Court Opinion

ID: 769875
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:24:02+00
Date Added: 2024-06-11T17:55:46.197037
License: Public Domain

222 F.3d 428 (7th Cir. 2000)
UNITED STATES OF AMERICA, Plaintiff-Appellee,v.ANGEL C. LOPEZ, Defendant-Appellant.
No. 99-1724
In the  United States Court of Appeals  For the Seventh Circuit
Argued October 27, 1999Decided August 17, 2000

Appeal from the United States District Court for the Central District of Illinois.  No. 97 CR 20014--Michael M. Mihm, Judge.[Copyrighted Material Omitted]
Before FLAUM, Chief Judge, HARLINGTON WOOD, JR. and  EVANS, Circuit Judges.
HARLINGTON WOOD, JR., Circuit Judge.

1
Angel Lopez  ("Lopez") pleaded guilty to conspiracy to  embezzle and misapply credit union funds and  conspiracy to execute a scheme to defraud. Lopez  was sentenced to thirty-eight months in prison  and to pay restitution in the amount of  $1,029,867. Lopez challenges the sentencing  determination and the amount of restitution. We  affirm.

I.  BACKGROUND

2
It is necessary to try to unravel the  convoluted and complicated transactions involved.  Credit Union One ("CU1") was a state-regulated  credit union incorporated under the laws of  Illinois, but also falling within the regulatory  authority of the National Credit Union  Administration ("NCUA"), which organizes and  approves federal credit unions. CU1 was federally  insured by the National Credit Union Share  Insurance Fund ("NCUSIF").

3
Lopez graduated from high school and began  working in the financial field in 1959. He was  hired by CU1 in 1976 as assistant general  manager. He was promoted to general manager in  1978. In 1979, his title was changed to  president. Less than a year later, Lopez became  a member of CU1's board of directors. All board  members were required to sign an oath of  fiduciary duty to act in the best interests of  the credit union and to consider the interests of  the credit union before their own personal  interests. Board members were to receive no  compensation for their services, other than  reasonable and necessary reimbursement for  expenses incurred while on official credit union  business. The board of directors provided  oversight and direction for the operation of the  credit union, with the primary goal of offering  high savings rates. To offset the higher savings  rate, CU1 charged higher interest rates on loans.  Unfortunately, this left a large pool of tempting  cash.

4
Richard Binet ("Binet") was CU1's chairman of  the board throughout Lopez's employment. Binet  managed an investment portfolio of approximately  $82 million on a yearly average from 1986 to  early 1990. Lopez testified that he and Binet did  not sit down and form an elaborate plan on how  they would defraud CU1; it was basically an  arrangement where Lopez and others supported  Binet's actions and were consequentially rewarded  by Binet. Lopez stated that anyone who objected  to Binet's activity was quickly removed from the  board. During his tenure as president, Lopez  authorized at least $400,299 in direct and  indirect consulting fees to Binet, in addition to  authorizing CU1 purchases of two automobiles for  Binet at a total cost of $40,644.

5
Binet had CU1's board contract with CUSI, Ltd.,  a corporation formed by Binet, which received  payments totaling approximately $17,000  authorized by Lopez. According to Binet, the  services CUSI was to provide were illusory and of  no value. Lopez was also an officer of CUSI.  After CUSI stopped receiving money for Binet, he  created Credit Union Management, Inc. to receive  CU1 money for his benefit.

6
Binet also had CU1 create a travel agency known as  CU1 Travel. Lopez was listed as the "owner" of CU1  Travel and his wife as manager. Following an audit  by Deloitte & Touche in 1989, travel agency losses  of $141,231 were listed for 1988 and subsidiary  losses of $25,539 for 1989.

7
Binet, after complaining to the board about the  marketing efforts being made on CU1's behalf,  proposed that Hana Advertising Associates, Inc.  be given the marketing contract for CU1. The  board agreed. During interviews with the FBI,  after making a proffer (use immunity) agreement,  Lopez stated that he knew Binet owned numerous  companies, but that he (Lopez) was not involved  in any of the companies. Although Lopez stated  that "he had no involvement with a company called  . . . Hanah [sic]," Hana Advertising was  incorporated under the laws of Illinois with  Binet listed as president and Lopez as a  director. Without the board's knowledge or  approval, Lopez ordered checks totaling  approximately $230,000 to be issued to Hana  Advertising from 1986 to 1987.1 Lopez stated  that he signed the contract and approved the  checks to Binet because "that [wa]s the way Binet  wanted it," and that Lopez's relationship with  the board was basically, "You scratch my back,  I'll scratch yours." Lopez stated that if Binet  left, Lopez knew his lucrative compensation  package2 would be "seriously reduced."

8
Lopez also stated that he knew Binet owned or  controlled a company called Innovo, but did not  admit to any involvement with that company  either. However, Lopez later admitted to owning  a substantial amount of stock in Innovo Group  Inc., which was owned by Binet. Innovo received  a contract from CU1 in order to expedite the  purchase of plastic bags. Lopez eventually sold  his shares in Innovo, making a net profit of  approximately $100,000. Lopez also facilitated a  CU1 loan of approximately $100,000 to Innovo,  which was never paid back.

9
Having worked without a contract since 1976,  and being concerned about a retirement plan, in  1984 Lopez had his lawyer prepare an employment  contract which included a provision allowing  Lopez to retire after ten years of employment. If  Lopez exercised the retirement option, the  contract required CU1 to hire Lopez for a period  of not less than ten years as a "special  consultant" at an annual salary equal to fifty  percent of his highest annual salary earned while  president of CU1. The contract was self-renewing  every five years and specified Lopez could not be  terminated for "negligent or inadvertent  omissions or violations of regulatory rules or  laws." The board never reviewed or discussed this  contract. Under Binet's direction, the contract  was bought out in 1988 for $580,000, which the  government argued was approximately $300,000 more  than its true value.

10
Lopez also stated that dealing with Binet  became a necessity after Binet decided that CU1  should invest in collateralized mortgage  obligations ("CMOs")3 and collateralized  mortgage obligation residuals ("CMORs").4 Both  Lopez and Binet stated that Binet was the only  person at CU1 who had any knowledge of CMOs/CMORs  and that they and the board did not want to hire  an outside consultant who might recommend  needless transactions in order to increase  commissions. Lopez authorized payments to Binet  as an investment advisor in the amounts of  $78,000 for 1988 and $45,500 for 1989.

11
Although Lopez continually denied awareness of  or participation in a CMOR transaction with Binet  for personal profit, Binet stated that in  February 1988, he and Lopez used $8.8 million of  CU1 money to purchase a CMOR, with CU1 owning  eighty percent of the investment and Lopez and  Binet owning twenty percent. Binet stated the  CMOR was sold for a $1 million gain. He also  testified that he had destroyed a fax from Lopez  on June 6, 1988, which showed a portion of the  money being returned to CU1. Lopez received part  of his profits in the form of a "deferred  compensation" payment of $250,000 orchestrated by  Binet, and through the transfer of a universal  life program insurance policy for Lopez which  Binet had CU1 purchase in 1986. The policy, known  as a "key man" policy, insured that if Lopez  died, CU1 would own the cash flow from the  policy. According to Binet, he had the ownership  of the policy changed from CU1 to Lopez and Lopez  was able to redeem the policy for a cash value of  $265,000.

12
In February 1989, Lopez received notice that  NCUA was going to conduct a review of CU1 in  connection with CU1's status as an insured of the  NCUSIF. NCUA has mandatory regulations concerning  the buying and selling of CMOs and CMORs. As one  of NCUSIF's insureds, CU1 had agreed to follow  the NCUA regulations. After the review, NCUA  notified Lopez of numerous concerns regarding the  fact that CU1 had nearly fifty percent of its  assets invested in CMOs/CMORs. CU1 agreed to sell  fifty percent of the CMO/CMOR investments by  December 31, 1989, and agreed to dispose of the  remaining fifty percent by the following year.  However, Binet and Lopez decided to seek private  insurance in order to distance CU1 from NCUA  examinations and federal regulations. Presented  as a money-saving step, the board voted to  terminate its share insurance with NCUA and  sought private share insurance coverage with the  National Deposit Insurance Corporation (now known  as "ASI"). On February 11, 1990, the insurance  conversion became effective and CU1 was relieved  of its obligation to comply with NCUA's  requirements.

13
During a joint examination of CU1 by ASI and  the Illinois Department of Financial Institutions  ("DFI") in February 1991, it was noted that CU1  was not acting on divesting the CMOs/CMORs. As a  result, CU1 entered into a Letter of  Understanding and Agreement with the DFI and ASI  promising to engage a portfolio manager to assist  in the pricing and sales of all the CMOs/CMORs  and immediately cease payment of all compensation  to the board of directors. Lopez admitted he  provided false information to the DFI regulators  about the CMOs/CMORs.

14
Lopez was removed as president and as a  director of CU1 in 1992 following an  investigation by the DFI. On February 14, 1997,  Lopez signed a proffer agreement which granted  him use immunity for any information he provided  which was relevant to the criminal activity  engaged in while at CU1. Lopez was interviewed by  government agents for three days and also  assisted the government in locating and arresting  Binet. On December 29, 1997, Lopez signed a plea  agreement and on January 5, 1998, reviewed the  plea agreement before the district court and  pleaded guilty to conspiracy to embezzle and  misapply funds belonging to CU1 and conspiracy to  execute a scheme to defraud.

15
The court's sentencing calculations for fraud  began with a base offense level of 6 under sec.  2F1.1(a) of the 1989 United States Sentencing  Guidelines ("U.S.S.G." or the "Guidelines"),5  with an 11 level increase incurred for a loss of  $1,051,043.6 U.S.S.G. sec. 2F1.1(b)(L).  Additional increases were applied as follows: 2  levels for more than minimal planning, U.S.S.G.  sec. 2F1.1(b)(2)(A); 2 levels for abuse of a  position of public or private trust and use of  his position which "significantly facilitated the  commission or concealment of the offense", sec.  3B1.3; and 2 levels for obstruction of justice  when testifying untruthfully before the grand  jury about the CMOR, sec. 3C1.1 comment. n.1(c).  These additions created an adjusted offense level  of 23. A 2 level downward adjustment for  acceptance of responsibility under sec. 3E1.1  comment. n.4, was also made, which resulted in a  total offense level of 21. With no prior criminal  history, Lopez's Guideline range for sentencing  was thirty-seven to forty-six months. U.S.S.G.  sec. 5A. The district court sentenced Lopez to  thirty-eight months incarceration, and, under the  Mandatory Victim Restitution Act of 1996  ("MVRA"), ordered restitution to CU1 in the  amount of $1,029,867.7

16
Lopez contends that the district court erred on  eight issues: (1) by violating the immunity  proffer to enhance Lopez's sentence, (2) by  enhancing his sentence for obstruction of  justice, (3) by using gain to Binet as a  substitute for loss where there was no loss to  the victim, (4) by basing the estimated gain on  unreliable and contradictory evidence, (5) by  determining an arbitrary value for services  rendered by Binet, (6) by failing to reduce the  Guideline losses by the value of the cars  recovered by CU1, (7) by enhancing the loss  figure with bonuses paid to certain CU1  employees, and (8) by violating the Ex Post Facto  Clause in applying the MVRA.

II.  ANALYSIS
A.  Violation of Immunity Agreement

17
Lopez argues that the February 1997 proffer  agreement providing use immunity prohibited the  district court from using any information about  the personal CMOR transaction in Lopez's  sentencing. The terms of the immunity agreement  provide

18
[N]o statement made or information provided by  [Lopez] pursuant to this agreement may be used  directly against your client in any criminal  case, including sentencing . . . . [Lopez] will  provide complete and truthful information . . .  regarding his criminal conduct and everything he  knows or has reason to believe about the criminal  conduct of others. . . . Should [Lopez] knowingly  make any materially false statement or omission  in providing information under this agreement,  the government will be entitled to use his  statements and evidence he provides directly to  institute and support a criminal prosecution for  any offense as well as a prosecution for giving  false statements and perjury. . . . [Lopez] must  neither conceal or minimize his own actions or  involvement in any offense, nor conceal,  minimize, fabricate, or exaggerate anyone else's  action or involvement in any offense. He must be  completely truthful about the facts whatever  those may be.

19
(Emphasis in original.)

20
After signing the proffer, Lopez testified  before government agents and the grand jury that  Binet supervised the CMO/CMOR investments for  CU1. He stated that when Binet approached him to  purchase a CMOR with CU1's money for their own  profit, he refused to participate in such an  action and had no idea if Binet ever did so.  Binet later testified that he and Lopez made such  an investment, that Binet had had records of  Lopez's participation which he had since  destroyed, and that Lopez personally benefitted  from the transaction. In addition, Lopez failed  to mention the fact that he had conspired to  alter the minutes of the board meetings, although  the minutes were discussed with the government  and Lopez knew the government was relying on the  minutes in its investigation.

21
"As a contract, a proffer agreement must be  enforced according to its terms." United States  v. Cobblah, 118 F.3d 549, 551 (7th Cir. 1997)  (citation omitted). As in Cobblah, the proffer  "contract" obligated Lopez to give statements  that were entirely truthful. See id. The proffer  emphasized that Lopez should not seek to conceal  or minimize his own actions in the offenses  involved and clearly stated that any false  statements or omissions could then be used  against him. Given the language of the proffer,  the government was within its rights to consider  the proffer agreement had been voided due to  Lopez's omissions concerning the CMOR and the  alteration of the minutes. See id. We cannot say  the district court erred in its determination  that the government had established, by a  preponderance of the evidence, that Lopez did  know about the CMOR used for his and Binet's  personal profit and that Lopez concealed the fact  that he and others changed the board minutes. See  id. Lopez violated the terms of the proffer,  making it unenforceable.

22
Furthermore, in his plea agreement, signed  December 29, 1997, ten months after the proffer,  Lopez admitted to the following

23
On April 20, 1988, the defendant and Richard  Binet caused $8.8 million of CU1 funds to be used  to purchase a CMO residual with CU1 owning 80% of  the investment and the defendant and Binet owning  20% of said investment. Said use of CU1 funds was  never made known to the Board of Directors and  the defendant knew that individuals were not  entitled to own REMIC8 investments. When said  investment was sold for a $1 million gain, the  defendant knew that the benefit was not provided  to CU1. The defendant himself did not take any of  these funds directly but benefitted from a  $250,000 cash payment under the heading of  Deferred Compensation Plan. Further, the  defendant benefitted when a life insurance policy  which had originally been purchased by CU1 as a  key-man policy, beneficiary of which was to be  CU1, was transferred to him personally.

24
Lopez also admitted in the plea agreement that he  conspired to alter the minutes of the board  meetings. The plea agreement also stated that the  government was requesting a 2 level enhancement  for obstruction of justice, based on Lopez's  failure to fully disclose the CMOR transaction  and his failure to disclose alteration of the  minutes.

25
Lopez discussed the terms of the plea agreement  with the district court at the plea hearing.  Lopez stated that the plea agreement represented  "every understanding" he had with the government  and that he understood the terms of the plea  agreement. Lopez cannot invoke the proffer after  agreeing to the admissions and terms set forth in  the plea agreement.

B.  Obstruction of Justice

26
The Guidelines provide for an increase of 2  levels if the offender obstructed justice during  the investigation or prosecution of his offense.  U.S.S.G. sec. 3C1.1.9 The plea agreement states  that "[p]ursuant to sec. 3C1.1, the defendant may  receive 2 points for obstructing or impeding the  administration of justice during the  investigation or prosecution of the instant  offense . . . ." More specifically, the plea  agreement notes that because Lopez admitted his  guilt after being confronted with evidence that  he caused the minutes to be altered, he would  fall into a sentencing category under sec. 3E1.1  comment. n.4, which allows for both an  obstruction of justice and an acceptance of  responsibility adjustment to be applied. Lopez  also admitted in the plea agreement to knowledge  of the CMOR transaction Binet engineered and to  receiving personal benefits from the profits of  that transaction.

27
"To establish an obstruction of justice, the  sentencing court must make an independent factual  finding that the defendant engaged in a willfull  attempt to provide false testimony." United  States v. Sinclair, 74 F.3d 753, 762 (7th Cir.  1996) (citing United States v. Dunnigan, 507 U.S.  87, 93-96 (1993)). This finding may be reversed  only if clearly erroneous. Id. (citation  omitted). Based on the evidence of Lopez and  Binet's intertwined dealings, the substantial  amounts of money funneled to Lopez, and the  testimony of Binet about both the minutes and the  CMOR, the court determined that Lopez had  willfully withheld information about material  facts. The court stated, "I . . . believe there  were things you didn't tell them that you were  aware of and should have told them and didn't  until they were discovered somewhere else . . .  ." Given these findings, we cannot say the  district court's conclusion that Lopez's  testimony was intentionally withheld, and not the  result of confusion, mistake, or faulty memory,  was clearly erroneous. See id. Moreover, because  the district court recognized this finding was a  factual determination based in large part on an  issue of credibility, such credibility  determinations "can virtually never be clear  error." United States v. Hickok, 77 F.3d 992,  1007 (7th Cir. 1996) (quoting Anderson v. Bessemer  City, 470 U.S. 564, 575 (1985)); see also United  States v. Fiore, 178 F.3d 917, 924 (7th Cir.  1999). We also note that the court's enhancement  for obstruction of justice is not incompatible  with a reduction for acceptance of  responsibility. See United States v. Buckley, 192  F.3d 708, 711 (7th Cir. 1999); United States v.  Ramunno, 133 F.3d 476, 480 (7th Cir. 1998); United  States v. Lallemand, 989 F.2d 936, 938 (7th Cir.  1993).

C.  Gain as Substitute for Loss

28
Lopez argues the district court erred in using  the estimated profit made on the CMOR transaction  by his co-conspirator Binet towards Lopez's  sentence, even though the court determined that  there was no "actual loss" to CU1 because the  $8.8 million "borrowed" from CU1 was returned,  albeit with some (but not all) profit made on the  transaction. Lopez refers us to Application Note  8(b) to U.S.S.G. sec. 2F1.1 which, he asserts,  provides that a loss figure should be reduced "by  the amount the lending institution has recovered  or can expect to recover." There is no such  language in the 1989 Guidelines. This section  first appears in the 1991 Guidelines, sec. 2F1.1  comment. n.7(b), which deals specifically with  fraudulent loan application and contract  procurement cases, and pertains to a defendant  who understates debt information to obtain a  loan.10 There is no language in sec. 2F1.1 of  the 1989 Guidelines which requires the district  court to offset the amount of loss, although  comment. n.10 does allow for consideration that  a total dollar loss may overstate the seriousness  of a crime when "understating debts to a limited  degree in order to obtain a substantial loan  which the defendant genuinely expected to repay  . . . ." However, this language is not applicable  to the instant case, where Binet and Lopez did  not manufacture a "fraudulent loan" scheme but  simply took and used CU1's money outright.

29
Under sec. 2F1.1 comment. n.8 of the 1989  Guidelines, "The offender's gross gain from  committing the fraud is an alternative estimate  that ordinarily will understate the loss."  Section 2F1.1 "allow[s] the defendants' gain to  be used as a basis for calculating an approximate  loss when evidence of the exact amount of loss is  not available." United States v. Andersen, 45  F.3d 217, 221 (7th Cir. 1995).

30
While the meaning of loss under sec. 2F1.1  presents a question of law subject to de novo  review, United States v. Holiusa, 13 F.3d 1043,  1045 (7th Cir. 1994), the district court's finding  on the amount of loss is reviewed for clear error  only. United States v. Dillard, 43 F.3d 299, 309  (7th Cir. 1999).

31
Lopez argues that because the $8.8 million was  returned to CU1, there was no loss. He does not  deny the misapplication of funds for the CMOR  occurred. Lopez also maintains that because Binet  supervised and benefitted the most from the  transaction, he should not be held accountable for Binet's gain. Lopez admitted in his plea  agreement that he conspired with Binet to  embezzle, misapply, and defraud funds from CU1.  Section 1B1.3 comment. n.1, states

32
In the case of criminal activity undertaken in  concert with others, whether or not charged as a  conspiracy, the conduct for which the defendant  "would be otherwise accountable" also includes  conduct of others in furtherance of the execution  of the jointly-undertaken criminal activity that  was reasonably foreseeable by the defendant.

33
Binet testified this particular CMOR transaction  was purportedly made on behalf of CU1, but that  twenty percent of the profit was to go to Lopez  and to him. He also testified that Lopez was  involved in helping to transfer and receive the  monies. The transfer of $8.8 million of CU1 funds  was documented by the government. Therefore, any  estimated profit which Binet made on the  investment was correctly determined to be a loss  to CU1. Binet's profit from this particular  transaction would not have been realized without  his illegal use of CU1's funds. See United States  v. Marvin, 28 F.3d 663, 665 (7th Cir. 1994). The  profits were "intertwined with and an ingredient  of [defendant]'s overall fraudulent scheme." See  id. Additional punishment is merited where  sufficient evidence provides for determination of  monetary loss. See United States v. Schneider,  930 F.2d 555, 559 (7th Cir. 1991).

34
The district court did not clearly err, based  on Binet's statements that Lopez was involved in  this particular CMOR transaction, and Binet's  testimony, along with Lopez's testimony and  evidence in the record concerning benefits  received by Lopez, in determining that the  estimated profit from the CMOR transaction should  be applied as a factor in Lopez's sentencing.

35
D.  Estimated Gain Based on Unreliable Evidence

36
"Generally, the defendant's gain may provide a  reasonable approximation of a victim's loss, and  may be used when more precise means of measuring  loss are unavailable." Andersen, 45 F.3d at 221.  The amount of loss sustained by a victim must be  established by a preponderance of the evidence.  18 U.S.C. sec. 3664(d). In determining a sentence  under the Guidelines, the court has an  "obligation to employ fair procedures to  determine the accuracy of information used in  sentencing." United States v. Franz, 886 F.2d  973, 980 (7th Cir. 1989); see also United States  v. Agyemang, 876 F.2d 1264, 1270 (7th Cir. 1989).  "[T]he court properly discharge[s] its obligation  under sec. 2F1.1 of the Sentencing Guidelines by  reducing the available information to a  'reasonable estimate' of the loss." United States  v. Haddon, 927 F.2d 942, 952 (7th Cir. 1991);  U.S.S.G. sec. 2F1.1 comment. n.8. "Every factual  inaccuracy does not amount to a constitutional  violation." Franz, 886 F.2d at 980 (citations  omitted). The burden of proof on appealing a  district court's loss calculation requires the  defendant to show that the determination "was not  only inaccurate but outside the realm of  permissible computations." United States v.  Hassan, 211 F.3d 380, 383 (7th Cir. 2000) (quoting  United States v. Jackson, 25 F.3d 327, 330 (6th  Cir. 1994)).

37
Based on calculations from incomplete  documentation concerning the CMOR  transaction,11 Binet stated that he believed  he, through his company, Credit Union Mortgage,  had received $1,360,000. He said, "I don't know  the exact amount, but it was at least a million."  He also stated that he was certain that he had  received $800,000 because he used that amount to  fund Innovo, his company in Texas. Lopez argues  that because Innovo's annual report listed a  "debt" balance of $413,754 during the relevant  period when Binet was siphoning off his profits  from the CMOR, that is the amount that should be  considered Binet's profit. Binet also testified  that he recalled approximately $600,000 had been  funneled into Innovo by the time it went public.  Although the district court noted that Binet "had  a lot of things going on at that same time . . .  that he was the man in terms of all of this  movement of money from one place to another, and  I'm not sure that it's totally clear in his mind  what he did," the court believed Binet had "made  an effort to be truthful in his testimony."

38
To the extent that the district court's  findings rest on credibility determinations, they  command even greater deference than ordinary  factual findings. Fed.R.Civ.P. 52(a); see Johnson  v. Zerbst, 327 U.S. 106, 111-12 (1946). This  court may not re-judge credibility and may  reverse only if, after reviewing the record, we  are left with the firm belief that the district  court made a mistake. Zeige Distributing Co.,  Inc. v. All Kitchens, Inc., 63 F.3d 609, 612 (7th  Cir. 1995) (citation omitted). "Congress has  mandated this deferential standard of review, see  18 U.S.C. sec. 3742(e), and we do not second-  guess the sentencing judge." United States v.  McEntire, 153 F.3d 424, 431 (7th Cir. 1998)  (citations omitted).

39
The district court calculated the estimated  profit at $600,000. This amount was arrived at  after hearing Binet testify at an alleged co-  conspirator's trial, in addition to three  separate sentencing hearings. The court reviewed  all of the available documentation concerning the  CMOR during the three sentencing hearings and  asked questions of both parties in seeking to  reconcile the documentation with the testimony.  The record indicates the district court's  inquiries were sufficiently searching to ensure  the probable accuracy of the available evidence.  See United States v. Beler, 20 F.3d 1428, 1443  (7th Cir. 1994). The district court judge stated  repeatedly that "Mr. Binet has been credible in  his testimony." Although the district court  stated there was sufficient evidence to support  a finding of $800,000 or more, the court reduced  the amount of loss to $600,000, given the  "grossly incomplete" records of the CMOR  transaction. The court noted the $413,754 loan  amount but, from the documents and testimony,  believed the profit on the $8.8 million CMOR to  be more than that.

40
We are satisfied the district court "correctly  applied the guidelines to findings of fact that  do not leave us with the definite and firm  conviction that a mistake has been committed."  United States v. Jordan, 890 F.2d 968, 972 (7th  Cir. 1989). Based on the evidence available, the  district court did not clearly err in determining  the estimated profit loss to CU1 was $600,000 on  a CMOR transaction involving $8.8 million and in  applying that amount to Lopez's sentence.

41
E.  Arbitrary Determination of Binet's Services

42
Binet received $399,500 during the four years  he managed CU1's investment portfolio. Lopez  argues the entire amount should be deducted from  CU1's losses because the portfolio earned money  during every year in question and Binet was worth  that much in managing a portfolio of  approximately $82 million on average. Of course,  this amount was "paid" to Binet through Lopez's  manipulations and without the board's knowledge.

43
The government proposed an offset based on the  annualized investment fees for 1988 and 1989,  $27,833.60 and $17,858.01 respectively, but  divided the figures in half to take into account  the amount of time Binet spent "working" at CU1  for personal gain. The defendants proposed fees  based on percentage points of the total of net  investments for each year, resulting in  calculations of approximately $300,000 for 1988,  $353,000 for 1989, and $428,000 for 1990.

44
The district court followed Schneider in  determining that there should be a certain offset  where the defendant provides a service. See 930  F.2d at 558.12 However, as the government  noted, when the NCUA, DFI, and ASI came in, they  all agreed that CU1 was not being managed well  and was involved in numerous questionable  investments, in addition to the embezzlement and  fraud later discovered. After hearing Binet's  testimony, the district court noted the  difficulty in quantifying an amount for Binet's  services to CU1 in the absence of any records  because Binet had so many "projects" going on, it  was difficult to separate the time spent on  legitimate CU1 investment business.

45
Binet was not a certified or licensed  investment broker or manager nor was he  registered with the SEC. The board was never  given the opportunity to determine what they  might wish to pay him or someone else. The court  was concerned that Binet was not licensed as an  investment manager and that he involved CU1 funds  in higher risk investments, both factors which  lowered the value of the services rendered.

46
The district court's determination of loss under  sec. 2F1.1 (b)(1) of the Guidelines is a finding  of fact reviewable for clear error only. United  States v. Strozier, 981 F.2d 281, 283 (7th Cir.  1992). The district court noted that testimony  indicated most credit unions do not have salaried  investment managers, as was the case with CU1.  The court then determined the offset to be one-  fifth of the $399,500 (the amount Binet had  chosen to "pay" himself); that is, $79,900 for  the four-year period. Because there are no  precise figures, as in Schneider, where the  difference between the contract price and the  contractor's costs was used as the measure of  damages rather than the full contract price, 930  F.2d at 558, the district court, after hearing  methods of calculations from both parties,  determined the amount based on a percentage of  Binet's self-remuneration.

47
We agree that Binet's services should not be  calculated on a par with a licensed professional  who does not commit embezzlement or fraud with a  client's money. Given the annualized investment  fees of $27,833.60 for 1988 and $17,858.01 for  1989, the district court's fee of $19,975 per  year is a "reasonable estimate," Haddon, 927 F.2d  at 952, and is not "outside the realm of  permissible computations." Hassan, 211 F.3d at  383 (citation omitted).

F.  Failure to Reduce Loss by Value of Cars

48
Lopez makes the same argument here he used in  opposing Binet's gain as a measure of loss, again  referring us to "Application Note 8(b) to  U.S.S.G. sec. 2F1.1" which is not found in the  1989 Guidelines. We repeat, that note is not  applicable to the instant case.

49
The court stated that the loss amount for  sentencing was determined by the original capital  outlay for the two cars because the defendants  had no right to purchase the vehicles with CU1  funds. There is no dispute that the original  expenditures for the two cars were $20,767 and  $19,877. Lopez argues that the trade-in and/or  resale value of each car should be deducted from  the loss amount. The district court did deduct  the trade-in/resale values from the restitution  amount, but stated that "the loss was determined  by the amount of [CU1] money that was expended to  purchase these items or lease them . . . ." The  district court did not clearly err in using the  purchase price of the cars for sentencing  purposes.

G.  Employee Bonuses

50
Binet testified that in February 1990 a payment  of $13,852 was made to Charles Wiseman, an  employee of CU1. Both Binet and Lopez testified  that Wiseman and several other employees assisted  in the cover-up of irregularities at CU1 prior to  obtaining private insurance. Lopez testified that  these bonuses were approved by the board.  Although Lopez stated that most or all employees  received annual bonuses, the bonuses for these  particular employees (and only these employees)  were issued on February 28, 1990. The insurance  conversion became effective on February 11, 1990.  The government maintains the timing of the  bonuses to these particular employees indicates  the payments were payoffs for assisting with the  fraud.

51
Minutes of the board meetings from December  1986, December 1987, and December 1989 state that  employee year-end bonuses were authorized at  those times. The district court found that the  people involved and the timing indicated the  payments were directly related to the change in  insurance. We cannot say the district court  committed clear error in making this  determination.

H.  Restitution Ex Post Facto Claim

52
Lopez argues that ordering restitution under the  MVRA, 18 U.S.C. sec. 3663A,13 which requires  restitution be ordered "without consideration of  the economic circumstances of the defendant," 18  U.S.C. sec. 3664(f)(1)(A), violates the Ex Post  Facto Clause of the Constitution, Art. I, sec. 9,  cl. 3. He asks us to overrule our holding in  United States v. Newman, 145 F.3d 531, 537 (7th  Cir. 1998) (finding that the MVRA applies to  cases in which a defendant is convicted on or  after April 24, 1996, the date of the enactment  of the MVRA, even though the criminal conduct may  have occurred prior to April 24, 1996).

53
Congress amended the Victim and Witness  Protection Act ("VWPA") in 1996 in an effort to  guarantee restitution to the victims of criminal  conduct. See Newman, 145 F.3d at 537. The Ex Post  Facto Clause prohibits the enactment of a "law  that changes the punishment, and inflicts a  greater punishment, than the law annexed to the  crime, when committed." Calder v. Bull, 3 U.S.  386, 390 (1798). In Newman, we held that  restitution does not qualify as criminal  punishment. 145 F.3d at 538; see also United  States v. Black, 125 F.3d 454, 467 (7th Cir.  1997). We observed in Newman that other courts  disagree with this finding and the Eighth  Circuit, in particular, does not agree with our  characterization of restitution under the VWPA.  Id. at 539.

54
Lopez notes the split in the circuits on this  issue and asks us to adopt the argument of the  Tenth Circuit in United States v. Nichols, 169  F.3d 1255 (10th Cir. 1999). His argument is  misplaced, as Nichols states, "[W]e accept the  view of the Seventh Circuit [in Newman] that the  Ex Post Facto Clause does not bar application of  the MVRA to a defendant whose criminal conduct  occurred before the effective date of the statute  and reject the views of the Second, Third,  Eighth, Ninth, Eleventh and D.C. circuits to the  contrary." 169 F.3d at 1280 n.9.

55
We decline to reconsider the holding in Newman.

III.  CONCLUSION

56
Based on the above-stated reasons, we affirm  the findings of the district court.

NOTES:

1
 Although several checks were issued in 1986, the  marketing contract was signed on May 16, 1987 and  terminated in December 1987. According to Lopez's  testimony, Binet instructed Lopez to use the name  Hana Advertising on the 1986 checks for Binet's  "work performed," even though Binet had not yet  created the contract using Hana Advertising's  name. However, Lopez testified that the checks  had actually been written to Binet, but the IRS  1099 forms were issued in the name of Hana  Advertising.

2
 Lopez's W2 form for 1989 listed $182,727 as his  annual salary.

3
 According to Barron's Business Guide Dictionary of Banking  Terms 127-28 (Thomas P. Fitch et al. eds., 1990),  a CMO is a:
mortgage-backed bond secured by the cash flow of  a pool of mortgages. In a CMO, the regular  principal and interest payments made by borrowers  are separated into different payment streams,  creating several bonds that repay invested  capital at different rates. . . . A CMO pays the  bondholder on a schedule that differs from the  mortgage pool as a whole, and includes fast pay,  medium pay, and slow pay bonds to suit the needs  of different investors. The common arrangements  include a fast-pay bond with a maturity much  shorter than the total pool; a bond paying  interest only for a period that may be fixed or  contingent on how prior CMOs perform, before  payment of principal begins; and a bond paying  variable interest based on an index . . . .  Fast  paying bonds appeal mostly to savings and loans  seeking short-term liquidity investments, whereas  longer-term CMOs appeal to the investment needs  of pension funds and institutional investors. .  . .

4
 Barron's Business Guide Dictionary of Banking Terms 524,  states that a CMO residual is:
cash flow resulting from the difference between  the income stream generated by a pool of  mortgages and the cash flow necessary to fund a  series of collateralized mortgage obligation  bonds. Also known as equity.

5
 The record states that the 1989 edition of the  Guidelines has been used to compute sentencing  for the crimes, which were committed from July  1984 through February 1990.

6
 The figure was derived from profit from contract  buyout-$37,000; CMOR-$600,000; overpayment to  Binet through CUSI-$17,000; overpayment to Binet  through Hana Advertising-$230,799; direct  payments to Binet-$78,000 and $45,500; bonuses  paid to CU1 employees-$36,000; and purchase of  cars for Binet-$40,644, totaling $1,130,943, less  an offset for the value of Binet's services  rendered to CU1 as determined by the district  court to be $79,900, resulting in a final total  of $1,051,043.

7
 This amount was derived from the $1,051,043  total, less an offset of $21,176 for the trade-in  and resale value of the two cars purchased for  Binet.

8
 A real estate mortgage investment conduit  ("REMIC") is a "mortgage securities vehicle authorized by the Tax Reform Act of 1986 that  holds commercial and residential mortgages in  trust, and issues securities representing an  undivided interest in these mortgages. . . .  similar to a collateralized mortgage obligation  (CMO) . . . ." Barron's Business Guide Dictionary of Banking  Terms 497. Most of the parties involved in the  case did not understand the exact nature of each  of the investments involved and tended to use  CMO, CMOR, and REMIC interchangeably.

9
 U.S.S.G. sec. 3C1.1 (1989) states, "If the  defendant willfully impeded or obstructed, or  attempted to impede or obstruct the  administration of justice during the  investigation or prosecution of the instant  offense, increase the offense level by 2 levels."

10
  This language appears in sec. 2F1.1 comment.  n.8(b), of the most current Guidelines (1998).

11
 Neither party was able to obtain complete records  from the banks involved, in part due to the lapse  of time between the transaction dates in 1987-88  and the filing of the indictment in March 1997.  Also, according to Binet, most of the CU1  documents on this particular CMOR transaction  were diverted to him and were later destroyed. In  addition, information about this transaction did  not come to light until after Binet's arrest in  1997.

12
 We note that Schneider limits this "offset"  calculation of loss to fraud cases "where the  fraud is discovered or otherwise interrupted  before the victim has been fleeced." 930 F.2d at  558. The fraud in the instant case was not  interrupted or discovered prior to completion of  the criminal activity. However, the government  does not argue that Binet should not receive an  offset for his services; there is no challenge to  the offset itself, only to the amount.

13
 Lopez mistakenly refers to the MVRA as 18 U.S.C.  sec. 4663A et seq.