United States of America v. ADRIAN TARTAREANU and DANIELA TARTAREANU

In the
United States Court of Appeals
For the Seventh Circuit
Nos. 17‐2759 and 17‐2761
U NITED STATES OF A MERICA,
Plaintiff‐Appellee,
v.
A DRIAN T ARTAREANU and D ANIELA
T ARTAREANU,
Defendants‐Appellants.
Appeals from the United States District Court for the
Northern District of Indiana, Hammond Division.
No. 2:12‐cr‐00175 — Philip P. Simon, Judge.
A RGUED FEBRUARY 7, 2018 — D ECIDED MARCH 8, 2018
Before BAUER , R OVNER , and SYKES, Circuit Judges.
BAUER , Circuit Judge. On October 23, 2013, a jury convicted
Adrian and Daniela Tartareanu of wire fraud in violation of 18
U.S.C. § 1343 and conspiracy to commit wire fraud in violation
of 18 U.S.C. § 1349. They appealed their original sentences, and
we remanded for resentencing. United States v. Litos, 847 F.3d

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2 Nos. 17‐2759 and 17‐2761
906 (7th Cir. 2017). On remand, the district court sentenced
Adrian to 36 months’ imprisonment, Daniela to 21 months’
imprisonment, and imposed a $30,000 fine on each of them.
In this appeal, the Tartareanus challenge the district court’s
intended loss calculation under U.S.S.G. § 2B1.1, as well as its
decision to deny Daniela a minor role reduction under U.S.S.G.
§ 3B1.2. We affirm.
I. BACKGROUND
In 2005, Adrian and co‐defendant Minas Litos established
a company called Red Brick Investment Properties, through
which they intended to purchase, rehabilitate, and resell
homes. Daniela, the only employee with a real estate license,
served as Red Brick’s office manager. The group sought out
buyers who either did not have good enough credit or enough
money for a down payment (or both) and assisted them in
applying for mortgage loans. Between June 2007 and March
2009, Red Brick sold 45 houses.
Red Brick provided the buyers with the down payment
funds for each sale, but the loan applications falsely stated that
the buyers were putting up their own money. Litos and the
Tartareanus also assisted the buyers in providing false infor‐
mation on the applications indicating their creditworthiness for
the loans, including fictitious incomes, nonexistent bank
accounts, and other fake assets. The Tartareanus attended the
closings as the seller’s representatives and signed documents
falsely stating that no portion of the down payments had been
paid by the seller or any other third party.
After closing, Red Brick provided the buyers with further
undisclosed payments, which were intended to ensure that the

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Nos. 17‐2759 and 17‐2761 3
buyers could make at least two payments before defaulting on
their loans. Red Brick told the buyers that the properties had
renters either present or incoming, though most buyers
ultimately received insufficient rental income to cover their
loan payments.
Bank of America provided the loans for 32 of the 45 Red
Brick sales, all of which were processed by loan officer Stepha‐
nie Riggs. In March 2008, Bank of America opened an internal
investigation into Riggs’ loan files. During the investigation
she acknowledged that it was possible that the loan applica‐
tions contained false income and assets, but denied falsifying
any of that information herself. Bank of America determined
there was no conclusive evidence that Riggs had been involved
in any dishonest act, but it fired her in April 2009, citing a loss
of trust and confidence.
After a four day trial, a jury found the Tartareanus guilty of
16 counts of wire fraud and one count of conspiracy to commit
wire fraud. The district court originally sentenced Daniela to
21 months’ imprisonment, Adrian to 36 months’ imprison‐
ment, and ordered $893,015 in restitution to be paid jointly and
severally to Bank of America. On appeal, we remanded for
resentencing, holding that Bank of America was not a proper
victim for purposes of a restitution order because it was
deliberately indifferent to the many warning signs regarding
the borrowers’ inability to repay their loans. Litos, 847 F.3d
at 908.
On remand, the United States Probation Office filed a
revised Presentence Investigation Report (PSR). It recom‐
mended a total loss amount of $1,835,861, which was the same

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4 Nos. 17‐2759 and 17‐2761
as its original recommendation. The Tartareanus objected in
their sentencing memoranda, arguing that the court should
exclude Bank of America’s losses from that calculation because
it was not a “victim” that suffered an actual loss. The govern‐
ment contended that Bank of America’s losses qualified as an
“intended loss” under U.S.S.G. § 2B1.1, and, therefore, were
properly included in the loss calculation.
The Tartareanus also cited a number of factors they
contended should mitigate their sentences, pursuant to 18
U.S.C. § 3553(a). They noted the lack of threats and violence,
that their fraud involved willing buyers and a complicit bank,
their lack of criminal history, and Adrian’s conduct while
imprisoned to that point. They also submitted affidavits and
other documents, which they argued demonstrated their belief
that they were operating within the bounds of the law.
Additionally, Daniela requested a base offense‐level reduction,
arguing that she was a minor participant under U.S.S.G.
§ 3B1.2.
At their resentencing hearings, the district court rejected the
Tartareanus’ objections to the loss amount calculation. It found
that this was a case of intended loss, and that whether Bank of
America was complicit in the scheme or not was irrelevant to
the calculation. It determined, therefore, that the total loss
amount was between $1.5 million and $3.5 million, corre‐
sponding to a 16‐level enhancement.
The court also rejected Daniela’s request for a minor role
reduction finding that she was “the key office person who
made the whole scheme, sort of, work.” It found that all the

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Nos. 17‐2759 and 17‐2761 5
participants played important roles and that none was more
minor than any other.
When considering the § 3553(a) factors, the court first
incorporated all of its findings and considerations from the
original sentencing hearings. The court noted Adrian’s
progress in prison and commended him for it, but stated that
after reviewing the new filings and the entire case, nothing had
materially changed from the time of the original sentences. The
court sentenced Daniela to 21 months’ imprisonment and
Adrian to 36 months’ imprisonment, both of which were below
the applicable Guidelines ranges. Before concluding the two
hearings, the court asked if it had addressed all of their
principal arguments in mitigation; both Adrian and Daniela
responded, through counsel, that it had. They timely appealed
their sentences.
II. DISCUSSION
The Tartareanus raise three arguments on appeal. First,
they argue that the district court erred in its loss calculation by
including the amount of the Bank of America loans. Second,
Daniela argues that the court erred by denying her request for
a minor role reduction. Finally, they both contend that the
court failed to adequately address their principal arguments in
mitigation. We address each in turn.
A. Loss Calculation
The Tartareanus first take issue with the district court’s
inclusion of Bank of America’s losses within the meaning of
“intended loss” under U.S.S.G. § 2B1.1. We review de novo a
district court’s interpretation of the meaning of “loss” and the

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6 Nos. 17‐2759 and 17‐2761
methodology used in measuring that loss. United States v.
Rosen, 726 F.3d 1017, 1024 (7th Cir. 2013).
U.S.S.G. § 2B1.1 provides for enhancements to a base
offense level dependent upon the amount of “loss” an offense
involved. § 2B1.1(b)(1). The Application Notes explain that
“loss is the greater of actual loss or intended loss.” § 2B1.1 cmt.
n.3(A). The Notes define “intended loss” as “the pecuniary
harm that the defendant purposely sought to inflict,” including
any harm “that would have been impossible or unlikely to
occur.” § 2B1.1 cmt. n.3(A)(ii). The district court determined
that the Tartareanus’ intended loss was between $1.5 million
and $3.5 million, which led to a 16‐level increase in their base
offense level. § 2B1.1(b)(1)(I). It included in that calculation the
amount of the Bank of America loans involved in the scheme,
which totaled approximately $1.3 million.
The Tartareanus argue that Bank of America’s losses cannot
be included in an intended loss calculation under § 2B1.1
because the bank was not a “victim” in this case due to its
complicity in the scheme. As support, they rely heavily on
United States v. Vitek Supply Corp., 144 F.3d 476 (7th Cir. 1998),
which, in their view, stands for the proposition that an in‐
tended loss calculation requires an identifiable victim; their
reliance is misplaced, as that case focused on the actual losses
suffered by a company, its consumers, and its competitors. See
id. at 488–92. It did not contain an analysis, or even a discus‐
sion, of intended loss and certainly did not hold that a court
must identify a “victim” for purposes of intended loss.
It is true, as we explained in our first opinion in this case,
that Bank of America did not have clean hands in this scheme

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Nos. 17‐2759 and 17‐2761 7
and applying the label of “victim” seems inappropriate. See
Litos, 847 F.3d at 908–09. We have recently made clear, how‐
ever, that such a characterization is not relevant to the intended
loss calculation. “Our cases have explained that intended loss
is the amount that the defendant placed at risk,” and neither
the text of the Guidelines nor the relevant case law requires the
government or the court to identify who, or what entity, was
at risk. United States v. Betts‐Gaston, 860 F.3d 525, 539 (7th Cir.
2017) (internal quotation marks and citations omitted).
An intended loss calculation simply requires a determina‐
tion of the amount of money the defendants intended to place
at risk. See id.; U.S.S.G. § 2B1.1 cmt. n.3(A)(ii). In Betts‐Gaston,
the “scheme induced lenders to make mortgage‐backed loans
that were much riskier than their lenders realized because the
borrowers were not as creditworthy as reported.” 860 F.3d at
539. Because the defendant intended to place those loan
amounts at risk, we held that the lenders’ questionable conduct
was not material to the analysis. Id. Here, the Tartareanus
intended to place Bank of America’s money at risk when they
falsified information regarding down payments on the loan
documents. Therefore, the court was correct to include the
Bank of America loan amounts in the intended loss calculation,
regardless of the bank’s level of culpability.
B. Minor Role Reduction
Next, Daniela argues that the district court erred when it
denied her request for an offense‐level reduction based on her
role in the scheme. The denial of a minor role reduction
requires a finding of fact and, therefore, we review that
decision for clear error. United States v. Orlando, 819 F.3d 1016,

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8 Nos. 17‐2759 and 17‐2761
1024 (7th Cir. 2016). “Clear error exists when, after reviewing
the evidence, we are left with a definite and firm conviction
that a mistake has been committed.” Id. (quoting United States
v. Panaigua‐Verdugo, 537 F.3d 722, 724 (7th Cir. 2008)).
Pursuant to U.S.S.G. § 3B1.2(b), a district court may reduce
a defendant’s offense level by two if it finds that “the defen‐
dant was a minor participant in the criminal activity.” The
Application Notes explain that the reductions available under
this section are “for a defendant who plays a part in commit‐
ting the offense that makes him substantially less culpable.” Id.
cmt. n.3(A). More specifically, a “minor participant” is one
“who is less culpable than most other participants in the
criminal activity, but whose role could not be described as
minimal.” Id. cmt. n.5.
Here, the district court denied Daniela a minor role reduc‐
tion because it found that, while Litos and the Tartareanus
each had discrete and different roles, all three of them were
necessary to the functioning of the scheme. It noted that
Daniela issued most of the kickback and down payment checks
to purchasers, attended closings where she signed settlement
documents, assisted in convincing buyers that renters were
available, and used her real estate license to find comparable
homes that were used to boost the appraisal values of the
homes Red Brick sold. The court also cited to the testimony of
an employee of the title company, who stated that Daniela was
the “point person” in the Red Brick office to whom she spoke
if she needed to get something done.
Daniela argues that Litos and Adrian were substantially
more culpable than she was because they had the only owner‐

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Nos. 17‐2759 and 17‐2761 9
ship stakes in Red Brick, they were primarily involved in
recruiting buyers, and Litos had “executive authority and veto
power concerning every decision.” There is no denying that
Litos and Adrian were essential to the initiation of the scheme
and its continuing operation. However, the district court found
that Daniela’s participation was just as important, and based
on the facts it set forth, we cannot say that finding was clearly
erroneous. Because all three were necessary components of the
scheme, Daniela is not entitled to a minor role reduction. See
United States v. Kerr, 13 F.3d 203, 206 (7th Cir. 1993) (“If
everyone has an equal role, no one’s offense level can be
diminished … .”).
C. Principal Arguments in Mitigation
“A district court is required at sentencing to address the
defendant’s principal arguments in mitigation unless those
arguments are without factual foundation or are too weak to
require discussion.” United States v. Rosales, 813 F.3d 634, 637
(7th Cir. 2016) (citing United States v. Cunningham, 429 F.3d 673,
679 (7th Cir. 2005)). The Tartareanus contend that the court
failed to consider a number of affidavits and other documents
they attached to their sentencing memorandum, which they
argue demonstrated their belief that they had been operating
within the bounds of the law.
This argument is waived. Before concluding both sentenc‐
ing hearings, the court directly asked defense counsel whether
it had adequately addressed all of Adrian’s and Daniela’s
arguments in mitigation. In both instances, defense counsel
responded, “Yes, judge.” We have advised district courts to
ask precisely that question in order to avoid this sort of

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10 Nos. 17‐2759 and 17‐2761
procedural error, and we have explained that “[i]f counsel
replies in the affirmative, a contention on appeal that the
district court failed to address a principal argument in mitiga‐
tion would be deemed waived.” Id. at 638 (citing United States
v. Garcia‐Segura, 717 F.3d 566, 569 (7th Cir. 2013)).
Contrary to the Tartareanus’ contention, this is not a
situation like the one present in United States v. Morris, where
the court imposed its sentence and then simply asked,
“Anything further in this matter?” 775 F.3d 882, 885 (7th Cir.
2015). There was no waiver there because the question “did not
alert Morris’s counsel that she needed to do something further
to preserve her sentencing arguments, as we envisioned in
Garcia‐Segura.” Id. at 886. Here, the court did exactly what
Garcia‐Segura instructed it do, and by answering in the affirma‐
tive, the Tartareanus waived their argument.
III. CONCLUSION
For the foregoing reasons, the district court’s sentences are
AFFIRMED.

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