United States of America v. Benjamin Warner

Honorable Jane A. Restani, Chief Judge, United States Court of International*
Trade, sitting by designation.
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 07-3816
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UNITED STATES OF AMERICA
v.
BENJAMIN WARNER,
Appellant
On Appeal From the United States District Court
for the District of New Jersey
(No. 06-cr-00424)
District Judge: Honorable Anne E. Thompson
Submitted Under Third Circuit LAR 34.1(a)
November 20, 2008
Before: BARRY and CHAGARES, Circuit Judges, and RESTANI, Judge*
(Filed July 17, 2009)
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OPINION OF THE COURT
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CHAGARES, Circuit Judge.
Benjamin Warner appeals from a judgment of sentence upon conviction for one
count of mail fraud pursuant to 18 U.S.C. § 1341. We will affirm.
I.
Because we write solely for the benefit of the parties, we will only briefly
summarize the essential facts.
Warner was a financial analyst for the Robert Wood Johnson Foundation (RWJF),
a private charity. RWJF has a policy of matching its employees’ donations to other
charities, sometimes contributing as much as five times what the employee gave. Warner
discovered this policy and exploited it to his calculated advantage.
Warner, along with other employees using money he fronted to them, would make
donations to various charities and apply to RWJF for matching funds. RWJF would then
contribute to each of those charities five times the donated amount. However, Warner
arranged for the charities to kick-back to him a portion of those matching funds. To keep
up appearances and decrease the chance of getting caught, Warner interspersed these
fraudulent donations with legitimate charitable contributions that did not generate
kickbacks. All told, Warner’s scheme caused RWJF to pay out $324,875 in matching
funds. Warner pocketed at least $70,000 of those funds.
Warner pleaded guilty to one count of mail fraud in violation of 18 U.S.C. § 1341.
At sentencing, the District Court held that RWJF’s “loss” was the entire amount of its

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The District Court and the parties all appear to have proceeded on the assumption1
that the 2002 edition of the U.S. Sentencing Guidelines applies in this case.
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$324,875 payout (rather than some lesser amount such as the $70,000 actually pocketed
by Warner). This yielded an advisory range of 24 to 30 months of incarceration. The
District Court sentenced Warner to 24 months’ imprisonment and three years’ supervised
release. The District Court also ordered Warner to make restitution to RWJF in the
amount of $324,875. It set a payment schedule of $1,000 per month during Warner’s
incarceration and required Warner to pay the balance by the end of his first year of
supervised release.
Warner now appeals from this judgment of sentence.
II.
The District Court had jurisdiction pursuant to 18 U.S.C. § 3231, and we have
jurisdiction pursuant to 18 U.S.C. § 3742(a) and 28 U.S.C. § 1291.
We exercise plenary review of the District Court’s interpretation of the legal
meaning of “loss” under U.S. Sentencing Guidelines § 2B1.1 (2002). United States v.1
Evans, 155 F.3d 245, 252 (3d Cir. 1998). We review the District Court’s factual
determination of the loss amount for clear error. United States v. Vitillo, 490 F.3d 314,
330 (3d Cir. 2007).
Section 2B1.1 provides a 12-level enhancement from the base offense level if the
“loss” is greater than $200,000 and less than or equal to $400,000, where “loss” is

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defined as “the reasonably foreseeable pecuniary harm that resulted from the offense.” §
2B1.1(b)(1)(G) & cmt. n.2(A)(i) (2002). “Reasonably foreseeable pecuniary harm”
means “pecuniary harm that the defendant knew or, under the circumstances, reasonably
should have known, was a potential result of the offense.” § 2B1.1 cmt. n.2(A)(iv)
(2002). It also includes losses to the victim generated by
all acts and omissions committed, aided, abetted, counseled, commanded, induced,
procured, or willfully caused by the defendant . . . that occurred during the
commission of the offense of conviction, in preparation for that offense, or in the
course of attempting to avoid detection or responsibility for that offense.
§ 1B1.3(a)(1) (2002) (defining relevant conduct for sentencing purposes). The
Guidelines further instruct that “[t]he 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.” § 2B1.1 cmt. n.2(C) (2002).
Warner was convicted of mail fraud for inducing RWJF to pay $324,875 in what it
thought were pure charitable contributions but in what ended up including more than
$70,000 in kickbacks to Warner personally. He argues that the District Court erred in
using RWJF’s full $324,875 payout as the § 2B1.1 loss amount, thereby arriving at an
advisory range of 24 to 30 months of imprisonment. This argument is unpersuasive.
First, Warner argues that some of the donations that generated the $324,875 payout
do not qualify as relevant conduct for sentencing purposes. Therefore, the argument
continues, the matching funds traceable to those donations should be excluded from the

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We have explained that “but for the fraud” means “had the defendant refrained2
from the conduct that gave rise to the fraud,” not “had the defendant engaged in such
conduct but did so lawfully (rather than fraudulently).” See United States v. Neadle, 72
F.3d 1104, 1109-11 (3d Cir. 1996) (loss caused by insurance fraud measured against what
would have happened had defendant never entered insurance business, rather than what
would have happened had defendant entered insurance business and behaved lawfully)
(interpreting provisions materially identical to 2002 Guidelines §§ 1B1.3(a)(1) and
2B1.1). Thus, the appropriate baseline here is the scenario where Warner never solicited
employee donors, fronted money, and made donations in the first place.
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total loss amount. Warner is mistaken. All of the donations at issue constitute relevant
conduct for sentencing purposes. Those donations that actually triggered kickbacks
constitute the primary conduct — the fraudulent scheme — for which Warner was
convicted. And Warner admitted that the donations that did not trigger kickbacks were
nevertheless made “[t]o further execute the scheme” even if, standing alone, they would
not have implicated 18 U.S.C. § 1341. Appendix (App.) A34-A39 (transcript of
allocution during guilty plea hearing); § 1B1.3(a)(1)(A) (2002).
Second, Warner argues that even if all of the donations qualify as relevant
sentencing conduct, the $324,875 loss should be reduced by the amount actually retained
by the charities (and not kicked back to Warner) and used for charitable purposes. This
argument, too, is unavailing. A victim’s loss will count against the defendant at
sentencing if it would not have occurred but for the fraud. There is no evidence here2
that, had Warner not solicited employee donors, fronted money, and made donations,
RWJF would have donated any money to any charity, much less the exact sums of money
donated here to the exact same charities. Therefore, the District Court did not clearly err

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when it held that $324,875 was the proper loss amount for sentencing purposes.
III.
We review the appropriateness of the District Court’s payment schedule in
connection with its restitution order for an abuse of discretion. United States v. Crandon,
173 F.3d 122, 125 (3d Cir. 1999).
Warner does not appear to argue that the § 2B1.1 loss amount is not the proper
restitution amount in this case. Rather, he argues that the District Court erred in
structuring precisely how and when that restitution amount must be paid off. In setting a
schedule for restitution payments, the District Court must consider “the financial
resources and other assets of the defendant, including whether any of these assets are
jointly controlled . . . projected earnings and other income of the defendant . . . and any
financial obligations of the defendant, including obligations to dependents.” 18 U.S.C. §
3664(f)(2). A court may “aim high” in structuring a payment plan, and as long as it
creates a plan with which the defendant can “realistically” comply, it acts within its wide
discretion. United States v. Hunter, 52 F.3d 489, 494 (3d Cir. 1995). Further, the court
need not make “such precise findings regarding a defendant’s income and expenses as
often occurs in matrimonial litigation.” Id. at 494 n.2.
Before imposing restitution, the District Court indicated that it had reviewed the
Pre-Sentence Report (PSR). App. A225. The PSR reveals that Warner has $50,100 in
cash, PSR ¶ 69, and owns two pieces of property, PSR ¶ 69, one of which he rejected an

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offer to sell for $205,000, App. A120. And Warner is not unable to earn a living. He has
undergraduate and graduate degrees, PSR ¶ 62, at one point held a white-collar financial
job paying $46,000 per year, PSR ¶¶ 63-68, and may be able to earn money while
incarcerated, PSR ¶ 74. The District Court recited some of these same facts at
sentencing. See, e.g., App. A228-29.
True, Warner is not without expenses. PSR ¶ 69. But we cannot say that the
District Court abused its wide discretion – even if it did “aim high” – in finding that
Warner could use his current assets to pay his expenses during incarceration and then use
his proven ability to obtain gainful employment to continue paying those expenses while
simultaneously meeting his restitution obligations after he is released. That is, we cannot
say that the District Court imposed a schedule with which Warner has no realistic hope of
complying.
IV.
For the reasons articulated above, we will affirm the District Court’s judgment.

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