-
USCA1 Opinion
UNITED STATES COURT OF APPEALS UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT FOR THE FIRST CIRCUIT
____________________
No. 95-1586
UNITED STATES OF AMERICA,
Plaintiff, Appellee,
v.
GARY S. GILBERG,
Defendant, Appellant.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Douglas P. Woodlock, U.S. District Judge] ___________________
____________________
Selya, Cyr and Stahl,
Circuit Judges. ______________
____________________
Gary C. Crossen, with whom Toni G. Wolfman, Mark D. Rosen, Cindy _______________ _______________ ______________ _____
M. Lott and Foley, Hoag & Eliot were on brief for appellant. _______ ___________________
Wan J. Kim, Attorney, Department of Justice, with whom Donald K. __________ __________
Stern, United States Attorney, Mark D. Seltzer, Acting Director, New _____ _______________
England Bank Fraud Task Force, and James P. Gillis, Trial Attorney, ________________
New England Bank Fraud Task Force, were on brief for appellee.
____________________
January 31, 1996
____________________
CYR, Circuit Judge. Defendant Gary S. Gilberg chal- CYR, Circuit Judge. _____________
lenges several district court rulings relating to his trial and
sentencing for conspiring to make, and making, false statements
to financial institutions in order to procure mortgage loan
financing, see 18 U.S.C. 371 & 1014. We affirm all but the ___
restitutionary sentence.
I I
BACKGROUND BACKGROUND __________
During the 1980s, after borrowing almost $5 million
which he agreed to repay from future condominium sale proceeds,
Gilberg launched Chancery Court, a forty-unit condominium project
in Lynn, Massachusetts. Condominium sales did not proceed apace,
however, and Gilberg decided to lure prospective buyers by
promising to obtain 100% mortgage financing for them, obviating
the need for down payments. To this end, Gilberg would inflate
the purchase price stated on the sales agreement which he submit-
ted to the bank in support of the buyer's mortgage loan applica-
tion. A so-called "amended" sales agreement, containing the true
purchase price, would be retained in Gilberg's private files, and
the buyer was told not to mention the "amendment" to the bank.
On other occasions, Gilberg provided prospective buyers with
second mortgage financing, which he concealed from the first-
mortgage lenders by instructing his attorney not to record the
second mortgages, or to record them late. Gilberg attended each
loan closing, personally signing HUD-1 settlement statements
which he knew to contain false information. These means enabled
2
Gilberg to sell thirty-seven condominium units, which were
financed through various banks.
In August 1993, Gilberg was indicted in one count for
conspiring to make false statements on twenty-one loan applica-
tions to three FDIC-insured financial institutions, see 18 U.S.C. ___
371, and in thirteen counts for making false statements to
FDIC-insured institutions, see id. 1014. Several condominium ___ ___
buyers, as well as Gilberg's attorney, testified that Gilberg
originated and orchestrated the scheme. The jury convicted on
all counts and the district court sentenced Gilberg to thirty-six
months' imprisonment and ordered $3,635,000 in restitution.
II II
DISCUSSION DISCUSSION __________
A. The Trial Related Rulings A. The Trial Related Rulings _________________________
1. "Good faith" Jury Instruction 1. "Good faith" Jury Instruction ____________________________
Gilberg first contends that the final jury instruction
misdefined the mens rea element in 18 U.S.C. 1014, which ____ ___
criminalizes "knowingly mak[ing] any false statement or report . _________
. . for the purpose of influencing in any way the action of . . . ___ ___ _______ __ ___________
any [FDIC-insured bank] . . . upon any application, advance, . .
. commitment, or loan." (Emphasis added.) Gilberg argues that
section 1014 affords a "good faith" defense where the defendant
knew the statement or report contained false information but
acted without the "bad" purpose to influence the bank's actions.
He proffered evidence that he knew and believed, at the time of
the various loan applications, that the prevailing banking
3
practice was to approve or disapprove applications based solely ______
on the appraised value of the real property securing the loan,
rather than on whether the real estate sale itself involved price
"discounts" or secondary mortgage financing. Thus, Gilberg
argues, the district court hobbled his defense by instructing the
jury that "a defendant does not act in good faith even if he
honestly holds a particular opinion or belief and, yet, knowingly
makes false and fraudulent statements or misrepresentations."
Gilberg concededly raised no objection to the jury
instruction. See Fed. R. Crim. P. 51. Consequently, we review ___
for plain error, see Fed. R. Crim. P. 52(b), and may reverse only ___
if (i) the final jury instruction constituted error (ii) which
was or should have been "obvious" in the sense that the governing
law was clearly settled to the contrary, and (iii) appellant
proves that the error resulted in "prejudice," or in other words,
that it affected his substantial rights. See United States v. ___ ______________
Hurley, 63 F.3d 1, 9 (1st Cir. 1995) (citing United States v. ______ ______________
Olano, 113 S. Ct. 1770, 1777 (1993)). Even if these three _____
criteria are met, however, we do not "notice the error unless it
caused `a miscarriage of justice' or [seriously] undermined `the
integrity or public reputation of judicial proceedings.'" Id. ___
(citations omitted).
Though the statutory interpretation posited by Gilberg
is dubious at best, cf., e.g., United States v. Wilcox, 919 F.2d ___ ___ _____________ ______
109, 112 (9th Cir. 1990) ("The requisite intent [under 1014] is
the intent to influence an action, and nothing more."), we do not
4
reach the merits. Gilberg cites to no authority let alone to
a controlling United States Supreme Court or First Circuit
decision clearly holding that the "good faith" instruction
given below contained an erroneous statement of the mens rea ____ ___
requirement under section 1014. See Olano, 113 S. Ct. at 1777 ___ _____
("At a minimum, the Court of Appeals cannot correct an error __ _ _______
pursuant to Rule 52(b) unless the error is clear under current
law.") (emphasis added).1 Hence, any error in the challenged
instruction was neither "obvious," nor cognizable under Criminal
Rule 52(b).
2. Motion in Limine 2. Motion in Limine ________________
Gilberg next assigns error in the district court order
precluding evidence that the defrauded banks had relied exclu-
sively on property appraisals in determining whether to approve
loan applications, and not on the apparent absence of "discounts"
and second mortgage financing. He claims that this ruling
prejudiced him because the excluded evidence would have bolstered
his "good faith" defense. See supra Section II.A.1.2 ___ _____
____________________
1Morissette v. United States, 342 U.S. 246 (1952), and Cheek __________ _____________ _____
v. United States, 498 U.S. 192 (1991), are inapposite. Even if _____________
Gilberg's interpretation of the "purpose" clause in 1014 were
correct, he cannot seriously contend that the one clear mens rea ____ ___
element in 1014 "knowingly" communicating false statements _____
does not criminalize conduct a normal person readily would
recognize as culpable.
2We do not understand Gilberg to argue that the excluded
evidence was relevant to the discredited "complicity" defense,
namely, that any bank officials' knowing participation in the
scheme would exonerate Gilberg under 1014. See United States ___ _____________
v. Johnson, 585 F.2d 119, 124 (5th Cir. 1978) (rejecting complic- _______
ity defense, and noting that the "[t]he savings and loan's
awareness of the fraud is not relevant, for its existence is not
5
Once again we review for plain error, since Gilberg
first raised this claim on appeal. See Hurley, 63 F.3d at 9. As ___ ______
there was no plain error in rejecting the "good faith" defense
instruction, a fortiori there can have been no plain error in _ ________
excluding evidence offered in support. Furthermore, given
Gilberg's concession that a representative sampling of this "good
faith" evidence was admitted at trial, he has failed to demon-
strate "prejudice." Olano, 113 S. Ct. at 1778 (noting that, _____
unlike Rule 52(a), Rule 52(b) provides that "the defendant rather _________
than the Government . . . bears the burden of persuasion with
respect to prejudice") (emphasis added).
B. The Sentencing Rulings B. The Sentencing Rulings ______________________
1. Amount of Loss (U.S.S.G. 2F1.1) 1. Amount of Loss (U.S.S.G. 2F1.1) ________________________________
Gilberg contends that the district court committed
three errors in calculating the amount of loss under the then-
applicable version of U.S.S.G. 2F1.1, and that the combined
effect of its miscalculations ballooned the total loss from $1-2
million to the $2-5 million range, which in turn led the court to
make a ten-level (rather than a nine-level) upward adjustment in
____________________
inconsistent with the intent to influence which a violator of
1014 must possess"). Nor do we understand Gilberg to argue for
the similarly discredited "lack of reliance" defense, namely,
that his purpose to influence was immaterial because the banks __________
did not, in the end, actually rely on his false statements in
approving the loan applications. See United States v. Norberg, ___ _____________ _______
612 F.2d 1, 4 (1st Cir. 1979) (expressly rejecting such a de-
fense).
6
his base offense level of six.3
First, Gilberg argues that the loss calculation should
not have included $726,637 in accrued mortgage loan interest.
See U.S.S.G. 2F1.1, comment. (n.7) (excluding from the loss ___
calculation the "interest the victim could have earned"); United ______
States v. Hoyle, 33 F.3d 415, 419 (4th Cir. 1994). But the ______ _____
settled law in this circuit is to the contrary. See United ___ ______
States v. Goodchild, 25 F.3d 55, 66-67 (1st Cir. 1994) (holding ______ _________
that accrued finance charges on credit cards are not lost "oppor-
tunity costs," and may be included in amount of loss) (citing
United States v. Lowder, 5 F.3d 467, 471 (10th Cir. 1993)). ______________ ______
Gilberg's attempt to distinguish Goodchild is unavailing. As the _________
Goodchild panel's citation to Lowder and other authority makes _________ ______
clear, we have found no principled difference between interest
earned on a credit card (a/k/a "finance charges") and interest _____
earned on other types of loans. See Hurley, 63 F.3d at 9 (noting ___ ______
that newly-constituted panels are bound by a prior panel decision
on point). Since it was proper to include the $726,637 in
interest as part of the loss, the other loss calculation errors
raised on appeal need not be addressed because the unimpeachable
loss totalled no less than $2,669,065, well within the $2-5
million range necessary to trigger a ten-level upward adjustment.
____________________
3Although normally a loss determination under U.S.S.G.
2F1.1 is fact-based and subject to clear error review, see United ___ ______
States v. Goodchild, 25 F.3d 55, 64 (1st Cir. 1994), Gilberg ______ _________
challenges the district court's interpretation of a sentencing
guideline. Therefore, review is de novo. See id.; see also __ ____ ___ ___ ___ ____
United States v. Ovalle-Marquez, 36 F.3d 212, 221 (1st Cir. ______________ ______________
1994), cert. denied, 115 S. Ct. 1322 (1995). _____ ______
7
2. The "Role in Offense" Enhancement 2. The "Role in Offense" Enhancement _________________________________
Gilberg challenges the four-level upward adjustment
based on his role in the offense, see U.S.S.G. 3B1.1, contend- ___
ing that the government improperly singled him out for prosecu-
tion by cutting deals with the real "leaders" of the Chancery
Court scheme his attorney and a business partner. Second, he
complains that the district court failed to make express findings
of fact regarding the comparative responsibilities of the partic- ___________ ________________
ipants in the scheme. We review for "clear error," see United ___ ______
States v. Akitoye, 923 F.2d 221, 227 (1st Cir. 1991), mindful ______ _______
that "battles over a defendant's [role in the offense] . . . will
almost always be won or lost in the district court," United ______
States v. Graciani, 61 F.3d 70, 75 (1st Cir. 1995). Gilberg's ______ ________
case is no exception.
Gilberg concedes that the evidence could support a
rational inference that he orchestrated the criminal conduct
alleged in the indictment. The evidence disclosed that he was a
sophisticated real estate developer who supplied false purchase
prices to his attorney, instructed his attorney and prospective
buyers to conceal his false statements, and secreted the documen-
tation containing the actual terms. Gilberg cites no authority
nor is there any for the proposition that a sentencing
court must compare the responsibilities of all participants _______
before imposing a U.S.S.G. 3B1.1 enhancement against a defen-
dant. Moreover, in crediting the evidence that Gilberg played
8
the pivotal role in the initial success of the Chancery Court
scheme, the district court implicitly found that Gilberg was an
"organizer," regardless of the precise roles played by each
cohort. See U.S.S.G. 3B1.1, comment. (n.4) (noting that an ___
offense may involve "more than one person who qualifies as a
leader or organizer"); United States v. Tejeda-Beltran, 50 F.3d _____________ ______________
105, 111-13 (1st Cir. 1995) ("We hold that retention of control
over other participants, although sometimes relevant to an
inquiry into the status of a putative organizer, is not an
essential attribute of organizer status."); cf. U.S.S.G. 3B1.1, __
comment. (n.2) (authorizing upward departure for "management
responsibility over the property, assets, or activities of a
criminal organization," even though defendant neither led nor
supervised any other participant). 3. The Victim and Wit- 3. The Victim and Wit- ____________________
ness Protection Act ness Protection Act ___________________
Finally, Gilberg claims that the restitutionary sen-
tence overstates victim loss because the class of "victims" is
too broad. He points out that the sentencing court ordered
restitution in connection with all thirty-one loans, whereas the
indictment charged him in relation to only twenty-one loans.
The government concedes that the last criminal conduct
involving Gilberg took place no later than June 1990. The Victim
and Witness Protection Act ("VWPA"), 18 U.S.C. 3663-3664
(1990), governs restitution in criminal cases. See, e.g., United ___ ____ ______
States v. DeSalvo, 41 F.3d 505, 511 (9th Cir. 1994). In June ______ _______
1990, the VWPA provided that the district court in sentencing
9
"a defendant convicted of an offense" may order "restitution _________ __ __ _______
to any victim of such offense." 18 U.S.C. 3579(a)(1)(1982) ______ __ ____ _______
(emphasis added); see 18 U.S.C. 3579-3780 (1987), amended by ___ _______ __
18 U.S.C. 3663-3664 (1990). In Hughey v. United States, 495 ______ _____________
U.S. 411 (1990), the defendant had been charged, in multiple
counts, with theft and unauthorized use of credit cards, offenses
which caused victim losses totaling $90,431. Although Hughey
pled guilty to but one count of unauthorized use of a single ______
credit card, which caused $10,412 in victim loss, id. at 414, the __
district court ordered $90,431 in restitution. Reversing, the
Supreme Court held that "the language and structure of the [VWPA]
make plain Congress' intent to authorize an award of restitution
only for the loss caused by the specific conduct that is the ____ ________ _______
basis of the offense of conviction." Id. at 413, 422 n.5. _____ __ ___ _______ __ __________ ___
Effective November 29, 1990, Congress broadened the
VWPA definition of "victim," see Pub. L. No. 101-647, 2509, 104 ___
Stat. 4789, 4863, 4931 (Nov. 29, 1990) (Crime Control Act of
1990) (codified at 18 U.S.C. 3663(a)(2)), thereby effectively
overruling Hughey in part. Section 3663(a)(2) now provides 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. 3663(a)(2)
(emphasis added). See generally United States v. Neal, 36 F.3d ___ _________ _____________ ____
1190, 1200 (1st Cir. 1994).
The district court ordered Gilberg to make restitution
10
to banks other than the three FDIC-insured banks involved in the _____ ____ ____________
twenty-one insured loans which formed the entire basis for the
conspiracy and the substantive counts upon which Gilberg was
convicted. The parties agree that, under the 1987 version of the ____
VWPA as interpreted in Hughey, the restitution order imposed on ______
Gilberg would be improper, and that "approximately $2 million"
would be the maximum permissible "victim loss" calculation.
The government nonetheless contends that the district
court order complies with the 1990 VWPA. See Hughey, 495 U.S. at ____ ___ ______
413 n.1 (normally, the VWPA version in effect at sentencing __________
controls). Gilberg responds that such a retroactive application
of section 3663(a)(2) to his pre-November 1990 criminal conduct
would violate the Ex Post Facto Clause, U.S. Const. art. I, 9, __ ____ _____
cl. 3. See Miller v. Florida, 482 U.S. 423, 430-31 (1987); see ___ ______ _______ ___
also United States v. Newman, 49 F.3d 1, 10-11 (1st Cir. 1995); ____ _____________ ______
United States v. Cronin, 990 F.2d 663, 666 (1st Cir. 1993). _____________ ______
Normally, we review restitution orders only for "abuse
of discretion." See United States v. Benjamin, 30 F.3d 196, 198 ___ _____________ ________
(1st Cir. 1994); United States v. Savoie, 985 F.2d 612, 617 (1st _____________ ______
Cir. 1993). Although a timely challenge to a retroactive appli-
cation of the 1990 VWPA amendments would present a question of ____
law subject to plenary review, see, e.g., United States v. ___ ____ ______________
Guthrie, 64 F.3d 1510, 1514 (10th Cir. 1995); DeSalvo, 41 F.3d at _______ _______
511; United States v. Meacham, 27 F.3d 214, 218 (6th Cir. 1994), _____________ _______
Gilberg concedes that he did not object at sentencing. Accord-
ingly, we review only for plain error. See United States v. ___ ______________
11
Tutiven, 40 F.3d 1, 7-8 (1st Cir. 1994), cert. denied, 115 S. Ct. _______ _____ ______
1391 (1995); United States v. Rodriguez, 938 F.2d 319, 321 (1st ______________ _________
Cir. 1991). As the Rule 52(b) "plain error" test announced in
Olano, 113 S. Ct. at 1776-79, applies to sentencing errors, see _____ ___
Benjamin, 30 F.3d at 197; supra Section II.A.1, we apply the ________ _____
Olano "plain error" criteria to the forfeited "victim loss" _____
calculation claim asserted by Gilberg on appeal.4
a) "Error" a) "Error" _____
The first Olano criterion that there be "error," _____
Olano, 113 S. Ct. at 1777 is readily met here. Retroactive _____
application of VWPA 3663(a)(2) would violate the Ex Post Facto __ ____ _____
Clause, since it would "make[] more burdensome the punishment for __________ ___
[Gilberg's] crime[s], after [their] commission . . . ." Dobbert _________ ________ _____ _____ __________ _______
v. Florida, 432 U.S. 282, 292 (1977) (emphasis added); see also _______ ___ ____
United States v. Johnson, 952 F.2d 565, 585 (1st Cir. 1991), ______________ _______
cert. denied, 113 S. Ct. 58 (1992). As an order of restitution _____ ______
is part of the criminal sentence, we reject the suggestion that
the November 1990 VWPA amendments may be applied against Gilberg.
See, e.g., United States v. Jewett, 978 F.2d 248, 252-53 (6th ___ ____ _____________ ______
Cir. 1992) (rejecting retroactivity argument); see also United ___ ____ ______
States v. Elliott, 62 F.3d 1304, 1313-14 (11th Cir. 1995) (same); ______ _______
DeSalvo, 41 F.3d at 515 (same). _______
____________________
4Given the concession by the government that application of
Hughey would result in a $1.6 million reduction in the restitu- ______
tion order, we conclude that Gilberg has shouldered his burden on
the third Olano factor "prejudice." See supra Section II.A.1. _____ ___ _____
We therefore confine our "plain error" analysis to the three
remaining Olano factors (i.e., error, "obviousness," and "mani- _____
fest miscarriage of justice").
12
b) Obviousness of Error b) Obviousness of Error ____________________
The government argues that retroactive application of
the 1990 VWPA amendments would not constitute "obvious" error,
see Olano, 113 S. Ct. at 1777, because this court had yet to ___ _____
weigh in on the retroactivity question by the time Gilberg was __ ___ ____ _______ ___
sentenced, and other courts of appeals were divided. Compare _________ _______
Jewett, 978 F.2d at 252-53, with United States v. Rice, 954 F.2d ______ ____ _____________ ____
40 (2d Cir. 1992); United States v. Arnold, 947 F.2d 1236 (5th _____________ ______
Cir. 1991) (per curiam). We disagree.
The Rice and Arnold cases are factually and legally ____ ______
inapposite to the present context. The retroactivity issue in
Rice ultimately turned on a different 1990 VWPA amendment not ____ _________ ___
implicated in our case which provided that "[t]he court may
also order restitution in any criminal case to the extent agreed
to by the parties in a plea agreement." 18 U.S.C. 3663(a)(3) ____ _________
(emphasis added). The plea agreement in Rice expressly provided ____ _________
for restitution both to victims of the dismissed counts and
victims of uncharged criminal conduct, Rice, 954 F.2d at 41-42, ____
and the plea predated both the 1990 VWPA amendments and Hughey. ____ ____ ___ ______
Thus, settled Second Circuit precedent supported the expansive
victim loss calculation agreed to by Rice. Id. at 44. The ___
Second Circuit rejected Rice's ex post facto argument because (1) __ ____ _____
Rice must have relied on the more onerous Second Circuit case ____
law, rather than on Hughey, when he agreed to the broad restitu- ______
tion commitment adopted in the plea agreement; and (2) section
3663(a)(3) did not retroactively "enhance the punishment for an ___
13
offense" but "merely provided that a specified type of plea
agreement could be enforced from that point on." Id. ___
The Fifth Circuit employed the same analysis in Arnold, ______
947 F.2d at 1238 n.2, noting that section 3663(a)(3) was not
retroactive but "applied prospectively to validate Arnold's
[earlier] plea agreement." The government cites no apposite
circuit court authority holding that section 3663(a)(2) applies __________
retroactively to pre-November 1990 criminal conduct.
As the government correctly notes, we have yet to
address this precise question. In Cronin, 990 F.2d at 663, the ______
government did not contend that section 3663(a)(2) should be
applied retroactively to pre-November 1990 conduct, urging ____________ ____
instead that Hughey is distinguishable from cases involving ______ _______________
convictions for "offense[s]" like mail fraud which require, ____ _____
as an essential element, proof of a broader "scheme to defraud."
See id. at 666; see also, e.g., 18 U.S.C. 1341. Given the ___ ___ ___ ____ ____
inherent breadth of the "offense" of conviction in Cronin, the ______
government argued that VWPA restitution was not limited to losses
caused by the particular mailings designated in the individual __________ ________
counts upon which the defendant was convicted, but included all
victim losses occasioned by the larger fraud "scheme." Noting a
circuit split on the issue, we sided with the majority rule, and
concluded that Hughey barred the broader restitution order. ______
Cronin, 990 F.2d at 666; see also Newman, 49 F.3d at 11 (applying ______ ___ ____ ______
Cronin pronouncement to wire fraud conviction). ______
The implicit concessions of nonretroactivity in Cronin ______
14
and Newman apparently stemmed from the government's acknowl- ______
edgement that retroactive application of section 3663(a)(2) would
have had no colorable basis in the decisional law construing the
Ex Post Facto Clause. See id. at 11 n.14 (noting that, "[a]s the __ ____ _____ ___ ___
offenses occurred in 1989 and early 1990, Newman is subject to
the restitution statute as it stood prior to amendment in Novem-
ber of 1990"). Further, had this court been satisfied that the
1990 VWPA amendments were readily amenable to retroactive appli-
cation in Cronin and Newman, we could have affirmed those restit- ______ ______
utionary sentences on that alternative ground. See United States ___ _____________
v. Alzanki, 54 F.3d 994, 1008 (1st Cir. 1995), petition for cert. _______ ________ ___ _____
filed, 64 U.S.L.W. 3298 (U.S. Oct. 16, 1995) (No. 95-619) (appel- _____
late court may affirm district court on any ground supported by
record); cf. also Jewett, 978 F.2d at 252 (finding that Hughey ___ ____ ______ ______
precluded broad restitution order, before addressing VWPA retro-
activity question, even though the latter issue had not been
addressed by parties). Based on the clear language of the 1987
VWPA and the unanimous circuit precedents rejecting the govern-
ment's retroactivity claim, see supra Section II.B.3.a, we hold ___ _____
that the error in this case satisfied the "obviousness" test
announced in Olano.5 See United States v. Weiner, 3 F.3d 17, 24 _____ ___ _____________ ______
____________________
5It is noteworthy that the Olano Court explicitly reserved _____
decision on whether an error that becomes clear after trial, but
prior to review by the court of appeals, may be considered
"obvious." Olano, 113 S. Ct. at 1777. ("At a minimum, the Court _____
of Appeals cannot correct an error pursuant to Rule 52(b) unless
the error is obvious under current law."). As in Olano, we need _____
not resolve this question because we have found, given the
unanimous case law, that it was already "obvious" at the time of
sentencing that Gilberg should not be held responsible under the __________
15
n.5 (1st Cir. 1993) (noting that a circuit split may rule out a
finding that forfeited error was "obvious," even if First Circuit
has not weighed in on issue).
c) "Miscarriage of Justice" c) "Miscarriage of Justice" ______________________
Although Olano entrusts remediation of plain error to _____
the sound discretion of the reviewing court, the courts of
appeals "should not" exercise their discretion unless a forfeited
error results in "`a miscarriage of justice,' or "`seriously
affect[s] the fairness, integrity or public reputation of judi-
cial proceedings.'" Olano, 113 S. Ct. at 1776 (citations omit- _____
ted).
In all events, the VWPA expressly limits restitutionary
relief to "victims of [the] offense [of conviction]." 18 U.S.C. _______
3662(a)(1) (emphasis added). A federal court has no inherent
authority to order restitution in a criminal case; it may do so
only as expressly provided by statute. DeSalvo, 41 F.3d at 511. _______
We have noted that when the district court fundamentally departs
from "obvious" sentencing principles, "the situation corresponds
mutatis mutandis to one in which a forfeited error may have _______ ________
caused the conviction of an innocent person, the other rubric ________ ______
under which a plain and prejudicial error should be noticed on
appeal." United States v. Whiting, 28 F.3d 1296, 1312 (1st Cir.) _____________ _______
(citing Olano, 113 S. Ct. at 1779) (emphasis added), cert. _____ _____
denied, 115 S. Ct. 378 (1994). Given the particular circum- ______
____________________
1987 VWPA for losses occasioned victims of offenses with which he
was not charged, nor held retroactively responsible under the
1990 VWPA amendments. See supra Section II.B.3(a), (b). ___ _____ _
16
stances of this case, and the substantial $1.6 million reduction
in restitution portended by Hughey's application, we find plain ______
error warranting vacatur of the restitutionary sentence in this
case.6 The restitution award is reduced to $2,107,406.00,
comprising the total estimated loss on the twenty-one mortgage
loans designated in the indictment.7
The sentence is modified to require restitution in the ___ ________ __ ________ __ _______ ___________ __ ___
amount of $2,107,406. The district court judgment is affirmed, ______ __ __________ ___ ________ _____ ________ __ _________
as modified. __ ________
____________________
6Gilberg's remaining challenges to the restitution order do
not meet the "plain error" standard. First, he argues that the
district court erroneously assessed the loss occasioned the
lenders by using the price the lender received on resale follow- ________
ing foreclosure, rather than the foreclosure price bid by the ___
lender. This issue has not yet been addressed in the First
Circuit. The circuit court decisions cited by Gilberg are
inapposite, simply holding that the sentencing court should be
wary of basing restitution on the resale price where the lender
acquired real estate at foreclosure but does not resell for
years. See, e.g., United States v. Holley, 23 F.3d 902, 914 (5th ___ ____ _____________ ______
Cir. 1994) (six years). Here, however, there is no evidence that
Gilberg's victims held the property for such extended periods
following foreclosure. Consequently, any error in the victim
loss calculation, or the standard employed, has not been shown to
be "obvious."
Second, Gilberg contends that the district court failed to
make explicit findings on his ability to pay restitution. See 18 ___
U.S.C. 3664(a). Nevertheless, we have held that such findings
need not be explicit. See Newman, 49 F.3d at 10 (citing Savoie, ___ ______ ______
985 F.2d at 618). Moreover, the district court supportably found
that Gilberg's earning potential would enable him to meet his
considerable restitutionary obligations in the future. Id. at ___
10-11.
7Since loss calculations under U.S.S.G. 2F1.1 are based on
criteria different from the VWPA victim loss criteria, see, e.g., ___ ____
id. 2B1.3 (providing that "relevant conduct," for guideline ___
sentencing purposes, may encompass conduct not charged in indict-
ment, and conduct underlying the counts upon which defendant was
acquitted), the reduction in Gilberg's restitutionary sentence
requires no readjustment in the offense level. See supra Section ___ _____
II.B.1.
17
Document Info
Docket Number： 95-1586
Filed Date： 1/31/1996
Precedential Status： Precedential
Modified Date： 3/3/2016