United States v. Hensley ( 1996 )


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  • USCA1 Opinion








    UNITED STATES COURT OF APPEALS
    FOR THE FIRST CIRCUIT

    ____________________

    No. 96-1110

    UNITED STATES OF AMERICA,

    Appellee,

    v.

    SCOTT A. HENSLEY,

    Defendant, Appellant.

    ____________________


    APPEAL FROM THE UNITED STATES DISTRICT COURT

    FOR THE DISTRICT OF MASSACHUSETTS

    [Hon. Douglas P. Woodlock, U.S. District Judge] ___________________

    ____________________

    Before

    Torruella, Chief Judge, ___________

    Cyr and Lynch, Circuit Judges. ______________


    ____________________



    Miriam Conrad, with whom Federal Defender Office was on brief for _____________ _______________________
    appellant.
    Annette Forde, Assistant United States Attorney, with whom Donald _____________ ______
    K. Stern, United States Attorney, was on brief for appellee. ________


    ____________________

    August 5, 1996
    ____________________

















    CYR, Circuit Judge. Defendant Scott Allen Hensley CYR, Circuit Judge ______________

    challenges the restitutionary sentence imposed upon him by the

    district court, thus presenting this court with its first occa-

    sion to interpret and apply the 1990 amendments to the Victim and

    Witness Protection Act ("VWPA"), 18 U.S.C. 3663-64 (1994).

    Finding no error, we affirm the district court judgment.


    I I

    BACKGROUND BACKGROUND __________

    After a federal grand jury indicted him for, among

    other things, devising and executing a scheme to obtain merchan-

    dise under false pretenses from various computer-products dis-

    tributors across the country, Hensley pled guilty to all counts,

    thereby conceding the following facts as alleged in the indict-

    ment.1

    On April 1, 1995, under the alias "Robert Halford,"

    Hensley rented a box at Mail Boxes, Etc. ("MBE"), 510 Common-

    wealth Avenue, Boston, Massachusetts. On April 14, he telephoned

    companies in California, New York, Texas, and New Jersey, and

    using the name "Halford," placed orders for computer equipment in

    behalf of a fictitious company, American Telemark, purportedly a

    division of AT&T, for delivery to the MBE address in Boston.

    Hensley remitted five forged checks via Federal Express, in

    ____________________

    1The charges included mail fraud, 18 U.S.C. 1341 (1994);
    wire fraud, id. 1343; making or possessing counterfeit securi- ___
    ties, id. 513; interstate transportation of counterfeit securi- ___
    ties, id. 2314; and receipt of stolen goods transported in ___
    interstate commerce, id. 2315. ___

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    amounts ranging from $20,000 to $31,000 and bearing the AT&T

    logo. Once the computer equipment arrived, Hensley used the

    alias "William Noonan" to rent storage space and a U-Haul truck

    to transport the equipment. On his next visit to the MBE,

    Hensley was arrested by the FBI.

    After Hensley pled guilty and before sentencing, the

    government learned that he had committed additional fraudulent

    acts during the same time period. According to the undisputed __________

    facts set forth in the presentence report ("PSR"), see United ___ ______

    States v. Benjamin, 30 F.3d 196, 197 (1st Cir. 1994) (failing to ______ ________

    object bars appellate challenge to facts stated in PSR), on March

    30, 1995, Hensley had used the "William Noonan" alias to rent a

    second box at another MBE location, on Newbury Street in Boston.

    On April 3, "Noonan" placed an $837.86 telephone order for

    computer software with Creative Computers, a California company,

    for delivery to the Newbury Street MBE. He tendered a counter-

    feit money order drawn on a Boston Check Cashiers ("BCC") company

    account, which was dishonored after he absconded with the Cre-

    ative Computers software. Hensley issued three more counterfeit

    BCC money orders in payment for another computer order placed

    with ATS Technologies ("ATS"), a credit card bill, and a car

    rental.

    Although the charged conduct resulted in no actual

    losses because the equipment was recovered, the PSR recommended

    that Hensley reimburse the car rental company ($500.00), the

    credit card company ($725.00), Creative Computers ($837.86), and


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    ATS ($1,026.12), each of which had accepted a counterfeit BCC

    money order. Hensley objected that the four companies were not

    victims of the offense of conviction as the indictment did not

    charge him with passing the counterfeit money orders. Following

    briefing and oral argument, the district court found that ATS had

    sustained no loss, and that neither the credit card bill nor the

    car rental came within the scope of the offense of conviction.

    The court nonetheless ruled that the Creative Computers acquisi-

    tion was within the alleged scheme to defraud. The court accord-

    ingly directed Hensley to make restitution to Creative Computers,

    and Hensley appealed.

    II II

    DISCUSSION DISCUSSION __________

    Federal courts possess no inherent authority to order

    restitution, and may do so only as explicitly empowered by stat-

    ute. United States v. Gilberg, 75 F.3d 15, 22 (1st Cir. 1996). _____________ _______

    The VWPA authorizes restitutionary sentences by the district

    courts for the benefit of victims of federal offenses. As

    Hensley's criminal conduct and conviction occurred after November

    29, 1990, the effective date of the Crime Control Act of 1990,

    the 1990 VWPA amendments govern our decision.2

    The VWPA provides that "[t]he court . . . may order . .

    . restitution to any victim of such offense." 18 U.S.C. ___ ______ __ ____ _______

    ____________________

    2Gilberg, 75 F.3d at 20-22. Moreover, the Sentencing Guide- _______
    lines do not purport to expand the sentencing court's authority
    to order restitution. U.S.S.G. 5E1.1(a)(1) (1995) (incorporat-
    ing the VWPA).

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    3663(a)(1) (emphasis added). Prior to the 1990 amendments, the

    VWPA had been interpreted by the Supreme Court as limiting resti-

    tution to the "loss caused by the specific conduct that [was] the ________ _______

    basis of the offense of conviction." Hughey v. United States, ______ _____________

    495 U.S. 411, 413 (1990) (emphasis added). The Hughey Court ______

    therefore reversed a restitutionary sentence which had been based

    on the total loss attributable to all counts in an indictment ___

    charging unauthorized use of credit cards and theft by a Postal

    Service employee, rather than on the loss attributable to the one

    count to which Hughey had pled guilty. Id. at 422. ___

    After Hughey, this court held that the specific conduct ______ ________ _______

    underlying a mail fraud conviction, which requires proof of a

    broader scheme to defraud, includes only the particular mailing

    charged and not the entire mail fraud scheme. United States v. _____________

    Cronin, 990 F.2d 663, 666 (1st Cir. 1993); accord United States ______ ______ _____________

    v. Newman, 49 F.3d 1, 11 (1st Cir. 1995) (wire fraud). Thus, we ______

    adopted the more narrow and lenient majority view during the

    interim preceding the 1990 amendments to the VWPA. Cronin, 990 ______

    F.2d at 666.

    The present controversy requires us to reexamine Cronin ______

    in light of the 1990 amendments. Consistent with the minority

    view we rejected in Cronin, in 1990 Congress amended the VWPA to ______

    provide that "a victim of an offense that involves as an element _ ______ __ __ _______ ____ ________ __ __ _______

    a scheme, a conspiracy, or a pattern of criminal activity means _ ______ _____

    any person directly harmed by the defendant's criminal conduct in ___ ______ ________ ______ __ ___ ___________ ________ _______ __

    the course of the scheme, conspiracy, or pattern." 18 U.S.C. ___ ______ __ ___ ______


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    3663(a)(2) (emphasis added). As Hensley concedes that a scheme

    to defraud is an element of the mail and wire fraud offenses to

    which he pled guilty, see United States v. Sawyer, 85 F.3d 713, ___ ______ ______ ______

    723 (1st Cir. 1996), the district court correctly applied VWPA

    3663(a)(2) in this case. Compare United States v. Reed, 80 F.3d _______ ______________ ____

    1419, 1423 (9th Cir. 1996) ("felon in possession" offense does

    not require proof of scheme).

    Under current VWPA 3663(a)(2), the district court may

    order restitution to every victim directly harmed by the

    defendant's conduct "in the course of the scheme, conspiracy, or

    pattern of criminal activity" that is an element of the offense

    of conviction, without regard to whether the particular criminal __________ ________

    conduct of the defendant which directly harmed the victim was _______

    alleged in a count to which the defendant pled guilty, or was

    even charged in the indictment. United States v. Henoud, 81 F.3d _____________ ______

    484, 488 (4th Cir. 1996) (unnamed victim); United States v. ______________

    Kones, 77 F.3d 66, 70 (3d Cir. 1996) (providing example); United _____ ______

    States v. Pepper, 51 F.3d 469, 473 (5th Cir. 1995). Thus, the ______ ______

    outer limits of a VWPA 3663(a)(2) restitution order encompass

    all direct harm from the criminal conduct of the defendant which

    was within any scheme, conspiracy, or pattern of activity that

    was an element of any offense of conviction. See Kones, 77 F.3d ___ _____

    at 70 (discussing causation requirement).

    Although Hensley acknowledges the expansiveness of the

    1990 amendments, he contends that the fraudulent order placed

    with Creative Computers was not within the same scheme embraced


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    by the offense to which he pled guilty. We approach this claim

    by examining the terms of the indictment and the plea agreement.

    Henoud, 81 F.3d at 488. For the most part, courts require that ______

    the indictment "specifically" define the scheme in order to

    ensure that the restitutionary amount not exceed the harm direct-

    ly caused the victim of the scheme embraced by the offense of

    conviction, id.; see also United States v. Bennett, 943 F.2d 738, ___ ___ ____ _____________ _______

    741 (7th Cir. 1991) (noting amorphous nature of "scheme" con-

    cept), cert. denied, 504 U.S. 987 (1992). Nevertheless, the _____ ______

    courts of appeals consistently have upheld restitutionary sen-

    tences based simply on evidence sufficient to enable the sentenc-

    ing court to demarcate the scheme, including its "mechanics . .

    .[,] the location of the operation, the duration of the criminal

    activity, [and] the methods used" to effect it. Henoud, 81 F.3d ______

    at 489-90 n.11; Pepper, 51 F.3d at 473; United States v. Turino, ______ _____________ ______

    978 F.2d 315, 318-19 (7th Cir. 1992) (collecting cases), cert. _____

    denied, 508 U.S. 975 (1993). Hensley concedes that the ______

    indictment adequately defined the scheme, but faults the district

    court for focusing on the broad "boilerplate" language in the

    indictment, rather than the specific conduct alleged. We think

    the 1990 amendments to the VWPA and the relevant caselaw, see, ___

    e.g., Turino, 978 F.2d at 318-19 (discussing Seventh Circuit ____ ______

    cases), preclude so narrow a definition of the "scheme" element,

    which amounts to an attempt to revive the Hughey holding discard- ______

    ed by Congress in the 1990 VWPA amendments. See supra pp. 4-5. ___ _____

    Hensley pled guilty to an indictment alleging that he


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    devised and executed a scheme in Boston to obtain merchandise by

    false pretenses from specific computer-products distributors

    around the country, which extended roughly from April 1 to April

    25, 1995. Thus, the indictment adequately detailed the offense

    of conviction, as well as the underlying scheme to defraud, so as

    to enable the district court reliably to fashion a restitutionary

    sentence which fairly reimbursed any victim directly harmed by

    Hensley's criminal conduct during the course of the scheme

    involved in the offense of conviction.

    As a fallback position, Hensley claims that the Cre-

    ative Computers software purchase was not part of the scheme

    underlying the offense of conviction, even under the broad

    definition we now adopt. Restitution orders normally are re-

    viewed only for "abuse of discretion," Gilberg, 75 F.3d at 20, _______

    and their subsidiary factual findings only for "clear error."

    United States v. Savoie, 985 F.2d 612, 617 (1st Cir. 1993) ______________ ______

    (victim loss); United States v. Sarno, 73 F.3d 1470, 1503 (9th _____________ _____

    Cir. 1995), cert. denied, 116 S. Ct. 2553 (1996), and petition _____ ______ ___ ________

    for cert. filed, U.S.L.W. , (U.S. June 27, 1996) (No. 95- ___ _____ _____ __ ___

    9478).

    At the outset, we note that the cases on restitutionary

    sentences cast little light on how the sentencing court is to

    determine whether a criminal defendant's conduct was part of a

    unitary scheme. However, we agree with the government's sugges-

    tion, to which Hensley takes no exception, that it is useful to

    consult the analogous caselaw on duplicitous indictments and


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    variance of proof. See, e.g., United States v. Morse, 785 F.2d ___ ____ _____________ _____

    771, 774-75 (9th Cir.) (mail fraud), cert. denied, 476 U.S. 1186 _____ ______

    (1986). Thus, in determining whether particular criminal conduct

    comprised part of a unitary scheme to defraud, the sentencing

    court should consider the totality of the circumstances, includ-

    ing the nature of the scheme, the identity of its participants

    and victims, and any commonality in timing, goals, and modus

    operandi. Id. Accord United States v. Morrow, 39 F.3d 1228, ___ ______ _____________ ______

    1233-34 (1st Cir. 1994) (conspiracy), cert. denied, 115 S. Ct. _____ ______

    1328 (1995).3

    We do not agree that there were too many differences

    between the fraudulent acquisition from Creative Computers and

    the conduct alleged in the indictment to permit the district

    court to rule that the former acquisition came within any alleged

    unitary scheme to defraud. The undisputed evidence plainly

    supported the district court finding that Hensley launched the

    unitary scheme with the Creative Computers purchase, by renting

    the two drop boxes at MBE locations in Boston within two days of

    ____________________

    3We reject the assertion by Hensley that this interpretation
    permits restitution for "any loss caused by defendant's fraudu-
    lent conduct, no matter how unrelated to the specific scheme at
    issue." The district court finding that the counterfeit money
    orders Hensley used to "pay" a credit card bill and a car rental
    bill were not part of the scheme underlying the offense of
    conviction illustrates the limits upon a sentencing court's
    authority to order restitution under the 1990 VWPA amendments.
    Moreover, the criteria we endorse for determining whether various
    conduct comprised a single scheme serves as a guide to both the
    initial restitutionary sentencing decision and appellate review,
    and, in keeping with the amendatory statute, allows the sentenc-
    ing court substantial, though not unbridled, discretion to
    reimburse crime victims.

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    one another, placing all the fraudulent orders for goods with

    computer-products suppliers (similar victims) within less than

    two weeks, using interstate wires in each instance, and "paying"

    for the goods with counterfeit instruments. This abundance of

    proof on the commonality of the victims, timing, and modus

    operandi utterly precludes a finding of clear error. See Savoie, ___ ______

    985 F.2d at 617.

    III III

    CONCLUSION CONCLUSION __________

    As the district court correctly concluded that Creative

    Computers was a victim of the offense of conviction for purposes

    of the restitution statute, its $837.86 restitutionary sentence

    must be affirmed.

    AFFIRMED. AFFIRMED ________


























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