In the

United States Court of Appeals

For the Seventh Circuit
____________________
No. 13-1407
UNITID STATIS OI AMIRICA,
!"#$%&$''()**+""++,
,-
RITA A. CRUNDWILL,
.+'+%/#%&()**+""#%&.
____________________
AeaI from lhe Uniled Slales Dislricl Courl for lhe
Norlhern Dislricl of IIIinois, Weslern Division.
No. 12 CR 50027 !"#$#% '( )*#+",-., 12/3+.
____________________
ARGUID NOVIMIR 4, 2013 DICIDID NOVIMIR 15, 2013
____________________
efore IASTIRROOK, KANNI, and TINDIR, 4$562$& 12/3+7.
IASTIRROOK, 4$562$& 12/3+. In 2011 a Commissioner of
Dixon, IIIinois, lhe chiIdhood home of Iresidenl Reagan,
Iauded Rila CrundveII, lhe Cily's ComlroIIer since 1983,
because she Iooks afler every lax doIIar as if il vere her
ovn. Hov righl he vas. The nexl year CrundveII Ieaded
guiIly lo embezzIing aroximaleIy $53 miIIion from lhe
Cily belveen 1990 and 2012. She used lhe money lo suorl
more lhan 400 quarler horses and a Iavish IifeslyIe, vhich
Case: 13-1407 Document: 33 Filed: 11/15/2013 Pages: 7
No. 13-1407 2
she exIained lo co-vorkers as lhe fruil of lhe horses' suc-
cess. During lhe finaI six years of her scheme, lhe embez-
zIemenl averaged 28% of lhe Cily's budgel. In exchange for
her guiIly Iea, lhe roseculor Iimiled lhe charge lo a singIe
counl of vire fraud. See 18 U.S.C. 1343.
CrundveII loId olher ubIic officiaIs lhal lhe Cily had lo
lighlen ils beIl. She bIamed a dovnlurn in lhe economy and
a reduclion in remillances from lhe slale, vhen her ovn
lhefl vas lhe reaI cause. IoIice venl vilhoul vaIuabIe
equimenl. The Cily reduced lhe slaff of ils Slreel Dearl-
menl from nine lo six and cul lhe rale of mainlenance. In lhe
decade before CrundveII's arresl, lhe Cily resurfaced onIy
65 bIocks of ils more lhan 100 miIes of aved roads. The Iisl
of vays in vhich CrundveII's crime in|ured lhe ouIalion
of Dixon is Iong and Iayed a ma|or roIe in lhe dislricl
courl's decision lo senlence her lo 235 monlhs' imrison-
menl, subslanliaIIy above lhe GuideIine range of 151 lo 188
monlhs.
The scheme vas nol arlicuIarIy sohislicaled.
CrundveII oened an accounl al a IocaI branch of Iiflh
Third ank. The accounl vas caIIed RSCDA Reserve Iund
and nominaIIy vas ovned by lhe Cily, bul CrundveII heId
soIe conlroI over disbursemenls. She used her aulhorily as
ComlroIIer lo move money from lhe Cily's Iegilimale ac-
counls lo lhe RSCDA accounl. Once lhe money vas lhere
she vrole checks for her ovn benefil. She crealed bogus in-
voices lo |uslify lhe lransfers from lhe Iegilimale accounls.
Ior more lhan 20 years, lhe bank faiIed lo nolice lhal lhe
funds in lhe RSCDA accounl vere being ul lo rivale ra-
lher lhan ubIic use. And lhe Cily's audilors
CIiflonLarsonAIIen and SamueI Card, a IocaI accounlanl
Case: 13-1407 Document: 33 Filed: 11/15/2013 Pages: 7
3 No. 13-1407
faiIed lo delecl lhe scam, even lhough lhe sol checks of in-
voices and disbursemenls required by audiling slandards
oughl lo have lurned il u Iong before 2012. The embezzIe-
menl vas caughl vhen a bank slalemenl of lhe RSCDA ac-
counl reached lhe Mayor by accidenl, and he honed lhe II
because lhe lransaclions il reveaIed slarlIed him. The Cily
sued lhe bank and lhe lvo audilors, vhich recenlIy sellIed
for aroximaleIy $40 miIIion. SaIes of CrundveII's assels
reaIized anolher $10 miIIion, so lhe Cily has recovered much
of vhal CrundveII look (if ve disregard inleresl, vhich over
lhis Ienglhy eriod vouId have been subslanliaI) bul Iosl lhe
benefils, such as veII-aved roads and efficienl oIice, lhal
lhe money couId have achieved had il been avaiIabIe be-
lveen 1990 and 2012.
CrundveII asked lhe |udge lo imose a senlence al lhe
Iov end of lhe GuideIine range, conlending lhal a higher
senlence couId hoId her veII inlo her 70s (she vas born in
1953). She conlended lhal she had rovided exlraordinary
assislance lo lhe roseculion by describing aII delaiIs of her
scheme and heIing agenls marshaI her assels, so lhal lhey
couId be soId for lhe Cily's benefil. The roseculor, by con-
lrasl, deicled CrundveII as being no more candid lhan she
lhoughl necessary and Iess candid lhan she shouId have
been. She iniliaIIy asserled lhal lhe embezzIemenl began in
1999 or 2000, a decade afler il acluaIIy slarled, and lhal lhe
lolaI lake vas aroximaleIy $10 miIIion. She admilled lhe
earIier slarl, and lhe higher lolaI, onIy vhen confronled by
evidence. She did nol bolher lo leII her debriefers lhal she
began sleaIing from lhe Cily in 1988, using a melhod differ-
enl from lhe RSCDA accounl, unliI federaI agenls discovered
lhal addilionaI crime on lheir ovn.
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No. 13-1407 4
The dislricl |udge recognized lhal CrundveII had ro-
vided some aid, rinciaIIy in rounding u assels, bul he
lhoughl lhal lhe vaIue of lhe assislance aIed in comarison
vilh lhe in|ury lhal CrundveII had infIicled on lhe cilizenry.
The |udge noled lhal her lhefls derived lhe cilizens of lhe
services for vhich lheir laxes had aid, and lhe discovery
lhal her Iong-running scheme had gone on under lhe noses
of mayors, members of lhe IocaI IegisIalure, audilors, and
banks aIike Ied lo a sIum in lhe cilizens' eslimale of lhe
governmenl's comelence and vaIue. The Ioss of ubIic ben-
efils and confidence |uslify a enaIly above lhe GuideIine
range, lhe |udge concIuded. The |udge aIso noled lhal a 235-
monlh senlence vouId aIIov CrundveII lo be reIeased in
2030, vhen she vouId be 77, veII under lhe Iife execlancy
of a 60-year-oId voman.
In exIaining vhy he chose a senlence above lhe Guide-
Iine range, lhe |udge reIied in arl on U.S.S.G. 21.1 AIi-
calion Nole 19(A)(ii), vhich says lhal a senlence may dearl
from lhe range recommended by lhe Senlencing Commis-
sion for financiaI crimes vhen |ljhe offense caused or
risked subslanliaI non-monelary harm. Ior examIe, lhe of-
fense caused hysicaI harm, sychoIogicaI harm, or severe
emolionaI lrauma. (This Ianguage is arl of AIicalion
Nole 20(A)(ii) in lhe currenl version of lhe GuideIines, ils
subslance is unchanged.) The |udge lhoughl lhal cilizens of
Dixon suffered sychoIogicaI harm from lhe reveIalion
lhal a rominenl officehoIder vas crooked, lhal olher offi-
ciaIs did nol delecl lhe crime, and lhal for 20 years lhey had
been derived of vaIuabIe municiaI services. CrundveII
conlends lhal onIy lhe Cily counls as a viclim and lhal or-
ganizalions cannol suffer sychoIogicaI harm because lhey
are insensale. Yel 21.1 AIicalion Nole 19(A)(ii) does nol
Case: 13-1407 Document: 33 Filed: 11/15/2013 Pages: 7
5 No. 13-1407
secify lhe crime's immediale viclim onIy, lhe Ianguage asks
vhelher lhe crime caused hysicaI or sychoIogicaI harm lo
#%89%+. We slaled in :%$&+/ ;&#&+7 ,- !#<+8, 664 I.3d 1084,
109899 (7lh Cir. 2011), lhal a Ioss of ubIic confidence in
governmenl caused by a ubIic officiaI's defaIcalion is sy-
choIogicaI harm for lhe urose of lhis lexl.
Whal's more, a senlence's roriely does nol deend on
vhelher lhe Senlencing Commission has aulhorized a dear-
lure from lhe GuideIinesand dearlure is vhal 21.1
AIicalion Nole 19(A)(ii) is aboul. :%$&+/ ;&#&+7 ,- =99>+5,
543 U.S. 220 (2005), made dearlures obsoIele. Thal's vhy
ve heId in :%$&+/ ;&#&+7 ,- ?9@%7+%/, 724 I.3d 749, 751 (7lh
Cir. 2013), lhal il no Ionger mallers vhelher a senlencing
|udge roerIy underslands lhe Commission's rescrilions
aboul vhen dearlures are |uslified. Once a |udge correclIy
caIcuIales lhe aIicabIe rangeand CrundveII does nol
conlesl lhe caIcuIalion of her rangeeverylhing deends on
lhe |udge's reasonabIe aIicalion of lhe crileria in 18 U.S.C.
3553(a). }udges are enlilIed lo imIemenl lheir ovn enaI
hiIosohies, lhey are nol bound by lhe Senlencing Com-
mission's. See ;*+#57 ,- :%$&+/ ;&#&+7, 555 U.S. 261 (2009),
A$B<5923C ,- :%$&+/ ;&#&+7, 552 U.S. 85 (2007), :%$&+/ ;&#&+7 ,-
495%+5, 598 I.3d 411 (7lh Cir. 2010) (en banc).
CrundveII conlends lhal ?9@%7+%/ is dislinguishabIe be-
cause il invoIved lhe deniaI of a defendanl's requesl for a
dovnvard variance, vhiIe her case enlaiIs lhe granl of lhe
roseculor's requesl for an uvard variance. Thal's a differ-
ence, lo be sure, bul il is an irreIevanl difference. ?9@%7+%/
refIecls lhe facl lhal =99>+5 suersedes dearlures. }udges are
enlilIed lo discrelion vhelher lhe variance is above or beIov
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No. 13-1407 6
lhe GuideIine range, lhe lerms on vhich dearlures used lo
be aulhorized do nol maller in eilher direclion.
?9@%7+%/ observes lhal a |udge couId misuse or misun-
dersland lhe remnanls of lhe oId dearlure syslem in lhree
vays: a |udge mighl suose lhal a variance is forbidden un-
Iess aulhorized by lhe Senlencing Commission in a oIicy
slalemenl or aIicalion nole (lhal vouId be an error under
=99>+5 and Ialer oinions), a |udge mighl refuse lo enlerlain
an argumenl based on a oIicy slalemenl or nole (lhal vouId
be an error because many of lhe crileria formerIy used lo |us-
lify dearlures remain saIienl under 3553(a)), or a |udge
mighl beIieve lhal lhe oIicy slalemenls and noles in lhe
GuideIines ManuaI exhausl lhe aroriale grounds for a
variance (lhal vouId be an error because 3553(a), nol lhe
GuideIines ManuaI, suIies lhe IegaIIy conlroIIing crileria).
CrundveII does nol conlend lhal lhe |udge made any of lhe-
se mislakes. The mosl one can say for her osilion is lhal lhe
|udge may have underslood sychoIogicaI harm differenl-
Iy from lhe Senlencing Commissionbul as any difference
on lhal score does nol affecl lhe vaIidily of her senlence, lhe
ossibiIily gels her novhere.
The dislricl |udge ronounced a subslanliveIy reasonabIe
senlence afler giving CrundveII fuII oorlunily lo resenl
evidence and argumenls. The |udge lhoughl a subslanliaI
enaIly |uslified by consideralions of delerrence and deserl.
CrundveII singIe-handedIy sloIe from lhe cilizens of a smaII
communily (Dixon's ouIalion is under 16,000) len limes as
much as ubIic officiaIs in lhe Teaol Dome Affair, lhe na-
lionaI governmenl's mosl nolorious financiaI scandaI, mis-
arorialed from lhe cilizenry of lhe counlry as a vhoIe.
(Secrelary of lhe Inlerior AIberl IaII received aboul $400,000,
Case: 13-1407 Document: 33 Filed: 11/15/2013 Pages: 7
7 No. 13-1407
vorlh $5.3 miIIion in currenl doIIars.) CrundveII mainlains
lhal lhe |udge did nol consider her argumenls, bul lhe |udge
addressed every one of lhem. Thal he lhoughl Iess veII of
her cooeralion lhan CrundveII herseIf did, and gave a Iov-
er veighl lo her age lhan she asked him lo, does nol under-
mine lhe senlence's vaIidily. }udges musl consider a defend-
anl's rinciaI argumenls bul need nol agree vilh lhem.
AIIIRMID
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