Opinion ID: 220729
Heading Depth: 2
Heading Rank: 2

Heading: How harmful was it?

Text: Parisi next challenges the inclusion of specific amounts in the restitution order. Parisi disputes the following five amounts: (1) $129,044 relating to the SAMHSA funds at issue in counts three and five; (2) $33,000 spent on a Racino referendum effort, as well as other transfers from the health center's budget over which he had no control; (3) $15,900 of housing authority funds; and (4) a $30,000 DOJ COPS grant. [27] Before we address these contentions, however, we must first determine whether these claims were preserved. The government claims that Parisi did not properly object to some, and possibly any, of the specified amounts at sentencing. The government claims that Parisi only objected at sentencing to (3), the Racino expenditures, and that it was raised only with respect to the guidelines calculation rather than the size of the restitution order itself. Paragraphs 71-72 of the PSR detailed the use of health center funds to pay for the Racino effort. Parisi objected to paragraph 71 on the ground that he had no authority to initiate or stop the use of the $33,000 for the Racino effort, and he repeated this contention at the sentencing hearing. The government's position appears to be that although Parisi objected to the inclusion of the Racino funds, he did not object to the amount imposed. We do not know what to make of this contention. Parisi's claim was that the Racino funds should not have been included at all, from which it follows that in his view the correct amount was zero. Moreover, the government's contention that [t]he sentencing transcript reveals only one reference to any of the four disputed amounts is belied by the record. Parisi's objections to the PSR's inclusion of the $129,044 in SAMHSA funds can be found on pages 8-10 of the sentencing transcript. His objections to the DOJ COPS grant can be found on pages 15-16. The discussion of Parisi's involvement with transfers from the Housing Authority, although more elliptical, can be found on page 8. The objections were preserved.
Parisi first contests the inclusion of the $129,044 deriving from the misapplication of SAMHSA funds used to pay ghost employee salaries in the early part of 2004. Parisi argues that he was not the cause of this loss under the standard announced in United States v. Vaknin, 112 F.3d 579, 589 (1st Cir.1997). In Vaknin, we held that a modified but for standard of causation is appropriate for restitution under the [Victim and Witness Protection Act], meaning that the government must show not only that a particular loss would not have occurred but for the conduct underlying the offense of conviction, but also that the causal nexus between the conduct and the loss is not too attenuated (either factually or temporally). Id. at 589-90. We cautioned that what constitutes sufficient causation can only be determined case by case, in a fact-specific probe. Id. [28] Parisi was acquitted of count three, which alleged the actual misapplication, but was convicted of count five, which alleged filing false statements with HHS relating to the misuse of the SAMHSA funds. [29] Although the timing is not entirely clear, it appears that the funds were disbursed no later than May 2004, i.e., before the falsified 269 forms were filed with HHS. The form therefore could not have been a but for cause in causing HHS to disburse the funds. See id. at 589 (Restitution should not be ordered in respect to a loss which would have occurred regardless of the defendant's conduct.). This sum therefore should not have been included under Vaknin. [30]
Parisi also contests the inclusion of $33,000 used by the tribal government to pay for expenses stemming from an effort to get a referendum question on the November 2007 ballot asking for voter approval of a Racino. Less specifically, he challenges the inclusion of any of the transfers from the Health Center account used to make PTIT's payroll. Parisi does not provide a specific dollar amount, but the challenge appears to account for over $1 million of the $1.6 million restitution order. In both cases, the gist of Parisi's argument is that he was not the cause of these losses, as the decision to make those illicit transfers was made by Newell and other members of the Tribe's political leadership. Newell, in many cases with the tribal council's express consent, made the decision to transfer funds from federal grants to pay for, among other things, the council members' own salaries. Similarly, the $33,000 check to the Joint Tribal Council to cover the cost of the Racino referendum effort was authorized by Newell and approved by three separate council members. It was delivered to the Joint Tribal Council by Joe Socobasin, the Tribe's lieutenant governor at the time. It does not appear that Parisi had any say in deciding whether to support the Racino effort in the first place, or where the funds to do so would come from. The entirety of Parisi's involvement with this check appears to be that Newell ordered him to have it drawn up, an order that he in turn conveyed to Frances Neptune, the Tribe's IHS bookkeeper. The Tribe's habit of playing fast and loose with federal grant money, Parisi argues, was present before [Parisi] arrived. . . and continued after he left. Therefore, he contends, he was not a cause of the losses under Vaknin. The uncontroverted evidence in the record does indeed suggest that Parisi may have been set up by Newell to take the fall for the Tribe's corrupt financial practices. Unfortunately for Parisi, however, it is well established that defendants can be required to pay restitution for the reasonably foreseeable offenses of their co-conspirators. Collins, 209 F.3d at 4. As we noted above, even if Parisi's role was as limited as he suggestscarrying out or transmitting Newell's ordersthat is sufficient to support his conviction for conspiring with Newell to misapply federal funds. Since at some point the financial impropriety must have been glaringly obvious, and since there is no question that Parisi's co-conspirator, Newell, caused the transfers, Parisi's challenge to the inclusion of these amounts must be denied. Parisi's reliance on United States v. Neal, 36 F.3d 1190, 1200-01 (1st Cir.1994), is misplaced. It is true that we held in Neal that a person who aided others in committing a bank robbery, but did not actually participate in the robbery itself, could not be required on that basis alone to make restitution for the full amount of the loss suffered by the bank. However, as we made clear in Neal, Congress has insisted on a different standard when a defendant has been convicted of a federal crime that require[s] proof of a scheme, conspiracy, or pattern of criminal conduct. Id. at 1200; see also Collins, 209 F.3d at 3. [31] Unlike the defendant in Neal, Parisi was most definitely convicted of such a crime. Therefore, the reckoning of the losses that may be laid at his doorstep is substantially broader than it otherwise would have been.
Parisi claims that the district court erred in including $15,900 based on transfers from the Indian Township Housing Authority. The district court, Parisi argues, explicitly conceded that Parisi was not involved in these transfers but went ahead and included them in the restitution order anyway. Our review is for abuse of discretion. Parisi claims that the district court found that Parisi had nothing to do with the transfers from the Housing Authority. It is not clear from the record whether or not the district court made such a finding. The portion of the sentencing transcript on which Parisi relies shows that the parties were disputing another matterParisi's contention that the PSR should reflect that he never transferred money to accounts outside the tribal government's control. The court overruled Parisi's objection, and stated that it takes into account the parenthetical added to paragraph 26, and with that addition believes the paragraph to be accurate. [32] However, while the referenced parenthetical does include Parisi's insistence that he had nothing to do with the Housing Authority transfers, no actual discussion of that claim is reflected in the sentencing transcript, as the discussion instead was focused on the issue of his responsibility for transferring money to non-tribal accounts. Also bearing on our analysis here is the fact that many of these transfers from the Housing Authority's funds appear to have been undertaken exclusively by Newell for his own purposese.g., a donation for the marriage of Mr. and Mrs. Tammy Newell, unspecified loans in small amounts, compensation to Newell himself for mileage, and medical assistance to Tribe members whose relationship to Newell and/or Parisi is unexplained. In the absence of an explicit ruling by the district court, we are left uncertain whether the district court viewed these transfers as not within the scope of the (tacit) agreement between Newell and Parisi, but mistakenly did not deduct them from the overall restitution order, or if the court concluded that they were, appearances notwithstanding, indeed part of the overall conspiracy. Particularly in light of the extensive number of transactions involved, and the factual complexity of the case, both possibilities seem equally plausible. Because of the ambiguity in the record, we remand the restitution order to the district court to clarify its disposition of the $15,900 Indian Township Housing Authority transfers.
Parisi raises a similar contention in his reply brief as to the inclusion of $30,000 based on the misapplication of a DOJ COPS grant. The district court stated that [b]oth sides seem to agree that the PSR is inaccurate to the extent it states that Mr. Parisi requested the transfer of those funds. The statement will not be considered by the court. Nevertheless, the restitution order included this amount. Parisi's suggestion is that this was an oversight. The government's somewhat gnostic counter-suggestion is that the district court ruled only that it would not consider at sentencing the PSR's claim that Parisi had requested the transfer, but that it nevertheless intended to include the $30,000 in the restitution order. Once again, it is simply unclear on the record what the district court intended. It is possible that the district court concluded that the $30,000 DOJ COPS transfer was to be excluded from consideration. But we are not in a position to assert as much with any confidence. However, Parisi only raised this issue in his reply brief. As we have noted, issues raised for the first time in an appellant's reply brief are generally deemed waived. United States v. Torres, 162 F.3d 6, 11 (1st Cir.1998). Parisi attempts to circumvent this rule by characterizing the DOJ COPS grant issue as merely another instance of the restitution order including acquitted conduct. But Parisi was not in fact acquitted of this conduct. He was convicted of count 30, which, among other things, alleged misapplication of the COPS grant. The claim is therefore procedurally defaulted.