United States v. Sami Natour

In the

United States Court of Appeals

For the Seventh Circuit

No. 11-2577

U NITED STATES OF A MERICA,

Plaintiff-Appellee,

v.

S AMI N ATOUR,

Defendant-Appellant.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 1:07-cr-00083-1—Elaine E. Bucklo, Judge.

A RGUED F EBRUARY 16, 2012—D ECIDED N OVEMBER 9, 2012

Before P OSNER, R IPPLE and W ILLIAMS, Circuit Judges.

R IPPLE, Circuit Judge. Sami Natour was convicted,

following a jury trial, of four counts of interstate trans-

portation of stolen property in violation of 18 U.S.C.

§ 2314. At sentencing, the district court attributed to him

a loss amount of approximately $292,000 and deter-

mined that he was “in the business of receiving and

selling stolen property,” U.S.S.G. § 2B1.1(b)(4); these con-

clusions resulted in a 14-level increase to Mr. Natour’s

2 No. 11-2577

base offense level under the Guidelines. See U.S.S.G.

§§ 2B1.1(b)(1)(G), (b)(4). The district court sentenced

Mr. Natour to 28 months’ imprisonment on all counts,

to run concurrently, followed by three years of super-

vised release, and ordered restitution in the amount

of $104,742.16. Mr. Natour appeals, challenging both

his conviction and sentence.

We perceive no violation of the Grand Jury Clause in

Mr. Natour’s conviction. The terms used in 18 U.S.C. § 2314

are not of a wholly independent character, and the

offense conduct proved at trial and stated in the jury

instructions are within the charges approved by the

grand jury. Further, we find no reversible error in the

district court’s sentencing decisions. The court properly

applied § 2B1.1(b)(4) of the United States Sentencing

Guidelines to Mr. Natour as a person in the business

of receiving and selling stolen property, and the court

used both an acceptable method and evidence-based

mathematical figures in arriving at a loss calculation

for purposes of § 2B1.1(b)(1). Accordingly, we affirm

the judgment of the district court.

I

BACKGROUND

A. Facts

On February 7, 2007, Secret Service Agent Joel Heffernan

received a tip from FedEx about suspicious activity

on Mr. Natour’s account, namely, four packages sent from

No. 11-2577 3

“Sam-Tek” 1 to “Sam, SNS” in New York, for cash on

delivery in the amount of $63,970. Upon visiting the

FedEx facility the following day, agents discovered that

the boxes contained 290 new Nextel cellular phones in

individual boxes, but not shrink-wrapped. There were

no invoices or packing slips. Law enforcement catalogued

the contents, and the packages were forwarded on to

the delivery address.

The same day, FedEx called the Secret Service again,

this time to alert them to two additional packages from

Mr. Natour to the same recipient, for cash on delivery

in the amount of $20,000. In these two boxes, agents

found 100 new Nextel phones packed in the same

manner with no packing slips or invoices. Again, the

contents were catalogued and forwarded to the recipient.

On February 8 and 9, a person identifying himself

as Mr. Natour called FedEx to complain about de-

layed delivery of his February 7 packages, which he

1

For several years before and during the operative events in

the present case, Mr. Natour operated a series of businesses.

From 2000 to 2004, Mr. Natour operated Sam-Tek out of his

home in Oak Forest, Illinois. He dissolved the company in

December 2006, but reincorporated the following month,

approximately one month prior to the relevant events in this

case, under the name “Sam-Tek US.” He also operated, for

some unspecified period of time, a cell phone store called

“Orbitec,” later named “Quickcom,” in Chicago Ridge, Illinois,

which remained in operation during the relevant events in

this case.

4 No. 11-2577

claimed contained “electronic equipment such as mother-

boards.” 2

On February 12, 2007, agents conducted surveillance

of Mr. Natour’s home. They observed a man later identi-

fied as Andre Williams delivering two cardboard

boxes. Later the same day, the agents examined another

shipment from the defendant at the FedEx facility.

These boxes contained 119 Nextel phones in the same

condition as prior shipments, this time addressed to

“Frances, SND” in Los Angeles, for cash on delivery

of $23,000.

Two days later, on February 14, agents conducted

surveillance of Mr. Natour’s cell phone business,

Quickcom, located in Chicago Ridge. They observed a

FedEx driver pick up two packages for shipment. Upon

arriving at the FedEx facility, the agents opened the

packages and found 55 Nextel phones packed in the

same way as prior shipments. The agents searched the

trash at Quickcom and recovered five invoices for cell

phones ordered by individuals and businesses other

than the defendant or any of his business names. The

serial numbers on these invoices matched the numbers

for phones contained in the February 7 and 8 shipments

by Mr. Natour.

On February 27, 2007, agents obtained an arrest warrant

for Mr. Natour and search warrants for his home and

business. In the search of his home, agents discovered

2

R.191 at 186.

No. 11-2577 5

$34,000 in a FedEx box in his crawlspace, as well as

various relevant documents including FedEx airbills for

the shipments in question. At his business, the agents

verified that his inventory was legitimate. The agents

also executed a search warrant at SNS in New York,

a recipient of several of the suspicious shipments. They

discovered an additional 151 new Nextel phones

shipped by Mr. Natour to SNS for $30,030 cash on

delivery, in the same condition as prior shipments and

without packing slips.

Upon his arrest, Mr. Natour cooperated with the

agents and provided a statement. In it, he described

becoming acquainted with Williams, who Mr. Natour

claims obtained cell phones by incorporating a business

and purchasing phones in the business’s name, only

to default on the payment. Williams would sell

Mr. Natour the phones for $200 apiece, and Mr. Natour

would resell for a profit of $25-$35 per phone. Mr. Natour

stated that he had sold approximately 1500 phones to

SNS and had dealt with it “for the past five months.” 3

He identified other individuals with whom he was in-

volved, and others that were involved with Williams,

including one whom he described as “[t]he main business

owner dealing with illegal phones.” 4 Immediately after

these admissions, Mr. Natour’s statement concluded:

“I think that I made about $60,000 in 2004, $75,000 in

2005 and $90,000 in 2006. I know I didn’t claim this

3

R.192 at 91.

4

R.192 at 91.

6 No. 11-2577

money on my taxes. I know what I did, I know what

I was doing was illegal, but I wasn’t sending any

money overseas.” 5

B. District Court Proceedings

The Government indicted Mr. Natour on five counts

of transporting telephones “knowing the same to have

been stolen and converted,” in violation of 18 U.S.C. § 2314.

Each count corresponded to a shipment date: February 7,

8, 12, 14 and 27 of 2007.

At trial, the Government relied heavily on the testi-

mony of Michael Stock, the manager of Sprint’s 6

corporate security group. Stock had reviewed all of the

inventory data acquired by the Secret Service agents in

the course of their investigation. Stock stated that, of

the 708 total phones involved in the five shipments,

roughly 550 were identified by their serial numbers

as Sprint/Nextel phones. Of the Sprint/Nextel phones,

379 were associated with an account “adjustment,”

which Stock described as follows: When a phone was

ordered from Sprint, a line-item charge would be placed

on a customer’s phone bill. If a customer called Sprint

to indicate that a phone purchase never had been autho-

5

R.192 at 91.

6

Sprint and Nextel merged in 2005. Although not entirely

clear from the record, it appears that the business continues

to refer to itself as “Sprint,” but at least some of its phones

are sold under the brand name “Nextel.”

No. 11-2577 7

rized, nor had any phone actually been ordered or re-

ceived, Sprint would “adjust” the bill to correct the

error. When the charge was unauthorized, the bill

would be adjusted to zero, meaning the entire cost of

the phone would be written-off as a loss by Sprint.

When this process was handled by one of Sprint’s fraud

investigators, the loss would be coded in Sprint’s

internal accounting system with the notation “F,” for

fraud. If the report was handled by a customer service

agent rather than a fraud investigator, it could not be

given the “F” code, although it is possible that the cus-

tomer’s complaint could have been identical.

Stock also explained to the jury numerous tables iden-

tifying individual phones and the account adjustments

with which they were associated. He acknowledged

that, although the majority were associated with a

fraud code, other adjustments and other codes also were

present. He noted that, if a customer did not contact

Sprint to complain that a phone was charged improperly

to his account, no fraud investigation would be initiated

and no adjustment made. Stock’s testimony suggested

that similar account fraud could go undetected if a cus-

tomer did not notice and report an irregularity on his bill.

Stock tallied all of the adjustments to Sprint accounts

associated with the 379 phones and concluded that,

based on those phones alone, the “minimum loss to

Sprint” was $104,742.16.7 Stock identified this number as

a “minimum loss” because, although it represented the

7

R.192 at 24; R.186 at 41.

8 No. 11-2577

total value of adjustments to customer accounts on the

379 phones for which adjustments were sought, whether

coded “F” or otherwise, it did not reflect the full value

of the phones, which are offered at a below-cost dis-

count to customers, primarily as inducements to enter

or lengthen telephone service contracts.

Stock also testified that neither Mr. Natour nor any of

his business names had accounts with Sprint, although

one need not be an authorized dealer or account

holder to sell Sprint phones. Finally, Stock reviewed the

packing slips recovered from the Quickcom trash search

and stated that all five were orders by legitimate

Sprint customers. All of the packing slips had shipping

addresses that did not match the customer’s billing ad-

dresses, which, he indicated, was evidence of fraud.

He also stated that four of the five slips contained

orders that were associated with account adjustments.

The fifth slip contained an order on the business account

of Frito-Lay. Frito-Lay never contacted Sprint to report

unauthorized charges or request an adjustment.

More than 150 cell phones catalogued by the agents

could not be associated with Sprint. Among them were

all 55 cell phones related to Count 4, concerning the

February 14 shipment. According to the agents’ records,

those phones had a differently formatted serial num-

ber and could not be identified at all. Accordingly,

the Government dismissed Count 4.

At the close of the Government’s evidence, Mr. Natour

presented no evidence and instead made an oral motion

requesting a judgment of acquittal. The court denied

No. 11-2577 9

the motion. After the jury returned a verdict of guilty on

all counts, Mr. Natour moved for a new trial, which

was also denied.

The presentence investigation report (“PSR”) recom-

mended a total offense level of 16. Specifically, after

accounting for a base offense level of 6, the PSR recom-

mended an 8-point increase under U.S.S.G. § 2B1.1(b)(1)(E)

for the amount of loss claimed by Sprint ($104,742) and

a 2-point increase under § 2B1.1(b)(4) for being “in

the business of receiving and selling stolen property.”

Mr. Natour objected that the total loss amount should

be lower, arguing that there had been insufficient evi-

dence that all 708 phones were stolen. He also claimed

that, because he operated a legitimate cell phone busi-

ness, he was not “in the business of” receiving stolen prop-

erty. The Government, in turn, argued that Sprint’s mini-

mum loss estimates understated the actual loss because

it related to only the 379 actually adjusted accounts,

rather than the total amount of “stolen” property;

in the Government’s view, the total value of all

708 phones should be counted.

The district court accepted the Government’s view with

modifications. The court agreed that an amount that

accounted only for the 379 Sprint phones associated

with account adjustments was an insufficient reflection

of the magnitude of the loss. However, the court

adjusted the total amount of phones upon which it

would base its estimate from 708 to 653, excluding the

55 phones that had been included in dismissed Count 4.

With 653 phones, the court calculated the loss amount

at approximately $292,000. Accordingly, the court added

10 No. 11-2577

4 levels, for a total of 12, to correspond to its calculated

loss amount. See U.S.S.G. § 2B1.1(b)(1)(G). Due to the

higher loss amount, the court calculated the total

offense level at 20, with a guidelines range of 37-46

months’ imprisonment. Ultimately, the court entered a

below-Guidelines sentence of 28 months’ imprisonment.

The court also ordered restitution in the amount of

loss actually claimed by Sprint, $104,742.16.

II

DISCUSSION

Mr. Natour appeals both his conviction and sentence.

With respect to his conviction, Mr. Natour submits that

the evidence and the jury instructions impermissibly

broadened the indictment in violation of his rights

under the Grand Jury Clause. See U.S. Const. amend. V.

Relatedly, he claims that, under his narrower reading

of the indictment, the evidence was insufficient to

support a conviction. With respect to his sentence,

Mr. Natour challenges both the application of the en-

hancement for being “in the business of receiving and

selling stolen property,” see U.S.S.G. § 2B1.1(b)(4), and

the district court’s loss calculation. We address each

contention in turn.

A. Constructive Amendment of the Indictment in

Violation of the Grand Jury Clause

Mr. Natour contends that his rights under the Grand

Jury Clause of the Fifth Amendment were violated

No. 11-2577 11

because the Government’s evidence at trial and the

jury instruction constructively amended the indictment

to include additional offense conduct beyond the

language of the indictment. Mr. Natour acknowledges

that he failed to object to the instruction or to otherwise

raise the issue in the district court and that, therefore,

review is for plain error. United States v. Penaloza, 648

F.3d 539, 546 (7th Cir. 2011). Nevertheless, he argues

that the error is plain and per se reversible.

A constructive amendment “occurs where the permissi-

ble bases for conviction are broadened beyond those

presented to the grand jury.” United States v. Blanchard,

542 F.3d 1133, 1143 (7th Cir. 2008). That is, a constructive

amendment can be demonstrated if the “proof at trial

‘goes beyond the parameters of the indictment in that

it establishes offenses different from or in addition to

those charged by the grand jury.’ ” United States v. Pigee,

197 F.3d 879, 886 (7th Cir. 1999) (quoting United States

v. Willoughby, 27 F.3d 263, 266 (7th Cir. 1994)) (emphasis

added). “As such, we are primarily concerned with

changes made to the indictment that affect elements of

the crime.” United States v. Mitov, 460 F.3d 901, 906 (7th

Cir. 2006). The Fifth Amendment is not offended when

a difference between the indictment and the proof at

trial is insignificant, or a broadly worded indictment

provides sufficient room for the evidence presented at

trial. See, e.g., United States v. Trennell, 290 F.3d 881, 887-89

(7th Cir. 2002) (holding that an indictment that referred

to “wholesale quantities of cocaine and cocaine base”

was sufficiently broad to include the specific quantities

of drugs actually found by the jury). By contrast, reversal

12 No. 11-2577

is required where, although the conviction is within

the statutory prohibition, it is outside the indictment, by

which the theory of criminal liability effectively is nar-

rowed. See Stirone v. United States, 361 U.S. 212, 213-14,

219 (1960) (reversing a conviction under a statute that

prohibited interference with either the import or export

of various products, where the indictment charged only

that the defendant had interfered with importation,

but evidence at trial and the jury instructions would

have allowed the jury to convict on either basis); Pigee,

197 F.3d at 886-87 (reversing a conviction for “manufac-

turing, storing, distributing, or using” cocaine, when

only “storing” was alleged in the indictment, but evidence

of distribution was introduced at trial). Finally, even

where we have found a constructive amendment, we

have not reversed if the error is harmless because the

defendant was unable to show that the outcome of his

trial would have been different if the constructive amend-

ment had not occurred. See United States v. Murphy,

406 F.3d 857, 861 (7th Cir. 2005) (affirming where

an indictment charged that a defendant had used

“physical force,” but the jury instruction also permitted

a conviction if he had used less severe “intimidation,”

reasoning that “the jury would have obviously reached

the same result because there was strong evidence

of physical force and injury”).

In order to assess Mr. Natour’s contention, we must

examine and compare the statute of conviction, the in-

dictment, the proof at trial and the specific jury instruction.

Mr. Natour was charged with a violation of 18 U.S.C.

§ 2314, which provides, in relevant part:

No. 11-2577 13

Whoever transports, transmits, or transfers in

interstate or foreign commerce any goods, wares,

merchandise, securities or money, of the value of

$5,000 or more, knowing the same to have been

stolen, converted or taken by fraud . . . [s]hall be fined

under this title or imprisoned not more than

ten years, or both.

Id. (emphasis added). This section provides no definition

for the terms “stolen,” “converted” or “taken by fraud.”

The indictment charged Mr. Natour with five separate

counts under the same statute, for transporting across

state lines cell phones with a value in excess of $5,000,

“knowing the same to have been stolen and converted.” 8

The indictment does not allege explicitly that the cell

phones in question may have been “taken by fraud.”

According to Mr. Natour, however, the Government’s

evidence at trial was intended to demonstrate that

the phones had been acquired by fraudulent means. In

reaching this conclusion, Mr. Natour relies heavily on

Stock’s testimony on behalf of Sprint that, for purposes

of internal accounting, many of the phone “purchases”

for which Sprint ultimately adjusted accounts were cate-

gorized as involving fraud. Mr. Natour treads carefully

with this argument, however, because he also disputes

whether there was sufficient evidence to determine

that the phones were taken by fraud.

The jury was charged using a Seventh Circuit pattern

jury instruction defining the term “stolen”:

8

R.116 at 1-5.

14 No. 11-2577

The word “stolen” as used in these instructions

means any taking with the intent to deprive the

owner of his or her rights and benefits of owner-

ship. The taking may be accomplished through

the use of false pretenses, trickery, or misrepresen-

tation in obtaining possession. It is not neces-

sary, however, that the taking be initially unlaw-

ful. Even if possession is first acquired lawfully,

the taking falls within the meaning of “stolen” if

the defendant thereafter forms the intent to de-

prive the owner of his or her ownership [inter-

ests].9

In Mr. Natour’s view, the Government limited its

theory of the case by indicting him on narrower grounds

than the statute would have permitted, specifically, by

eliminating the term “taken by fraud.” He further

asserts that the proof at trial, which was suggestive of

fraud, combined with an instruction that explicitly re-

broadened the theory of liability to include transfer of

property acquired by fraud, amounts to an impermis-

sible constructive amendment of the indictment, in viola-

tion of his right under the Grand Jury Clause.

Mr. Natour invites our attention to United States v.

Sayan, 968 F.2d 55 (D.C. Cir. 1992), a case involving the

same statute of conviction. In Sayan, the indictment

charged that the defendant had transported money

known to have been “taken by fraud,” without reference

to the other statutory language in § 2314. Id. at 59. The

9

R.192 at 170.

No. 11-2577 15

jury was instructed, however, that if the money in

question had been acquired through any of the means

listed in § 2314, it would be sufficient to convict.

On appeal, the defendant claimed that the indictment

had been constructively amended. Id. The District of

Columbia Circuit noted that, although it was “con-

ceivabl[e]” that this instruction “could have broadened

the theories regarding the method [the defendant] used

to achieve [her] end” from that presented in the indict-

ment, the proof at trial was limited to fraud; therefore,

no constructive amendment had occurred. Id. at 60.

We do not read Sayan to conclude that the statutory

terms must be read as entirely distinct, with no intersec-

tion or overlap. The District of Columbia Circuit’s con-

clusion is merely that such a result is “conceivabl[e],”

under some circumstances that were not presented to it.

Id. Moreover, the tentative nature of that conclusion

was further qualified by the court through the addition

of a footnote in which it specifically declined to address

the scope of the statutory terms and cited cases that

“might support a conclusion that the phrase ‘taken by

fraud’ as used in Sayan’s indictment encompasses

‘stolen, converted or taken by fraud.’ ” Id. at 60 n.5.

The statement in Sayan that Mr. Natour reads as suppor-

tive of his view, is, therefore, not as definitive as he

would have us conclude. We therefore turn to a more

detailed examination of the history of § 2314 and the

case law interpreting it.

Section 2314 was enacted in 1934 as the National

Stolen Property Act (the “Act”). At that time, the Act’s

16 No. 11-2577

prohibition employed similar—though not identi-

cal—language to the current version under which

Mr. Natour was charged. Specifically, the 1934 Act made

it a crime to “transport or cause to be transported . . .

any goods, wares or merchandise, securities or money, of

the value of $5,000 or more, theretofore stolen or taken

feloniously by fraud or with intent to steal or purloin.” See

National Stolen Property Act, § 3, Pub. L. No. 73-246, 48

Stat. 794, 794-95 (May 22, 1934) (emphasis added). The

section was revised in 1939, in response to a letter from

the Attorney General in which he noted that it would

be “desirable to include within [the statute’s] provi-

sions property, money, or securities that have been em-

bezzled as well as those that have been stolen.” S. Rep. No.

76-674, at 1 (1939). The resulting amendment included,

for the first time, language relating to property “feloni-

ously converted.” Pub. L. No. 76-255, 53 Stat. 1178,

1178 (Aug. 3, 1939).

Interestingly, the original 1934 Act was drafted as an

act “to extend the provisions of the National Motor

Vehicle Theft Act to other stolen property.” H. Rep. No. 73-

1599, at 1 (1934) (Conf. Rep.); see also Dowling v. United

States, 473 U.S. 207, 218-20 (1985) (describing the history

of the National Stolen Property Act). The National

Motor Vehicle Theft Act, enacted in 1919 and codified

at 18 U.S.C. § 2312, consistently has punished the trans-

portation in interstate commerce of motor vehicles

known to be “stolen,” without further expansion of the

terms parallel to those contained in the National Stolen

Property Act. See Pub. L. No. 66-70, 41 Stat. 324, 325 (1919).

The Supreme Court has held that the term “stolen” as

No. 11-2577 17

it is used in the National Motor Vehicle Theft Act encom-

passes activities involving virtually any illegally

acquired property, regardless of the specific means. In

United States v. Turley, 352 U.S. 407, 417 (1957), the Court

specifically rejected an interpretation that would have

limited the statute to common-law larceny and held

that the statute punishes “all felonious takings” of

property within the statute’s reach. Notably, the Court

specifically emphasized that “ ‘steal’ ‘may denote the

criminal taking of personal property either by larceny,

embezzlement, or false pretenses.’ ” Id. at 412 (quoting

Black’s Law Dictionary (4th ed. 1951)). Indeed, the Court

emphasized that “ ‘stolen’ and ‘steal’ have been used in

federal criminal statutes, and the courts interpreting

those words have declared that they do not have a neces-

sary common-law meaning coterminous with larceny

and exclusive of other theft crimes.” Id. The Court

quoted with approval the comment of the Court of

Appeals for the Fourth Circuit that “steal” has become

“ ‘the generic designation for dishonest acquisition.’ ” Id.

(quoting Boone v. United States, 235 F.2d 939, 940 (4th

Cir. 1956)). Finally, the Court also noted that the practice

of the federal courts comported with generally accepted

dictionary usage. Consequently, although amendment

of the National Stolen Property Act ostensibly was in-

tended to clarify the breadth of its coverage, the act

from which it originated has been interpreted to reach

equally as far, without the addition of terms related

specifically to conversion or fraud.

Shortly after Turley, the Fifth Circuit considered the

reach of the statutory term “stolen” in § 2314. Lyda v.

18 No. 11-2577

United States, 279 F.2d 461, 463-65 (5th Cir. 1960), found

Turley squarely applicable. In Lyda, the defendant was

charged in an indictment referencing only “stolen” prop-

erty, while he claimed that the evidence at trial demon-

strated clearly that he had embezzled, rather than

stolen, a truckload of pecans. The Fifth Circuit found

the distinction irrelevant in the context of § 2314. The

court concluded that

[t]he term “stolen” as used here is certainly as

comprehensive as “theft” which, we have said, “is

not like ‘larceny’, a technical word of art with a

narrowly defined meaning but is, on the

contrary, a word of general and broad connotation,

intended to cover and covering any criminal

appropriation of another’s property to the use

of the taker, particularly including theft by swin-

dling, false pretenses, and any other form of guile.”

Id. at 464 (quoting Edwards v. Bromberg, 232 F.2d 107,

110 (5th Cir. 1956). Furthermore, the court continued,

[w]hile we need not here draw upon the adjacent

terms of “converted or taken by fraud” as they

appear in § 2314, we think their presence is rele-

vant. The aim of the statute is, of course, to pro-

hibit the use of interstate transportation facilities

for goods having certain unlawful qualities. This

reflects a congressional purpose to reach all ways

by which an owner is wrongfully deprived of

the use or benefits of the use of his property. It

was one way to meet the difficulties in legislative

draftsmanship. . . . Congress by the use of broad

No. 11-2577 19

terms was trying to make clear that if a person

was deprived of his property by unlawful

means amounting to a forcible taking or a taking

without his permission, by false pretense, by

fraud, swindling, or by a conversion by one right-

fully in possession, the subsequent transporta-

tion of such goods in interstate commerce was

prohibited as a crime. Since the aim of Congress

was to reach all such deprivations, it would distort

that purpose if by a sort of reverse process the transac-

tion under review had to consider whether the property

was stolen or converted or taken by fraud. The con-

tiguous presence of all three descriptives lends

meaning to each.

Id. (emphasis added) (citations omitted) (internal quota-

tion marks omitted); see also United States v. Long Cove

Seafood, Inc., 582 F.2d 159, 163 (2d Cir. 1978) (calling a

broad reading of the term “stolen” in § 2314, borrowed

from Turley’s interpretation of § 2312, “relatively

well-established”).

In light of the Act’s history and the Supreme Court’s

decision in Turley, we, like the Fifth Circuit in Lyda, are

not inclined to read the term “stolen” to narrow artificially

its meaning. The most natural reading of the statute, and

the one we adopt, views the three descriptive terms as

containing a significant amount of overlap. “Stolen” is

broad enough to encompass the kind of fraudulent

taking the evidence in this case supported.

The alternative interpretation, favored by Mr. Natour,

is that, whatever “stolen” means, it must at the very least

20 No. 11-2577

exclude anything within the definition of “converted” or

“taken by fraud.” See Appellant’s Br. 21-22 & n.4. In

support of this argument, Mr. Natour relies principally

on the familiar canon of construction that, in inter-

preting ambiguous statutory language, courts should

strive to give meaning to every word and should reject

any interpretation that renders any portion of the

statute superfluous. See, e.g., United States v. Menasche,

348 U.S. 528, 538-39 (1955); Connecticut Nat’l Bank v.

Germain, 503 U.S. 249, 253 (1992).

We are not persuaded that the canon commands that

we adopt a meaning of the terms that understands

each as entirely distinct. As the Supreme Court has re-

minded us,

canons are not mandatory rules. They are guides

that “need not be conclusive.” Circuit City Stores,

Inc. v. Adams, 532 U.S. 105, 115 (2001). They are

designed to help judges determine the Legisla-

ture’s intent as embodied in particular statutory

language. And other circumstances evidencing

congressional intent can overcome their force.

Chickasaw Nation v. United States, 534 U.S. 84, 94 (2001);

see also Connecticut Nat’l Bank, 503 U.S. at 253-54 (“Redun-

dancies across statutes are not unusual events in

drafting, and so long as there is no positive repugnancy

between two laws, a court must give effect to both.”

(citation omitted) (internal quotation marks omitted));

id. (“[C]anons of construction are no more than rules of

thumb that help courts determine the meaning of legisla-

tion . . . .”). Section 2314 does include duplication and

No. 11-2577 21

even redundancy for the sake of clarity and complete-

ness. Any violation of the canon of construction caused

by the most sensible reading of the statute is otherwise

supported by the history and precedents.

Finally, Mr. Natour asserts that any ambiguity in the

meaning of the statute requires the court to employ

the rule of lenity in favor of Mr. Natour. As the

Supreme Court has cautioned, however, “we have

always reserved lenity for those situations in which a

reasonable doubt persists about a statute’s intended

scope even after resort to the language and structure,

legislative history, and motivating policies of the stat-

ute.” Moskal v. United States, 498 U.S. 103, 108 (1990)

(citation omitted) (internal quotation marks omitted)

(rejecting a plea for application of the rule of lenity to

§ 2314 after concluding that the defendant’s conduct

unambiguously fell within the statute). Our review of the

appropriate sources leaves us with no such ambiguity.

Because we conclude that the terms included within

the indictment were themselves sufficiently broad

enough to encompass goods “taken by fraud,” we also

must conclude that the proof at trial and the jury instruc-

tions did not constructively amend Mr. Natour’s indict-

ment. The district court did not plainly err in instructing

the jury using a related pattern instruction that incorpo-

rated “fraud” into the definition of “stolen.” 1 0

10

Although Mr. Natour separately contends that there was

insufficient evidence that the phones were either “stolen” or

(continued...)

22 No. 11-2577

B. Enhancement for Being “In the Business of

Receiving and Selling Stolen Property”

Mr. Natour next challenges the district court’s determi-

nation that he “was a person in the business of re-

ceiving and selling stolen property” and therefore sub-

ject to a 2-level increase in his guidelines calculation at

sentencing. See U.S.S.G. § 2B1.1(b)(4). Mr. Natour submits

both that application of the enhancement is improper

on the merits and that the district court’s treatment of the

matter was so insufficient as to be procedurally unrea-

sonable. The district court’s findings of fact stand

unless clearly erroneous; however, we review de novo

whether the facts as found are sufficient to support an

enhancement under the Guidelines. United States v.

Pabey, 664 F.3d 1084, 1094 (7th Cir. 2011). We also

review de novo whether a district court committed pro-

cedural error, such as by failing to explain adequately

its sentencing determinations. United States v. Olmeda-

Garcia, 613 F.3d 721, 723 (7th Cir. 2010).

The application notes for § 2B1.1(b)(4) provide:

For purposes of subsection (b)(4), the court shall

consider the following non-exhaustive list of

factors in determining whether the defendant was

in the business of receiving and selling stolen

property:

10

(...continued)

“converted” as those terms were used in the indictment,

we consider this submission to be simply a repackaging of

his statutory interpretation argument. We therefore are

not persuaded for the reasons already identified.

No. 11-2577 23

(A) The regularity and sophistication of

the defendant’s activities.

(B) The value and size of the inventory of

stolen property maintained by the defen-

dant.

(C) The extent to which the defendant’s

activities encouraged or facilitated other

crimes.

(D) The defendant’s past activities involv-

ing stolen property.

U.S.S.G. § 2B1.1, cmt. 5.

The sentencing transcript includes relatively little on

this question, although, in the context of Mr. Natour’s

argument below, it is not surprising. In response to the

recommendation of the PSR that the enhancement apply,

the portion of Mr. Natour’s sentencing memorandum

addressing this subject consists of only four sentences,

the essence of which is that he “was involved in legiti-

mate business in addition to also being involved in

the instant offense. This section of the fraud statute was

designed with the ‘fence’ in mind and we submit that

the evidence does not support such an increase.” 1 1 At

11

R.157 at 6. The Government’s memorandum provided a

fuller analysis of the relevant guideline section and Mr. Natour’s

conduct. See R.161 at 5-8. The Government argued that

Mr. Natour’s conduct fell within all four of the Guideline’s

suggested factors, that Mr. Natour probably could be con-

(continued...)

24 No. 11-2577

the sentencing hearing, when defense counsel reached

this point, he indicated that he was “not going to

address further the in the business” enhancement,

because the argument in the memorandum was “pretty

straightforward.” 12 As an initial response, the court

stated simply, “[w]ell, I reject your argument.” 1 3 It

later returned to the subject, however, stating that the

Guidelines posed “no question. He could have a

legitimate business and still be in the business of

buying and selling stolen property.” 1 4

When read in context, the court’s treatment of the

issue did not fall below acceptable procedural levels.1 5

11

(...continued)

sidered a “fence” and that the Guideline does not exempt

business owners who conduct some legitimate business

in addition to their sale of stolen goods. R.161 at 6-7.

12

R.186 at 19.

13

R.186 at 19.

14

R.186 at 39.

15

We have stated that the district court’s burden of ruling on an

objection explicitly and providing a statement of reasons need

not result in lengthy discussion and imposes only a “minimal

burden,” United States v. Sykes, 357 F.3d 672, 674 (7th Cir. 2004):

Federal Rule of Criminal Procedure 32(i)(3) requires a

district court to rule on all controverted matters that

will affect sentencing. This requirement ensures that

the court addresses all of the defendant’s objections

and provides a record of how the objections were

(continued...)

No. 11-2577 25

Although the court did not analyze extensively all the

factors listed in the application note, it did address the

principal objection that Mr. Natour raised—that he oper-

ated a legitimate business and was not a professional

“fence.” 1 6 Moreover, on the facts, application of the

15

(...continued)

resolved for later reference. But Rule 32 does not

impose an onerous burden. The district court can

often satisfy the rule by adopting the proposed

findings in the presentence report (PSR), even as to

contested facts, so long as the PSR articulates a suffi-

ciently clear basis for the sentence, and the reviewing

court can be sure that “the district court made a deci-

sion of design rather than of convenience.”

Id. (citations omitted).

16

Although Mr. Natour’s brief to the district court was not

clear on this point, the “fence test” was the test previously

used in this circuit to determine the applicability of the Guide-

line, and it referred to the difference between selling goods

one had stolen himself versus professionally selling

goods unlawfully acquired by others. See, e.g., United States

v. Braslawsky, 913 F.2d 466, 468 (7th Cir. 1990) (stating that only

the latter category of criminal warranted the Guidelines en-

hancement). The Guidelines were amended in 2001 to adopt

the totality of the circumstances test embodied in the current

application note. Moreover, it is undisputed that Mr. Natour

both received and sold unlawfully acquired property; indeed,

he admitted that he bought the phones in question from

Williams. Therefore, to the extent that the question

whether a person is a “professional fence” is still relevant, see

(continued...)

26 No. 11-2577

enhancement appropriately accounts for the scope of

Mr. Natour’s illegal conduct. Mr. Natour was convicted

of making four large shipments of illegally obtained

phones in less than a one-month period. In his initial

statement to police, he admitted to dealing roughly 1500

phones so acquired. The value of those phones was esti-

mated to be somewhere between $100,000 and $300,000.

Further, in order to operate his end of the illegal business,

others had to obtain illegally phones for him and still

others had to sell to consumers the phones so obtained;

thus, his behavior encouraged additional criminal con-

duct. Mr. Natour also operated a legitimate business that

contained legitimate inventory, but there is simply

no reason that operation of a separate, legitimate enter-

prise undermines the fact that, over a period of several

months, he engaged in a pattern of serious criminal

conduct involving a significant quantity of stolen

goods. Under these circumstances, application of the

Guideline was not erroneous.

C. Loss Calculation

Mr. Natour’s final contention is that the district court

erred in calculating the amount of loss caused by

his offense, and, in so doing, improperly calculated

the applicable guidelines range. “We review the district

16

(...continued)

United States v. Vigil, 644 F.3d 1114, 1120-21 (10th Cir. 2011),

Mr. Natour clearly engaged in conduct that fell within the

Guideline.

No. 11-2577 27

court’s interpretation and application of the guidelines

de novo and its findings of fact for clear error.” United

States v. Sutton, 582 F.3d 781, 783-84 (7th Cir. 2009).

The district court’s loss calculation itself, “which need

only be ‘a reasonable estimate of the loss,’ ” is reviewed for

clear error. Id. at 784 (quoting U.S.S.G. § 2B1.1 cmt. 3(C)).1 7

17

The language of the Guideline refers only to “loss.”

§ 2B1.1(b)(1). The commentary clarifies that “loss” is “the greater

of actual loss or intended loss.” Id. cmt. 3(A). The commentary

continues:

(i) Actual Loss.--“Actual loss” means the reasonably

foreseeable pecuniary harm that resulted from the

offense.

(ii) Intended Loss.--“Intended loss” (I) means the

pecuniary harm that was intended to result from the

offense; and (II) includes intended pecuniary harm

that would have been impossible or unlikely to

occur (e.g., as in a government sting operation, or

an insurance fraud in which the claim exceeded

the insured value).

....

(B) Gain.--The court shall use the gain that resulted

from the offense as an alternative measure of loss only

if there is a loss but it reasonably cannot be determined.

(C) Estimation of Loss.--The court need only make a

reasonable estimate of the loss. The sentencing judge

is in a unique position to assess the evidence and

estimate the loss based upon that evidence. For this

reason, the court’s loss determination is entitled to

appropriate deference. See 18 U.S.C. § 3742(e) and (f).

(continued...)

28 No. 11-2577

In order to understand his objection, it is necessary

to examine the sentencing proceedings on loss amount

in some detail.

Beginning with the PSR and the responses by the

parties and continuing through the sentencing hearing,

17

(...continued)

The estimate of the loss shall be based on available

information, taking into account, as appropriate and

practicable under the circumstances, factors such as

the following:

(i) The fair market value of the property un-

lawfully taken, copied, or destroyed; or, if the

fair market value is impracticable to determine

or inadequately measures the harm, the cost

to the victim of replacing that property.

(ii) In the case of proprietary information (e.g.,

trade secrets), the cost of developing that

information or the reduction in the value of

that information that resulted from the offense.

(iii) The cost of repairs to damaged property.

(iv) The approximate number of victims multi-

plied by the average loss to each victim.

(v) The reduction that resulted from the offense

in the value of equity securities or other corpo-

rate assets.

(vi) More general factors, such as the scope and

duration of the offense and revenues generated

by similar operations.

Id. cmt. 3.

No. 11-2577 29

numerous bases for the loss amount were proposed

and considered, among them proven loss to Sprint, gain

to the defendant as profit and fair market value of the

property. The PSR recommended basing the loss amount

on the adjustments made to Sprint accounts to which

Stock had testified, namely, $104,742.16. Mr. Natour

proposed various numbers before the district court in

loss calculation ranging between $0 and $70,000.1 8

The Government urged that the loss amounts should be

the total value of the phones as estimated by Sprint (as

the manufacturer’s suggested retail price or “MSRP”),

and contended that the amount was $302,000; in the

alternative, the Government suggested using “gain” to

the defendant as a measure, as estimated by the

cash-on-delivery amounts received for the four

convicted counts, resulting in a loss of roughly $136,000.

The defendant objected that the cash-on-delivery or

MSRP estimates, which would value each phone around

$200, were unrealistic: “nobody is getting two, $300

18

Mr. Natour apparently based this figure on the Guidelines

rather than a particular interpretation of facts relevant to loss.

In his response to the PSR, he stated that although he was “not

in a position to suggest to the Court an exact dollar amount

that would more accurately reflect the actual loss” than that

of the PSR, “based on the nature of the business and the poten-

tial recovery of their loss . . . the real figure should be well

below the $70,000 amount required to increase the level by 8,”

referring to the breaking points in the Guidelines chart. R.157

at 5-6.

30 No. 11-2577

for these phones, whether legitimate or otherwise.” 1 9

The court responded:

Well, apparently they were because that’s what

they were, had to pay on these. So if that isn’t a

reasonable value for the rest of the phones, why

isn’t it up to you to show that it isn’t? My only

concern is that you don’t actually, you don’t

know who suffered the loss, and so I suppose

we don’t know how much it is.

But if it’s fair to do it as a fair retail value and

that’s a fair measure of damages, then I think

we’ve got pretty good evidence that that’s what

they actually had to pay back. Obviously some

people bought them at that price, enough people

that they paid back 100 some thousand dollars.

I think I’m going to go with the government’s

figures. I don’t have anything else really to go by.

I’m not going to—I can’t go out on the street and

say, “How much are you selling them for?” And

the fact that they may have deals, that just, I think

it’s supposed to be an approximation. They have

more than an approximation on a third of those

phones. So you can take out the ones on that one

count if you want. I don’t know if it makes

much difference.

[COUNSEL FOR DEFENDANT]: So I apologize,

then, Judge. Which numbers is the Court going

to use?

19

R.186 at 29.

No. 11-2577 31

THE COURT: The government’s 300 some thou-

sand minus the 50 phones or whatever it was,

55 phones. I doubt that that makes any big dif-

ference, but maybe it does. I don’t know.2 0

The resultant sentence, therefore, took the Government’s

figures, based on the MSRP, for all phones associated

with the charges of conviction, thus omitting from that

estimate only the 55 phones associated with the dis-

missed Count 4.

Mr. Natour now argues that the district court effec-

tively “g[a]ve up” 2 1 and accepted the Government’s

figures without adequate explanation. He also contends

that the loss calculation is clearly erroneous.

First, reading the sentencing proceedings as a whole,

we are not persuaded that the district court failed to

adequately explain its reasoning. Mr. Natour is correct

that the ruling is not a model of clarity. The court certainly

struggled to put a number to the loss, but also clearly

was dissatisfied with a number that reflected only the

379 phones upon which an adjustment had been made

by Sprint. The court acknowledged that, although

Sprint had not documented further losses, the remainder

of the phones were taken unlawfully and someone

had sustained a loss, the reasonable value of which could

be extrapolated from the known losses with respect to a

portion of the phones. Reading the transcript as a whole,

20

R.186 at 29-30.

21

Appellant’s Br. 40.

32 No. 11-2577

the district court did not provide so scant a rationale as

to deprive us of a reasonable basis for review. See

United States v. Leiskunas, 656 F.3d 732, 738 (7th Cir. 2011)

(remanding for a rationale when the district court pro-

vided no reasoning whatsoever for a loss amount).

With respect to the substance of the calculation, we

also perceive no reversible error by the district court.

First, “[t]he court need only make a reasonable estimate

of the loss,” U.S.S.G. § 2B1.1(b)(1), cmt. 3(C), and, in

arriving at that figure, may employ an “approximate

number of victims multiplied by the average loss to

each victim,” id., cmt. 3(C)(iv). That is, the Guidelines

specifically contemplate that exact figures will not

always be available and among other acceptable methods

of arriving at an approximation, is one in which limited

evidence is scaled to reflect the scope of the loss in-

volved. Accordingly, the district court was not required to

limit its loss figure to the amount that reflected only the

379 phones associated with an adjustment from Sprint.

Furthermore, the inclusion of the additional phones at

similar costs was supported by record evidence that

phones not associated with an “adjustment” still resulted

in a loss to someone. Specifically, the evidence estab-

lished that if phones were purchased through fake busi-

nesses and the accounts with Sprint were in default, the

accounts would not have appeared as “adjusted” to reflect

an unauthorized charge and thus would not have ap-

peared in the total, although Sprint would have suffered a

loss; this is consistent with Mr. Natour’s post-arrest

statement about obtaining phones from Williams. Simi-

larly, if a consumer, likely a business with large bills, failed

No. 11-2577 33

to notice or report an unauthorized line-item charge,

the account would not be adjusted, but the customer

would have paid for a phone it did not receive; this is

consistent with the evidence that Mr. Natour received

phones ordered by “Frito-Lay” on a corporate account

not associated with an adjustment.2 2 The district court,

therefore, did not err in accounting for all of the

phones related to the charges of conviction.

Although we find no error in the inclusion of these

phones, we still must determine if the estimate itself is

clearly erroneous. “A defendant challenging a district

court’s loss calculation must not only demonstrate that

it is inaccurate, but also outside the realm of permissible

computations.” United States v. Kimoto, 588 F.3d 464, 493-

94 (7th Cir. 2009) (internal quotation marks omitted). On

this point, Mr. Natour’s argument also falters: We

have accepted fair market value of stolen goods as a

reasonable estimate of loss. See United States v. Wasz, 450

F.3d 720, 727 (7th Cir. 2006). We also find persuasive

a factually similar case in which the Fifth Circuit ap-

proved of a loss calculation based on the “fair market

value” of stolen goods and explicitly rejected a “replace-

ment value” or “wholesale value” calculation that

reflects the lower amount Sprint would have to pay

a wholesaler to replace the phones. See United States v.

Lige, 635 F.3d 668, 671-72 (5th Cir. 2011). For reasons

similar to those expressed in Lige, we would be sus-

picious of a figure that was based on, for example,

22

See R.186 at 25 (Government’s explanation of losses not

covered by adjustments).

34 No. 11-2577

the cash-on-delivery value or the discounted price at

which Sprint might have chosen to offer phones to cus-

tomers in exchange for a service contract. As our col-

leagues in the Fifth Circuit reasoned in Lige, the victims

here were not in the business of selling phones at cost.

The phone had a greater value to the victim and an eco-

nomically realistic measure of that value is the price

for which that phone could be “sold” in its business,

either as an outright sale to retail customers or as an

inducement to enter a long-term service arrangement

with that customer. The retail value of the phone is an

“economically realistic” measure of the monetary loss

to the victim. Lige, 635 F.3d at 671.

The district court’s singular task was to value the

goods in order to estimate the loss to the victim, and

the method chosen by the court here, among the

available options under the facts of this case, rests on

solid ground.

Although the district court’s reasoning was discernible

in context and its result not clearly erroneous, we never-

theless believe that this case presents us with an oppor-

tunity to respectfully remind district courts that cost

calculations should be undertaken with great care and

with maximum possible clarity of the record.

Conclusion

The judgment of the district court is affirmed.

A FFIRMED

11-9-12