In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 06-3534
UNITED STATES OF AMERICA,
                                             Plaintiff-Appellee,
                               v.


TERRY L. SPIRK,
                                         Defendant-Appellant.
                         ____________
       Appeal from the United States District Court for the
         Northern District of Illinois, Western Division.
         No. 05 CR 50054—Philip G. Reinhard, Judge.
                         ____________
  ARGUED AUGUST 8, 2007—DECIDED SEPTEMBER 26, 2007
                    ____________


 Before EASTERBROOK, Chief Judge, and COFFEY and
MANION, Circuit Judges.
  EASTERBROOK, Chief Judge. Terry Spirk’s career in
the insurance business culminated in 1991 with his
ownership of Lancaster Annuities Service Corporation.
After LASCO had operated profitably for several years,
Spirk decided to diversify and founded American Senior
Alliance, Inc. (ASA), to provide discounted health and
travel programs for members. Recruiting members proved
more difficult than expected, however, and by 1996 ASA
could not stay in operation without financial assistance
from LASCO, its sister corporation in a holding-company
2                                             No. 06-3534

structure that Spirk created. (The capstone was American
Benefits Group.)
  Spirk decided to raise operating funds for ASA by selling
convertible notes in its profitable sibling LASCO. He
assured investors that the investments were safe be-
cause he had guaranteed them and pledged his life in-
surance policy as additional security. He did not register
these notes with state or federal securities regulators,
however, and in 1998 the Illinois Securities Department
told Spirk that he must either register the notes or stop
selling them. Spirk signed a consent order promising to
comply. But he went on selling the notes without registra-
tion and without providing investors with information
that an issuer of securities must supply. When investors
asked about regulatory approval, Spirk told them that
the Illinois Securities Department had authorized the
notes’ sale; he instructed his staff at LASCO to tell
investors the same thing.
  By late 1998 LASCO was having trouble making inter-
est payments on the notes and could not redeem notes
presented for repayment of principal. Spirk tried to solve
this problem by selling notes even faster, using the
money from new investors to pay off the old, or at least
to pay interest and keep them happy. Spirk regularly
assured potential investors that LASCO was booming
and their investments safe, though he knew that these
representations were untrue. Late in 2000 the Illinois
Securities Department issued an order banning Spirk from
selling securities whether or not he registered them; this
did not stop him from peddling yet more LASCO notes. But
using new money to pay old investors, with interest, can’t
last unless the number of new investors increases expo-
nentially. In LASCO’s case the end came early in 2001,
when both LASCO and Spirk entered bankruptcy. Inves-
tors lost more than $3 million. Unlike most operators of
Ponzi schemes, Spirk did not live the high life while the
No. 06-3534                                                3

money rolled in; he plowed the cash into LASCO and ASA,
even reducing his salary so that he could pay the staff ’s
wages. This is cold comfort to the investors, however,
many of whom lost their retirement savings.
   Spirk violated not only state securities laws but also §5
of the Securities Act of 1933, 15 U.S.C. §77e, which
provides that no securities may be sold in or by means of
interstate commerce unless a registration statement is in
effect or some exemption applies. Notes are among the
many kinds of securities covered by this rule. 15 U.S.C.
§77b(a)(1). Although intra-state sales are exempted by
§3(a)(11), 15 U.S.C. §77c(a)(11), the exemption is lost if
even a single security is offered or sold to a person outside
the issuer’s state of incorporation. It seems unlikely that
Spirk never tried to induce anyone domiciled outside of
Illinois to buy the notes. And other exemptions, such as
the non-public offering exemption of §4(2), 15 U.S.C.
§77d(2), are unavailable to persons who promote the
stock widely and fail to comply with the SEC’s Regulation
D. See SEC v. Ralston Purina Co., 

(1953).
Had he been indicted for violating §5, Spirk would have
had no option but to plead guilty.
  The indictment, when it came in 2005, did not mention
the Securities Act. Instead it contained fifteen counts of
fraud—eleven of mail fraud, 18 U.S.C. §1341, one of wire
fraud, 18 U.S.C. §1343, and three of transporting in
interstate commerce checks obtained by fraud, 18 U.S.C.
§2314. Section 5 of the Securities Act does not require
proof of fraud: sale of unregistered securities is a crime
no matter how candid the issuer. The fraud charges did
not avoid the need to show interstate commerce; all three
fraud statutes, like §5 of the Securities Act, have com-
merce elements. Nor did charging 15 counts change
the applicable penalty: Whether charged as a securities
crime or as fraud, Spirk’s acts fall within U.S.S.G. §2B1.1,
and the number of counts is rendered irrelevant by
4                                            No. 06-3534

U.S.S.G. §3D1.2, which treats as one group all convictions
arising from the same sort of conduct committed as part
of a single scheme or plan. (The number of counts does
matter if the guideline range exceeds the statutory maxi-
mum for a single count. Spirk’s sentence of 108 months
is less than the maximum for a single conviction under
§2314 but would have required two unregistered-
securities counts, as each has a maximum penalty of five
years. 15 U.S.C. §77x.)
   By charging a vanilla securities offense as a 15-count
fraud offense, the indictment greatly complicated matters.
The prosecutor called to the stand a parade of investors,
who testified about what Spirk told them and how much
they had lost. The prosecutor called Spirk’s employees at
LASCO and had them testify about how funds were
raised and disbursed. Doubtless the prosecutor sought to
engage the jurors’ sympathy for the put-upon investors
and depict Spirk as an inveterate liar—that’s what the
Assistant United States Attorney told us at oral argu-
ment—but the price was a long trial where no trial should
have been necessary. And the prosecutor handed Spirk
an opportunity to make a rejoinder that he would not
have had to a securities-law charge. For although Spirk
conceded every fact needed to convict him of violating §5,
he vigorously denied that he had defrauded anyone. Some
of his representations were true, Spirk insisted, and
others were puffery rather than misrepresentations of
fact. What’s more, Spirk maintained, he intended to pay
everyone eventually; that’s why he guaranteed the notes,
putting his own assets behind LASCO’s promises. The
prosecutor responded with proof suggesting that Spirk did
not really plan to repay—that he did not reaffirm the
guarantee following his bankruptcy, that he allowed his
life insurance to lapse, that he has not paid investors
any portion of his post-bankruptcy earnings, and so on.
No. 06-3534                                               5

  Spirk’s main argument on appeal is that his fervent
belief in LASCO’s long-run prospects, and his desire to
repay, entitle him to a judgment of acquittal. The district
judge allowed Spirk to present this argument to the jury
(and allowed the prosecutor to respond at length) but
should have put the whole subject off limits. The to and
fro is irrelevant.
   The crime of fraud means intentional falsehoods that
are material (i.e., likely to be significant to a reasonable
person deciding what to do). See, e.g., Neder v. United
States, 

(1999). Someone who obtains a loan
from a bank by representing that his income is $1 million
a year, when actually he earns only $100,000 annually,
has committed fraud even though he sincerely believes
that he can repay. The lie exposes the bank to a materially
greater risk of nonpayment than the lender knew it was
accepting, and the creation of this risk by deceit is a
crime even if the borrower plans to repay—indeed, even
if the borrower actually repays. See, e.g., United States v.
Hamilton, No. 06-1249 (7th Cir. Aug 29, 2007); United
States v. Masquelier, 

, 759 (7th Cir. 2001);
United States v. Dunn, 

, 651 (7th Cir. 1992).
  The law requires people to tell the truth, so that their
trading partners may decide for themselves which invest-
ments to make and which goods to buy or sell. People
who want to raise money cannot obtain it by deceit and
then try to persuade a jury that their intentions were good;
a license to lie with a “good heart” would expose people
to far too much risk and deny them the option of making
intelligent and autonomous choices on their own behalf.
Some people willingly accept risk, but they want to be
compensated; by overstating LASCO’s business prospects,
Spirk secured high-risk investments at low-risk rates, so
investors would have been losers even if LASCO had paid
as promised. And many of the investors from whom
6                                             No. 06-3534

Spirk raised money would not have made high-risk
investments no matter the promised rate of return.
  The prosecutor’s decision to pursue fifteen fraud charges
created other complications. Instead of having to show
that Spirk used the means or instrumentalities of inter-
state commerce once, the prosecutor assumed the burden
of showing fifteen uses. Spirk contends that for one count,
at least, the prosecutor conspicuously failed. Why Spirk
should care is beyond us: 14 convictions are the same as 15
for sentencing purposes. But the $100-per-count-of-convic-
tion special assessment (which as far as we can see has
not been and never will be paid) means that we cannot
invoke the concurrent-sentence doctrine. See Ray v. United
States, 

(1987).
   Perhaps the Criminal Justice Act, 18 U.S.C. §3006A,
should be amended to provide that the public fisc will not
reimburse more than $100 for an appeal to contest a
concurrent sentence, and then only if the special assess-
ment has been satisfied. Solvent defendants would not
spend more than $100 to save $100, and the sixth amend-
ment does not entitle insolvent defendants to more legal
assistance than a wealthy defendant would buy in the
market. But, as things stand, Spirk has enjoyed (at public
expense) the assistance of one of the nation’s top law
firms to make this pointless argument, which the ap-
pellate briefs have debated with vigor. The prosecutor’s
brief runs 49 pages. So we must soldier on.
  William V. Schubert testified that he invested $250,000
in LASCO’s notes. The money came via two checks, one for
$200,000 that Schubert hand-delivered to Spirk or
LASCO’s accountant, and the other for $50,000 carried to
LASCO’s offices by an employee of Schubert’s insurance
agent. The notes were handed over in exchange for the
checks. Spirk’s marketing efforts to Schubert were oral.
For taking Schubert’s money Spirk was convicted (in
No. 06-3534                                               7

Count 8) of mail fraud, but where’s the mailing? The
prosecutor’s theory is that Spirk caused LASCO’s accoun-
tant to mail Schubert a letter, dated two days after
LASCO received the second check, describing Schubert’s
rights under the note and attaching a photocopy of its
first page. That the mailing follows the fraud does not
(necessarily) foreclose a conviction for mail fraud. Compare
Schmuck v. United States, 

(1989), with
United States v. Maze, 

(1974). Still, it was
essential to prove beyond a reasonable doubt that the
letter was mailed rather than hand-delivered, as the
checks and notes had been, and on this the evidence
is equivocal.
  The record contains the letter but not its envelope.
LASCO’s  files do not show whether it was mailed, sent by
courier, or handed over when Spirk or the accountant
next saw Schubert in person. Schubert testified that he
“received” the letter but did not say how. This ensued:
    PROSECUTOR: And how would that have gotten
    to you? You didn’t go in to [LASCO’s office in]
    Naperville and pick it up, correct?
    SCHUBERT: No.
    PROSECUTOR: So, how would you have received
    it then?
    SCHUBERT: Mail, probably.
Schubert was not a hostile witness; why was the prosecu-
tor asking leading questions? But even with leading
questions all he could get was “[m]ail, probably.” Schubert
implied here, and made clear in response to other ques-
tions, that by the time of trial he could not remember
receiving the letter. “Mail, probably” was just a guess—and
not necessarily a good guess, given his history of dealing
with Spirk face-to-face. The prosecutor did not estab-
lish that any mail, in either direction, passed between
8                                            No. 06-3534

Schubert and Spirk. A guess is not proof beyond a reason-
able doubt.
  Spirk’s conviction on Count 8 is reversed. The convic-
tions on the other counts, and the sentences correspond-
ing to those counts, are affirmed.

A true Copy:
      Teste:

                      ________________________________
                      Clerk of the United States Court of
                        Appeals for the Seventh Circuit




                  USCA-02-C-0072—9-26-07