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USCA1 Opinion
March 29, 1993 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 92-2025
UNITED STATES OF AMERICA,
Appellee,
v.
PETER J. REGAN,
Defendant, Appellant.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. A. David Mazzone, U.S. District Judge]
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Before
Boudin, Circuit Judge,
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Aldrich, Senior Circuit Judge,
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and Stahl, Circuit Judge.
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George F. Gormley with whom John D. Colucci was on brief for
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appellant.
Ralph F. Boyd, Jr., Assistant United States Attorney, with whom
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Robert J. Lynn, Assistant United States Attorney, and A. John
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Pappalardo, United States Attorney, were on brief for appellee.
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March 29, 1993
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ALDRICH, Senior Circuit Judge. Defendant Peter J.
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Regan, who pled guilty to 55 counts of bank embezzlement (18
U.S.C. 656) on February 18, 1992 with no reservations or
conditions now relevant, appeals with respect to his U.S.
Sentencing Guidelines sentence of 40 months, (a) because he
was not allowed a hearing on oral testimony with respect to
his claimed deduction on account of diminished capacity; (b)
because he was sentenced under guidelines issued later than
the dates of some of his actions, and (c) because there were
enhancements made for abuse of trust and for more than
minimum planning. We affirm.
Defendant, during the period covered by the
indictment, viz., November, 1987 to July 16, 1991, was a
senior vice president in charge of the Special Loan Services
Division of the Shawmut National Bank. As head of this
division, defendant directly supervised and controlled the
collection and "work-out" of delinquent and problem
commercial loans. Because of the individuality of this work
and defendant's seniority, he was extraordinarily
unsupervised, all the way from his actions in causing debits
or credits to Shawmut's cash collateral account, down to his
maintaining personal custody of the files. During the period
in question he exercised this freedom in a number of manners
so as to embezzle some $2,500,000 from the Bank. On July 16,
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1991, by reason of a conspicuous act, he was discovered. He
was promptly indicted and, in due course, pleaded guilty.
Diminished Capacity
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Defendant first challenges the district court's
refusal to hold an evidentiary hearing on his entitlement to
a downward departure for diminished mental capacity.
Sentencing Guidelines 5K2.13 provides as follows:
5K2.13. Diminished Capacity (Policy
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Statement)
If the defendant committed a non-violent
offense while suffering from
significantly reduced mental capacity not
resulting from voluntary use of drugs or
other intoxicants, a lower sentence may
be warranted to reflect the extent to
which reduced mental capacity contributed
to the commission of the offense,
provided that the defendant's criminal
history does not indicate a need for
incarceration to protect the public.
The burden of proving causation is on the defendant, and
there can be no appeal from the district court's denial of a
reduction. United States v. Lauzon, 938 F.2d 326, 331 (1st
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Cir.), cert. denied, 112 S.Ct. 450 (1991); United States v.
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Shattuck, 961 F.2d 1012 (1st Cir. 1992). However, "[w]hen
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any factor important to the sentencing determination is
reasonably in dispute, the parties shall be given an adequate
opportunity to present information to the court regarding the
factor." U.S.S.G. 6A1.3(a). Except with respect to cross-
examination, post, defendant does not claim that his
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presentation was substantively curtailed; his complaint is
that the refusal to hear it on oral testimony was an abuse of
discretion. United States v. Gerante, 891 F.2d 364, 367 (1st
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Cir. 1989); see also Fed. R. Crim. P. 32(a)(1).
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In the written record there was the pre-sentence
report containing a lengthy statement from defendant and
favoring and unfavoring opinions of experts. The court chose
to accept the latter, concluding,
I have no confidence at all . . . in that
defense. I have no doubt that this case
has had a severe and traumatic effect on
Mr. Regan, but I fear that that all took
place after he was caught. I do not
believe he was diminished in his
capacity. I accept the report of Doctor
Strasburger. And during the course of
his criminal conduct, he was not
diminished in his capacity.
We review the evidence as the best approach to defendant's
contention that the court abused its discretion in denying
oral presentation. Basically, defendant contends diminished
capacity produced a delusional conviction that the country
was faced with economic, and hence political, chaos for which
he must fortify himself. In the late 1970s and early 1980s
he stored dried foods in his cellar, ultimately several
years' supply, stored firewood, and made arrangements for
water and other necessities. These were all acquired with
defendant's own earnings. Commencing in November 1987,
however, defendant exercised what the record shows to have
been highly skillful and comprehensive methods -- hence the
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55 counts -- to divert Bank funds. Their ingenuity and
effective concealment, evoking no suspicions, show remarkable
ability. The proceeds largely were salted away in Swiss bank
accounts. Shortly after his discovery and discharge by
Shawmut, defendant voluntarily entered McLean Hospital, where
he was found to be profoundly disturbed. At first his
condition was too serious to assist in his defense, but after
two admissions he sufficiently recovered, and ultimately was
allowed to plead.
In connection with the coming sentence hearing
defendant submitted records from McLean Hospital and letters
from three psychiatrists. The earliest was from a McLean
Hospital doctor, Joseph Triebwasser, dated August 9, 1991, at
which time defendant was severely psychotic, indicating that
this severe illness was consistent with his alleged criminal
activities prior to his admission. This brief letter was
addressed to insurance coverage and is of no substantial
value. On November 21, 1991 Dr. Martin J. Kelly addressed a
letter to the court with relation to defendant's then
inability to participate in legal activities. This was
followed by a letter from Dr. Kelly with reference to
sentencing, dated December 13, 1991 in which the doctor spoke
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of defendant's competence, his high intelligence, and his
ability
to function, except when it deteriorates
into psychosis as it has from time to
time over the past 10 years. . . .[1]
It is difficult to say that Mr.
Regan did not have the capacity to known
(sic) the nature and quality of his acts
or did not have the capacity to know that
what he was doing was wrongful in light
of his own behavior, his capacity to
function at work, and as mentioned, his
intelligence. But, the behaviors seem to
me in large measure driven by his
psychiatric problems which occasionally
deteriorate to the point of faulty realty
testing and frank psychosis. However,
for much of the past 10 years he has not
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been in a psychotic state and during
those periods was also involved in
hoarding money as well as provisions and
arming himself in anticipation of the
looming economic collapse and resultant
anarchy. (Emphasis in original).
This was followed by a letter from Dr. Pierre V. Mayer in
which he said,
I wanted to let you know that I have
received Dr. Kelly's report and
essentially agree with his findings. (I
would qualify this by adding that I am
not convinced that Mr. Regan did not have
some degree of psychosis over the past 10
years).
This less than forceful opinion was followed by a
further letter from Dr. Kelly.
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1. We interject here that there is no evidence beyond
medical opinion, except from defendant himself, that his
abilities ever deteriorated or faltered. His associates
never observed such.
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In response, the government submitted a report from
Dr. Larry H. Strasburger. After indicating that he had
reviewed defendant's personal history as given to him in an
interview and the medical records, the letters from
defendant's experts, and interviews with officers at the Bank
who had dealt with defendant, the doctor concluded as
follows:
There was no information available
to this examiner which would corroborate
the existence of a psychosis prior to Mr.
Regan's hospitalization in July of 1991.
While delusional beliefs and psychotic
thinking may have been present prior to
the discovery of Mr. Regan's
embezzlement, these phenomena were not
evidenced to the coworkers whom I
interviewed. They stated that Mr.
Regan's capacity to think clearly and
effectively was an extraordinary one,
quite at variance with the psychotic
mental state documented on his hospital
admissions and during my interviews with
him. It is entirely possible, indeed
even likely, that his psychosis was
precipitated by the discovery of his
misappropriation of funds.
Even were Mr. Regan's psychosis to
have existed prior to his embezzlement
coming to light, the evidence that it
affected his thinking and diminished his
mental capacity is confined to his own
statements. The bank officers whom I
interviewed describe him as an extremely
effective thinker, negotiator, and
problem solver. Even were he to have
held delusional ideas, there is no
evidence that his cognitive capacities
were impaired by them. It is quite
possible that, even if he had entertained
delusions, he could also have
misappropriated funds simply for personal
gain. Given the information available to
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me, it is not possible to resolve this
question from a psychiatric perspective.
Prior to the sentencing hearing defendant moved to
present oral testimony of the doctors and for permission to
cross-examine Dr. Strasburger. The court denied this motion.
At the hearing, after briefly stating its reasons for
concurring with Dr. Strasburger, it expressed its ultimate
conclusion previously quoted.
Following its decision from the bench, the court
allowed defendant to file an offer of proof to permit the
court to reconsider. Thereafter defendant filed a further,
two page letter from Dr. Kelly, and a seven page, single-
space, letter from Dr. Mayer. The former added little. The
second was full and detailed, but, at bottom, did not change
the picture; there remained two views. We have, therefore,
an experienced judge, who spoke thoughtfully, "I have
reviewed this record very carefully, and I have done it
several times over the past week." The record was unusually
extensive. In addition he agreed to receive further proof,
and no doubt equally considered it. That this evidence was
not allowed to be presented orally was well within the
court's discretion. United States v. Pugliese, 805 F.2d
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1117, 1123 (2d Cir. 1986). See also U.S.S.G. 6A1.3
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Commentary.
There remains that defendant was not allowed to
cross-examine Dr. Strasburger. We have never held it an
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abuse of discretion to deny cross-examination in sentencing
hearings. E.g., United States v. Zuleta-Alvarez, 922 F.2d
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33, 36 (1st Cir. 1990), cert. denied, 111 S.Ct. 2039 (1991).
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This would not be the case to begin. While offers of proof
are not normally required in connection with cross-examining
a hostile witness, see United States v. Colonial Motor Inn,
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Inc., 440 F.2d 1227, 1228 (1st Cir. 1971), this was an area
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where defendant should well know what he would ask or try to
elicit from Dr. Strasburger. Cf. United States v. Shattuck,
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ante. In his offer of proof he made no substantive
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suggestions. We see no error.
In closing this aspect, this is not a case where
the defendant was of general diminished capacity, but quite
the contrary. His extreme views were on a single subject,
and even here they merely pursued opinions that were held by
other doomsayers, and envisioned conditions not unknown to
history. Defendant had read depressing books, and his work
in the Bank was with economic entities that were moribund, or
nearly so. Even if a reduced sentence could be warranted in
the case of a single delusion, it does not follow that a
delusion means psychosis. In any event, according to his own
expert, defendant continued his conduct, which he knew to be
wrongful, during intervals when, concededly, he was not
psychotic. This is an unusual case, and we have given it
much attention, but the court had defendant's case fully
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before it, and we believe that to complain about a breach of
discretion in not receiving it orally is truly frivolous.
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Continuing Offense
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During Regan's embezzlement activities the United
States Sentencing Guidelines 2B1.1(b)(1) was amended with
the result of increasing the base level enhancement for the
amount here embezzled from twelve levels to fifteen. See
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U.S.S.G. Manual, Appendix C, pp. 39-40, Amendment No. 99
(effective Nov. 1, 1989). The court applied the amendment,
and defendant complains this was an ex post facto
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deprivation. The ex post facto clause of the Constitution
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"forbids the application of any law or rule that increases
punishment for pre-existing conduct." United States v.
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Havener, 905 F.2d 3, 5 (1st Cir. 1990); Miller v. Florida,
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482 U.S. 423 (1987). Where a "continuing offense" straddles
the old and new law, however, applying the new is recognized
as constitutionally sound. E.g., United States v. Arboleda,
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929 F.2d 858, 871 (1st Cir. 1991). See also United States v.
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Fazio, 914 F.2d 950, 959 n. 14 (7th Cir. 1990) (collecting
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cases). We agree with the defendant that the cases relied on
by the government can arguably be distinguished in the sense
that all involved true straddles where the offense itself
began before the increase in sentence but concluded
afterwards. The government says that this was all one
scheme, though variously carried out, to use defendant's
office to embezzle from his employer. However, pursuant to
the substitute indictment, defendant was formally sentenced
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for some offenses that were completed before the guideline
increase and, if the prior guideline were applied (either to
all the counts or through some "blended" method), his
sentence would be lower.
Nevertheless, we think it constitutional that the
defendant be subject to the sentence actually imposed even if
no increased penalty is permitted for the convictions that
occurred before the guideline increase. Under the guidelines
the prior acts of embezzlement were "relevant conduct" that
would enhance defendant's sentence for the embezzlements that
occurred after the guideline increase even if he had been
convicted only on the latter counts. U.S.S.G.
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1B1.3(a)(2); 3D1.2(b), (d). These two guidelines taken
together base the sentence on the full amount embezzled
during the same course of conduct or as part of the same
scheme or plan even if a defendant is indicted and convicted
on just one of the counts. See U.S.S.G. 3D1.2, Note 4,
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example 4. In this instance, however pleaded, the
defendant's embezzlements were manifestly part of the same
ongoing scheme of embezzlements.
The guidelines' criminal history provisions are
routinely applied to increase sentences based upon
convictions that occurred before the guidelines were adopted.
Cf. United States v. Ykema, 887 F.2d 697, 700 (6th Cir.
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1989), cert. denied, 493 U.S. 1062 (1990); United States v.
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Cusack, 901 F.2d 29, 32 (4th Cir. 1990). For example, a
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repeat offender statute may increase the sentence for a later
crime based on convictions that occurred before the statute
was enacted. See United States v. Ykema, ante, (citing
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cases). In those cases, as in this one, the defendant has
fair warning at the time he commits his later acts that the
prior ones may or will be used in determining his sentence
for the latter ones. Cf. Amaral v. I.N.S., 977 F.2d 33, 36-
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37 (1st Cir. 1992). Accordingly, there is no ex post facto
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violation in this case. It may be that some of defendant's
earlier 40 month sentences could not be supported, but they
are to be served concurrently, and as defendant has not
suggested prejudice we do not pursue the matter.
Enhancements
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Finally, defendant complains that there should have
been no enhancements under U.S.S.G. 3B1.3 "for abuse of
trust," and under 2B1.1(b)(4) for more than minimum
planning. Defendant, in talking about abuse of trust, which
he says is already included in embezzlement, neglects that
3B1.3 includes "special skill." The court dealt
unanswerably with defendant's special skill. Defendant
complains, equally unwarrantably, that the size of the
embezzlement, for which his sentence was increased,
necessarily assumed planning, so that to add more for the
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planning was redundant. There could be no end to such a
contention.
Affirmed.
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Document Info
Docket Number： 92-2025
Filed Date： 3/29/1993
Precedential Status： Precedential
Modified Date： 9/21/2015