Manager/Supervisor Role Enhancement Turns on Relative Culpability (Not Direct Control) and Unraised Sentencing-Disparity Objections Are Waived After the Garcia-Segura Inquiry

Introduction

In United States v. Feroz Jalal (7th Cir. Dec. 31, 2025) (nonprecedential), the Seventh Circuit affirmed a below-Guidelines sentence (62 months) imposed after a guilty plea to bank fraud and money laundering arising from a COVID-19-era Paycheck Protection Program (“PPP”) loan scheme. Jalal coordinated fraudulent PPP loan applications, fabricated payroll/tax documentation, recruited and directed others (including Nafees Usmani), and used intermediaries to launder proceeds.

The appeal raised three sentencing issues: (1) whether the district court properly applied the three-level manager/supervisor enhancement under U.S.S.G. § 3B1.1(b); (2) whether the court adequately addressed Jalal’s argument about sentencing disparities in other PPP fraud cases; and (3) whether the court improperly “deferred” to the Guidelines range instead of making an individualized assessment under 18 U.S.C. § 3553(a).

Summary of the Opinion

The Seventh Circuit affirmed. It held that the district judge did not err in applying § 3B1.1(b) because the enhancement does not require proof that the defendant exercised direct control over “knowing participants”; instead, the inquiry is a commonsense assessment of the defendant’s role and relative culpability. The panel also concluded that Jalal waived his procedural challenge to the court’s consideration of sentencing disparities by failing to raise it when the judge solicited any objections before imposing sentence. In any event, the panel found the sentencing-disparity argument meritless because the Guidelines are an “anti-disparity formula,” and Jalal failed to show that the comparators had similar Guidelines ranges. Finally, the panel rejected the claim that the court improperly relied on the Guidelines, noting the judge articulated the correct legal framework and grounded the sentence in case-specific aggravating and mitigating factors.

Analysis

Precedents Cited

Standards of review and sentencing factfinding

  • United States v. Pugh, 147 F.4th 801, 808 (7th Cir. 2025): The panel applied Pugh to frame review of the § 3B1.1(b) issue—de novo as to whether the enhancement applies, clear error for underlying factual findings—and reiterated that sentencing facts need only be proven by a preponderance of the evidence with “great deference” to the district court’s findings.

Manager/supervisor enhancement under U.S.S.G. § 3B1.1(b)

  • United States v. House, 883 F.3d 720, 724 (7th Cir. 2018): The opinion leaned heavily on House for two propositions: (1) none of the Application Note factors is a prerequisite to applying § 3B1.1, and (2) the enhancement does not require an explicit finding of direct control over another participant. By analogizing to a defendant who used a business as cover, helped design the scheme, supplied falsified information, and distributed proceeds, the panel treated Jalal’s coordination and orchestration as comfortably within § 3B1.1(b).
  • United States v. Grigsby, 692 F.3d 778, 790 (7th Cir. 2012): Cited to reinforce a practical definition—“someone who helps manage or supervise a criminal scheme”—supporting a functional, not formalistic, approach to leadership roles.
  • United States v. Curb, 626 F.3d 921, 925-26 (7th Cir. 2010): Used for the specific point that recruiting an accomplice is conduct consistent with being a manager or supervisor.

Waiver of procedural sentencing arguments after a judge’s inquiry

  • United States v. Garcia-Segura, 717 F.3d 566, 569 (7th Cir. 2013): The panel applied Garcia-Segura to hold that when a district judge asks whether the parties’ principal arguments have been addressed, a defendant must speak up to preserve procedural objections. Jalal’s silence (followed by confirmation that the judge addressed his arguments) resulted in waiver.
  • United States v. Patel, 921 F.3d 663, 671 n.4 (7th Cir. 2019): Cited for the waiver rule and, on the merits, for the minimal procedural requirement: it is enough that the defendant makes the argument, the government can respond, and the court addresses it on the record.
  • United States v. Bridgewater, 950 F.3d 928, 934 (7th Cir. 2020): Distinguished to explain that some disparity arguments framed as substantive reasonableness challenges may not be waived the same way, but Jalal’s was a procedural complaint about the court’s explanation/consideration.

Sentencing disparities, the Guidelines, and explanation duties

  • United States v. Blagojevich, 854 F.3d 918, 921 (7th Cir. 2017) (citing Gall v. United States, 552 U.S. 38, 54 (2007)): The panel relied on this pairing for the principle that the Sentencing Guidelines function as an “anti-disparity formula,” undermining Jalal’s attempt to use out-of-range sentences in other cases as a benchmark without comparable Guidelines calculations.
  • United States v. Bartlett, 567 F.3d 901, 908 (7th Cir. 2009): Cited to emphasize that following the Guidelines is generally the “best way” to reduce unwarranted disparities, framing Jalal’s request for a lower sentence as effectively seeking a larger disparity in his favor.
  • United States v. Tounisi, 900 F.3d 982, 987 (7th Cir. 2018): The panel used Tounisi to clarify that a judge must address mitigation arguments but need not do so at length.
  • United States v. Vasquez-Abarca, 946 F.3d 990, 994 (7th Cir. 2020): Cited to validate the district judge’s description of the Guidelines’ role: calculate correctly, consider seriously, do not presume the range is correct, and give more compelling reasons as variances grow.
  • United States v. Saldana-Gonzalez, 70 F.4th 981, 986 (7th Cir. 2023): Used to confirm that the district court’s explanation—tying the sentence to offense seriousness, deterrence, health, and restitution efforts—was sufficient.

Legal Reasoning

1) § 3B1.1(b): “manager or supervisor” is a flexible, culpability-based inquiry

Jalal’s principal move was to treat the § 3B1.1 Application Notes as imposing a rigid prerequisite: that a defendant must have exercised authority over “participants” who knowingly assisted the fraud. The panel rejected this as an overreading. Relying on United States v. House, it emphasized that the factors in Application Note 4 are not elements and no single factor is required. It further reiterated that the enhancement does not turn on a formal showing of direct control.

The opinion then applied a “commonsense judgment” of relative culpability, supported by concrete conduct: Jalal (i) recruited Usmani; (ii) arranged corporate reinstatement and bank accounts; (iii) directed the signing/submission of tax forms; (iv) orchestrated the movement of funds (including instructing checks labeled “payroll” and obtaining blank checks for his share); and (v) used employees/others to conceal proceeds through deposits and cash withdrawals. Those facts fit the Seventh Circuit’s functional understanding of managing/supervising a scheme (United States v. Grigsby) and recruiting accomplices (United States v. Curb).

2) Sentencing disparities: waiver plus weak comparators

Jalal framed the disparity issue as the district court’s failure to meaningfully consider his examples of other PPP fraud defendants receiving probation or shorter sentences. The panel characterized this as a procedural challenge (insufficient explanation/consideration) and held it was waived because Jalal did not raise it after the judge’s explicit check-in under United States v. Garcia-Segura. United States v. Patel supplied the waiver authority and reinforced that, to preserve such a claim, the defendant must alert the judge at sentencing.

The panel also rejected the argument on the merits. It stressed that the Guidelines themselves address disparity (United States v. Blagojevich (citing Gall v. United States)) and that Jalal’s sentence already fell below the Guidelines range. It further faulted Jalal’s comparisons because he did not show the other defendants had similar Guidelines ranges—an implicit reminder that “similar offense conduct” is not enough for disparity analysis without comparable Guidelines calculations and offender characteristics.

3) “Deference to the Guidelines”: the judge articulated the correct framework and individualized reasons

Jalal argued the district court treated the Guidelines as effectively controlling. The panel rejected this, pointing to the judge’s accurate description of sentencing methodology consistent with United States v. Vasquez-Abarca and the judge’s explicit reliance on individualized factors: the “particularly galling” exploitation of a vulnerable period, greed-driven conduct, general deterrence for white-collar crime, as well as mitigation (health issues, restitution efforts, and supportive letters). Under United States v. Saldana-Gonzalez, that explanation sufficed—especially given the sentence was below-range.

4) Evidentiary support at sentencing: reliance on the PSR mooted the co-defendant-plea concern

Jalal claimed the court erred by relying on admissions in a co-defendant’s plea agreement. The panel’s response was practical: even if that were a concern, the relevant facts were supported by the undisputed portions of Jalal’s own presentence investigation report. The result underscores a recurrent sentencing reality: when factual assertions are in the PSR and not meaningfully disputed, they can supply a sufficient basis for role findings under the preponderance standard (United States v. Pugh).

Impact

  • Role enhancements in fraud schemes: The decision reinforces (consistent with House) that § 3B1.1(b) turns on functional management of the scheme—recruiting, directing logistics, controlling the flow and concealment of funds, and ensuring execution—not on formal hierarchy or explicit supervision over a clearly identified “knowing participant.”
  • PPP/COVID-relief fraud sentencing: The opinion validates heavy emphasis on deterrence and the moral seriousness of exploiting emergency relief programs, supporting judges who treat such cases as demanding “strong deterrent” sentences even when varying downward.
  • Preservation and waiver at sentencing: The application of Garcia-Segura signals that defendants must be prepared to object in real time when a judge asks whether all principal arguments have been addressed—particularly for procedural claims about explanation, consideration of § 3553(a) factors, and disparity arguments.
  • Comparator discipline for disparity claims: The panel’s insistence on comparable Guidelines ranges discourages “headline comparisons” to other white-collar sentences without a matched Guidelines/CHC/offense-level foundation.

Complex Concepts Simplified

U.S.S.G. § 3B1.1(b) (manager/supervisor enhancement)
A Guideline that adds three offense levels if the defendant managed or supervised criminal activity involving five or more participants or that was otherwise extensive. Courts look at practical indicators (e.g., recruiting, organizing, directing money movement) rather than requiring a formal boss-subordinate structure.
Application Notes
Commentary that lists factors (like decision-making authority, recruitment, degree of planning). The Seventh Circuit reiterated that these are considerations, not mandatory checkboxes.
Guidelines range
A recommended sentencing range (here, 70–87 months) derived from the offense level and criminal history category. Judges must calculate it correctly, consider it seriously, but are not allowed to presume it is the right sentence.
18 U.S.C. § 3553(a)
The statute listing the sentencing factors: seriousness of the offense, deterrence, protection of the public, rehabilitation, avoiding unwarranted disparities, and more.
Procedural vs. substantive reasonableness
“Procedural” challenges attack the process (e.g., failing to address an argument, miscalculating the Guidelines). “Substantive” challenges attack the sentence length as unreasonable. This distinction mattered because Jalal’s disparity claim was treated as procedural and therefore waivable.
Waiver after the judge’s inquiry
When a judge asks if all principal arguments have been addressed, failing to object can forfeit (waive) later appellate claims that the judge did not adequately consider a point.

Conclusion

United States v. Feroz Jalal reaffirms a pragmatic Seventh Circuit approach to sentencing: § 3B1.1(b) hinges on a commonsense evaluation of whether the defendant helped manage or supervise the criminal scheme, not on rigid proof of direct control over knowing participants. It also underscores an important appellate practice point—procedural sentencing objections, including complaints about inadequate consideration of sentencing disparities, can be waived when a judge invites final objections and the defendant does not raise them. In PPP fraud cases, the opinion further signals broad judicial latitude to emphasize deterrence and the gravity of exploiting emergency relief programs, even while imposing below-Guidelines sentences.