The Honorable Robert M. Dow, Jr., United States District



Judge for the Northern District of Illinois, sitting by designation.

In the

United States Court of Appeals

For the Seventh Circuit

No. 07-2729

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

GREGORY A. BARNHART,

Defendant-Appellant.

Appeal from the United States District Court

for the Central District of Illinois.

No. 05-CR-20018—Michael P. McCuskey, Chief Judge.

ARGUED FEBRUARY 9, 2009—DECIDED MARCH 26, 2010

Before POSNER and SYKES, Circuit Judges, and DOW,

District Judge.



SYKES, Circuit Judge. A jury convicted Gregory Barnhart

on two counts of wire fraud—one involving a fraud on

a former employer and the other involving a fraudulent

scheme to obtain a $500,000 loan from Sun Trust Bank
2 No. 07-2729

secured by E. I. du Pont de Nemours and Company

(“DuPont”). Barnhart argues that we should reverse his

convictions for two reasons. First, he contends that the

district judge’s questioning of witnesses during his

trial displayed an inappropriate bias in favor of the government. Second, he argues that the government prejudicially “paraded” before the jury the factual details of his

prior convictions for theft and deceptive practices.

Barnhart also challenges his sentence, claiming that the

district judge improperly calculated the amount of loss

and erred by ordering him to pay restitution based on

relevant conduct.

We agree that the judge’s questioning of the witnesses

during this trial went too far, but it did not prejudice

Barnhart’s substantial rights given the overwhelming

evidence of his guilt. Barnhart’s “parading” argument is

meritless, as is his contention that the district court improperly calculated the amount of loss. We therefore

affirm his conviction and sentence. On the limited issue

of restitution, however, a remand is in order; the government concedes that the district court should not have

ordered restitution based on relevant conduct, and

we agree.

I. Background

A. The Frauds

In the spring of 2003, Barnhart approached Paul Tatman,

owner of Tatman’s Collision Repair Centers (“Tatman’s”),

to discuss the possibility of purchasing the business.
No. 07-2729 3

Barnhart was unable to raise the necessary capital for the

acquisition, however, so Paul Tatman instead brought

him into the business as an employee to implement

improved systems and procedures at the company’s four

collision-repair service centers. Tatman’s issued Barnhart

a corporate credit card because the job required Barnhart

to travel between these four locations, which were scattered throughout central Illinois. In September 2003, after

Barnhart had been working at Tatman’s for a few months,

the company’s accountant alerted Paul Tatman that

Barnhart had used the corporate credit card to purchase

a home-entertainment system—a plasma television,

speakers, a wall mount, and a three-year service plan—for

a total cost of $7,919.99. In making the purchase,

Barnhart had represented himself as the president of

Tatman’s. Paul Tatman promptly fired him.

Also in the spring of 2003, Barnhart began seeing—first

professionally and later socially—Dr. Sandra Schwartz,

a chiropractor who operated a profitable chiropractic

practice and had a net worth of roughly $1 million. After

he lost his job at Tatman’s, Barnhart presented Schwartz

with his idea to start a collision-repair company called

Blue Star Collision (“Blue Star”), and Schwartz loaned

Barnhart $25,000 in November 2003 to start the business.

Barnhart used most of that money to pay personal expenses. Over the next six months, Schwartz contributed

about half a million dollars in capital to Blue Star with

an understanding that she would receive an 85% ownership stake. But the two did not formalize this agreement, and Schwartz never became a shareholder.

Barnhart also opened several corporate credit-card ac-
4 No. 07-2729

counts in Schwartz’s name and used the cards to charge

approximately $100,000 in personal expenses.

Despite Schwartz’s loans, Blue Star had cash-flow

problems, and Barnhart needed to find another source

of funds. In the spring of 2004, he entered into discussions with the regional sales representative for DuPont’s

auto-body unit, and Barnhart and DuPont executed a

loan/guaranty/supply agreement in April 2004. Pursuant

to the agreement, Barnhart received a $500,000 loan

from SunTrust Bank, and DuPont agreed to guarantee

the loan in exchange for Barnhart’s agreement to purchase all of Blue Star’s auto-refinishing paint from

DuPont. Schwartz in turn personally guaranteed the

loan, and she instructed Barnhart to inform her of all

expenditures related to the loan. Exhibit B of the loan

agreement required Barnhart to disclose Blue Star’s

“Indebtedness,” which Barnhart listed as “none.” Barnhart

also represented to DuPont that Blue Star would not be

insolvent after the execution of the agreement and agreed

that the loan proceeds would be used only to purchase

equipment for the body shop.

Soon after Blue Star and DuPont closed on this loan,

Schwartz left for a few days to care for her sick mother.

When she returned, the loan money was gone. Barnhart

had transferred $30,000 into his personal account and

used these funds to purchase a hot tub, a four-wheel allterrain vehicle, a 50-inch plasma television, and to make

child-support payments to his ex-wife. (Barnhart appears

to have committed the rest of the loan funds to pay off

various start-up costs, including equipment and building-
No. 07-2729 5

design costs; the government did not question this use

of loan proceeds.) Blue Star went out of business soon

thereafter, and DuPont was left on the hook to SunTrust

for the entire $500,000.

B. District-Court Proceedings

On May 6, 2005, a federal grand jury in the Central

District of Illinois returned an indictment against

Barnhart, charging him with three counts of wire fraud

in violation of 18 U.S.C. § 1343. Counts One and Two

concerned Barnhart’s actions when he was employed by

Tatman’s, and Count Three concerned the $500,000 loan

from SunTrust and DuPont. Specifically, Count One

alleged that Barnhart committed wire fraud when he

purchased a set of custom tires and rims on his Tatman’s

credit card without authority from his employer. Count

Two related to Barnhart’s purchase of the home-entertainment system using the Tatman’s credit card. And Count

Three alleged that Barnhart obtained the DuPont/

SunTrust loan through fraud.

The case proceeded to trial. Because this appeal

primarily concerns Barnhart’s conviction on Count

Three—the most substantial of the frauds—we can skip

further discussion of the evidence on the other counts.

The government’s theory regarding the DuPont fraud

was that Barnhart intentionally misrepresented that

Blue Star had no indebtedness and was not insolvent

in order to obtain the loan, and that he fraudulently

used some of the loan proceeds to purchase personal items

and pay his child-support obligations. Much of the trial
6 No. 07-2729

The loan agreement is not a model of clarity. Apparently, no 1

part of the loan agreement explicitly stated what should be

listed in Exhibit B, which was titled “Indebtedness.” The

contract itself defined “Indebtedness” in a rather comprehensive

manner. It also defined “Authorized Indebtedness” as:

(i) Indebtedness under the Loans; (ii) purchase money

indebtedness; (iii) capital lease obligations; (iv) unsecured

current liabilities (other than liabilities for borrowed money

or liabilities evidenced by promissory notes, bonds or

similar instruments) incurred in the ordinary course of

business and either (A) not more than ninety (90) days past

due, or (B) being disputed in good faith by appropriate

proceedings with reserves for such disputed liability;

(v) other unsecured Indebtedness not to exceed Fifty

Thousand Dollars ($50,000) in the aggregate at one time

outstanding; (vi) loans obtained from Blue Star Collision

shareholders and (vii) the Indebtedness specifically listed

on Exhibit B.

(Emphasis added.) As we explain later, the parties offered

competing interpretations of the agreement.

testimony focused on Exhibit B of the loan agreement,

which required Barnhart to disclose Blue Star’s indebtedness. The government maintained that Barnhart’s state- 1

ment on Exhibit B that Blue Star had no debt was an

intentional falsehood; the prosecution marshaled substantial evidence establishing that the loan agreement

required Barnhart to list all Blue Star indebtedness and

that Blue Star had around $1.1 million of debt at the time

he executed the agreement.

Besides the loan documents, the evidence included

copies of Blue Star’s financial statements and testimony
No. 07-2729 7

from Dorothy Lierman, a certified public accountant

who worked for Blue Star in 2004. Lierman testified

about the company’s general financial situation and its

indebtedness at the time of the loan transaction. She

also explained that “insolvency” meant either that a

company’s liabilities exceeded its assets or, more

generally, that a company was unable to meet its regular

debt obligations, and that under either understanding,

Blue Star was obviously insolvent when Barnhart

executed the loan agreement. She told the jury that in

May 2004—just after the loan was closed—Blue Star’s

liabilities exceeded its assets by at least $100,000 and

possibly as much as $500,000. She said Barnhart would

have been well aware of the company’s indebtness and

insolvency.

The government also offered the testimony of

Gelsomina Paolini, the loan manager at DuPont who

handled the transaction. Paolini testified that the only

financial information she received from Blue Star after

February 2004 was confirmation that Schwartz had contributed more than $500,000 to the company. DuPont

apparently classified this as “investment capital” based

on its identification as an “undocumented loan”—an

unsecured loan of a shareholder on which there was

no maturity date. Regarding Barnhart’s fraudulent use

of the loan proceeds, the government established that

Barnhart quickly spent $30,000 of the loan proceeds on

personal expenses.

Barnhart’s defense consisted primarily of his own

testimony and that of an attorney who represented
8 No. 07-2729

Blue Star during the loan negotiations. As to the allegation that he misrepresented Blue Star’s indebtedness,

Barnhart claimed that the loan agreement did not require

him to disclose all of Blue Star’s indebtedness and that

even if it did, he did not intend to deceive DuPont when

he wrote “none” on Exhibit B. Jeffrey Davis, Blue Star’s

counsel during the transaction, testified that Barnhart’s

disclosures on Exhibit B were arguably not improper.

The attorney said the agreement never made clear

what debt should be listed on Exhibit B; he described

what he said was the confusing interaction between the

defined terms “Indebtedness” and “Authorized Indebtedness” in the contract—both of which (he contended) were

used to describe existing and future indebtedness.

Barnhart claimed that he informed DuPont about Blue

Star’s financial condition long before the consummation

of the loan. He readily acknowledged that Blue Star’s

liabilities exceeded $1 million at the time the loan

closed, but he said he disclosed the company’s financial

situation months earlier by sending DuPont a Blue

Star prospectus. Paolini confirmed she received the

prospectus and acknowledged on cross-examination

that DuPont had relied on it to classify the loan was

“high risk.” Finally, Barnhart testified that he believed

Blue Star could use the loan funds for business expenses

such as payroll, and he characterized the $30,000 that

he took for personal use as “payroll” because he had

not received a salary for several months. Any misunderstanding on this point, he claimed, was simply a

mistake rather than evidence of intent to defraud.
No. 07-2729 9

During the testimony of prosecution and defense witnesses alike, the judge interjected with questions of his

own. Barnhart did not object at the time, but the judge’s

questioning of the witnesses figures prominently in his

appeal. The jury returned guilty verdicts on Counts Two

and Three but was unable to reach a verdict on Count

One. In calculating the amount of loss to determine

Barnhart’s advisory Sentencing Guidelines range, the

judge included Barnhart’s fraudulent conduct against

Schwartz as relevant conduct. The judge sentenced

Barnhart to 78 months’ imprisonment and ordered him

to pay restitution of $500,000 to DuPont and $604,070.42

to Schwartz. This appeal followed.

II. Discussion

A. Judicial Questioning of Witnesses

Barnhart’s primary claim on appeal is that the district

judge’s questioning of witnesses was highly prejudicial

and either overtly or subtly conveyed a bias in favor of

the government. A claim of this type requires us to

make two inquiries: “First, we inquire whether the judge

in fact conveyed a bias regarding the defendant’s honesty

or guilt. If so, we consider whether the complaining

party has shown serious prejudice resulting from the

district court’s comments or questions.” United States v.

Washington, 417 F.3d 780, 784 (7th Cir. 2005) (citation

omitted). We evaluate the judge’s questioning of witnesses in the context of the entire trial and not in isolation. See United States v. Martin, 189 F.3d 547, 554 (7th Cir.

1999). “If the court’s questions were partial to the pros-
10 No. 07-2729

At oral argument Barnhart suggested that preserving an 2

objection in this context is impractical because of the obvious

sensitivity of objecting to the judge’s conduct in front of the

jury. We have previously acknowledged the awkwardness of

preserving a claim of judicial bias. See United States v. McCray,

437 F.3d 639, 644 (7th Cir. 2006). Nevertheless, the objection

must be made; but nothing in Federal Rule of Evidence 614(c)

requires this to be done in the jury’s presence.

ecution and they could prejudice the jury’s decision, then

reversal of the conviction could be in order.” Id.; see also

United States v. Verser, 916 F.2d 1268, 1272-73 (7th Cir. 1990)

(explaining that a district judge’s duty to avoid giving an

“impression to the jury that the judge believes one version

of the evidence and disbelieves or doubts another” is

“[f]undamental to the right to a fair trial” (quotation marks

omitted)).

But where, as here, the defendant failed to make a

timely objection to the district judge’s questioning, we

analyze the claim of improper signaling through the lens

of plain-error review. See FED. R. CRIM. P. 52(b). This 2

means Barnhart must establish that (1) an error has occurred; (2) that it was “plain” in the sense that it was

clear; (3) that it affected his “substantial rights”; and

(4) that it “seriously affected the fairness, integrity, or

public reputation of the judicial proceedings.” United

States v. Askew, 403 F.3d 496, 503 (7th Cir. 2005).

District judges have broad discretion in conducting

trials and may question witnesses during direct or crossexamination to clarify testimony or assist the jury’s under-
No. 07-2729 11

standing of the evidence. See FED R. EVID. 614(b); United

States v. McCray, 437 F.3d 639, 643 (7th Cir. 2006). But the

judge’s discretion to question witnesses is not unfettered;

the judge may not “assume the role of an advocate for

either side” by either signaling through his questions

that he thinks a witness is not credible or suggesting that

he disbelieves a party’s theory of the case. Martin, 189

F.3d at 553.

Barnhart argues that the judge’s questioning of both

defense and prosecution witnesses was so one-sided

that it conveyed the clear impression that the judge

thought the government’s case was strong and Barnhart’s

defense implausible. He points first to the judge’s questioning of Jeffrey Davis, Blue Star’s counsel during the

loan negotiations. Davis testified about his understanding

of the loan agreement’s definition of indebtedness

and what he said were its confusing instructions about

how to disclose Blue Star’s indebtedness. During crossexamination, the prosecutor sparred with Davis over the

proper interpretation of the agreement. Davis tried to

explain that the confusion stemmed from the agreement’s use of the terms “indebtedness” and “authorized

indebtedness.” At this the district judge interrupted: 

THE COURT: If DuPont knew there was $1.1 million

worth of indebtedness, would they have made

this loan?

THE WITNESS: I do not know. I don’t know what was in

the—probably not with the balance sheets that they—

THE COURT: Especially if one document says “none”

and another document says “1.1 million.” That’s a big

variance, isn’t it?
12 No. 07-2729

THE WITNESS: Yes. And I think that the issue is . . . that

the definition of “authorized indebtedness” sets forth

all those items which are authorized pursuant to

the agreement, which lists all of (i) through (vi), and

then has a second catch-all which would cover anything that wasn’t covered through (i) through (vi).

THE COURT: But they were trying to get their money

guaranteed and not put themselves in a position they’d

have to fight anybody else, right?

THE WITNESS: Yes, sir.

These leading questions read like a cross-examination.

The first question forced Davis to speculate without

foundation as to the materiality of Barnhart’s representations, and it also tacitly rejected the defense theory that

DuPont was sufficiently informed of the status of Blue

Star’s debt by the prospectus Barnhart provided months

before the loan closed. The second and third questions

largely dismissed Davis’s proffered interpretation of the

contract, by which he tried to explain the variance

between Blue Star’s actual indebtedness and Barnhart’s

representation on Exhibit B. In short, the exchange

strongly suggests that the district judge doubted the

plausibility of both Davis’s testimony in particular as well

as the overall defense theory that Barnhart merely misunderstood the terms of the loan agreement and did not

knowingly deceive DuPont.

Barnhart also directs us to several questions from the

judge which served to emphasize uncontested facts that

were highly unfavorable to the defense. For example, the

judge repeatedly asked Davis and Barnhart to admit that
No. 07-2729 13

Davis testified on cross-examination that he told DuPont that 3

the loans were “undocumented.” The prosecutor showed him a

copy of Blue Star’s balance sheet to demonstrate that the loans

were reflected on the company’s books. Davis said that

was not what he meant by “undocumented” and tried to

explain that he was referring to a loan without a promissory

note setting forth repayment terms or interest rates. The judge

interrupted: 

THE COURT: Had [Barnhart] ever presented this [balance

sheet exhibit], a copy of this to you? 

THE WITNESS: Not this balance sheet, no.

THE COURT: Had anybody—or, well, had [Barnhart]

presented to you the number of $433,532.57 [the loan

amount specified on the balance sheet]? 

THE WITNESS: I knew that that’s the approximate

amount of [Schwartz’s] initial, her initial investment. Yes.

THE COURT: Okay. And that came from him?

THE WITNESS: Correct. And it was, it was—again, when

we originally met, that was—it was supposed to be a

million dollars; but, again, that number came from

[Barnhart].

Barnhart controlled access to all of Blue Star’s financial

information. Davis had already testified that Barnhart

never shared Blue Star’s balance sheet with him and

explained that he usually does not see a client’s financial

information. When Davis moved on to explain what he

meant by the phrase “undocumented loans,” the judge

interrupted his explanation to return to his testimony

that Barnhart never supplied him with Blue Star’s financial statements. The judge also jumped in during a series 3

of questions to Davis about what Barnhart was required
14 No. 07-2729

Davis continued to press the notion that the only debt that 4

needed to be reported on Exhibit B was unauthorized debt and

explained that all other debt would have been disclosed on the

balance sheets. The following exchange then followed between

the district judge, Davis, and the government: 

THE COURT: And any balance sheet that was sent to

DuPont by Mr. Barnhart, you never saw that?

THE WITNESS: I did not see those balance sheets. No. 

MR. BASS: So you’re not disputing that DuPont had asked

for and was interested in finding out about what debt,

regardless of what it was, Blue Star had before it made this

loan . . .[?]

THE WITNESS: I’m not disputing that . . . . The only thing

I was disputing was what would fall on Exhibit B.

At this point in Barnhart’s cross-examination, the prosecutor 5

showed Barnhart a copy of the prospectus, which contained an

explanation that Blue Star anticipated approximately $1 million

in debt when it opened its doors. Barnhart testified that he gave

this prospectus to his contact at DuPont in either February or

March of 2004. The judge then asked:

THE COURT: And I think you presented it to [the contact]?

THE WITNESS: That’s correct. 

THE COURT: And Mr. Davis testified that he never saw

that; is that correct? 

(continued...)

to disclose concerning Blue Star’s indebtedness. Later, 4

when Barnhart contended that the prospectus he sent to

Dupont had sufficiently disclosed Blue Star’s financial

situation, the judge interrupted to get him to confirm he

had never given Davis a copy of the prospectus. These 5
No. 07-2729 15

(...continued) 5

THE WITNESS: Yeah. He would not have.

THE COURT: Okay.

For example, near the end of Paolini’s direct examination, the 6

judge asked her to confirm that “[b]ased on the representations made, you made a business decision that the business

could have sufficient income to pay that monthly . . . debt [on

the loan]?” Even though this question asked Paolini to summarize a portion of her testimony that was detrimental to

Barnhart, it was well within the appropriate zone of discretion;

judges are permitted to ask witnesses to summarize their

testimony as an aid to jurors. Although we have previously

held that too many clarifying questions may operate to

impermissibly reinforce testimony detrimental to the defendant and amount to improper judicial signaling, see United

States v. Paladino, 401 F.3d 471, 478 (7th Cir. 2005), this is not

such a question.

questions gave the impression that the judge was skeptical

of Barnhart’s claim that he did not willfully withhold

information about Blue Star’s debt.

The judge also questioned the government’s witnesses,

and although most of this was innocuous, we are troubled 6

by one particular passage in the testimony. During crossexamination of Lierman, Blue Star’s accountant, Barnhart’s

trial counsel was attempting to establish that the concept

of “insolvency” could have a different meaning to a

certified public accountant than to a lay businessperson.

Barnhart’s counsel asked Lierman to restate the definition of the term she had used on direct examination so

he could compare it to his own proposed layperson’s
16 No. 07-2729

Barnhart’s argument properly takes issue with the effect of 7

the judge’s questions and not with the effect of damaging

responses to otherwise neutral clarifying questions. The distinction is critical in cases alleging improper judicial signaling.

“[T]he rule concerning judicial interrogation is designed to

prevent judges from conveying prejudicial messages to the

jury. It is not concerned with the damaging truth that the

questions might uncover.” Martin, 189 F.3d at 554.

definition. After Lierman restated the definition, the

judge said to her: “And so that’s what you would define

then as insolvency with your 30-year experience, your

education, is that there’s not sufficient money coming in

to pay the bills that need to be paid on a monthly basis?”

This attempt to bolster the prosecution’s witness took the

wind out of the sails of the defense attorney’s crossexamination.

Considered as a whole and in light of the entire trial, the

judge’s questioning of the witnesses went beyond mere

clarification and instead gave the impression that the

judge disbelieved Barnhart’s defense. Trial judges need 7

not be silent spectators, but they are neutral arbiters; the

quantity and quality of the judge’s questions in this case

conveyed an improper skepticism about Barnhart’s defense. This was error, but whether it affected Barnhart’s

substantial rights is another matter.

To establish prejudice, Barnhart must show that but for

the judge’s improper questioning, he probably would not

have been convicted. See United States v. Olano, 507 U.S.

725, 734 (1993). That is, if the evidence of guilt is over-
No. 07-2729 17

Although jurors are presumed to follow limiting or curative 8

instructions, in this as in other contexts, a limiting instruction

may be insufficient to fully or even partially cure a trial error.

Cf. United States v. Smith, 308 F.3d 726, 739 (7th Cir. 2002)

(“[J]urors are presumed to follow limiting and curative instructions unless the matter improperly before them is so

powerfully incriminating that they cannot reasonably be

expected to put it out of their minds.”).

whelming, this type of error can be considered harmless.

See United States v. Paladino, 401 F.3d 471, 478 (7th Cir.

2005). Although the trial judge’s influence on the jury is

ordinarily “of great weight,” Quercia v. United States, 289

U.S. 466, 470 (1933) (quotation marks omitted), the risk

of prejudice from judicial questioning can be minimized

if, as here, the judge issues an instruction at the close of

the case reminding the jury that nothing he said should

be construed as an opinion about the evidence or to

suggest what the jury’s verdict should be. See, e.g., McCray,

437 F.3d at 644. Such an instruction might not entirely

erase the suggestive effect of one-sided questions from

the judge, but it limits the degree of influence the ques- 8

tions might otherwise have on the jury’s deliberations

and may permit a conclusion that the judge’s error

was not prejudicial. This is especially true where, as here,

the evidence of guilt is very strong. We are confident

that the judge’s questions to the witnesses, though they

crossed the line, did not affect the outcome of this trial.

The basic facts of the case—the details of the DuPont loan

transaction, Blue Star’s indebtedness and insolvency, and

Barnhart’s misappropriation of the loan proceeds for

personal use—were not in dispute. The verdict turned
18 No. 07-2729

on the question of Barnhart’s intent—whether he intended

to defraud DuPont when he represented that Blue Star

had no indebtedness and was solvent, and when he used

$30,000 of the loan funds for personal expenses, including

the purchase of a 50-inch plasma television, a hot tub,

an all-terrain vehicle, and payment of back child support.

Let’s start with the misuse of the $30,000. Barnhart

claimed that he honestly thought he could use the loan

proceeds to pay general business expenses, including

“payroll,” and that the $30,000 represented his salary.

Implausible on its face, the prosecution’s evidence overwhelmingly contradicted this claim. First, using any of

the loan money for “payroll” was plainly in violation of

the loan agreement, which stipulated that the funds

were to be used only for purchasing auto-body machinery.

Second, that the $30,000 went primarily toward the purchase of luxury personal items severely undermines the

already implausible claim that the money represented

Barnhart’s “salary.” Finally, Barnhart’s history of fraud—

as represented by his cynical deception of Schwartz and

his convictions for theft and deceptive practices—made

his claim of innocent intent simply unbelievable.

Likewise, Barnhart’s efforts to explain away his misrepresentations regarding Blue Star’s solvency and lack of

indebtedness must be seen in light of the obviously

fraudulent endgame of this scheme, as well as his

ongoing fraud against Schwartz and his other convictions. Whatever plausibility his innocent explanation

for these misrepresentations might have had (and there

wasn’t much), it evaporates when considered in light of
No. 07-2729 19

the rest of his conduct. The best piece of evidence in his

favor was Paolini’s acknowledgment that he had given

her a copy of Blue Star’s prospectus in February 2004; it

listed roughly $1.1 million in expenditures, and Barnhart

argued that DuPont should have realized that these

expenditures would be liabilities by April 2004 when the

parties negotiated and executed the loan agreement. But

what DuPont should have known is not really the point;

the rest of the evidence overwhelmingly established

Barnhart’s intent to defraud.

In short, although the judge’s questions went too far,

Barnhart has not established that they were prejudicial.

Accordingly, while we agree there was error, it was not so

significant as to affect his substantial rights or require

correction under plain-error review. 

B. “Parading” Barnhart’s Prior Conviction

Barnhart also claims that the government improperly

“paraded” the facts underlying his convictions for theft

and deceptive practices, admitted for impeachment

purposes. He acknowledges that the government was

permitted to go beyond establishing the mere fact of these

convictions (permitted under Rule 609(a)(1) of the

Federal Rules of Evidence) and question him regarding

the specific conduct underlying his convictions pursuant

to Rule 608(b) (permitting cross-examination regarding

specific instances of conduct bearing on a witness’s character for truthfulness). Barnhart argues instead that the

government went too far and exploited the facts involved

in his theft and deceptive-practices convictions. For
20 No. 07-2729

support he relies on United States v. Smith, 454 F.3d 707

(7th Cir. 2006); United States v. Robinson, 8 F.3d 398 (7th

Cir. 1993); and Campbell v. Greer, 831 F.2d 700 (7th Cir.

1987), but those cases are inapplicable. Both involved

impeachment by prior conviction when the conviction

was offered under Rule 609, which restricts the introducing party to “identify[ing] the particular felony

charged, the date, and the disposition of a prior conviction.” Smith, 454 F.3d at 716.

Here, as we have noted, Rule 608(b) permitted the

government to cross-examine Barnhart regarding the

facts underlying his theft and deceptive-practices convictions because he was a witness and the convictions

related to his character for truthfulness. Rule 403 may in

some cases limit or prohibit this line of questioning if

its prejudicial effect would substantially outweigh its

probative value. But that’s not the case here. The central

focus of this case was Barnhart’s intent to defraud. The

underlying facts of his theft and deceptive-practices case

involved a $40,000 fraud on a friend in connection with

the ostensible purchase of a luxury suite at the Daytona

Speedway. This course of conduct is highly relevant to

Barnhart’s character for truthfulness. The government’s

cross-examination on the specifics of Barnhart’s prior

convictions was entirely appropriate.

C. Barnhart’s Sentence and Restitution Order

Barnhart challenges his sentence and restitution order

on two grounds. First, he argues that the district judge

erred in determining the amount of loss by including the
No. 07-2729 21

funds Schwartz provided through loans and credit-card

charges as relevant conduct. Second, Barnhart contends

that the court erred in ordering him to pay restitution

based on this relevant conduct. The government correctly

concedes that the district court erred in its restitution

order; losses resulting from relevant conduct are not

properly within the scope of restitution. See United States

v. Frith, 461 F.3d 914, 920-21 (7th Cir. 2006). Barnhart is

entitled to a remand for modification of the judgment

to remove that amount from the restitution order.

As for the loss amount, the district court concluded

that Barnhart caused a total of $1,104,070.42 in losses—

$604,070.42 to Schwartz and $500,000 to DuPont. Specifically, the court found that the fraud against Schwartz

was “inextricably intertwined” with the fraud against

DuPont and could be considered relevant conduct

under U.S.S.G. § 1B1.3(a)(2). We review this determination for clear error. Frith, 461 F.3d at 917. Barnhart challenges this loss calculation on two grounds. He claims

there is no evidence Schwartz’s loss resulted from

criminal conduct, and he argues it was not sufficiently

related to the scheme to defraud DuPont to count as

“relevant” conduct. Both arguments are without merit.

“A defendant who challenges a district court’s loss

calculation carries a heavy burden, for he must show that

the calculation was not only inaccurate, but also outside

the realm of possible computation.” United States v.

Wheeler, 540 F.3d 683, 693 (7th Cir. 2008) (quotation marks

omitted). Under the guidelines relevant conduct includes

“all acts and omissions . . . that were part of the same

course of conduct or common scheme or plan as the
22 No. 07-2729

offense of conviction.” U.S.S.G. § 1B1.3(a)(2). Applying

this standard, the district court properly concluded that

Barnhart’s deceit of Schwartz amounted to a criminal

fraud. Schwartz loaned Barnhart in excess of $500,000

based on his false promise that she would have an 85%

ownership interest in Blue Star. Barnhart instead used

much of this money for personal expenses, including

luxury personal items and a trip to the Cayman Islands.

Considered in light of his fraudulent schemes against

DuPont and Paul Tatman, his deception of Schwartz

easily qualifies as a criminal fraud.

Barnhart’s claim that this conduct was not sufficiently intertwined with his fraud on DuPont is equally

unavailing. The commentary to the guidelines notes that

a “common scheme or plan” for purposes of a relevantconduct finding exists where the two acts are “substantially connected to each other by at least one common

factor, such as common victims, common accomplices,

common purpose, or similar modus operandi.” Id. § 1B1.3

cmt. n.9(A). The commentary further states that two

acts are part of the same course of conduct if they are

“sufficiently connected or related to each other as to

warrant the conclusion that they are part of a single

episode, spree, or ongoing series of offenses.” Id.

cmt. n.9(B). The two frauds at issue here easily satisfy

this standard. They overlapped in time, in context, and in

their ultimate objective. Both the fraud on Schwartz and

the fraud on DuPont involved Barnhart’s use of Blue Star

to obtain money for his personal use. Barnhart’s ongoing

deception of Schwartz helped make his deception of

DuPont possible.
No. 07-2729 23

This case is not, as Barnhart claims, like United States

v. Coffman, 94 F.3d 330, 337 (7th Cir. 1996). There, we

concluded that a fraudulent scheme to induce one group

of investors to purchase stock was not sufficiently

related to a separate fraudulent scheme two years later to

borrow money from a bank using the same stock as

security. Here, in contrast, Barnhart’s two fraudulent

schemes were nearly contemporaneous and so intertwined that it would have been difficult to carry out

each one independently.

Accordingly, for the foregoing reasons, we conclude

that although the district court’s questioning of the witnesses during Barnhart’s trial was improper, this error

did not prejudice Barnhart’s substantial rights in light of

the overwhelming evidence against him. There was no

evidentiary error in the use of Barnhart’s prior convictions for theft and deceptive practices, and the district

court’s loss calculation was correct. The restitution order,

however, should not have included amounts attributable

to loss from relevant conduct. Accordingly, we AFFIRM

the convictions and sentence but VACATE the restitution

order and REMAND for limited further proceedings consistent with this opinion.

3-26-10