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USCA1 Opinion
For the First Circuit
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No. 96-2002
UNITED STATES,
Appellee,
v.
ANTHONY J. RIZZO,
Defendant, Appellant.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge]
____________________
Before
Torruella, Chief Judge,
Cyr, Senior Circuit Judge,
and Stahl, Circuit Judge.
____________________
James H. Budreau for appellant.
John M. Griffin , Assistant United States Attorney, with whom Donald
K. Stern, United States Attorney, was on brief for appellee.
____________________
August 11, 1997
____________________
STAHL, Circuit Judge . Defendant-appellant Anthony J.
Rizzo appeals the thirty-seven month sentence that the district
court imposed upon him after he pleaded guilty to several
counts involving possessing, negotiating, and uttering
counterfeit securities in violation of 18 U.S.C. SS 371, 513.
Finding no merit to Rizzo's arguments, we affirm.
Facts
We consider the facts as set forth in "the
presentence report, the sentencing transcript[,] and various
other materials before the district court." United States v.
Gill, 99 F.3d 484, 485 (1st Cir. 1996).
The counterfeit scheme in which Rizzo was involved
was designed to operate as follows: Rizzo supplied counterfeit
checks to Ronald A. Moore, who forwarded them to Joseph
Savarese. The checks were made payable to Savarese's business,
Thermal Shield of New England ("Thermal Shield"). Savarese was
to deposit the counterfeit checks in his business' bank
accounts and then withdraw the funds after the checks had
cleared. Rizzo, Moore, and Savarese were to share in the
illegal proceeds from the counterfeit checks.
During the course of the scheme in 1992, Rizzo
provided Savarese with five checks that were fraudulent
reproductions of actual corporate checks. Moore operated as
the middleman between Rizzo and Savarese for the first three
checks; Rizzo dealt directly with Savarese for the final two
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checks. The companies whose checks had been counterfeited
neither issued these checks nor authorized the disbursement of
any funds to Thermal Shield.
In April 1992, Rizzo, Moore, and Savarese conducted
their first illegal transaction. Moore gave Savarese a
$160,00.00 counterfeit check that Rizzo had provided him
listing Thermal Shield as payee and Hasbro, Inc. as payor.
Savarese then deposited the counterfeit check into the Thermal
Shield account at the Winthrop, Massachusetts branch of New
World Bank and delivered the deposit slip to Moore. After the
check cleared, Savarese withdrew the $160,000.00 proceeds from
the check. There being little honor among the dishonest, it
was not until Moore made threatening statements to Savarese on
several occasions that he provided Moore with approximately
$40,000.00 of the illicit proceeds to be shared with Rizzo as
their portion of the illegal booty.
Prior to the Hasbro check transaction, for reasons
not entirely clear in the record, Savarese had contacted agents
of the Federal Bureau of Investigations ("FBI") concerning the
counterfeit check scheme. The FBI agents instructed Savarese
that under no circumstances was he to become involved with the
Hasbro check. Savarese did not follow these instructions, and
the FBI agents subsequently discovered Savarese's participation
in negotiating the first counterfeit check. Following the
Hasbro check transaction, Savarese began cooperating with the
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FBI in connection with the Bureau's investigation of the
counterfeit check scheme. During this time, the FBI, with the
knowledge of Savarese and the assistance of security officials
at the Bank of Boston, established a "shell" account in the
name of Thermal Shield at the Bank of Boston.
Emboldened by their success with the Hasbro check,
Rizzo, Moore, and Savarese agreed to negotiate additional
counterfeit checks drawn on unsuspecting corporations. On June
2, 1992, Moore gave Savarese two counterfeit checks from Rizzo;
one in the amount of $47,750.00 naming New Wave Transport
(U.S.A.) as payor and one in the amount of $47,785.00 naming
The American Experience West Corp. as payor. Savarese
deposited the checks in the Thermal Shield account at the Bank
of Boston and delivered the deposit slip to Moore. On June 9,
1992, upon Moore's urging, Savarese visited the Bank of Boston
in an effort to withdraw the funds from the two counterfeit
checks. By previous arrangement between the FBI and the Bank
of Boston, the teller furnished Savarese with a letter stating
that his account was closed.
On July 1, 1992, Savarese met directly with Rizzo.
During one conversation, Rizzo told Savarese that they would
"do two more." Several days later, Rizzo gave Savarese two new
counterfeit checks, one in the amount of $9300.00 naming the
Great Atlantic and Pacific Tea Company, Inc. as payor and one
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in the amount of $9,275.00 naming Waldbaum, Inc. as payor. The
conspirators never negotiated either of these two checks.
Procedural Background
On December 14, 1995, a federal grand jury returned
a three-count superseding indictment alleging that Rizzo
engaged in a counterfeit check scheme. The indictment stated
that Rizzo illegally conspired with co-defendant Ronald A.
Moore and others to obtain cash through the negotiation of
counterfeit corporate securities, in violation of 18 U.S.C. S
371. The indictment further alleged two counts of uttering and
possessing counterfeited securities of a corporation, in
contravention of 18 U.S.C. S 513.
On May 10, 1996, Rizzo entered a plea of guilty to
all three counts. Following Rizzo's plea, the United States
Probation Officer prepared a Presentence Report, which
recommended an adjusted offense level of sixteen for Rizzo's
participation in the counterfeit check scheme. The base
offense level under U.S.S.G. S 2F1.1 was six and the Report
suggested several enhancements. First, the Report recommended
an eight-level increase because the intended loss from the
scheme exceeded $200,000.00. See U.S.S.G. S 2F1.1(b)(1)(I).
The Presentence Report calculated the amount of loss under
1. On December 14, 1993, Savarese was convicted and sentenced
to sixty-three months imprisonment. Savarese's conviction and
sentence reflected his involvement in the negotiation of the
Hasbro check.
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U.S.S.G. S 2F1.1 by using the actual loss of $160,000.00 from
the Hasbro check and adding the intended loss of $113,950.00,
representing the total of the four other checks involved in the
scheme. The next suggested enhancement entailed a two-level
increase, which reflected the fact that the offense involved
more than minimal planning. See U.S.S.G. S 2F1.1(b)(2)(A).
Finally, the Presentence Report recommended a three-level
increase because Rizzo committed the offense while awaiting
sentencing on a 1992 federal conviction. See U.S.S.G. S 2J1.7.
The Presentence Report recommended reducing the resulting
offense level of nineteen to sixteen because Rizzo demonstrated
acceptance of responsibility. See U.S.S.G. S 3E1.1(a),(b)(2).
The Presentence Report computed Rizzo's criminal
history category as a IV. This computation included Rizzo's
1992 federal conviction for negotiating counterfeit checks and
using stolen credit cards and false identification, for which
he had been sentenced to thirty-three months' imprisonment on
September 17, 1992. Rizzo completed the sentence on February
3, 1995, at which time he began a period of supervised release.
Rizzo's criminal history computation also reflected a 1989
conviction in Charlestown District Court for possession of a
firearm without proper identification.
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Rizzo filed numerous objections to the Presentence
Report. Of importance for purposes of this appeal, Rizzo
argued for a downward departure, asserting that his case fell
outside the heartland of the Guidelines because he was unable
to request concurrent federal sentences due to the fact that
the thirty-three month sentence imposed in September 1992 had
been discharged by the time he was indicted in this case. In
support of this assertion, Rizzo advanced two arguments:
first, he contended that the government purposefully delayed
the indictment in the instant case until after he completed his
thirty-three month sentence for his 1992 conviction in order to
circumvent U.S.S.G. S 5G1.3(c); second, he claimed that the
government was aware of the instant counterfeit check offenses
when he was sentenced in September 1992 for his prior crimes,
but improperly failed to inform the district court of the new
offenses at the 1992 sentencing so that the sentencing judge
could consider them as relevant conduct. According to Rizzo,
if the government properly had informed the court of the
relevant conduct involving this case, the court then "would
have combined the two cases." If the court had combined the
two cases, this process would have "result[ed] in a level 20
2. Rizzo lodged a total of nine objections to the Presentence
Report. We discuss only those arguments which bear upon the
subject matter of this appeal.
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for the combined cases." A level twenty carries a sentencing
range of thirty-seven to forty-six months, which is at least
twenty-four and potentially thirty-three months shorter than
the total of seventy months Rizzo received on the two separate
indictments.
Also of importance for purposes of this appeal, Rizzo
insisted that he should not have been subject to an eight-level
increase reflecting the intended loss. According to Rizzo, the
$273,950.00 of counterfeit checks involved in the scheme were
"generated through a government sting operation," and, thus,
"no loss was capable of occurring as a matter of law."
On July 19, 1996, following an hour-long sentencing
hearing at which Rizzo voiced his objections to the Presentence
Report, the district court (Gorton, J.) accepted the
recommendations contained in the Report and declined to depart
downward from the suggested adjusted offense level of sixteen.
The district court sentenced Rizzo to thirty-seven months'
imprisonment and three years of supervised release. Thirty-
three months of the imprisonment term were to run concurrently
3. Given our disposition of this appeal, we need not recite
the process Rizzo set forth to arrive at a total offense level
of twenty.
4. An offense level of sixteen permits the sentencing judge to
sentence the defendant to a period of incarceration ranging
from thirty-three months to forty-one months. The sentence
that Judge Gorton imposed in this case (thirty-seven months)
thus falls precisely in the middle of the possible
incarceration terms Rizzo faced at sentencing.
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on counts one, two, and three, and four months of the term were
to run consecutively, pursuant to 18 U.S.C. S 3147. The
district court also ordered Rizzo to pay $12,500 in
restitution.
Standard of Review
"[O]ur review of the legal conclusions and factual
determinations underlying the district court's departure
decision [is] . . . conducted under a unitary abuse-of-
discretion standard." United States v. Cali, 87 F.3d 571, 580
(1st Cir. 1996). "Abuse of discretion review necessarily
'includes review to determine that the [district court's
exercise of] discretion was not guided by erroneous legal
conclusions.'" Id. (quoting Koon v. United States , 116 S. Ct.
2035, 2045 (1996)). When the issue is whether or not the
district court believed it had authority to depart, we have
held that "[w]hat the district court thought was the scope of
its authority [to depart from the guidelines] is perhaps a
question of fact, but it is one that we must answer ourselves,
by reviewing the sentencing transcript. Whether the district
court's belief was mistaken is plainly a legal question that we
5. 18 U.S.C. S 3147 concerns "person[s] convicted of an
offense committed while released pursuant to this chapter," and
provides that "[a] term of imprisonment imposed pursuant to
this section shall be consecutive to any other sentence of
imprisonment." As noted above, at the time Rizzo committed the
crimes underlying this appeal, he was on release awaiting
sentencing for his 1992 conviction.
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review de novo." United States v. Saldana, 109 F.3d 100, 103
(1st Cir. 1997).
"Appellate review of a district court's application
of the Guidelines is a two-part process. We first determine
the applicability of the guideline to a particular case de
novo. After determining the guideline's scope and meaning, we
review the district court's factual determinations for clear
error, 'giv[ing] due deference to the district court's
application of the guidelines to the facts.'" Cali, 87 F.3d at
575 (internal citations omitted) (quoting United States v.
Joyce, 70 F.3d 679, 681 (1st Cir. 1995), cert. denied, 116 S.
Ct. 1556 (1996)).
Discussion
On appeal, Rizzo advances two arguments that he
raised both in his objections to the Presentence Report and
during his sentencing hearing. First, he contends that the
district court erred when it denied his request for a downward
departure pursuant to U.S.S.G. S 5K2.0 and U.S.S.G. S 5G1.3(c)
6. U.S.S.G. S 5K2.0 provides in pertinent part: "Under 18
U.S.C. S 3553(b) the sentencing court may impose a sentence
outside the range established by the applicable guideline, if
the court finds 'that there exists an aggravating or mitigating
circumstance of a kind, or to a degree, not adequately taken
into consideration by the Sentencing Commission in formulating
the guidelines that should result in a sentence different from
that described.'"
7. U.S.S.G. S 5G1.3(c) states: "(Policy Statement) In any
other case, the sentence for the instant offense may be imposed
to run concurrently, partially concurrently, or consecutively
to the prior undischarged term of imprisonment to achieve a
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because "the record in the instant case fails to reveal whether
the court understood that the present case fell outside of the
guideline's heartland and that it had the discretion to depart
downward." Second, Rizzo insists that the district court
arrived at an incorrect adjusted offense level because it
misapplied U.S.S.G. S 2F1.1 in calculating the loss
attributable to him. We address Rizzo's arguments in turn.
A. Downward Departure
As we previously have stated, "a criminal defendant
cannot ground an appeal on the sentencing court's discretionary
decision not to depart below the GSR. . . . [A]ppellate
jurisdiction[, however,] may attach if it appears that the
failure to depart stemmed from the sentencing court's mistaken
impression that it lacked the legal authority to deviate from
reasonable punishment of the instant offense." Rizzo bases
much of his argument on a snippet of commentary to this section
stating "[d]eparture would be warranted when independent
prosecutions produce anomalous results that circumvent or
defeat the intent of the guidelines." This commentary,
however, was deleted from the Guidelines in 1989. Because
Rizzo was sentenced in 1996, the November 1995 Guidelines apply
to this case. See United States v. DiSanto, 86 F.3d 1238, 1254
n.26 (1st Cir. 1996), cert. denied, 117 S. Ct. 1109 (1997);
United States v. Springer, 28 F.3d 236, 237 (1st Cir. 1994).
Moreover, there is no ex post facto problem because S 5G1.3(c)
did not change after Rizzo committed the offenses underlying
this appeal. See United States v. Aymelek, 926 F.2d 64, 66 n.1
(1st Cir. 1991).
8. U.S.S.G. S 2F1.1(b)(1) concerns increases to the base
offense level of six applicable to offenses involving fraud or
deceit and necessitates increases to this base offense level
depending on the amount of loss resulting from the fraud or
deceit.
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the guideline range." United States v. Gifford, 17 F.3d 462,
473 (1st Cir. 1994). Rizzo asserts both that the district
court believed that it lacked the legal authority to depart and
that the court's belief was mistaken. The record reveals
little to buttress his assertion that the district court
believed it lacked authority to depart downward. To support
his assertion that the district court was mistaken, Rizzo
contends that a court may depart downward pursuant to U.S.S.G.
S 5G1.3(c) and U.S.S.G. S 5K2.0 when the government delays an
indictment until after a defendant completes a previous federal
sentence or when the government "had full knowledge of the
facts and circumstances related to the instant case prior to
the sentencing in that previous case" but failed to apprise the
court of such facts and circumstances.
9. Specifically, Rizzo points to the following question that
the district court asked during the sentencing hearing as
evidence that the court believed it lacked authority to depart:
"Do you have any law, statutory or otherwise in this regard,
that requires the government to call such relevant conduct to
the attention of the sentencing court?" Rizzo's counsel then
directed the court to a section of the commentary to U.S.S.G.
S 5G1.3 that was deleted in 1989: "[A] departure would be
warranted when independent prosecutions produce anomalous
results that circumvent or defeat the intent of the
guidelines." See supra note 7. The court then responded by
questioning Rizzo's counsel about this commentary: "It ought
to be in the guideline manual, shouldn't it?" The court
ultimately denied Rizzo's request for a downward departure,
stating: "To the extent that this is in support of a motion
for a downward departure, that motion is denied." From this
interchange, Rizzo concludes that the district court did not
think that it possessed the authority to depart downward.
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"We are obliged to review a trial court's actions as
they are made manifest in the record." United States v.
Tavano, 12 F.3d 301, 304 (1st Cir. 1993); see United States v.
Morrison, 46 F.3d 127, 130 (1st Cir. 1995) ("When determining
whether the sentencing court merely refused to exercise its
discretionary power to depart, we consider the totality of the
record and the sentencing court's actions as reflected
therein."). The record in this case does not support Rizzo's
claim that the district court believed it lacked authority to
depart downward.
Rizzo, both in his objections to the Presentence
Report and during his sentencing hearing, clearly enunciated
his position that his case fell outside the heartland of the
guidelines and thus warranted a downward departure pursuant to
U.S.S.G. S 5K2.0 and U.S.S.G. S 5G1.3. During the sentencing
hearing, for instance, Rizzo's counsel explained that "[a]ll of
this is, even the reference to . . . 5G.3 is in reference to a
downward departure. . . . And, again, I think, because of the
facts, it does take it out of the heartland of the guidelines."
During the course of the sentencing hearing, the district
court questioned Rizzo's counsel concerning this argument. The
court repeatedly manifested its understanding of Rizzo's
argument, initially stating: "you argue that under Sections
5G1.3 and 5G1.2, pertaining to the sentencing on multiple
counts of conviction, that the present offense should run
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concurrently with Mr. Rizzo's prior offense. Is that basically
it?" Later in the discussion, the court asked Rizzo's counsel,
"Do you have any law, statutory or otherwise, that will guide
the Court in this regard, that requires the government to call
such relevant conduct to the attention of the sentencing
court?" After Rizzo's counsel presented his argument and the
district court subjected him to questioning, the government
responded to Rizzo's argument at length during the sentencing
hearing. After listening to both parties on the subject of a
downward departure pursuant to U.S.S.G. S 5K2.0 and U.S.S.G. S
5G1.3, the district court ruled: "To the extent that that is
in support of a motion for a downward departure, that motion is
denied."
"[I]f a district court desired to depart but thought
this course forbidden by explicit guideline language, one would
expect the court to cast its refusal in these terms." United
States v. DeCosta, 37 F.3d 5, 8 (1st Cir. 1994); see United
States v. Grandmaison, 77 F.3d 555, 565 (1st Cir. 1996)
(indicating that if the record is ambiguous concerning the
district court's awareness of its discretion to depart
downward, "that ambiguity, without more, would not be enough to
make the district court's refusal to depart appealable"). In
this case, unlike in DeCosta, the district court made
absolutely no remark that could be construed to indicate that
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it thought it lacked the authority under the guidelines to
depart downward.
[W]e have suggested that a sentencing
court state, where appropriate, "that it
has considered the mitigating factors
urged but does not find them sufficiently
unusual to warrant a departure in the case
at hand." If a sentencing court neglects
to use such language, however, the
sentencing decision is not necessarily
ripe for remand or review. Sentencing
courts have had abundant opportunity to
become experienced with the Guidelines and
familiar with their authority to make
discretionary decisions regarding whether
to depart.
Morrison, 46 F.3d at 132 (internal citations and footnote
omitted) (emphasis added) (quoting ( DeCosta, 37 F.3d at 8). As
in Morrison, "viewed in harmony with its context, the [district
court's decision not to] depart[] reflects no misapprehension
on the part of the district court as to its departure power,
but simply its decision not to exercise that power in the
present case." Id. at 132-33; see United States v. DiIorio,
948 F.2d 1, 9 (1st Cir. 1991) ("[W]e think it apparent from
this record that the court understood its authority to depart
downward[], and yet concluded . . . that the specific
provisions of the Guideline that DiIorio wished to invoke
simply did not permit departure under the circumstances of her
case.").
10. While we do not believe the record supports Rizzo's
contention that the district court did not understand that it
had authority to depart downward in this case, we note that the
district court could have avoided much trouble in this case if
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Because we find that the record contains no evidence
that the district court believed it lacked authority to depart
downward in this case, we pause only briefly to address Rizzo's
arguments supporting his plea for such a departure. Initially,
we note that with respect to his contention that U.S.S.G. S
5G1.3 provided authority for the district court to depart
downward, S 5G1.3 applies only to "undischarged terms of
imprisonment." See United States v. McHan, 101 F.3d 1027, 1040
(4th Cir. 1996), cert. denied, No. 96-8994, 1997 WL 275967
(June 16, 1997); Prewitt v. United States , 83 F.3d 812, 817-18
(7th Cir. 1996). In this case, Rizzo had discharged the
thirty-three month term of imprisonment resulting from his 1992
convictions prior to being sentenced for his 1995 federal
indictment.
Similarly, Rizzo's argument that the government
improperly delayed indicting Rizzo until he served his thirty-
three month term of imprisonment for the 1992 convictions is
unavailing in light of United States v. Saldana, 109 F.3d 100,
104 (1st Cir. 1997). In Saldana, a federal grand jury indicted
the appellant following his release after serving twenty months
of a thirty-month state sentence. The federal grand jury
it had heeded the suggestions of DeCosta and Morrison. See
DeCosta, 37 F.3d at 8 (suggesting that the "district court
say--where this is the case--that it has considered the
mitigating factors urged but does not find them sufficiently
unusual to warrant a departure in the case at hand"); Morrison,
46 F.3d at 132 (same).
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indicted the appellant based on conduct that occurred
approximately two years previously, prior to his conviction and
sentencing in the state case. The district court sentenced the
appellant to seventy months' imprisonment. See id. at 102.
The appellant claimed, inter alia, that "if he had
been charged with the federal offense while still serving his
state sentence, the federal sentence would, under U.S.S.G. S
5G1.3(c), have been set to run concurrently with the state
sentence." Id. In Saldana, we reasoned that "deliberate
tampering to increase a sentence would be a concern, but the
ordinary accidents of acceleration or delay are part of the
fabric of criminal proceedings." Id. at 104. Affirming
appellant's sentence, we held that "in the present case, the
delay was neither extreme nor implicitly sinister." Id.
As in Saldana, nothing in the record indicates that
the delay in this case was sinister. Rizzo indicated that he
possessed no evidence concerning the government's motive in
waiting to indict him until 1995. During the sentencing
hearing, in fact, Rizzo's counsel conceded "I'm not pointing
the finger at the government in terms of its conduct."
Furthermore, in light of the precedent in this circuit, we do
not believe that the delay in this case was "extreme." See
Saldana, 109 F.3d at 102-04 (involving two-year delay); United
States v. McCoy, 977 F.2d 706, 711 (1st Cir. 1992) (finding no
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due process violation in case of three and one-half year delay
between conduct at issue and return of federal indictment).
Rizzo's contention that the government knew of the
facts of the offenses underlying this appeal at the time of his
1992 sentencing and improperly withheld this information from
the sentencing court also is unpersuasive. We previously have
explained:
Undercover operations comprise a valuable,
and generally lawful, weapon in the
government's ar[senal]. Thus, courts
should proceed with caution in staking out
rules that will hinder government agents
who seek lawfully to set such ruses in
motion. "Despite the fact that undercover
operations by their nature involve
elements of furtiveness, duplicity, and
manipulation, we have never held that such
initiatives are per se unfair. To the
contrary, we think that the Executive
Branch is free, within broad limits, to
set such snares for unwary criminals."
United States v. Gibbens, 25 F.3d 28, 31 (1st Cir. 1994)
(internal citations omitted) (emphasis added) (quoting United
States v. Gifford, 17 F.3d 462, 470-71 (1st Cir. 1994)). Given
the wide latitude we afford the government in conducting sting
operations, "the burden of showing sentencing factor
manipulation [necessarily] rests with the defendant. As with
other fact-sensitive sentencing issues, the burden of proof
must be carried by a preponderance of the evidence." Gibbens,
11. Particularly in light of Rizzo's failure to provide an
adequate explanation, we agree with the government that Rizzo's
non-disclosure argument essentially constitutes an accusation
of sentencing factor manipulation on the part of the
-18- 18
25 F.3d at 31-32 (internal citations omitted); see United
States v. Montoya, 62 F.3d 1, 4 (1st Cir. 1995) (indicating
that the "standard is very high" and cautioning that "garden
variety manipulation claims are largely a waste of time").
In this case, Rizzo offered no evidence whatsoever of
any bad faith on the government's behalf. During Rizzo's
sentencing hearing, his counsel explicitly stated that he did
not have evidence concerning the government's motive in
protecting the information pertaining to Rizzo's "relevant
conduct" during the 1992 sentencing. At one point, Rizzo's
counsel admitted: "I can't probe into the minds of the
government at the time." Later in the hearing, Rizzo's counsel
explained: "[W]e can't speculate about whatever the reasons
were for the government not raising it at that time."
Rizzo also failed to direct the district court (and
now fails to point this court) to any authority requiring the
government to "call such relevant conduct to the attention of
the sentencing court." For its part, the government explained
that it did not reveal Rizzo's "relevant conduct" to the 1992
government. See United States v. Montoya, 62 F.3d 1, 4 (1st
Cir. 1995) (indicating that sentencing factor manipulation
encompasses "vast range of circumstances"); United States v.
Connell, 960 F.2d 191, 196 n.8 (1st Cir. 1992) ("Governmental
misconduct that shapes the contours of the crime and thus
delimits the available sentencing options . . . can, in a
suitable case, furnish the basis for downward departure."); see
also United States v. Okey, 47 F.3d 238, 240 (7th Cir. 1995)
("Sentencing manipulation occurs when the government engages in
improper conduct that has the effect of increasing a
defendant's sentence.").
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sentencing court because it "had a specific investigative plan
. . . to move from Mr. Rizzo to . . . find out who the
participants were in this counterfeit check ring who were
spreading [fraudulent] paper all throughout the city." This
explanation is plausible given the record in this case and
particularly Rizzo's numerous references to others in the
scheme to whom he was responsible. See Gibbens, 25 F.3d at 31
(crediting government's explanation that it "was hoping, based
on appellant's allusions to a supposed business partner, to
land a bigger fish"). We thus find that the district court did
not commit an abuse of discretion in refusing to depart
downward on the grounds that the government somehow manipulated
Rizzo's 1992 sentence; Rizzo simply failed to carry his burden
of proof with respect to his allegation of sentencing factor
manipulation. See id. at 32; Montoya, 62 F.3d at 4.
B. Loss Calculation
The district court sentenced Rizzo based on the total
$273,950.00 value of the five counterfeit checks given to
Savarese in 1992. Pursuant to U.S.S.G. S 2F1.1(B)(1)(I), the
district court increased Rizzo's base offense level of six by
eight levels because the loss involved in the scheme fell
between $200,000.00 and $350,000.00.
Rizzo objected to the eight-level increase both in
his objections to the Presentence Report and during his
sentencing hearing. Rizzo argued that the $273,950.00 was
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generated through a government sting operation. Distorting the
record, Rizzo asserted that "all the checks were deposited into
the government's shell corporation . . . . Therefore, Mr.
Rizzo's guidelines should not be increased by 2F1.1(b)(1) as no
loss was capable of occurring as a matter of law." Perhaps
recognizing the flaw in his earlier assertion, on appeal Rizzo
alters his argument slightly, insisting that he "should only
have been responsible for at most $160,000 under S 2F1.1 since
the other amounts were incapable of being lost and/or had not
been completed as a substantive offense." Because a loss
calculation of $160,000.00 necessitates a seven-level increase
pursuant to U.S.S.G. S 2F1.1(b)(1)(H), rather than an eight-
level increase pursuant to U.S.S.G. S 2F1.1(b)(1)(I), Rizzo
maintained that his "total offense level should have been 15
instead of 16."
Rizzo rests his argument that actual rather than
intended loss represents the appropriate calculation for
purposes of U.S.S.G. S 2F1.1(b)(1) on two cases, United States
v. Galbraith, 20 F.3d 1054 (10th Cir.), cert. denied, 513 U.S.
889 (1994), and United States v. Watkins, 994 F.2d 1192 (6th
Cir. 1992). In Galbraith, the appellant contended that
"because his offense was committed in response to an undercover
sting operation structured so there was no possibility of loss
to a victim, the intended or probable loss was zero."
Galbraith, 20 F.3d at 1059. Reasoning that "[b]ecause this was
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an undercover sting operation which was structured to sell
stock to a pension fund that did not exist, defendant could not
have occasioned any loss even if the scheme had been
completed," the Tenth Circuit ruled that the applicable loss
calculation for purposes of U.S.S.G. S 2F1.1(b)(1) was zero.
Id.
The Galbraith court's rationale is inapplicable to
this case. Unlike the fictitious victim in Galbraith, the
intended victims of Rizzo's counterfeit check scheme were
actual corporations. Moreover, the fact that the conspirators
managed to deposit the first check and then to withdraw the
entire $160,000.00 demonstrates that Rizzo could have
"occasioned" a loss "if the scheme had been completed" with
respect to the remaining four checks. If, for instance,
Savarese again had determined to flout the FBI's instructions,
it appears that the conspirators could have successfully
negotiated the other checks totaling $113,950.00.
As with Galbraith, we find Watkins' treatment of the
appropriate loss calculation under U.S.S.G. S 2F1.1(b)(1)
unpersuasive in the context of Rizzo's appeal. In Watkins, the
Sixth Circuit enunciated three factors that must be present for
an amount of loss to be relevant under U.S.S.G. S 2F1.1:
"First, as application note 7 instructs, the defendant must
have intended the loss. Second, it must have been possible for
the defendant to cause the loss. Third, the defendant must
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have completed or been about to complete but for interruption,
all of the acts necessary to bring about the loss." Watkins,
994 F.2d at 1196. Contrary to Rizzo, we believe that these
three factors were satisfied in this case. First, as Rizzo
admits, he intended the $273,950.00 loss. Second, the
conspirators' success with the $160,000.00 check demonstrates
that it was possible for the defendant to cause the loss.
Third, Rizzo provided Savarese with five checks totalling
$273,950.00 and urged him to deposit these checks and then to
remove the funds from the Thermal Shield account, thus
"complet[ing] . . . but for interruption, all of the acts
necessary to bring about the loss." We therefore find that
even if the Watkins factors were dispositive of this appeal,
the circumstances of this case were such that $273,950.00, not
$160,000.00, would represent the proper figure for purposes of
calculating loss pursuant to U.S.S.G. S 2F1.1(b)(1).
Because Watkins does not guide our analysis of this
issue, we add a few words about our interpretation of U.S.S.G.
S 2F1.1(b)(1). Application Note 7 to U.S.S.G. S 2F1.1 states
in pertinent part: "Consistent with the provisions of S 2X1.1
(Attempt, Solicitation or Conspiracy), if an intended loss that
the defendant was attempting to inflict can be determined, this
figure will be used if it is greater than the actual loss." In
this case, Rizzo admits that he intended to inflict $273,950.00
of loss. According to Application Note 7, therefore,
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$273,950.00 represents the appropriate amount for purposes of
calculating loss under U.S.S.G. S 2F1.1 in this case.
In United States v. Egemonye, 62 F.3d 425, 428-29
(1st Cir. 1995), furthermore, we addressed the issue of
intended loss in the context of U.S.S.G. S 2F1.1. The Egemonye
appellant was charged with conspiracy and other offenses
relating to the possession and use of stolen credit cards. See
id. at 426. Pursuant to U.S.S.G. S 2F1.1(b)(1)(H), the
district court computed the loss at $242,950.00, "representing
the aggregate credit limit of the 51 credit cards purchased .
. . in the four transactions," despite the fact that the
appellant never inflicted any actual loss with many of the
stolen credit cards that he purchased. Id. at 426-27. As in
the instant case, the appellant was sentenced within the
guidelines range to thirty-seven months' imprisonment. See id.
at 427. Rejecting the appellant's argument that the district
court's loss calculation based on the limits of all of the
credit cards was "unrealistic," we concluded that on the
"record the use of the aggregate card limits as a measure of
intended and potential loss was [not] clearly erroneous." Id.
at 429. We explained that "[w]here there is good evidence of
actual intent and some prospect of success, we do not think
that a court needs to engage in more refined forecasts of just
how successful the scheme was likely to be." Id.
-24- 24
Given the evidence of Rizzo's intent and the prospect
of future success manifested by his initial success with the
$160,000.00 check, we do not find that the district court's use
of the $273,950.00 figure for purposes of calculating loss
under U.S.S.G. S 2F1.1(b)(1) was clearly erroneous. See United
States v. Carrington, 96 F.3d 1, 7 (1st Cir. 1996), cert.
denied, 117 S. Ct. 1328 (1997); Egemonye, 62 F.3d at 429.
Conclusion
For the reasons stated above, we affirm the sentence
that the district court imposed.
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Document Info
Docket Number： 96-2002
Filed Date： 8/11/1997
Precedential Status： Precedential
Modified Date： 3/3/2016