial. This argument

is specious. The government still had to prepare for a lengthy trial because Neal

pleaded guilty on the brink of trial, over six months after he was indicted. What

is more, the government’s job was complicated by Neal’s efforts to influence

witness testimony and threaten those prosecuting him.

In sum, the district court committed no significant procedural error and

considered the § 3553(a) factors. We cannot say that the district court’s sentence

should be vacated as an abuse of discretion.

AFFIRMED.