Court Opinion

ID: 2963178
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:07:20.336063+00
Date Added: 2024-06-11T11:42:39.192677
License: Public Domain

USCA1 Opinion

	

          March 2, 1995                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 91-1963                                    UNITED STATES,                                      Appellee,                                          v.                                  THOMAS E. NEWMAN,                                Defendant, Appellant.                                 ____________________                                     ERRATA SHEET
                                     ERRATA SHEET               The  opinion of this Court  issued on February  28, 1995, is          amended as follows:               Page 1:  change "Ronald R. Lagueux, U.S.  District Judge" to
                                                   ____________________          "Francis J. Boyle, Senior U.S. District Judge".
                             __________________________

                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 91-1963                                    UNITED STATES,                                      Appellee,                                          v.                                  THOMAS E. NEWMAN,                                Defendant, Appellant.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF RHODE ISLAND                 [Hon. Francis J. Boyle, Senior U.S. District Judge]
                                         __________________________                                 ____________________                                        Before                                 Selya, Circuit Judge,
                                        _____________                           Campbell, Senior Circuit Judge,
                                     ____________________                              and Stahl, Circuit Judge.
                                         _____________                                 ____________________            John A. Macfadyen for appellant.
            _________________            Margaret E.  Curran, Assistant United  States Attorney, with  whom
            ___________________        Sheldon  Whitehouse,  United  States  Attorney,  and  Edwin  J.  Gale,
        ___________________                                   _______________        Assistant United States Attorney, were on brief for appellee.                                 ____________________                                  February 28, 1995                                 ____________________                                          2

                      CAMPBELL, Senior Circuit  Judge.  Defendant  Thomas
                                _____________________            Newman appeals  from final  judgment and sentence  entered by            the district court   after a three-week criminal trial.   The            jury convicted Newman of five counts of wire fraud (18 U.S.C.               1343  (1988))  and  four  counts  of  transporting  stolen            property in  interstate commerce  (18 U.S.C.    2314 (1988)),            all arising out of his allegedly fraudulent acquisition of an            insurance company and the diversion of almost $400,000 of its            funds for his personal use.  Newman alleges that the district            court  committed  a  variety  of  errors   at  trial  and  at            sentencing.  We affirm  the judgment, and most, but  not all,            aspects of the sentence.                                          I.
                                          I.                      In late 1989, Newman, a self-described businessman,            met  with the  owner  and officers  of  Rumford Property  and            Liability Insurance Company ("RPLIC") to discuss his possible            purchase of the Rhode  Island-based insurance company.  After            a  series of  discussions and negotiations,  Newman purchased            RPLIC for $200,000 on  December 11, 1989.  RPLIC's  stock was            immediately transferred to the newly-created  Rumford Holding            Company ("RHC"), which was wholly owned by Newman.                      Prior  to  the  purchase,  RPLIC  had  been  facing            financial  difficulties.      In  part   because   of   these            difficulties,  RPLIC had  been  under investigation  by Rhode            Island's  Department of  Business Regulation ("DBR")  and had                                         -3-
                                          3

            entered   into  several   consent   orders   concerning   its            operations.  The most recent of these orders, dated May 1989,            was still in effect  at the time of purchase  and restricted,            inter  alia,  certain  uses  of RPLIC's  assets  without  DBR
            ___________            approval.  At the time of purchase, these assets consisted of            approximately  $1.2 million  in  cash, $1  million in  common            stock, $200,000 in  bonds, and various other assets.  RPLIC's            liabilities exceeded its assets.   Under Rhode Island law,  a            sale  of an insurance company  is subject to  approval by the            DBR.   R.I. Gen. Laws   27-35-2.   When first notified of the            possibility  that RPLIC might be sold, the DBR indicated that            it would not approve the sale unless the purchaser added $2.5            to $5 million in capital.                      At the  time of the  purchase, Newman was  aware of            these facts.  During the course of the  negotiations, various            drafts  of the  purchase  agreement were  circulated, all  of            which  referred to the consent  order and the  need to obtain            approval from the  DBR.  Newman had also  been given a letter            documenting RPLIC's financial  condition and indicating  that            its  liabilities exceeded  its assets.   The  final agreement            required Newman to seek DBR approval of the sale immediately.            Furthermore, at  the closing on December 11,  Newman read the            most recent consent  order, dated May 1989.   Although Newman            first expressed surprise and concern over the content  of the            consent  order,  he was  assured that  it  would not  bar the                                         -4-
                                          4

            normal operation of the  business, although it would  bar any            extraordinary transfers of funds.  After a lengthy discussion            Newman went  ahead and purchased  RPLIC, as noted  above, for            $200,000  ($100,000  in  cash,  which he  had  borrowed,  and            $100,000 in a promissory note).1                      The next day, December 12, Newman met with a number            of RPLIC  officers  and  announced that  he  needed  to  make            disbursements   of   approximately   $400,000  from   RPLIC's            accounts.   Over  their objections,  Newman directed  them to            transfer from  RPLIC's accounts (and the  accounts of RPLIC's            subsidiaries) the following  funds:  a $120,000 check  from a            RPLIC  subsidiary's checking  account;  $79,100 from  various            money  market  accounts;  and  $184,3002  from  a  number  of            brokerage  accounts.     The   check  was  given   to  Newman            personally,  and  the  other  funds  were  transferred  to  a            checking  account in the name  of Rumford Holdings, for which            Newman  was the  sole  signatory.   Altogether, $380,400  was            removed from RPLIC's accounts.                      Newman subsequently  used the $120,000 check to pay            back  the loan  that he  had taken  out for  the cash  he had            needed at  the closing.   From the Rumford  Holdings checking                                
            ____________________            1.   Under  Rhode  Island  law,  the signing  of  a  purchase            agreement without prior DBR  approval is permitted.  However,            final legal  control over the  company does not  change hands            until the purchase has been approved.            2.   This  sum consisted  of  four separate  transfers, which            formed the basis of counts I through IV (wire fraud).                                         -5-
                                          5

            account, Newman made  the following disbursements:   $150,000            to  the brokerage  firm that  had  helped him  acquire RPLIC;            $21,0003 in a  check payable  to himself; $7,000  in cash  to            himself;  $15,0004 in three checks, one to himself and two to            his wife; and  $50,0005 in a wire  transfer to an  account in            his name and  that of his  wife at  the First Virginia  Bank.            The  funds from  this  last transfer  were  used to  pay  his            personal  bills,  including  mortgage  payments on  a  house.            Included in  the above  were the disbursements  and transfers            that formed the basis  for the five counts of  wire fraud and            four counts  of interstate  transport of stolen  property set            forth in the indictment.  Newman subsequently made additional            transfers  of funds  from  RPLIC,6  although these  transfers            were not a part of the indictment.    Although  the  purchase            agreement required  Newman to seek  DBR approval of  the sale            immediately,  he did  not notify  the DBR  of the  sale until                                
            ____________________            3.   This  sum  formed  the  basis of  count  VI  (interstate            transport).              4.   These  three  checks  formed  the basis  of  counts  VII            through IX (interstate transport).            5.   This sum formed the basis of count V (wire fraud).            6.   In  January  of  1990,  Newman leased  office  space  in            Washington D.C.,  for which  Rumford Holdings paid  the rent.            In February, Newman  appointed himself  the president,  chief            executive  officer,  and chairman  of  the  board of  Rumford            Holdings, and began  to draw  an annual  salary of  $100,000.            Between  February  and  July,  Newman  charged  approximately            $50,000 in  personal expenses on the  Rumford Holdings credit            card.                                         -6-
                                          6

            March of 1990.   In April,  the DBR sent  a letter to  Newman            demanding  that he  formally seek  approval  from the  DBR by            filing a "Form A" by mid-April.  Then in May, the DBR learned            that Newman  had diverted  nearly $490,000 of  RPLIC's funds.            The  DBR wrote Newman, notifying him that he had no authority            to divert the funds and demanding that he return the funds to            RPLIC immediately.  After  receiving no response from Newman,            the DBR in June of 1990 petitioned for an order placing RPLIC            in receivership.                      Newman  was  indicted in  February  of  1991.   The            government argued  that Newman had acquired  the company with            no intent of  revitalizing it,  but with the  sole intent  to            divert its assets for  his own personal use.   The government            contended  that  Newman  knew  that RPLIC  was  in  financial            trouble  and that  the  consent order  precluded transfer  of            RPLIC's assets,  yet removed those assets  without making any            attempt  to  provide  the  company with  the  needed  capital            infusion.                      Newman's  defense  at  trial  was that  he  was  an            innocent  victim   who  had   been  deceived  by   the  other            participants involved  in the purchase of  RPLIC, namely, the            former owner, various RPLIC executives, and the broker of the            purchase.  Newman claimed that he was unaware of RPLIC's dire            financial position and that his counsel had advised  him that            the  consent  order did  not apply  to  him.   Newman further                                         -7-
                                          7

            claimed  that,  after the  purchase  of RPLIC,  he  had tried            desperately  to  find  investors  to  provide  the  necessary            capital,  and that  the transferred  funds were  simply loans            that he intended to repay.  Newman also argued that he failed            to seek DBR  approval because  he believed he  had more  time            under the contract before he was required to do so.                      The  jury convicted Newman of  all nine counts.  In            September  of 1991,  the district  judge sentenced  Newman to            concurrent  terms  of  71  months  for  the  four  counts  of            interstate transport of stolen property and 60 months for the            five counts of wire fraud.  The judge also imposed concurrent            three-year terms of supervised  release on the condition that            Newman  pay  $489,779 in  restitution  and the  costs  of his            supervised release.7                                         II.
                                         II.                      Newman  argues that the  district court made errors            at the trial and at sentencing.   These errors can be grouped            into   four  categories:  (1)  the  district  court  excluded                                
            ____________________            7.   The government  in its brief acknowledges that, although            Newman  has not raised this point, the district court appears            to have erred  in imposing the  costs of supervised  release.            Such costs  constitute an  additional fine  that can  only be            imposed in  conjunction  with a  punitive fine.   See  United
                                                              ___  ______            States v. Brandon, 17 F.3d 409, 461 (1st Cir.), cert. denied,
            ______    _______                               ____________            115 S. Ct.  80 (1994).   Because the  district court did  not            impose  a fine, the government asks this court to vacate that            part of the judgment.  United States v. Pineda, 981 F.2d 569,
                                   _____________    ______            576 (1st Cir. 1992).  As requested, we accordingly vacate the            part  of  the  sentence  imposing  the  costs  of  supervised            release.                                         -8-
                                          8

            evidence  that should  have  been allowed;  (2) the  district            court allowed  evidence that  should have been  excluded; (3)            the  district  court  permitted  the  prosecutor  to question            Newman unfairly;  and  (4)  the  district  court  erroneously            applied the sentencing guidelines.  Only in the last category            do we find any claim of merit.            A.   Improperly Excluded Evidence 
                 ____________________________                      Newman argues that  the district  court abused  its            discretion  in refusing  to admit  into evidence a  series of            letters exchanged in May of 1990 between Newman and Daniel K.            Jackson & Associates, an investment firm.  The correspondence            included  a  form  filled  out  by  Newman  containing  basic            information  about RPLIC  and requesting  investment capital.            The correspondence also included  a response from the company            indicating it was interested in  perhaps arranging financing.            According to Newman, the correspondence was  clearly relevant            in that it corroborated his testimony at trial that he was in            fact actively seeking  capital investment for  the continuing            operation of RPLIC.   It would  supposedly have rebutted  the            government's contention  that Newman  had bought  the company            with the sole intent of diverting its assets.                      We  agree  with the  government  that  the district            court did not abuse its  discretion in excluding the evidence            as irrelevant.   The correspondence  was exchanged in  May of            1990,  four  months  after  Newman had  purchased  RPLIC  and                                         -9-
                                          9

            diverted its assets.  Given the timing of the correspondence,            the district court  could reasonably have found that  it said            nothing  about the relevant issue:  Newman's state of mind at            the  time of  the  purchase and  diversion  of assets.    The            correspondence,  moreover,  was  cumulative.    Even assuming            arguendo  its  relevance,  its exclusion  was  unprejudicial,            since Newman had already  testified that he sought investment            financing  from Daniel K. Jackson  & Associates as  well as a            number of  other  investment companies,  and  the  government            never disputed this assertion.                      Newman next argues  that the district  court abused            its discretion when it  excluded certain proffered  testimony            by the director  of the  DBR.  This  testimony concerned  the            circumstances that led up to  the consent orders entered into            with  RPLIC prior to Newman's  purchase of the  company.  The            district court concluded that this testimony was not relevant            to  whether Newman had known  of the consent  orders.  Newman            argues, however, that the testimony would have indicated that            the  consent  orders  had  been  entered into  prior  to  his            involvement with RPLIC and were directed primarily at RPLIC's            former owner.   This,  Newman suggests, would  have bolstered            his claim that his  lawyers had advised him that  the consent            orders  did   not  apply  to  him,   thereby  countering  the            government's argument that Newman's flagrant violation of the            consent orders was evidence of his intent to defraud.                                         -10-
                                          10

                      Again, we think  that this  evidentiary ruling  did            not  constitute an abuse  of discretion.   The district court            could reasonably have concluded that the specific events that            led up to  the consent  orders were not  relevant to  whether            Newman was aware  of the restrictions imposed  by the decrees            at  the time  he purchased  RPLIC.   The testimony  sought by            Newman concerned the events that led up to the consent order;            it did not suggest  that Newman was unaware  of the order  or            the limits  it imposed  on the  transfer  of RPLIC's  assets.            Indeed,  the  consent order  clearly stated  on its  face the            restrictions imposed  upon RPLIC,  and it is  undisputed that            Newman  had read  the  order prior  to  his purchase  of  the            company.  Newman, moreover, could not have been prejudiced by            exclusion  of   this  testimony   since  there   was  already            considerable  testimony from  other witnesses  concerning the            history of the consent orders.                      Finally,  Newman  argues  that  the  district court            abused  its discretion when it  excluded a DBR  report from a            1987 investigation of RPLIC.  The report indicated that RPLIC            was in  financial trouble  and that RPLIC's  records were  in            such  disarray that  it  was difficult  to determine  whether            RPLIC was  solvent.  Newman contends that  an RPLIC executive            first received a copy of this report in January  of 1990, but            failed to  show it to Newman  (who by then  had purchased the            company).    Newman  argues  that  the  report  is  therefore                                         -11-
                                          11

            relevant  in that the failure to  show it to him supports his            claim that the same executives withheld information about the            financial status  of RPLIC  from him  before his  decision to
                                                  ______            purchase RPLIC.                       The district court did  not abuse its discretion in            excluding the report as irrelevant.  The report  was received            by  RPLIC after Newman had  already purchased the company and            thus  says nothing  about  what information  might have  been            withheld from him before the purchase.  The report, moreover,            was cumulative of other evidence and  its exclusion could not            have prejudiced  Newman.   The record shows  that Newman  had            repeatedly  been  informed  of RPLIC's  precarious  financial            state prior to his  purchase of the company.   In particular,            the  $200,000  purchase price  and  the  letter stating  that            RPLIC's  liabilities  exceeded  its  assets would  have  told            Newman of RPLIC's situation.            B.   Improperly Included Evidence
                 ____________________________                      Newman  argues  that the  district  court erred  in            allowing  testimony by  the  government's  witnesses  to  the            effect that Newman's actions violated the law.  Specifically,            Newman points to the following three pieces of evidence:                      1.   a  letter from  the DBR  director to                      Newman dated  May 16, 1990,  stating: "It                      has  come to  our  attention .  . .  that                      certain  funds  have  been diverted  from                      these Companies in  violation of the laws                      of the State of Rhode Island . . . .  The                      transactions   referred   to  are   grave                      violations of  the insurance laws  of the                                         -12-
                                          12

                      State  of Rhode  Island and  subject both                      the   Companies   and   the   individuals                      involved to criminal penalties."                      2.   DBR  legal counsel's  testimony that                      she told  the broker  of the sale  of the                      company "that I  believed that he  should                      return [the broker's fee], because it had                      been illegally appropriated."                      3.   RPLIC  counsel's  testimony that  he                      told  RPLIC's   comptroller  that  Newman                      should  return "the monies which had been                      wrongfully taken immediately."            Newman  argues   that  these  statements  amounted  to  legal            opinions about  Newman's guilt,  and were  hence inadmissible            and extremely  prejudicial in that they  effectively told the            jury what result  to reach.  See,  e.g., Hygh v. Jacobs,  961
                                         ___   ____  ____    ______            F.2d  359, 363 (2d Cir.  1992); Torres v.  County of Oakland,
                                            ______     _________________            758 F.2d  147, 150 (6th  Cir. 1985); see  also Marx &  Co. v.
                                                 ___  ____ ___________            Diners' Club, Inc., 550 F.2d  505, 512 (2d Cir.) ("It is  not
            __________________            for  witnesses   to  instruct  the  jury   as  to  applicable            principles of  law, but for  the judge."), cert.  denied, 434
                                                       _____________            U.S. 861 (1977).                      We  agree that  opinions as  to the  ultimate legal            issue  of guilt  or innocence  are generally  not admissible.            See, e.g., United  States v.  Espino, 32 F.3d  253, 257  (7th
            ___  ____  ______________     ______            Cir. 1994); Hogan v. American Telephone &  Telegraph Co., 812
                        _____    ___________________________________            F.2d  409, 411-12 (8th Cir. 1987); Fed. R. Evid. 704 advisory                                         -13-
                                          13

            committee's notes.8  However, Newman failed  to object to the            first  two  statements,  and,  absent  any   objections,  the            district court had little reason to exclude the statements on            its own accord.   The  above statements were  not offered  as            opinion testimony per se;  rather, the DBR director's opinion            was  part  of  a  letter  demanding  that  Newman return  the            diverted assets, and  the second statement was offered in the            ordinary course of describing certain  events and discussions            surrounding the  discovery  of Newman's  diversion of  funds.            Without objection  to the specific items,  the district court            could  well have  concluded that  the evidence,  overall, was            helpful to  the jury in  understanding the course  of events.            Admission of the first two statements clearly did not rise to            the level of plain error.  See United States v. Williams, 809
                                       ___ _____________    ________            F.2d  75,  82 (1st  Cir. 1986),  cert.  denied, 482  U.S. 906
                                             _____________            (1987).                      Newman did object to the third statement, and while            its  admission was  erroneous, the  error was harmless.   The                                
            ____________________            8.   Although  Newman   couches  his  argument  in  terms  of            improper  expert  opinion  (which  he  apparently  argues  is
                      ______            inadmissible  under  Fed.  R.  Evid. 702),  we  construe  his            argument  as objecting  to improper  lay opinion  (subject to
                                                 ___            Fed. R.  Evid.  701), since  the  above statements  were  not            offered  as expert  testimony.   This does  not significantly            alter Newman's argument,  however, as ultimate legal  opinion            may  be equally inadmissible under both Fed. R. Evid. 701 and            702.    See  Fed. R.  Evid.  704  advisory committee's  notes
                    ___            ("Rules 701 and 702 . . . afford ample assurances against the            admission of opinions  which would merely tell the  jury what            result to reach . . . .").                                         -14-
                                          14

            general concern with statements of ultimate legal opinions is            that juries  may  be  confused  or  may  accept  the  offered            opinions in  lieu of the legal  rulings of the judge.   See 3
                                                                    ___            Jack  Weinstein  & Margaret  Berger,  Weinstein's Evidence   
                                                  ____________________            704[02] (1994).   The  third statement  did not  present this            risk.  Like the  second statement, it was made in  the course            of  describing  events and  discussions  surrounding Newman's            diversion  of the funds.   The statement was  made in passing            and  was not held out  as authoritative or  expert opinion on            Newman's  guilt for the charges  on trial.   See, e.g., Hygh,
                                                         ___  ____  ____            961  F.2d  363 (finding  that  erroneous  admission of  legal            opinion was harmless error).            C.   Prosecutorial Misconduct
                 ________________________                      Newman  argues that  the  district  court erred  in            allowing  the  government to  ask  him  grossly improper  and            argumentative questions  during  the opening  of  the  cross-            examination.     Newman  points  to  two   specific  sets  of            questions.  In the  first, the prosecutor asked Newman  if he            knew  the meaning of the  terms "intent" or  "state of mind."            We  find these  questions to  be  clearly harmless.   Indeed,            Newman  does  not  indicate  that this  line  of  questioning            unfairly prejudiced him in any way.                      The second set of questions is more troublesome:                      PROSECUTOR:    Do you know what a con man                                     is, sir?                      NEWMAN:        What a what, I'm sorry?                      P:             A con man, C-O-N?                                         -15-
                                          15

                      N:             I've     seen     it    on                                     television.                      P:             Is that the only place?                      N:             Yes.                      P:             Con    man   stands    for                                     confidence  man,  is  that                                     correct?                      N:             I don't know that.                      P:             You don't know that?                      N:             No.                      P:             Con   game    stands   for                                     confidence  game,  doesn't                                     it?                      N:             If  you  say  so, I  don't                                     know that.                      P:             You don't know that?                      N:             No.                      P:             Are you  telling this jury                                     you don't know what  a con                                     man is?                      N:             I   said   I  saw   it  on                                     television,    I    didn't                                     really know  what the word                                     meant in the sense of what                                     it wasan abbreviation for.                      P:             And  you  don't know  what                                     confidence game is?                      N:             I've  heard  of confidence                                     games, yes.                      P:             But  you  don't know  what                                     they are?                      N:             Well,   purely  from   the                                     superficial point of view.                      P:             Well,    superficially   a                                     confidence game is a game,                                     is it not, conducted  by a                                     con   man   where  through                                     certain representations or                                     through   an  absence   of                                     providing          certain                                     information,  the  victims                                     of  the  con game  will do                                     something or refrain  from                                     doing something  that they                                     would otherwise do without                                     those  misrepresentations,                                     correct?                      N:             Are   you  asking   me  if                                     that's the definition of a                                     con man?                                         -16-
                                          16

                      P:             Is   that   an    accurate                                     definition?                      N:             I don't know.                      P:             You  were  blessed with  a                                     good  education,  is  that                                     correct, sir?                      N:             I  was   blessed  with  an                                     education,     yes,    God                                     allowed   me  to   get  an                                     education,      a     good                                     education.            Newman argues that these questions had nothing to do with his            guilt or innocence, but were designed solely to discredit him            by   insinuation.    Newman   argues  that  this  constituted            prosecutorial misconduct and that the district court erred in            allowing it to occur.  Newman urges us to use our supervisory            powers to  reverse his  conviction in  order to  deter future            such  misconduct.  See United States v. Capone, 683 F.2d 582,
                               ___ _____________    ______            585-86  (1st Cir.  1982).   We  agree  with Newman  that  the            prosecutor's questions  were extremely inappropriate.   There            seems  to have been no  justifiable purpose for  that line of            questioning, other than, as Newman suggests, to discredit him            by insinuation.   Not  directed at ascertaining  any relevant            fact, the questions should not have been allowed.                      Newman did not, however, object to the questioning.            Our review is therefore limited to determining if the judge's            failure  to cut  off the questioning  sua sponte  amounted to
                                                  __________            plain  error.  See United States  v. Smith, 982 F.2d 681, 682
                           ___ _____________     _____            (1st Cir. 1993).  We conclude  that they did not.  See United
                                                               ___ ______            States v. Sgro, 816 F.2d 30, 34 (1st Cir. 1987), cert. denied
            ______    ____                                   ____________                                         -17-
                                          17

            484 U.S. 1063 (1988).  The questioning was only  a small part            of  the lengthy  cross-examination; it  was isolated  and not            characteristic of  other questioning by the  prosecutor.  The            judge,  on several  occasions during  the trial,  advised the            jury that questions asked by the attorneys were not evidence.            The evidence of  Newman's guilt  was extensive.   In all  the            circumstances,  the prosecutor's  improper questions  did not            "so  poison[] the well" that  the verdict was  affected and a            new trial is required.  See Smith, 982 F.2d at 682; Sgro, 816
                                    ___ _____                   ____            F.2d at 34.              D.   Sentencing Guidelines Errors
                 ____________________________                      Newman  argues  that  the  district  court  wrongly            applied  the  sentencing   guidelines.    Specifically,   the            district court allegedly erred: (1) in enhancing the sentence            for "abuse of a private trust"; (2) in enhancing the sentence            for  violation  of a  consent  order;  and  (3)  in  imposing            restitution in the amount of $489,779.                 1.   Abuse of Private Trust
                      ______________________                      Newman  argues  that  the district  court  erred in            enhancing  his sentence under U.S.S.G.   3B1.3 for abuse of a            position of  private trust.9   The district court  found that                                
            ____________________            9.   U.S.S.G.   3B1.3 provides in relevant part:                      If the  defendant  abused a  position  of                      public or private trust . . . in a manner                      that   significantly    facilitated   the                      commission or concealment of the offense,                      increase by two levels.                                         -18-
                                          18

            the insurance industry is  heavily regulated and that persons            in  control of insurance companies occupy a position of trust            which  obligates  them  to  act in  the  interests  of  their            policyholders and employees.   The district court found that,            by diverting  RPLIC's funds  for his  own use,  Newman abused            this position  of trust.   Newman argues,  however, that  the            enhancement does not  apply since he never legally occupied a            "position of trust."  Newman argues that he technically never            obtained  legal control  of  RPLIC, having  failed to  obtain            approval of the purchase from the DBR as required under Rhode            Island  law.  At  most, Newman argues,  the evidence suggests            that he committed  an ordinary fraud.   Never having occupied            the position legally, Newman argues, he cannot be subject  to            the enhancement.10                      While Newman may  never have  legally occupied  the            position,  he  indisputably had  de  facto  control over  the
                                             _________            company and thus in  fact occupied a position of trust.   The            application note  to the  sentencing guidelines in  effect at            the  time of  sentencing  provides that:  "[t]he position  of            trust  must  have  contributed  in some  substantial  way  to                                
            ____________________            10.  The government argues that,  although Newman objected to            this  enhancement at  sentencing, he did  not object  on this            precise ground  and this  argument is therefore  not properly            preserved  on appeal.  See  United States v.  Ortiz, 966 F.2d
                                   ___  _____________     _____            707,  717  (1st Cir.  1992), cert.  denied,  113 S.  Ct. 1005
                                         _____________            (1993).  Since  it is not  entirely clear to  us that  Newman            failed to object on this ground, we choose instead to dispose            of the claim on its merits.                                         -19-
                                          19

            facilitating  the  crime  and  not merely  have  provided  an            opportunity  that could as easily have been afforded to other            persons."  U.S.S.G.   3B1.3  comment. (n.1) (1991).  Newman's            position and  his effective  discretionary  control over  the            company  enabled him to transfer  the funds for  his own use.            This is exactly the type of behavior that the enhancement was            aimed at.  It would be perverse to allow the  lack of formal,            legal control, for which Newman was responsible by failing to            file  the  appropriate  forms,   to  insulate  him  from  the            consequences  of his breach of  trust.  Cf.  United States v.
                                                    ___  _____________            Innamorati, 996  F.2d 456,  489-90 (1st Cir.),  (former state
            __________            registry police  officer subject  to enhancement where  prior            position of  trust facilitated his crime),  cert. denied, 114
                                                        ____________            S. Ct. 409 (1993).                      Newman  also  argues  that the  enhancement  cannot            apply to him since  his acquisition of the position  of trust            was itself  a part of the crime.  Drawing an analogy to cases            dealing with enhancements under   3B1.3 for abuse of "special            skills", see United States  v. Young, 932 F.2d  1510, 1513-14
                     ___ _____________     _____            (D.C. Cir. 1991), he argues that the enhancement applies only            to  the  abuse  of  a  preexisting  position  of  trust,  and
                                   ___________            therefore  cannot  apply  to  him.   However,  even  assuming            arguendo  that this theory  has validity, Newman misconstrues            the crimes of which he  was convicted.  He was  not convicted            of  the  fraudulent  acquisition  of  an  insurance  company.                                         -20-
                                          20

            Rather,  he  was  convicted  of  wire  fraud  and  interstate            transport of stolen property, crimes which were substantially            facilitated  by his  prior  acquisition of  control over  the            insurance company.   His abuse of the  position was precisely            the behavior targeted by  the enhancement.  We find  no error            in the application of this sentence enhancement.                 2.   Violation of Consent Order
                      __________________________                      Newman further argues that the district court erred            in  imposing   a   two-level  increase   under   U.S.S.G.                2F1.1(b)(3)(B)  for  a  knowing  violation  of  the   consent            order.11   Newman  argues that  the enhancement  applies only            when a defendant violates an  order directed at the defendant            personally  or  at  an  entity  that  is  controlled  by  the            defendant.   Newman argues that the order was not directed at            him personally  nor was he  a party to  the order, as  it was            entered  into prior to his  purchase of the  company.  Newman            further argues,  as above,  that he never  legally controlled            RPLIC, since the DBR  never approved the sale.   Accordingly,            Newman argues, the enhancement could not apply to him.                      We   find  no   error  in   the  district   court's            application  of  this enhancement.    The  commentary to  the                                
            ____________________            11.  U.S.S.G.   2F1.1(b)(3)(B) provides in relevant part:                      If  the offense involved  . . . violation                      of any judicial or  administrative order,                      injunction,  decree or  process, increase                      by two levels.                                         -21-
                                          21

            guidelines provides: "If it is established that an entity the            defendant controlled was a party to the prior proceeding, and            the defendant  had knowledge  of the  prior decree  or order,            this  provision applies  even  if  the  defendant was  not  a            specifically-named  party in  that prior  case."   U.S.S.G.              2F1.1, comment. (n.5) (1991).  Even though not a party to the            order, Newman was subject to the enhancement if he controlled            the company and knew  of the prior order.   As already  said,            Newman had de facto control of the company.  Moreover, he was
                       ________            aware of the consent  order and could be found  to have acted            in deliberate contravention of it.  Newman's violation of the            order   was   thus   subject    to   enhancement   under                 2F1.1.(b)(3)(B).12                 3.   Restitution
                      ___________                      Newman  argues  that the  district  court  erred in            ordering,   as  a  condition   of  his   supervised  release,            restitution  in the amount  of $489,179 under  the Victim and            Witness Protection Act, 18 U.S.C.   3663-3664 (1988).  Newman            first  argues that the court erred when it failed to consider            Newman's  inability  to pay  restitution.    In fashioning  a            restitution order, a  court must consider "the  amount of the                                
            ____________________            12.  Newman additionally argues that the enhancement does not            apply since  it requires  that the defendant  have controlled            the entity  at  the time  the order  was entered  into.   The
                        __________________________________________            guideline,   however,  contains   no   such  requirement   of            contemporaneousness, and Newman cites no cases imposing  such            a requirement.                                         -22-
                                          22

            loss sustained by any victim as a result of  the offense, the            financial resources of the defendant, the financial needs and            earning  ability   of  the  defendant   and  the  defendant's            dependents,  and  such  other  factors  as  the  court  deems            appropriate."   18 U.S.C.    3664(a)  (1988).   Newman argues            that nothing in the district court opinion indicates that the            court considered Newman's financial resources.  Newman points            to  his  presentence  report   which  indicates  that  he  is            currently indigent, has a negative net worth, and "has little            current  ability  to pay  a fine."13   Newman  further argues            that  he has no reasonable prospect of paying the restitution            in the future.  Accordingly,  he argues, the district court's            imposition of  restitution despite evidence of  his inability            to  pay  evinced a  lack  of  adequate consideration  of  the            statutory factors  and constituted abuse of  discretion.  See
                                                                      ___            United States  v. McIlvain,  967 F.2d  1479, 1481 (10th  Cir.
            _____________     ________            1992); United States v.  Ramilo, 986 F.2d 333, 336  (9th Cir.
                   _____________     ______            1993).                                
            ____________________            13.  The presentence investigation  report detailed  Newman's            employment history and then stated:  that Newman's only asset            is $50,000 in equity in his former residence; that Newman has            $68,000  in  outstanding  liabilities;  that  Newman  has  no            current  income;  and  that  Newman's  monthly  expenses  are            currently $1,476.   The  report concluded:   "Based  upon the            defendant's financial  profile, it  would appear that  he has            little current ability to pay a fine; however, once his legal            matters are resolved,  he would  be in a  position to  secure            gainful employment."                                         -23-
                                          23

                      Although  the district  court  did  not  explicitly            consider Newman's  ability to pay the  restitution, the court            was  not required  to make  specific findings  of fact.   See
                                                                      ___            United States v. Savoie,  985 F.2d 612, 618 (1st  Cir. 1992).
            _____________    ______            Rather, it  is sufficient  if "the  record on  appeal reveals            that the judge made implicit findings or otherwise adequately            evinced  his consideration of those factors."  Id.  Here, the
                                                           ___            record  is sufficient  to  indicate that  the district  court            considered   the  requisite  factors   in  arriving   at  the            restitution  amount.    The  district  court  considered  and            explicitly  adopted the  findings in the  presentence report,            which   included   information   about   Newman's   financial            condition, earning ability, and ability to pay.  Although  we            agree  that the evidence in the presentence report may not be            able to support a finding that Newman has the ability  to pay            restitution in that amount, the statute does not require such            a finding; it requires only that the  district court consider
                                                                 ________            the defendant's financial resource as a factor in arriving at            the  figure.  See United States v.  Lombardi, 5 F.3d 568, 573
                          ___ _____________     ________            (1st Cir. 1993).  Newman's possible future ability to pay may            also  be sufficient  to  support a  restitution  order.   See
                                                                      ___            United  States  v.  Brandon,  17  F.3d  409,  461  (1st Cir.)
            ______________      _______            (imposing  $500,000 restitution order,  even though defendant            had no  current ability to  pay, based on  defendant's future            prospects of employment), cert. denied, 115 S. Ct. 80 (1994);
                                      ____________                                         -24-
                                          24

            Lombardi, 5 F.3d at 573.  Here, the presentence report stated
            ________            that "once [Newman's] legal matters are resolved, he would be            in a position to secure gainful employment."  Thus, we cannot            say that it was an abuse of discretion for the district court            to impose restitution.   See Lombardi, 5 F.3d at  573 ("While
                                     ___ ________            the judgment  requiring restitution may be  fruitless, it may            also  be  of some  use if  [the  defendant] ever  secures new            assets .  . . .   In all events, the  statute merely requires            the court  to  'consider' financial  condition,  among  other            factors; there is no requirement that  the defendant be found            able to pay now.") (citations omitted).                      Newman further  argues that,  even if the  district            court  adequately considered  his ability  to pay,  the court            erred in  fixing the  amount of  restitution at  $489,179, as            that  amount far exceeds the unlawful  transfers for which he            was  convicted.     Newman  notes  that,   in  this  circuit,            restitution under the pre-November  1990 version of   3663(a)            is limited only  to loss caused by the  conduct for which the            defendant has been convicted.   United States v.  Cronin, 990
                                            _____________     ______            F.2d 663,  666 (1st  Cir. 1993).14   The $489,179  represents            all of  the sums paid  out by RPLIC  as a result  of Newman's            fraudulent scheme.   However, the  indictment charges  Newman                                
            ____________________            14.  As the offenses occurred in 1989  and early 1990, Newman            is  subject to the restitution  statute as it  stood prior to            amendment in November of 1990 by Pub. L. No. 101-647,   2509,            104 Stat. 4789, 4863 (1990).                                         -25-
                                          25

            only with the  diversion of $184,300.   Thus, Newman  argues,            the court erred in charging Newman with the entire sum.                      We  agree.   Under  the law  in  this circuit,  the            district court should have fixed the amount of restitution at            $184,300, the amount that  Newman was convicted of diverting.            See  Cronin, 990 F.2d at  666.  The  government concedes that
            ___  ______            under  Cronin restitution is limited  to that lesser sum, but
                   ______            urges  nonetheless  that we  adopt the  alternative position,            taken  by a  minority of  circuits, under  which a  court may            award restitution for all of the harm caused by the scheme to            defraud, not simply the specific harm for which the defendant            was convicted.   See,  e.g., United  States v.  Stouffer, 986
                             ___   ____  ______________     ________            F.2d  916, 929  (5th  Cir.), cert.  denied,  114 S.  Ct.  115
                                         _____________            (1993).   In most circumstances,  a panel in  this circuit is            bound to  adhere to precedent  established by  a prior  panel            unless departure is mandated  legislatively or by the Supreme            Court.    The  en  banc court  alone  can  reconsider circuit            precedent.  We follow our precedent in Cronin.
                                                   ______                                         III.
                                         III.                      For the reasons set forth above, we affirm Newman's            conviction.  We also affirm  all aspects of Newman's sentence            except:  (1)  the  restitution  order, which  we  direct  the            district court to  reduce from $489,179 to  $184,300; and (2)            the  order to pay the  costs of supervised  release, which we                                         -26-
                                          26

            direct  the district  court  to vacate  per the  government's            request, see supra, note 7.
                     ___ _____                      So ordered.
                      __________                                                       -27-
                                          27