Court Opinion

ID: 2963974
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:18:19.760201+00
Date Added: 2024-06-11T15:01:53.519060
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

        No. 95-2191

                              UNITED STATES OF AMERICA,

                                      Appellee,

                                          v.

                                  WILLIAM W. LILLY,

                                Defendant, Appellant.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                     [Hon. William G. Young, U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                                Cyr, Boudin and Stahl,

                                   Circuit Judges.
                                   ______________

                                 ____________________

            Morris  M.  Goldings with  whom  Richard  S.  Jacobs and  Mahoney,
            ____________________             ___________________      ________
        Hawkes & Goldings were on briefs for appellant.
        _________________
            John  J. Falvey, Jr.,  Assistant United States Attorney, with whom
            ____________________
        Donald K. Stern, United States Attorney,  was on brief for the  United
        _______________
        States.

                                 ____________________

                                    April 3, 1996
                                 ____________________

                 BOUDIN, Circuit Judge.  William Lilly appeals the denial
                         _____________

            of  his motion in the district court, brought under 28 U.S.C.

               2255 and  the  prior version  of Fed.  R.  Crim P.  35(a),

            seeking  relief as  to sentence.1   In substance,  Lilly asks

            both for resentencing and for a determination that no term of

            probation  may be  imposed upon  him.   He also  challenges a

            restitution  order that is part of his present sentence.  The

            facts are  set  forth in  detail  in Judge  Young's  thorough

            opinion in United States v. Lilly, 901 F.  Supp. 25 (D. Mass.
                       _____________    _____

            1995), and we limit ourselves to a brief summary.

                 Lilly was indicted in  1990 on 30 counts of  bank fraud.

            Four  charges were later dropped,  but he was  convicted by a

            jury on the remaining  26 counts.  This was  a pre-guidelines

            case, and in November 1991, Lilly was sentenced to five years

            in  prison on count 1, to be followed by concurrent five-year

            suspended sentences  on counts  2-7 and 12-29  accompanied by

            five years' probation, and  by a five-year suspended sentence

            on count 30 consecutive to the other suspended sentences.  He

            was ordered to pay $5,071,751.59 in restitution.

                 Nearly  two months later, and after Lilly had noticed an

            appeal,  the  trial  judge  realized that  a  probation  term

            required  by law  had  not  been imposed  on  count  30.   On

                                
            ____________________

                 1Former  Rule 35(a)  permitted the  court to  correct an
            "illegal  sentence" at  any  time and  continues to  apply to
            Lilly's sentence because his offenses were committed prior to
            November 1, 1987.

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            December 30, 1991,  he issued a  second judgment sua  sponte,
                                                             ___  ______

            which differed from the  first judgment in two respects:   it

            made all of the suspended  sentences run concurrently, and it

            explicitly imposed five years' probation on count 30.   Under

            this  second judgment,  Lilly's effective  sentence  was five

            years' imprisonment  to be  followed by a  suspended sentence

            and five years' probation.

                 Lilly's  initial  appeal  from  his  convictions, argued

            before this  court in 1992,  did not challenge  his sentence.

            Instead, he claimed that the indictment was multiplicitous in

            treating  as individual  offenses the various  frauds charged

            under  counts 1-29 against First Mutual Bank of Boston.  That

            argument proved successful and,  in December 1992, this court

            vacated  his convictions  on counts  2-7 and  12-29.   United
                                                                   ______

            States v. Lilly, 983 F.2d 300 (1st Cir. 1992).
            ______    _____

                 However, this court also found that the multiplicity did

            not impair the convictions on counts 1 and 30 and it affirmed

            both convictions.   Lilly, 983 F.2d at 306.   Count 1 covered
                                _____

            the  execution  of the  scheme to  defraud directed  at First

            Mutual  as to which counts 2-7 and 12-29 were multiplicitous;

            count  30 involved  execution of  a separate  scheme directed

            against another  bank and was unaffected  by the multiplicity

            ruling.  This court remanded for entry of a revised judgment,

            noting that a new sentencing proceeding was not required.

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                 In  February  1993, the  district  judge  entered a  new

            judgment on  remand, representing the third  judgment in this

            case.   In  this third  judgment, the  court gave  Lilly five

            years in prison on count 1; on count 30, the court gave Lilly

            a  five  year suspended  sentence to  run  after the  term of

            imprisonment imposed on count 1 and again ordered restitution

            of  $5,071,751.59.     The   judgment  referred   to  certain

            conditions of probation,  but in  another apparent  oversight

            did not specify any probation  term for count 30.  Lilly  did

            not appeal this third judgment.

                 In February  1995, Lilly  filed a motion  to vacate  his

            sentence, pursuant to 28 U.S.C.   2255 and former Rule 35(a).

            The district court treated the motion as one properly brought

            under former  Rule 35(a) to  correct an illegal  sentence but

            denied  it on  the  merits.   On  appeal, the  government  is

            content  to  assume arguendo  that  the  merits are  properly
                                ________

            presented  under former  Rule  35(a), although  it notes  its

            reservations as to Lilly's attack on the restitution order.

                 The essence of Lilly's argument as to probation is this:

            the first  and  third  judgments  did  not  sentence  him  to

            probation  on  count  30,  and  the  second  judgment,  which

            purported  to do so was without effect because it was entered

            in  his  absence and  after he  filed  his notice  of appeal.

            Lilly says that, at minimum, the third judgment is unclear as

            to probation and  entitles him to  resentencing.  He  further

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            asserts that because probation was not imposed on count 30 in

            the first judgment, the district court cannot now add it upon

            resentencing without impermissibly increasing his sentence.

                 The problem here is more complicated than difficult, and

            responds quickly  to the  application of  common sense.   The

            first question  is one  of interpreting the  prevailing third

            judgment entered in February 1993; we must parse it to decide

            whether  it should be read to incorporate a five-year term of

            probation,  which the  government  claims is  implicit.   The

            second question concerns the validity of  the judgment, if so

            read,  as against  Lilly's claim  that  such a  reading would

            unlawfully increase his sentence.

                 The parties agree that the applicable probation statute,

            18 U.S.C.   3651 (since  repealed), requires that a probation

            period accompany  any suspended  sentence; this is  a reading

            not obvious from  the statutory language but supported by the

            cases and various policy considerations.  Miller v. Aderhold,
                                                      ______    ________

            288  U.S. 206,  210-11 (1933)  (decided under  predecessor to

            section 3651); United  States v. Elkin,  731 F.2d 1005,  1010
                           ______________    _____

            (2d  Cir.), cert.  denied, 469  U.S. 822  (1984).   The first
                        _____  ______

            judgment  failed to specify a probation term on count 30, but

            the second judgment swiftly corrected the error.

                 Therefore,  when the  case came  up on  appeal from  the

            convictions  in  1992,  the then-existing  (second)  judgment

            reflected a five-year  term of probation  on count 30,  which

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            went  unchallenged   on  the   appeal.    In   affirming  the

            convictions  on counts 1 and 30, this court specifically said

            that  no resentencing  proceeding was  required.   Lilly, 983
                                                               _____

            F.2d at 306.   In the  new third judgment entered  on remand,

            the  sentences on counts 1  and 30 mirrored  those imposed on

            counts 1 and 30 in the  second judgment, save that (as in the

            first judgment) the district  court again overlooked the need

            to refer specifically to probation in count 30.

                 We say "overlooked" because  in our minds it is  evident

            that the district court  intended count 30 to include  a term

            of probation, as the law requires, and intended it to be five

            years.  Both the first and second judgments provided for five

            years'  imprisonment followed  by  five  years of  probation.

            Since  the  multiplicity  determination  did  not  alter  the

            substance of Lilly's misconduct, there was no reason  why the

            reduction in counts  should have been  expected to alter  the

            total sentence.2   Indeed, that is why  we did not require  a

            new sentencing proceeding.

                 In  addition,  the  third  judgment  expressly  included

            conditions  of probation,  conditions  that  would have  been

                                
            ____________________

                 2Lilly  had secured a single  large bank loan  to buy an
            apartment complex (submitting  in support mortgage  documents
            for   individual   apartments    units)   containing    false
            representations.   Although  the original  indictment treated
            each apartment mortgage as a separate fraud count, this court
            viewed the  loan application to  the bank  as comprising  the
            execution  of a single scheme to defraud.  Lilly, 983 F.2d at
                                                       _____
            303.

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            pointless  without  probation  and  signaled an  intent  that

            probation  be served.  In these circumstances, and given that

            probation was  legally required for a  suspended sentence and

            had in fact been imposed on count 30 in the  second judgment,

            it  is patent  to  us that  the  district court  intended  to

            reimpose  the   same  probation  requirement  in   the  third

            judgment.

                 Finally,  if we were  in the  slightest doubt  about the

            district court's intention, the doubt is clearly dispelled by

            the  district  court's  recent  decision in  the  Rule  35(a)

            proceeding  where it  explained its  intent as  to probation.

            Lilly, 901 F. Supp. at 29.  The district court's opinion makes
            _____

            it perfectly clear that, whatever wording was overlooked, the

            court intended in its third judgment--and its first as well--

            to impose  probation on  count  30.   A remand  to clarify  a

            supposed "ambiguity" would be an errant waste of time.

                 Lilly  knows full  well that  this is  so, and  the real

            thrust of his objection  is that the district court  lawfully

            could not when  imposing the  third judgment, or  in any  new
            _____ ___                                     __

            remand we might now order,  add a term of probation to  count

            30.  Lilly's  reason is  that probation was  not included  in

            count 30 of  the first judgment  and would therefore  enlarge

            the  original  sentence long  after  its  imposition.   Lilly

            thinks,  quite  mistakenly,  that  courts  are  automatically

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            forbidden  from  increasing sentences  after  they  have been

            imposed.

                 The law  on enlargement  of sentences after  their first

            imposition  is in  fact  complex.   There are  constitutional

            limitations  and  issues  of  authority  independent  of  the

            Constitution, but there is no automatic bar to an increase in
                                          _________

            all circumstances.  See generally Bozza v. United States, 330
                                _____________ _____    _____________

            U.S.  160, 165-67 (1947); DeWitt v. Ventetoulo, 6 F.3d 32, 34
                                      ______    __________

            n.3 (1st  Cir. 1993) (collecting cases), cert. denied, 114 S.
                                                     _____ ______

            Ct. 1542 (1994).  But the complexities need not be plumbed in

            this case because there  is no enlargement even if  we assume

            that count 30 did not incorporate a term of probation.

                 In  practical  terms,  the  present  judgment  does  not
                                                                      ___

            enlarge the  overall sentence originally imposed  for Lilly's

            misconduct.   As  already  noted, in  the first  judgment the

            explicit  sentence for  the package  of counts  included five

            years' imprisonment followed by a suspended sentence and five

            years'  probation.  That is also the sentence under the third

            judgment if read to  incorporate five years' probation.   The

            number of counts fell  but the underlying misconduct remained

            the same.  See United States v. Pimienta-Redondo, 874 F.2d 9,
                       ___ _____________    ________________

            16-17  (1st Cir.)  (en  banc),  cert.  denied, 493  U.S.  890
                                __  ____    _____  ______

            (1989).

                 Lilly's  remaining  claims  relate  to  the  restitution

            order.   Lilly asserts that the  district court miscalculated

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            the loss figures used to determine  the amount of restitution

            and  failed  to  make  express findings  to  confirm  Lilly's

            ability to pay restitution.  Independently, Lilly argues that

            the restitution  order is illegal because  the district court

            delegated to the probation officer the authority to determine

            when Lilly was obliged to make installment payments.

                 Former  Rule 35(a)  permits a  challenge to  an "illegal

            sentence"  and  it is  questionable  whether  all of  Lilly's

            attacks on the restitution order, even if sound, would render

            the restitution order  "illegal."  One  might think that  the

            first two are fairly  routine claims of mistake that  are not

            fundamental  infirmities  and  do   not  make  the   sentence

            "illegal."    As for  the third,  Lilly  has a  somewhat more

            plausible  claim that  improper delegation  would render  the

            order "illegal"  on its face.  Cf.  United States v. Ahmad, 2
                                           ___  _____________    _____

            F.3d 245, 248-49 (7th Cir. 1993).

                 The case  law under  former Rule 35(a)  reflects varying

            definitions of "illegality" and  some disagreement as to what

            makes a sentence "illegal."  Compare,  e.g., United States v.
                                         _______   ____  _____________

            Padgett,  892 F.2d 445 (6th Cir. 1989), with United States v.
            _______                                 ____ _____________

            Celani,  898 F.2d 543 (7th Cir. 1990).  There is little First
            ______

            Circuit law on  the subject.   However, without deciding  the

            jurisdictional issue, we are entitled to affirm on the merits

            where this will save  time, United States v. Connell,  6 F.3d
                                        _____________    _______

            27,  29  n.3  (1st Cir.  1993),  and  that  course is  doubly

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            appropriate  here  since former  Rule 35(a)  is a  subject of

            diminishing importance.

                 Lilly first says the restitution  order was not based on

            a proper theory of loss.  His argument appears to be that the

            district  court attributed to him  much or all  of the losses

            suffered  by  the  First  Mutual Bank  when  it  subsequently

            collapsed, despite  the court's  finding that  Lilly's frauds

            were only a contributing factor in the bank's demise.  But it

            is evident  from the sentencing colloquy  and the restitution

            amount that the court  did not rely on this  more speculative

            bank-collapse  theory.   Instead, the district  judge figured

            losses by  looking at Lilly's specific  transactions with the

            bank.

                 As  detailed in  the government's  sentencing memorandum

            and discussed  by Lilly's counsel at  the sentencing hearing,

            the  restitution total reflected  the difference  between the

            amounts  in default on the  mortgages that Lilly  sold to the

            bank and the lesser appraised value of the properties held as

            collateral.  Lilly is correct that the calculations relied to

            some  extent on estimates  of property values,  but this does

            not  preclude  restitution  where,   as  here,  a  reasonable

            approximation can be made.  United States v. Savoie, 985 F.2d
                                        _____________    ______

            612, 617 (1st Cir. 1993).   

                 Lilly also asserts the trial judge did not make adequate

            findings   regarding   his  ability   to   pay  the   ordered

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            restitution.  His theory is that because the statute requires

            the  court to consider ability  to pay, 18  U.S.C.   3664(a),
                          ________

            the restitution  order is invalid  if no findings  of ability

            are made on the record.  Although this view prevails  in some

            circuits,  we have  held that  the  statutory obligation--not

            very  demanding by  its own  terms--does not  require express

            record findings  and generally  is satisfied where,  as here,

            the  court  relies  on  a presentence  report  detailing  the

            defendant's financial condition.  Savoie, 985 F.2d at 618-19.
                                              ______

                 Nor does the statute require a  record basis for finding

            that a defendant can presently pay restitution.  The prospect

            of  future income is sufficient.  United States v. Newman, 49
                                              _____________    ______

            F.3d  1, 10-11  (1st Cir. 1995).   Lilly does  not attempt to

            argue  that no  such  likelihood exists,  so  we reserve  for

            another occasion  the question of what  circumstance, if any,

            would preclude  a  district court  from ordering  restitution

            based on prospective income.         

                 Lilly's   third  claim   is  that  the   district  court

            improperly delegated  authority to  the probation officer  to

            set a  payment schedule.   Several circuit  courts have  held

            that the  responsibility for  deciding when payments  must be

            made  inheres in  the district  court, and  that it  would be

            improper  for  the court  to  delegate  this authority  to  a

            probation officer.   E.g., United  States v. Porter,  41 F.3d
                                 ____  ______________    ______

            68, 71  (2d Cir.  1994); Ahmad,  2 F.3d  at 248-49.   Lilly's
                                     _____

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            claim turns on  the cryptic statement  in the third  judgment

            that Lilly  make restitution  "as directed" by  the probation

            officer.  

                 Whatever ambiguity may have  existed has been removed by

            Judge Young's recent opinion which makes clear that the third

            judgment does not give the probation officer authority to set

            a  binding  payment schedule.   Lilly,  901  F. Supp.  at 32.
                                            _____

            Rather,  it   is  Judge  Young's  intention   that  Lilly  be

            supervised  by the  probation  officer to  ensure good  faith

            compliance; and if any question arises as to whether Lilly is

            complying, it will be  resolved by the district court.   This

            limited  role  has been  approved  by  other circuits,  e.g.,
                                                                    ____

            Ahmad, 2 F.3d at 249,  and is a reasonable enlistment  of the
            _____

            probation officer's services.

                 Affirmed.
                 ________

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