In the

United States Court of Appeals

For the Seventh Circuit

No. 12-3159

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

VERNA PILON,

Defendant-Appellant.

Appeal from the United States District Court for the 

Northern District of Illinois, Eastern Division.

No. 10 CR 129 — Virginia M. Kendall, Judge.

ARGUED SEPTEMBER 19, 2013 — DECIDED OCTOBER 30, 2013

Before MANION, KANNE, and SYKES, Circuit Judges.

MANION, Circuit Judge. After eight witnesses had testified

at her jury trial, Verna Pilon pleaded guilty to five counts of

wire fraud in connection with a Ponzi scheme she ran with her

husband. At sentencing, the district court denied credit for

acceptance of responsibility, applied an enhancement for abuse

of a position of trust, and sentenced her to 78 months’ incarceration. On appeal, Pilon argues that the district court erred in

denying credit for acceptance of responsibility, in applying an
2 No. 12-3159

enhancement for abuse of a position of trust, and by ignoring

mitigation arguments that her attorney made at sentencing. In

addition to these procedural arguments, Pilon also argues that

her 78-month sentence was substantively unreasonable. We

affirm.

I. Factual Background

Through companies they operated and controlled, Verna

Pilon and her husband James Pilon offered two investment

opportunities: the “Mortgage Acceleration Program” and the

“Private Placement Program.” Pilon falsely represented that

the MortgageAccelerationProgramwouldgenerate significant

returns for investors on their money, such that she would pay

the investors’ monthly home mortgage payments going

forward, completely pay off the outstanding balance on the

investors’ mortgages within two years, and make a bonus cash

payment to investors at the end of the two-year period. Many

of the investors in the Mortgage Acceleration Program were

already financially struggling so they refinanced their mortgages to get the money necessary to invest in the program,

resulting in a higher monthly mortgage payment. With respect

to the Private Placement Program, Pilon falsely represented to

investors that she would invest their money in a high-yield

fund and that the investors would receive between a hundred

percent or more on their investments within 90 days or a

slightly longer period as a result of the Private Placement

Program. 

Pilon roped in investors not just by the promise of returns,

but also by hinting at religious and humanitarian purposes.

Among her companies were “Prayer International” and “Owe
No. 12-3159 3

No One International Ministry.” Pilon perpetuated the Mortgage Acceleration Program by paying early investors’ mortgages with later investors’ money (a Ponzi scheme) and she

kept the Private Placement Program alive by telling the

investors that the program was generating significant returns

when it was not. Approximately forty people were lured by

Pilon into investing amounts ranging from $4,000 to $110,000.

Investors entrusted a total of $1,027,900 to the Pilons. The

investment programs were frauds; $967,702 of the investors’

funds were lost.

Pilon did not invest the money she received from her

investors, but instead used the money in a manner inconsistent

with her representations to investors. For instance, she used

the money to pay for a 2004 Cadillac Escalade, a $14,000

diamond ring, a $125,000 earnest money payment on a $21

million home in California (purportedly to use as a temple for

the Washitaw Nation), hotel stays, airline tickets, and to pay off

personal debt. In March 2005, the Illinois Department of

Securities ordered Pilon to cease offering investments; she

ignored the order. As was inevitable, Pilon’s programs

eventually unraveled. Her investors—at this point, victims—lost the money they had given her. Additionally, many

who had refinanced their mortgages to fund the investments

lost their homes.

Pilon was indicted for wire fraud on February 17, 2010.

Pilon was a member of a sovereign citizen movement called

the Washitaw Nation. As such, Pilon moved to dismiss the

indictment against her because she believed that she was not

subject to the laws of the United States or to the jurisdiction of

its courts. The motion was denied and a jury trial was set for
4 No. 12-3159

May 22, 2012. The morning of May 22, right before jury

selection was to begin, Pilon informed the district court of her

intent to plead guilty to the indictment. The district court

conducted a change of plea hearing, and began by informing

Pilon of her rights and explaining the statutory guidelines and

the maximum penalties. However, when the government

proffered the factual basis of her offense, Ms. Pilon denied

everything; she denied any knowledge of the fraud, she denied

making any representations to investors (stating instead that

she followed a script), and she denied knowing that any of the

representationswere false. The district court told Pilon that she

had not admitted guilt and thus the court would not accept her

guilty plea. The court then proceeded to select a jury and

adjourned for the day. 

On May 23, 2012, the district court convened for the first

day of Pilon’s jury trial. Before the trial began, Pilon’s attorney

informed the court that Pilon would like to “revisit a possible

change of plea,” but that the attorney thought it could wait

until lunch. The court advised Pilon that, to plead guilty, she

would have to admit facts that show guilt. Pilon requested to

speak, and the court advised her to consult with her attorney.

After speaking with Pilon, her attorney stated they would try

the plea at lunch. The parties proceeded to give their opening

statements to the jury and eight of the government’s witnesses—victims of Pilon’s scheme—testified. No change of

plea was attempted at lunch. Instead, at the end of the day, the

court undertook a second change of plea hearing. The district

court againexplained Pilon’s rights and the sentencing process,

and the government proffered the same facts, but this time
No. 12-3159 5

Pilon admitted to the scheme and successfully pleaded guilty

to the indictment.

On September 6, 2012, the district court held Pilon’s

sentencing hearing. In calculating Pilon’s guideline range, the

court applied an enhancement for abuse of a position of trust.

Pilon’s counsel stated that there was no objection to the

enhancement (as he had also represented in Pilon’s sentencing

memorandum). The district court also declined to credit Pilon

for acceptance of responsibility, finding that she did not accept

responsibility “until the 11th hour, and that it was not based on

true remorse but, rather, upon the reality that she would be

convicted.” After hearing the sentencing arguments, the court

sentenced Pilon to 78 months’ incarceration, within the middle

of the guideline range, and imposed $967,702 in restitution. 

II. Discussion

On appeal, Pilon contends that the district court erred by

(1) denying credit for acceptance of responsibility; (2) applying

an enhancement for abuse of a position of trust; (3) failing to

adequately consider her mitigation arguments; and (4) sentencing her to a term of incarceration that is substantively unreasonable.

A. Acceptance of Responsibility

We review the district court’s application of the guidelines

de novo and review its factual determinations for clear error.

United States v. Walsh, 723 F.3d 802, 807 (7th Cir. 2013). Our

precedent is clear that not accepting responsibility until the

eleventh hour is a sufficient reason for a district court to deny

a defendant credit for acceptance of responsibility. See United
6 No. 12-3159

States v. Redmond, 667 F.3d 863, 874 (7th Cir. 2012). Pilon clearly

pleaded guilty well past the eleventh hour, but she attempts to

skirt our holdings by contending that the district court’s denial

of credit was not based on the lateness of her plea, but rather

on a clearly erroneous finding of fact. See United States v.

Ritsema, 31 F.3d 559, 568 (7th Cir. 1994) (reversing where the

district court erroneously denied acceptance-of-responsibility

credit based on the defendant’s refusal to accept responsibility

for conduct that was not relevant to the conviction). Specifically, Pilon contends that the district court erred in finding that

she did not accept responsibility until after hearing the

testimony against her during the first day of trial. 

At sentencing, Pilon’s attorney relayed to the court that

Pilon’s first attempt to plead guilty failed because she became

angry and upset at her husband when hearing the government’s proffer of facts. He stated that Pilon knew that she had

inappropriately denied the facts, but that she was ready to

plead guilty the morning of May 23, before hearing the

testimony against her. Pilon’s attorney informed the court that

the only reason she did not plead guilty the morning of the

second day was to let the government proceed with its out-oftown witnesses who were already present. Nevertheless, the

court stated: 

I do think, from what I observed at the trial,

the fact that it was after the seven witnesses1

who testified each were bringing her closer

There were eight, not seven, witnesses, as clarified later by the district

1

court.
No. 12-3159 7

and closer into the ambit of the criminal

scope of activity that she was becoming more

and more aware that there was going to be a

conviction.

And so as much as I sympathize with your

challenges, I don’t think that she accepted

responsibility until the 11th hour, and that it

was not based upon true remorse but, rather,

upon the reality that she would be convicted.

Pilon contends that this finding was clearly erroneous

because she had decided to plead guilty, and conveyed that

decision to the court through her attorney, the morning of the

second day—before hearing any testimony against her.

This contention is meritless. The district court heard Pilon’s

argument about when she made the decision to plead guilty,

but nonetheless found, based on the court’s observations of

Pilon, that she pleaded guilty only after the testimony of her

victims made her face the reality of conviction, not because of

remorse. The district court is in the best position to make this

determination and, especially given that Pilon had decided to

plead guilty the day before, but then denied all the facts, the

court’s finding is not clearly erroneous.

B. Abuse of a Position of Trust

Pilon asserts that the district court applied too broad a

definition of “position of trust” and therefore erred in finding

Pilon occupied such a position. Pilon waived this argument

when her attorney stated explicitly on the record that there

were no objections to the abuse of trust enhancement and,
8 No. 12-3159

instead, focused her argument on acceptance of responsibility.

See United States v. Vasquez, 673 F.3d 680, 684 (7th Cir. 2012)

(“Forfeiture takes place when counsel or a defendant negligently bypasses a valid argument. Waiver, on the other hand,

involves an intentional abandonment of a known right.”)

(citations omitted). The record shows that Pilon abandoned

any argument that the enhancement did not apply in the face

of an uphill battle for acceptance of responsibility credit. In

addition to stating that there were no objections to the enhancement at sentencing, Pilon’s sentencing memorandum

explicitly says, “The PSR has found that ‘... the defendant

abused a position of public or private trust, or used a special

skill, in a manner that significantly facilitated the commission

or concealment of the offense.’ Therefore, two levels are added

to the offense level. The defendant accepts this upward

adjustment.” Taken as a whole, these circumstances evince an

intent to abandon the argument that the enhancement did not

apply, and it is therefore waived.

Even if this argument was merely forfeited, application of

the enhancement was not plain error. The guidelines instruct

a district court that, if a defendant “abused a position of public

or private trust ... in a manner that significantly facilitated the

commission ... of the offense,” the court should increase the

offense level by two. U.S.S.G. § 3B1.3. In reviewing a decision

to apply the enhancement, we must consider “(1) whether the

defendant occupied a position of trust; and (2) whether his

abuse of the position of trust significantly facilitated the

crime.” United States v. Sierra, 188 F.3d 798, 802 (7th Cir. 1999).

Application Note 1 to § 3B1.3 clarifies that a position of “public

or private trust” is one characterized by “substantial discre-
No. 12-3159 9

tionary judgment that is ordinarily given considerable deference,” and, to clarify what is meant by discretion, the note

gives the example of “a bank executive’s fraudulent loan

scheme,” as opposed to “embezzlement ortheft by an ordinary

bank teller.” Id. Further, Application Note 3 states that the

abuse of a position of trust enhancement “also applies in a case

in which the defendant provides sufficient indicia to the victim

that the defendant legitimately holds a position of private or

public trust, when in fact, the defendant does not.” Id. That

note provides the example of a “defendant who ... perpetrates

a financial fraud by leading an investor to believe the defendant is a legitimate investment broker.” Id.

Here, the record shows that Pilon held herself out to her

victims as operating and controlling the companies that offered

the investment programs, she represented that she had made

money for other individuals through the programs, and she

promised that if the investors would invest the necessary

funds, she would provide them with astronomical returns. Her

victims placed their money in her and her husband’s programs

and their faith in her and her husband’s management of the

programs. This faith was akin to the trust placed in any

investment manager or broker’s management of investments.

Further, the investors in the Mortgage Acceleration Program

relied on Pilon to make their home mortgage payments for

them from the investment proceeds. 

The district court adopted the presentence report’s summary that Pilon “assumed a fiduciary duty in relation to those

investors by causing them to believe that they were entering

into a contractual agreement with the defendant's business

entities.” This is an apt summary; her victims entrusted their
10 No. 12-3159

money to her discretion, for their benefit. Pilon’s other arguments on this enhancement do not require discussion as they

do not come close to demonstrating error—plain or otherwise—in the district court’s application of the enhancement.

See Vasquez, 673 F.3d at 684-85 (“Under plain error review, the

court reverses only when there is: ‘(1) an error or defect (2) that

is clear or obvious (3) affecting the defendant’s substantial

rights (4) and seriously impugning the fairness, integrity, or

public reputation of judicial proceedings.’” (quoting United

States v. Anderson, 604 F.3d 997, 1002 (7th Cir. 2010))).

C. Consideration of Mitigation Arguments

Pilon also argues that the district court did not adequately

consider her mitigation arguments in determining her sentence. Specifically, Pilon argued that her poor health and the

burden her incarceration would have on her family called for

a lower sentence. While the sentencing guidelines are advisory,

the district court must apply the sentencing factors. United

States v. Miranda, 505 F.3d 785, 791 (7th Cir. 2007). Two such

factors that the court must consider are the “history and

characteristics of the defendant” and “the need ... to provide

the defendant with needed ... medical care ... in the most

effective manner.” 18 U.S.C. §3553(a)(1); (a)(2)(d). However,

the district court “need not comment on every argument the

defendant raises.” Miranda, 505 F.3d at 792.Rather, “arguments

clearly without merit can, and for the sake of judicial economy

should, be passed over in silence.” United States v. Cunningham,

429 F.3d 673, 678 (7th Cir. 2005) “But when a court gives little

or no attention to the defendant’s principal argument when

that argument ‘was not so weak as not to merit discussion,’ we

cannot have confidence that the judge adequately considered
No. 12-3159 11

the section 3553(a) factors.” Miranda, 505 F.3d at 792 (quoting

Cunningham, 429 F.3d at 679). “Mitigating arguments about ...

general hardships typically do not require any discussion at

all.” United States v. Gary, 613 F.3d 706, 710 (7th Cir. 2010).

However, “a sentencing court cannot summarily disregard a

defendant’s potentially meritorious argument as it relates to

extraordinary family circumstances.” Id. at 711. That is not

what happened here. 

At the time of her sentencing, Pilon was 60 years old and

was suffering from sarcoidosis, asthma, an irregular heartbeat,

and fused vertebrae in her spine. She had growths in her eyes

that were causing pain and vision problems. Further, she had

two high school-age children, one of whom was 19 and had

cancer. With her husband also incarcerated, care for these

children was left to her eldest daughter, who had three

children of her own and was facing a divorce. Before sentencing, Pilon’s counsel filed a sentencing memorandum which

referenced an attached letter from Pilon containing this

information (the specifics of her illness were in her presentence report); this information was, however, a small part

of Pilon’s sentencing argument. At her sentencing hearing,

Pilon’s attorney’s argument focused almost entirely on her

loyalty to her husband, her loyalty to the Washitaw Nation,

and the claim that Pilon may have thought there was a chance

of returning the money to her investors. The hardship on her

family was only mentioned in passing at the beginning of her

counsel’s argument.

The district court was not persuaded by Pilon’s arguments

for leniency. After conducting an analysis of the sentencing
12 No. 12-3159

factors, and then pronouncing its sentence, the court further

explained: 

I also note that some of the very same things

that you seek the Court to be sympathetic

regarding, for example, the fact that the

primary caregiver will now be imprisoned

and that there’s limited financial means for

your family, those were considerations that

you didn’t give to the victims in the case

earlier on when they were in limited financial

places.

This statement demonstrates that the district court considered Pilon’s arguments about her age, her role as caregiver,

and the hardship on her family, but found that these considerations were outweighed by the need for her sentence to reflect

the seriousness of her offense. See 18 U.S.C. § 3553(a)(2)(A).

This court has recognized that a sick, young child who

requires special care presents an extraordinary family circumstance that the court must consider in selecting its sentence—and a statement that the circumstance is the defendant’s fault is not adequate consideration. United States v.

Schroeder, 536 F.3d 746, 756 (7th Cir. 2008). Nonetheless, Pilon’s

family hardship argument was not a major part of her sentencing strategy, and the district court gave consideration commensurate with the argument that was made. The district court

demonstrated that it had read her letter and considered her

family hardship, but thought that the circumstances did not

outweigh the seriousness of her offense. Cf. Schroeder, 536 F.3d

at 751 (holding that summarily blaming the family hardship on
No. 12-3159 13

the defendant was insufficient consideration where the

defendant made family hardship a focal point by providing

medical documentation, offering testimony about the family’s

hardship, and making the circumstances a key point of

argument at sentencing). 

Further, by Pilon’s own admission, her older daughter has

cared for her son with cancer for some time. Her son is not a

minor. Cf. Schroeder, 536 F.3d at 750-51 (child was daycare age).

Further, when Pilon was finally arrested for her crime, she was

found in North Carolina (for medical reasons) far from her son

in Illinois. The district court adequately considered Pilon’s

mitigation arguments. See United States v. Diekemper, 604 F.3d

345, 355 (7th Cir. 2010) (“the fact that the district court acknowledged this argument is dispositive—as long as a

sentencing court considers the arguments made in mitigation,

even if implicitly and imprecisely, the sentence imposed will

be found reasonable”); cf. Schroeder, 536 F.3d at 756 (holding

that a district court’s rejection of an argument for an inappropriate reason was error). Finally, Pilon’s arguments about her

health and age were not exceptional. See United States v.

Moreland, 703 F.3d 976, 991 (7th Cir. 2012) (“As for age and

infirmity, age 59 is not elderly in our society; the elderly do not

have a license to commit crime, and adequate medical care is

available in federal prisons.”) (citations omitted). While the

court is sympathetic to the tragedy of leaving the care of a son

with cancer to an already burdened family member, the district

court did not fail to adequately consider Pilon’s arguments.
14 No. 12-3159

D. Substantive Reasonableness of Pilon’s Sentence

Pilon’s last argument buildsuponher mitigationarguments

by adding an argument that her personal characteristics and

low criminal history put her, statistically, at a very low risk of

recidivism, and all things considered a sentence of 78 months’

incarceration was substantively unreasonable. “A correctly

calculated, within-Guidelines sentence is entitled to a presumption of reasonableness.” United States v. Barnes, 660 F.3d

1000, 1010 (7th Cir. 2011). “To sustain the presumption, a

district court need provide only a justification for its sentence

‘adequate to allow for meaningful appellate review and to

promote the perception of fair sentencing.’” Id.(quoting United

States v. Scott, 555 F.3d 605, 608 (7th Cir. 2009)). 

Here, Pilon argues that her age and health, her family ties,

her nonexistent criminal history, and her statistically low

chance of recidivism make her sentence substantively unreasonable. But the district court found that her crime was very

serious, and the fact that it involved “preying upon weak

people” who “were targeted for their vulnerability to be

gullible enough to think that this was going to save them

during some challenging times and, instead, it was exactly the

thing that pushed them over the cliff” was “an extremely

aggravating factor.” See 18 U.S.C. § 3553(a)(2)(A) (the court

must consider the need for the sentence “to reflect the seriousness of the offense, to promote respect for the law, and to

provide just punishment for the offense”). Moreover, while

Pilon argues from statistics about recidivism, the court assessed her individually, and considering her refusal to recognize the jurisdiction of the court and the laws of the United

States in the context of her loyalty to her husband and the
No. 12-3159 15

Washitaw Nation found that Pilon was “someone who is prone

to recidivism and not acceptance, someone who is prone to

hiding the reality of the situation rather than accepting the

remorseful reality of it.” Finally, the district court noted that

Pilon’s scheme:

went on for a period of years, it had a broad

base with numerous victims, [and so it]

requires a sentence that will both be a sanction for the defendant as well as a message to

others who would consider such a scheme,

that they shouldn’t do it, because the sentence will be one that is serious enough to

deter the conduct of others in the future.

Accordingly, the district court believed that Pilon’s sentence was justified by the need for general and special deterrence and because of the seriousness of her offense. The district

court’s findings and rationales were not erroneous and they

provide a sufficient justification for Pilon’s presumptively

reasonable sentence. 

III.

For the foregoing reasons, Pilon’s sentence is AFFIRMED.