Court Opinion

ID: 815906
Source: CourtListenerOpinion
Date Created: 2013-01-25 02:35:36+00
Date Added: 2024-06-11T08:54:21.635237
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS
             FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,             
                Plaintiff-Appellee,
               v.                          No. 11-5162
CHRISTIAN M. ALLMENDINGER,
             Defendant-Appellant.
                                      
       Appeal from the United States District Court
     for the Eastern District of Virginia, at Richmond.
           Robert E. Payne, Senior District Judge.
                   (3:10-cr-00248-REP-1)

                Argued: December 7, 2012

                Decided: January 23, 2013

   Before TRAXLER, Chief Judge, and GREGORY and
               DAVIS, Circuit Judges.

Affirmed by published opinion. Chief Judge Traxler wrote the
opinion, in which Judge Gregory and Judge Davis joined.

                        COUNSEL

ARGUED: Barry Joel Pollack, MILLER & CHEVALIER,
CHARTERED, Washington, D.C., for Appellant. Michael
Steven Dry, OFFICE OF THE UNITED STATES ATTOR-
NEY, Richmond, Virginia, for Appellee. ON BRIEF: Laura
2               UNITED STATES v. ALLMENDINGER
G. Ferguson, Mia P. Haessly, MILLER & CHEVALIER,
CHARTERED, Washington, D.C., for Appellant. Neil H.
MacBride, United States Attorney, Alexandria, Virginia, Jes-
sica Aber Brumberg, Assistant United States Attorney,
OFFICE OF THE UNITED STATES ATTORNEY, Rich-
mond, Virginia; Denis J. McInerney, Chief, Albert B. Stieg-
litz, Jr., Trial Attorney, Criminal Division, Fraud Section,
UNITED STATES DEPARTMENT OF JUSTICE, Washing-
ton, D.C., for Appellee.

                          OPINION

TRAXLER, Chief Judge:

   Christian M. Allmendinger appeals his conviction and sen-
tence for several crimes relating to an investment scheme that
resulted in nearly $100 million dollars in losses for investors.
Finding no error, we affirm.

                               I.

   Allmendinger and Brent Oncale founded a company known
as "A&O" in Houston, Texas, in late 2004. The company sold
life settlement investments, which are interests in life insur-
ance policies. Until the end of 2006, A&O sold "bonded life
settlements," which were interests in particular life insurance
policies. The investments were for fixed terms of between
four and seven years. If the insured died during the term, the
life insurance company would pay a benefit, but if the insured
remained alive, a reinsurance bond, which A&O purchased
from Provident Capital Indemnity ("PCI"), was designed to
pay out and take over the life insurance policy (so long as the
life insurance policy premiums were current).

  Allmendinger and Oncale marketed and sold A&O’s
bonded life settlements directly to investors. In 2005, they
                UNITED STATES v. ALLMENDINGER                3
hired Adley Abdulwahab to help market the products through
his company, Houston Investment Center ("HIC"). In market-
ing A&O’s products, both orally and through written materi-
als they created, Allmendinger, Oncale, and Abdulwahab lied
about many critical facts. For example, they represented that
investor funds were placed in a segregated account dedicated
to those payments and used right away to pay policy premi-
ums up front; in reality, although A&O paid the premiums, it
had no separate account for that purpose and it paid them only
as they became due. Indeed, money invested with A&O was
commingled in a general operating account from which A&O
paid its bills. Over the time that A&O was in business, All-
mendinger, Oncale, and Abdulwahab took advantage of this
structure, misappropriating millions of dollars from this
account for themselves.

   The three men also misrepresented A&O’s size, staff, and
record of earning returns for its investors. In 2005 and 2006,
A&O’s websites, whose content Allmendinger and Oncale
had created, listed fictional people as company principals,
falsely stated that A&O had offices in multiple states, greatly
exaggerated the number of A&O employees, and falsely
stated that A&O had particular legal and business profession-
als on its staff. The sites also stated that A&O had "enabled
[their] clients to leverage $375 million into $800 million in
less than five years," J.A. 512 (internal quotation marks omit-
ted), when in actuality, no investor had received any pay out
at that time.

  In 2006, Allmendinger and Oncale invited Abdulwahab,
who was excelling at selling for A&O, to become a partner.
Thereafter, the three men each held an equal interest in A&O
and shared authority over the company.

  By late 2006, regulators from different states began to send
inquiries to A&O regarding its life settlement product, largely
based on concerns that A&O was selling an unregistered
security. These inquiries prompted the three partners to con-
4               UNITED STATES v. ALLMENDINGER
sult with Florida attorney Michael Lapat, who assisted A&O
in setting up hedge funds that were backed by life settlements.
By early 2007, A&O began offering fractionalized interests in
these funds that they called "capital appreciation bonds."

   This format change did not stem the tide of regulator inqui-
ries, however, and Allmendinger, Abdulwahab and Oncale
agreed to sell A&O to a company called "Blue Dymond."
Before the sale, however, Allmendinger, Abdulwahab, and
Oncale helped themselves — for what Allmendinger believed
was one final time — to several hundred thousand dollars
from A&O’s operating fund. After this raid on A&O’s cof-
fers, only $2.9 million remained in A&O’s bank accounts —
not even half of the amount A&O needed to pay the premi-
ums on all of its policies up through their bonding dates.

   Unbeknownst to Allmendinger, however, Abdulwahab and
Oncale had constructed an elaborate secret plan to purchase
the company themselves and continue running it. Blue
Dymond — the buyer of A&O — was little more than a front
for Abdulwahab and Oncale; it was a shell company created
and funded by Abdulwahab and Oncale with the assistance of
attorney Russell Mackert and without the knowledge of All-
mendinger.

   Under the terms of the sale, the partners were to receive
$750,000, with the expectation of an additional $250,000 in
the 18 months following the sale. While Allmendinger
received his $750,000, Oncale and Abdulwahab — unbe-
knownst to Allmendinger — received only $750 and secretly
continued the business through Blue Dymond. Through
August 31, 2007, the date of the sale, Allmendinger had per-
sonally received $8,455,033.60 from A&O; Oncale had
received $7,303,496.98; and Abdulwahab had received
$2,889,366.70. Allmendinger used his money to live an
exceptionally extravagant lifestyle, purchasing expensive jew-
elry, cars, and other items, including a $2 million home.
                  UNITED STATES v. ALLMENDINGER                       5
   In September 2007, Abdulwahab and Oncale hired David
White to serve as A&O’s president. During this time, A&O
continued generally to operate in much the same manner as it
had before Allmendinger sold his interest. Indeed, A&O con-
tinued to employ the fraudulent marketing materials Allmen-
dinger and his co-conspirators had created. The remaining
principals, however, accelerated their misappropriation of
investor funds. In the fall of 2007, A&O funds amounting to
$11 million were deposited in Mackert’s account and distrib-
uted to Abdulwahab and Oncale. A&O ceased making pre-
mium payments on many of its life insurance policies, causing
them to lapse, and A&O stopped taking new investor funds in
early 2008. Thereafter, Mackert took over the management of
A&O and subsequently placed A&O into bankruptcy. From
November 2004 until 2008, A&O’s more than 800 investors
lost more than $100 million.

   In January 2010, Allmendinger was interviewed by federal
prosecutors and law enforcement agents and informed that he
would be indicted based on his involvement with A&O. In the
following weeks, Allmendinger began to hide his assets. His
father opened a bank account in February 2010, and more
than $676,000 in funds that Allmendinger had previously held
with his father in a joint account was deposited into the new
account. His father then used some of those funds to pay more
than $300,000 of Allmendinger’s credit card debt.

  On September 7, 2010, Allmendinger, Abdulwahab, and
White, were indicted in the Eastern District of Virginia.1 On
February 1, 2011, the grand jury returned a superseding
indictment against the three men. Allmendinger was charged
  1
   As a result of cooperating with the government, Oncale was able to
plead guilty pursuant to a plea agreement to one count of conspiracy to
commit mail fraud and one count of conspiracy to commit money launder-
ing. He received a sentence of 10 years’ imprisonment. Mackert pled
guilty to a criminal information alleging mail fraud conspiracy and bulk
cash smuggling, see 31 U.S.C. § 5332, and received a sentence of 188
months’ imprisonment.
6                  UNITED STATES v. ALLMENDINGER
with one count of mail fraud conspiracy, see 18 U.S.C. § 1349
(Count 1); three counts of mail fraud, see 18 U.S.C. § 1341
(Counts 2-4); one count of money laundering conspiracy, see
18 U.S.C. § 1956(h) (Count 8); three counts of money laun-
dering, see 18 U.S.C. § 1956(a)(1)(A)(i) (Counts 9-11); and
two counts of securities fraud, see 15 U.S.C. §§ 77q(a), 77x
(Counts 15 and 16). The superseding indictment charged that
the purpose of the alleged conspiracy was "to mislead inves-
tors regarding A&O’s safekeeping and use of investor funds
and the risks of A&O’s investment offerings, in order to
obtain investor funds so that the conspirators could personally
profit." J.A. 269.1. The indictment charged that the sham sale
was part of the conspiracy and that the conspiracy continued
as Abdulwahab, Oncale, and White continued the business
without Allmendinger.

  After the grand jury returned the initial indictment on Sep-
tember 7, 2010, a restraining order was entered the next day
against all of Allmendinger’s then-known accounts. Allmend-
inger responded by surreptitiously opening three new bank
accounts and using them to receive and hold $125,000 in
checks from his father. He did not inform either the govern-
ment or the district court of the existence of these accounts.

   Allmendinger filed a motion to sever his trial from
Abdulwahab’s, contending that their defenses would be antag-
onistic and Allmendinger would be prejudiced if they were
tried together.2 Allmendinger also moved to strike the allega-
tions in the indictment concerning events that occurred after
the August 31, 2007, sale of his share of A&O. And he moved
to dismiss the two conspiracy counts, arguing that each count
in actuality alleged two conspiracies, the second of which
began after August 31, 2007. The district court rejected the
argument that the counts each alleged two separate conspira-
    2
   White pled guilty to a criminal information alleging conspiracy to com-
mit mail fraud, money laundering, and securities fraud, and he was sen-
tenced to five years’ imprisonment.
                  UNITED STATES v. ALLMENDINGER                       7
cies, stating that "[t]he language in the [superseding indict-
ment] permits the government to prove facts supporting the
existence of a single, overarching conspiracy, the purpose of
which was to defraud investors, from November 2004 to Jan-
uary 2008." J.A. 357. The district court therefore denied All-
mendinger’s motion to dismiss and his motion to strike, but
the court granted Allmendinger’s motion to sever.3

   Allmendinger’s jury trial then began. At the close of the
government’s case, Allmendinger moved for a judgment of
acquittal on all counts. During the hearing on that motion, the
district court observed that no evidence of Allmendinger’s
involvement in the A&O scheme after August 31, 2007, had
been presented. In light of that fact, notwithstanding that the
court had denied Allmendinger’s pre-trial motion to strike, the
government suggested striking the indictment language con-
cerning post-sale events and the sham nature of the sale of
A&O. In a reversal from his pretrial position, Allmendinger’s
counsel objected to the proposed redaction, arguing that the
government’s request amounted to a concession that the con-
spiracy counts each alleged two separate conspiracies, only
one of which the government had supported with evidence.
The district court overruled Allmendinger’s objection, noting
that it was only because of the severance of Allmendinger’s
trial that the government did not present evidence of the con-
tinuation of the conspiracy after Allmendinger ended his
involvement. The court reasoned that striking the post-sale
allegations was appropriate to protect Allmendinger from the
prejudice that might result were the jury to consider them.
The district court granted Allmendinger’s Rule 29 motion as
to one mail fraud and one securities fraud count but otherwise
denied the motion. Allmendinger renewed his Rule 29 motion
  3
    In June 2011, Abdulwahab was tried separately by a jury, which found
him guilty of mail-fraud conspiracy and money-laundering conspiracy,
five counts each of mail fraud and money laundering, and three counts of
securities fraud. Abdulwahab was sentenced to 60 years’ imprisonment.
His appeal is currently pending before a panel of this court.
8               UNITED STATES v. ALLMENDINGER
after the close of his case as to the remaining counts, but the
court again denied it.

   As per the court’s ruling, the government redacted the
superseding indictment to remove allegations of events that
occurred after August 31, 2007, and the events relating to the
sham nature of the sale. Most of the changes simply involved
deleting language; however, a few involved rewriting allega-
tions. In the rewritten passages, the government changed the
amount of funds lost by A&O investors from "approximately
$100 million" to "approximately $79.9 million," changed the
number of A&O investors from "more than 800" to "more
than 580," and changed the dates of the alleged conspiracies
from "November of 2004 through the present" to "November
of 2004 through August 31, 2007." Compare J.A. 267.1-
268.1, 278.1 with J.A. 238-39, 249. The court provided the
jury with the revised indictment. The jury subsequently found
Allmendinger guilty of all seven remaining counts.

   At sentencing, the district court proceeded to determine
Allmendinger’s advisory Guideline range. The court con-
cluded that the Guidelines called for grouping of the mail and
securities fraud and conspiracy to commit mail fraud offenses
(Counts 1, 2, 3, and 15) and the money laundering offenses
(Counts 8, 9, and 11). See U.S.S.G. § 3D1.2 (2010). The par-
ties argued various issues regarding the first group, most
importantly the amount of loss that Allmendinger’s crimes
caused.

   Allmendinger objected to the recommendation in the pre-
sentence report of a loss amount greater than $50 million but
not more than $100 million. The reinsurance bonds that A&O
had bought from PCI, which were intended to take over the
life insurance policies and make the payouts to the investors,
turned out to be fraudulent, and PCI therefore did not pay out
even when the bonds’ terms required payment. Allmendinger
argued that the fraudulent bonds caused the bulk (approxi-
mately $67 million) of the investors’ losses. Allmendinger
                UNITED STATES v. ALLMENDINGER                  9
maintained that PCI’s fraud was not foreseeable and that he
should not be held responsible for the losses attributable to the
bond fraud.

   The court overruled Allmendinger’s objections and deter-
mined the loss amount to be $93,920,635.46, which reflected
the total amount lost by the 825 investors during the entire
scheme less the amount that had been recovered in the related
A&O bankruptcy as of the date of the sentencing. The court
reasoned that Allmendinger had set up a scheme based on
wide-ranging lies intended to induce people to invest their
money in accounts that Allmendinger could use "as his per-
sonal piggy bank." J.A. 2302. As the court noted, Allmen-
dinger lied about "the structure and size and soundness of the
company, the extent of its reach, and the kind of activities in
which it engaged, the kind of success it had had, the yields
that it had had," and lied when he claimed that investors’
money would be placed in escrow or would be used to prepay
the policy premiums. J.A. 2302. The court found that even as
Allmendinger sold his share, "he knew that Abdulwahab at
least was going to continue in the business even though he
didn’t know Abdulwahab was going to end up being one of
the owners." J.A. 2302-03. The court concluded that "when
you are operating a business that is based on fraud, you are
charged with the knowledge that you potentially put at risk
everybody’s money that you’ve got and you’ve stolen and
inveigled them to part with." J.A. 2304. The court further
found that it was reasonably foreseeable to Allmendinger that
those continuing the business "were going to engage in
exactly the same kind of conduct." J.A. 2304.

   Because the court determined that the loss from the con-
spiracy exceeded $50 million, the court applied a 24-level
increase to Allmendinger’s base level under the Sentencing
Guidelines pursuant to U.S.S.G. § 2B1.1(b)(l)(M). This
enhancement and others produced an adjusted offense level of
45 for the first group, and a combined adjusted offense level
of 45, which was treated as a total offense level of 43, see
10             UNITED STATES v. ALLMENDINGER
U.S.S.G. Chap. 5, Pt. A n.2 (providing that a total "offense
level of more than 43 is to be treated as an offense level of
43"). This offense level and Allmendinger’s criminal history
category of I yielded an advisory Guidelines range of life
imprisonment, capped by a statutory maximum of 1,500
months’ imprisonment. See U.S.S.G. § 5G1.1(a) ("Where the
statutorily authorized maximum sentence is less than the
minimum of the applicable guideline range, the statutorily
authorized maximum sentence shall be the guideline sen-
tence.").

   Allmendinger sought a downward departure on two bases.
First, he contended that the loss amount found by the district
court overstated the seriousness of his conduct. Allmendinger
argued that the loss amount greatly exceeded the foreseeable
losses given that the life insurance policy premiums were paid
during the time he was operating the company and that he had
no reason to know that PCI’s bonds were worthless. He also
sought a downward departure based on his contention that he
received a large number of enhancements, some of which
overlapped with each other.

   While arguing for a below-guidelines sentence, defense
counsel emphasized that Allmendinger was a first-time nonvi-
olent offender and compared Allmendinger’s conduct to that
of Oncale, who had pled guilty pursuant to a plea agreement
to one count each of mail fraud and money laundering and
had received a sentence of only 10 years. Counsel maintained
that Allmendinger and Oncale were similarly situated and
should receive similar sentences, and counsel reiterated his
argument that the loss found by the court was much larger
than Allmendinger could reasonably have foreseen.

   In response, the government argued that Allmendinger and
Oncale actually were not similarly situated, contrasting
Oncale’s prompt cooperation after he was approached by
investigators with Allmendinger’s continued evasion and
attempts to hide and spend his money, and his possible inten-
                UNITED STATES v. ALLMENDINGER                11
tion to flee. The government stressed that Allmendinger’s
crimes had far-reaching impact, had "destroyed countless
lives," and thus warranted a very severe sentence in order to
deter those who would consider committing similar crimes.
J.A. 2403. The government also noted that Mackert, who was
not an architect of the fraud and who ended up with only
$250,000 from his participation in the scheme, was sentenced
to almost 16 years.

   In the end, the district court concluded that no downward
departure was warranted under the Guidelines. However, the
court, in discussing at length the 18 U.S.C. § 3553(a) factors,
noted the need for Allmendinger’s sentence to promote
respect for the law by being sufficiently, but not excessively,
severe and by not penalizing Allmendinger for exercising his
right to go to trial. In this regard, the court concluded that a
1500-month sentence would be "harsher than is necessary in
order to achieve the objectives of the sentencing." J.A. 2416.
In determining what sentence would be appropriate, the court
noted that it was taking into consideration "the fact that there
were many enhancements applied" and that the loss the court
found might not adequately reflect that Allmendinger did not
set out to steal all of the money entrusted to him, given that
he "did bond some of the obligations and did have premiums
paid." J.A. 2416. However, the court also specifically noted
that as Allmendinger began to suspect that his scheme would
be discovered, he continued to attempt to avoid responsibility,
to hide and spend the money he had taken, and to make plans
to flee, thus demonstrating the need for a sentence that would
provide specific deterrence. The court also added that "gen-
eral deterrence is particularly necessary in a crime of this
sort." J.A. 2418. And the court cited the need to avoid unwar-
ranted disparities among similarly situated defendants. In the
end, the court sentenced Allmendinger to 540 months’ impris-
onment and ordered him to pay restitution in the amount of
$101,963,048.05.
12              UNITED STATES v. ALLMENDINGER
                               II.

   Allmendinger first argues that the district court erred in
altering the superseding indictment. Specifically, he contends
that the district court violated his Fifth Amendment rights by
altering the indictment to omit the allegations relating to the
time after Allmendinger sold his interest in A&O and to
rewrite other language to reflect the shorter duration of the
conspiracy alleged in the altered indictment. On that basis, he
argues for reversal on the two conspiracy counts as well as the
associated substantive counts. We disagree.

   The Fifth Amendment to the United States Constitution
provides, as is relevant here, that "[n]o person shall be held
to answer for a capital, or otherwise infamous crime, unless
on a presentment or indictment of a Grand Jury . . . ." U.S.
Const. Amend. V. "When the government, through its presen-
tation of evidence or its argument, or the district court,
through its instructions to the jury, or both, broadens the bases
for conviction beyond those charged in the indictment, a con-
structive amendment—sometimes referred to as a fatal vari-
ance—occurs." United States v. Malloy, 568 F.3d 166, 178
(4th Cir. 2009). An indictment is constructively amended, and
a fatal variance occurs, when "the indictment is altered to
change the elements of the offense charged, such that the
defendant is actually convicted of a crime other than that
charged in the indictment." United States v. Randall, 171 F.3d
195, 203 (4th Cir. 1999) (internal quotation marks omitted).
However, not every difference between the government’s
proof and the indictment constitutes a fatal variance. See
United States v. Redd, 161 F.3d 793, 795 (4th Cir. 1998).
When the government’s proof diverges to some degree from
the indictment but does not change the crime charged in the
indictment, a mere variance occurs. See id. Such a variance
violates the defendant’s Fifth Amendment rights only if it
"prejudices [him] either by surprising him at trial and hinder-
ing the preparation of his defense, or by exposing him to the
danger of a second prosecution for the same offense." United
                UNITED STATES v. ALLMENDINGER               13
States v. Ashley, 606 F.3d 135, 141 (4th Cir. 2010) (internal
quotation marks omitted).

   When a court is considering a constructive amendment
claim, "it is the broadening [of the bases for the defendant’s
conviction] that is important — nothing more." United States
v. Floresca, 38 F.3d 706, 711 (4th Cir. 1994) (en banc)
(emphasis added). "The key inquiry is whether the defendant
has been tried on charges other than those made in the indict-
ment against him." United States v. Roe, 606 F.3d 180, 190
(4th Cir. 2010). Regarding conspiracies, "a prosecutor may
elect to proceed on a subset of the allegations in the indict-
ment, proving a conspiracy smaller than the one alleged, so
long as that subset is also illegal." United States v. Wilson,
134 F.3d 855, 865 (7th Cir. 1998) (citation and internal quota-
tion marks omitted). Additionally, "an indictment can be
amended without further consideration by the grand jury
when it is necessary to strike surplusage, or to correct the
indictment’s form, e.g., a misnomer, or a typographical error."
United States v. Whitfield, 695 F.3d 288, 308 (4th Cir. 2012)
(citations omitted). Whether an indictment has been construc-
tively amended is a question we review de novo. See id. at
306.

   In this case, the government, by limiting its case to events
occurring while Allmendinger was an owner of A&O, simply
proved a more narrow conspiracy than was charged in the
superseding indictment. By limiting its case to events occur-
ring while Allmendinger was an owner of A&O, the govern-
ment proved a conspiracy that was shorter in duration (and
therefore caused fewer losses to investors) than the charged
conspiracy. The conspiracy proven by the government none-
theless shared the same purpose as the charged conspiracy
and was premised on the same fraudulent representations
alleged in the indictment. Because the conspiracy proven was
within the scope of those alleged in the unredacted indict-
ment, the narrowing at most created a non-fatal variance. All-
mendinger makes no claim that the amendment surprised him
14               UNITED STATES v. ALLMENDINGER
or hindered his defense. And, there is no danger of further
prosecution, as the omitted allegations in the indictment con-
cerned not Allmendinger’s conduct, but that of those who
continued running the fraudulent business after Allmendinger
discontinued his participation.

   Allmendinger notes that the district court not only allowed
the government to prove the narrower conspiracy, but also
revised the indictment by striking some paragraphs and
rewriting others to reflect the reduced scope of the conspiracy,
and then compounded the error by sending the indictment
back with the jury. In this regard, Allmendinger cites Ex parte
Bain, 121 U.S. 1 (1887), for the proposition that it does not
lie "within the province of a court to change the charging part
of an indictment to suit its own notions of what it ought to
have been." Id. at 10. However, to the extent that Bain held
that the narrowing of an indictment violated the defendant’s
Fifth Amendment rights, Bain was overruled in United States
v. Miller, in which the Court noted that it had "sustain[ed]
convictions where courts had withdrawn or ignored indepen-
dent and unnecessary allegations in the indictments." 471 U.S.
130, 144 (1985); see Floresca, 38 F.3d at 710 n.10. And while
it is true that some of the narrowing here was accomplished
not just by deleting words but also by changing words, All-
mendinger offers no reason why this distinction would have
constitutional significance. Since the charges were narrowed
rather than broadened, Allmendinger’s constitutional rights
were not abridged.

                              III.

     Allmendinger next challenges his sentence.

  Since the Supreme Court issued its decision in United
States v. Booker, the Sentencing Guidelines are no longer
mandatory but rather are "effectively advisory." 543 U.S. 220,
245 (2005). When sentencing criminal defendants after
Booker, district courts must begin by correctly calculating the
                UNITED STATES v. ALLMENDINGER                15
defendant’s sentencing range under the Sentencing Guide-
lines. See Gall v. United States, 552 U.S. 38, 49 (2007). The
court is next required to give the parties the opportunity to
argue for what they believe to be an appropriate sentence, and
the court must consider those arguments in light of the factors
set forth in 18 U.S.C.A. § 3553(a). See id. at 49-50; United
States v. Abu Ali, 528 F.3d 210, 260 (4th Cir. 2008).

   Our review of Allmendinger’s sentence can be divided into
two steps. First, we must consider whether the district court
committed a significant procedural error, such as improperly
calculating the appropriate guideline range or inadequately
explaining the sentence imposed. See United States v. Wilkin-
son, 590 F.3d 259, 269 (4th Cir. 2010); United States v. Lynn,
592 F.3d 572, 575 (4th Cir. 2010). If it did, then we must
vacate the sentence and remand for resentencing. See Wilkin-
son, 590 F.3d at 269. If it did not, then we consider whether
the sentence imposed was substantively reasonable under an
abuse-of-discretion standard. See id.

                              A.

                               1.

   Allmendinger first seeks vacatur of his sentence and the
restitution order, arguing that his sentence was procedurally
unreasonable because the district court erred in calculating the
amount of loss under U.S.S.G. § 2B1.1(b)(1). We disagree.

   The Guidelines instruct that the amount of loss is "the
greater of actual loss or intended loss." U.S.S.G. § 2B1.1 cmt.
n. 3(A). "‘Actual loss’ means the reasonably foreseeable
pecuniary harm that resulted from the offense." Id. cmt. n.
3(A)(i). "‘[R]easonably foreseeable pecuniary harm’ means
pecuniary harm that the defendant knew or, under the circum-
stances, reasonably should have known, was a potential result
of the offense." Id. cmt. n. 3(A)(iv) (emphasis added). "[T]he
determination of loss attributable to a fraud scheme is a fac-
16                  UNITED STATES v. ALLMENDINGER
tual issue for resolution by the district court, and we review
such a finding of fact only for clear error." United States v.
Godwin, 272 F.3d 659, 671 (4th Cir. 2001).

   "In calculating fraud loss, a sentencing court must first
apply the principles of ‘relevant conduct.’" United States v.
Bolden, 325 F.3d 471, 498 (4th Cir. 2003). A defendant
charged with participating in a conspiracy can be held
accountable only for the reasonably foreseeable acts of others
that are taken in pursuit of the criminal activity he agreed to
join. See United States v. Gilliam, 987 F.2d 1009, 1012-13
(4th Cir. 1993). "A defendant’s membership in a conspiracy
is presumed to continue until he withdraws from the conspir-
acy by affirmative action. Withdrawal must be shown by evi-
dence that the defendant acted to defeat or disavow the
purposes of the conspiracy."4 United States v. West, 877 F.2d
281, 289 (4th Cir. 1989).

   Regarding the scope of the conspiracy, the district court
found that Allmendinger "agreed to a scheme and artifice to
defraud, and he orchestrated it. He was one of the principal
architects of it." J.A. 2301. The court found that the scheme
and artifice to defraud "was to make abundant misrepresenta-
tions to people to secure their money, to use, as he saw fit, in
his company." J.A. 2301-02. The court found that Allmen-
dinger agreed with his co-conspirators to lie in a variety of
ways, including about

       the structure and size and soundness of the company,
       the extent of its reach, and the kind of activities in
       which it engaged, the kind of success it had had, the
       yields that it had had, and [Allmendinger agreed] to
       perpetuate these lies by written communications in
       documents that were distributed with his auspices
       and approvals, as well as by emails and other elec-
       tronic communications, and to structure it in such a
  4
     Allmendinger does not argue that he satisfied this standard.
                UNITED STATES v. ALLMENDINGER               17
    way that he could treat the money in A&O as his
    personal piggy bank.

J.A. 2302. The court also found that Allmendinger knew that,
even after the "sale" of the business, Abdulwahab was going
to continue working there and the mode of operation that All-
mendinger had set in motion would continue.

   The court further noted that Allmendinger’s scheme
included telling the investors that their money would be in
escrow or that A&O would prepay the premiums, when in
actuality the money was not placed in escrow and the com-
pany paid the premiums only as they became due. The court
observed that in such a situation it was reasonably foreseeable
that money might not be available when it was needed and
that the premiums would not be paid. The court added that
"when you are operating a business that is based on fraud, you
are charged with the knowledge that you potentially put at
risk everybody’s money that you’ve got and you’ve stolen
and inveigled them to part with." J.A. 2304. Given this fact,
the court concluded that the victims’ losses were reasonably
foreseeable as a potential result of Allmendinger’s offense.
We can find no flaw with the district court’s analysis.

   Allmendinger argues that at the time he left A&O, premi-
ums for all life insurance policies were current. He relies on
testimony from his forensic accountant stating that on the date
Allmendinger left, A&O had funds sufficient to pay the pre-
miums and that had the PCI reinsurance bonds paid out as
anticipated, the investors would not have lost any money and
in fact would have received a substantial return on their
investment. He contends that the district court erred in hold-
ing him responsible for all that happened at the company after
he left, including the withdrawal of millions of dollars by the
company’s principals and the decision to allow the policies to
lapse. Allmendinger also contends the court erred in holding
him responsible for the failure of PCI’s bonds. We do not
agree.
18                 UNITED STATES v. ALLMENDINGER
   As the district court found, Allmendinger built a business
permeated by fraud in which the principals, instead of paying
the premiums immediately or putting the money in escrow,
placed them in an account that they used as their own piggy
bank. Of course, the very reason that the principals lied about
this system is that if the investors knew the truth, they would
know that the premiums would actually be paid only if the
money was available when the premiums became due and the
fraudsters handling the money decided to use it to pay the pre-
miums. Not only was it reasonably foreseeable that the premi-
ums might never be paid under this system, but hiding this
potentiality was the whole point of the co-conspirators’ lies
that they were prepaying the premiums.

   Nor did the district court clearly err by including in the loss
amount losses to which the failure of the PCI bonds contrib-
uted. Allmendinger helped create a scheme by which people
were deceived into entrusting their money to A&O on the
false pretense that the company had an incredible record of
protecting its investors’ principal while earning hundreds of
millions of dollars in double-digit returns. The allure of such
a record of success is obvious: It is one thing to have created
what in theory might seem like a recipe for success, and quite
another to have tested that formula and been able to produce
the intended results time and again. By lying to would-be
investors about A&O’s record, Allmendinger deceived them
into believing that A&O had built a time-tested money-
making machine, when in fact, investors were assuming the
risk that Allmendinger’s money-making plan would fail to
work as intended. That A&O’s bond holder, PCI, turned out,
like A&O, to be a complete fraud is just the sort of "kink" that
Allmendinger’s lies lulled investors into believing would have
been worked out had A&O truly had the experience and
record that Allmendinger and his coconspirators claimed it did.5
  5
   This connection between the fraud at issue and the third-party criminal
conduct distinguishes this case from United States v. Hicks, 217 F.3d 1038
                   UNITED STATES v. ALLMENDINGER                        19
Thus, we hold the district court did not clearly err in including
in Allmendinger’s loss the amounts that were caused in part
by PCI’s default. See United States v. Jimenez, 513 F.3d 62,
87-88 (3d Cir. 2008) ("It is not appropriate to reduce the
amount of the loss, as computed under the Guidelines, in
order to reflect other causes of the loss which were beyond
the defendant’s control." (internal quotation marks omitted)).

   Nevertheless, in a case in which the actual loss caused by
the defendant’s fraud has other causes more proximate than
the fraud, a discretionary downward departure or a variance
sentence may be appropriate. See id. at 88; United States v.
Kopp, 951 F.2d 521, 531 (3d Cir. 1991). Allmendinger argues
that the district court erred in failing to realize that it had
authority to consider a downward departure under the Guide-
lines on the basis that the loss amount overstated the serious-
ness of Allmendinger’s offense conduct. However, when a
district court imposes a below-Guidelines sentence via vari-
ance, as the court did here, it is of no legal significance that
the court may not have recognized that it also could have
achieved a below-Guidelines sentence via departure. See
United States v. Diosdado-Star, 630 F.3d 359, 364-65 (4th
Cir. 2011).

(9th Cir. 2000), on which Allmendinger relies. In that case the defendant
fraudulently obtained bank loans by submitting fake tax returns. See id. at
1041. The defendant maintained that after he defaulted and his fraud was
discovered, the person the bank hired to sell the properties in foreclosure
engaged in criminal misconduct that caused the properties to be sold at
unreasonably low prices. See id. at 1047. The district court declined to
hear evidence on the issue in determining the amount of loss, and on
appeal the Ninth Circuit vacated the sentence imposed, holding that
"[n]ew losses inflicted independently by third-party criminals after the
completion and discovery of a defendant’s crime do not ‘result from’ that
crime for purposes of [§ 2F1.1 of] the Sentencing Guidelines, even if the
defendant’s conduct in some coincidental way was a but-for cause of the
ultimate loss." Id. at 1048.
20              UNITED STATES v. ALLMENDINGER
                               2.

   Allmendinger also maintains that his sentence was proce-
durally unreasonable because the district court failed to
address Allmendinger’s argument that his sentence created an
unwarranted disparity with those of similarly situated defen-
dants. See 18 U.S.C. § 3553(a)(6) (providing that in deciding
an appropriate sentence, a district court must consider several
factors, including "the need to avoid unwarranted sentence
disparities among defendants with similar records who have
been found guilty of similar conduct"). We disagree.

   Although sentencing courts are statutorily required to state
their reasons for imposing a particular sentence, see 18
U.S.C.A. § 3553(c), it is not necessary that a court issue a
comprehensive, detailed opinion. See Rita v. United States,
551 U.S. 338, 356 (2007). Rather, the explanation given must
be sufficient "to satisfy the appellate court that [the district
court] has considered the parties’ arguments and has a rea-
soned basis for exercising [its] own legal decisionmaking
authority." Id.; see United States v. Boulware, 604 F.3d 832,
837 (4th Cir. 2010). Thus, a court is not required to discuss
each § 3553(a) factor extensively, but need only "provide a
rationale tailored to the particular case at hand and adequate
to permit meaningful appellate review." United States v. Car-
ter, 564 F.3d 325, 330 (4th Cir. 2009) (internal quotation
marks omitted).

   Here, the district court heard extensive argument from All-
mendinger and the government concerning the extent to
which Allmendinger was similarly situated to his co-
conspirator Oncale. The district court’s lengthy explanation
for the sentence imposed left no doubt regarding the court’s
reasons for selecting the particular sentence that it did.
Indeed, the court specifically noted that it was considering
unwarranted disparities both among defendants in general and
among co-defendants within the case. We therefore conclude
                 UNITED STATES v. ALLMENDINGER                  21
that the district court’s explanation satisfied the requisite stan-
dard.

                                B.

   Allmendinger finally argues that his sentence was substan-
tively unreasonable because it was significantly higher than
sentences imposed on similarly situated defendants. He spe-
cifically compares his sentence to the 10-year sentence
received by Oncale in this case and to similar sentences
imposed nationwide on defendants involved in similar fraud
schemes. We find no error.

   The co-conspirators in this case were all eventually con-
victed, and they received a wide range of sentences: Abdul-
wahab, 60 years; Oncale, 10 years; Mackert, 188 months; and
White, five years. As for the two co-conspirators most simi-
larly situated to Allmendinger, Allmendinger received a sen-
tence shorter than Abdulwahab’s but much longer than
Oncale’s.

   Oncale and Allmendinger were situated differently in that
Oncale was confronted by the government early in the investi-
gation and admitted to his culpability and immediately agreed
to plead guilty. He liquidated his assets and gave the money
to the government, and he cooperated extensively with the
government, including by pleading guilty. Allmendinger, on
the other hand, refused to accept responsibility for his actions
when confronted by the government. He instead sought to
squirrel away cash with his father in anticipation of his indict-
ment and continued to live a lavish lifestyle with this money.
He also hid money in violation of the restraining order and
attempted to flee just days before the trial. And he eventually
proceeded to trial, failing to accept responsibility.

   Because Oncale cooperated with the government, he was
allowed to plead guilty to one count of conspiracy to commit
mail fraud and one count of conspiracy to commit money
22              UNITED STATES v. ALLMENDINGER
laundering, each of which carried a maximum sentence of five
years’ imprisonment. We are not entitled to second guess the
government’s exercise of its prosecutorial discretion absent a
showing of invidious discrimination by the government, see
United States v. Batchelder, 442 U.S. 114, 124-26 & n.9
(1979), and Allmendinger does not allege such discrimina-
tion. The district court simply was not required, in the name
of avoiding unwarranted sentencing disparity, to treat All-
mendinger as if he had been convicted only of the crimes to
which Oncale pled guilty. See United States v. Duncan, 479
F.3d 924, 928 (7th Cir. 2007) (per curiam).

   Allmendinger also argues that his sentence was unreason-
able in light of the sentences handed down throughout the
country for comparable crimes. Again we disagree. Allmen-
dinger’s crimes involved frauds of unthinkable scope that
financially devastated hundreds of people. Indeed, victim
impact testimony established the crushing effect that the con-
spiracy had on many people’s lives. There is certainly prece-
dent for imposing a comparably stiff sentence for a fraudulent
scheme of this magnitude. See, e.g., United States v. Lewis,
594 F.3d 1270, 1277-78 (10th Cir. 2010) (affirming 310–year
sentence for a defendant convicted by a jury of an investment
fraud of over $40 million dollars). We conclude that the court
was within its discretion in sentencing Allmendinger as it did.

                             IV.

   In sum, finding no error, we affirm Allmendinger’s convic-
tions and sentence.

                                                  AFFIRMED