Court Opinion

ID: 2964554
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:27:23.098693+00
Date Added: 2024-06-11T11:42:57.529525
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

        No. 96-1132

                              UNITED STATES OF AMERICA,

                                      Appellee,

                                          v.

                                  RICHARD GOLDBERG,

                                Defendant, Appellant.

                                 ____________________

                                     ERRATA SHEET

            At page 16, line 15, delete ", Michael  Kendall," and at page  17,

        line 2, substitute "the prosecutor in question" for "Kendall".

                            UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT

                                 ____________________

        No. 96-1132

                              UNITED STATES OF AMERICA,

                                      Appellee,

                                          v.

                                  RICHARD GOLDBERG,

                                Defendant, Appellant.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                   [Hon. Douglas P. Woodlock, U.S. District Judge]
                                              ___________________

                                 ____________________

                                        Before

                                Boudin, Circuit Judge,
                                        _____________

                            Bownes, Senior Circuit Judge,
                                    ____________________

                              and Lynch, Circuit Judge.
                                         _____________

                                 ____________________

            Morris  M. Goldings  with  whom  David  R. Kerrigan  and  Mahoney,
            ___________________              __________________       ________

        Hawkes & Goldings were on brief for appellant.
        _________________

            Michael  Kendall,  Assistant  United  States Attorney,  with  whom
            ________________

        Donald K.  Stern,  United  States  Attorney, and  Kevin  J.  Cloherty,
        ________________                                  ___________________

        Assistant United States Attorney, was on brief for the United States. 

                                 ____________________

                                   February 3, 1997

                                 ____________________

                 BOUDIN, Circuit Judge.   Richard Goldberg was  convicted
                         _____________

            of two counts  of conspiracy to defraud the  Internal Revenue

            Service,  18 U.S.C.    371,  and eight  counts of  aiding and

            assisting the filing of false income tax returns, 26 U.S.C.  

            7206(2).  Goldberg's  appeal is now before  us.  We  begin by

            describing  the factual  background  and  proceedings in  the

            district court.

                 In the years prior to  his indictment in 1995,  Goldberg

            was involved in several businesses in and around Boston.  His

            ventures  included a billboard company, Logan Communications,

            and a partial interest in a "Park 'N Fly" lot located in East

            Boston near Logan Airport.   Goldberg also owned and operated

            Liverpool Lumber,  Inc., which Goldberg used  as a management

            company for various of his other enterprises.

                 In  or  around  1988,  Goldberg became  aware  that  the

            Commonwealth of Massachusetts  planned to take all or part of

            the East  Boston Park 'N Fly lot by eminent domain as part of

            its Third Harbor Tunnel project.  The planned taking not only

            threatened Goldberg's profitable  parking business, but  also

            his billboard company,  since many of its signs  were located

            on  the  parking  lot's  land.   Goldberg  began  an  intense

            lobbying  effort  against the  proposal  in  1988, eventually

            spending  over $1 million of  his and his  partners' money to

            oppose the tunnel plans.

                                         -2-
                                         -2-

                 Two  of  those hired  to  oppose  the project--community

            activist  Robert A. Scopa  and consultant  Vernon Clark--were

            named as co-conspirators in the two separate conspiracies for

            which Goldberg was ultimately convicted.  Taking the evidence

            most favorable  to the verdict,  the facts pertaining  to the

            two different conspiracies were as follows.

                 Scopa Conspiracy.  From  1990 to 1995, Goldberg employed
                 ________________

            Scopa to help organize the East Boston  community against the

            tunnel project and to  perform other services.  But  Goldberg

            never  paid Scopa in Scopa's own name.  Instead, Goldberg had

            his   Liverpool  Lumber  company  issue  paychecks  to  three

            successive  "straw"   employees,  none  of  whom  worked  for

            Goldberg  and all  of whom agreed  to hand the  money over to

            Scopa.  

                 To reflect the "wages"  of the straw employees, Goldberg

            directed  his  bookkeeper  at  Liverpool  Lumber  to  prepare

            various W-2,  W-3, and  W-4 reporting statements,  which were

            then filed with the  IRS.  These documents falsely  described

            wage  payments  to  straws  who  had performed  no  work  for

            Liverpool  Lumber.  The straws, in turn, falsely included the

            phantom wages from Liverpool on their own individual returns.

            Reporting the money on the straws' returns instead of Scopa's

            resulted  in a  loss of  about $150  to the  Internal Revenue

            Service.

                                         -3-
                                         -3-

                 The  government claimed  at  trial that  the scheme  was

            devised  so that Scopa would  seem to be  unemployed and thus

            could continue to collect monthly benefits under a disability

            insurance policy.  Evidence  also indicated that Scopa sought

            to hide the  payments in order to  preserve his status  as an

            "independent" activist  in the  East Boston community  and to

            prevent an  extramarital affair from being  discovered by his

            wife.  The  district court  later found that  Scopa, but  not

            Goldberg, was motivated by all of these objectives.  

                 Clark Conspiracy.  In  the course of opposing  the Third
                 ________________

            Harbor Tunnel project, Goldberg also retained Vernon Clark, a

            lobbyist in  Washington, D.C., who performed various services

            to this  end.  Goldberg's companies owed  Clark a substantial

            sum of money in 1991 for  work performed in opposition to the

            tunnel project.  Rather  than pay the bill directly,  the two

            men  agreed  with others  to  a more  complicated  method for

            Goldberg to discharge his debt to Clark.

                 At the time,  Clark was  having a secret  affair with  a

            woman named  Patricia McNally.   The pair  occasionally spent

            time in a Maine beach house of which  McNally was part owner.

            Clark  sought to fund an expansion of the beach house without

            his  wife's knowledge.  Goldberg  agreed to pay  the money he

            owed to Clark to  a landscaping company owned by  John Lango,

            McNally's  brother-in-law, who  would  in turn  construct the

            beach house expansion.

                                         -4-
                                         -4-

                 Goldberg arranged for  the preparation  of two  separate

            $10,000 invoices to Park 'N Fly from Lango, dated October 15,

            1991 and  January 1, 1992,  respectively.  The  invoices were

            ostensibly for landscaping services, although Lango performed

            no work for any  of Goldberg's companies.  The  invoices were

            paid  by  Park 'N  Fly.   Lango testified  at trial  that the

            payments were structured  in two installments so as to reduce

            his taxes on the transaction.

                 The triangular  flow of money and  services involved the

            preparation and filing  of several false  tax documents.   At

            Goldberg's direction,  Park 'N Fly sent  forms 1099-MISC, one

            for each $10,000 payment, to the IRS and to Lango.  The forms

            falsely listed  the payments as non-employee  compensation to

            Lango.  Lango in turn reported  the payments as income on his

            own income  tax returns  in  1991 and  1992.   Clark did  not

            report the money.   The foreseeable tax loss to the IRS based

            on this scheme was about $3,000.

                 A federal  grand jury indicted Goldberg on April 6, 1995

            for  offenses   relating  to  the  above   activities.    The

            indictment charged Goldberg with  two counts of conspiring to

            defraud  the  United  States  government, 18  U.S.C.     371,

            several counts of  aiding and assisting  the filing of  false

            income tax returns,  26 U.S.C.   7206(2),  and several counts

            of mail fraud  based on  his alleged efforts  to conceal  his

                                         -5-
                                         -5-

            employment of Scopa from the latter's disability insurer.  18

            U.S.C.   1341.

                 After moving  unsuccessfully to dismiss  the indictment,

            Goldberg waived his  right to  a trial by  jury.   Goldberg's

            trial  before the  district  judge took  eight  days, and  on

            September 6,  1995, the court  announced its  findings.   The

            court  found Goldberg  guilty  of conspiring  to defraud  the

            government and of aiding and assisting in  the preparation of

            false  tax  returns,  but acquitted  him  on  the  mail fraud

            charges on the  ground that  his motive to  help defraud  the

            insurer had not been proved beyond a reasonable doubt.

                 At Goldberg's  sentencing in December 1995, the district

            court made guideline calculations  (described below) but then

            departed downward  two levels  and sentenced Goldberg  at the

            bottom of the range.   The result was a  ten-month sentence--

            five  months to  be served  in prison  and five  in community

            confinement--as well as three years of supervised release and

            a  $20,000  fine.    Goldberg now  appeals,  challenging  his

            convictions and sentence.

                 The most important and difficult issues on appeal relate

            to Goldberg's conviction for conspiracy under 18 U.S.C.   371

            to defraud  the IRS.  This  type of conspiracy is  known as a

            Klein  conspiracy,  taking  its  name from  an  earlier  case
            _____

            involving a complex scheme designed to escape taxes.   United
                                                                   ______

            States  v.  Klein, 247  F.2d 908  (2d  Cir. 1957).   Goldberg
            ______      _____

                                         -6-
                                         -6-

            argues  that  the district  court  misunderstood  the crime's

            "purpose" element  and that  the evidence did  not support  a

            conviction.

                 The defraud  clause  of  Section  371  criminalizes  any

            conspiracy  "to  defraud the  United  States,  or any  agency

            thereof in any manner or for  any purpose."  18 U.S.C.   371.

            Such conspiracies to  defraud are not limited to those aiming

            to deprive the government of  money or property, but  include

            conspiracy to  interfere  with government  functions.    See,
                                                                     ____

            e.g., United States v. Tarvers, 833 F.2d 1068, 1075 (1st Cir.
            ____  _____________    _______

            1987).  The crime with which Goldberg was charged, therefore,

            was  that   he  conspired   to  interfere  with   the  proper

            functioning  of  the IRS,  through  the filing  of  false tax

            documents.

                 It  is commonly said that in such a conspiracy the fraud

            has  to be  a purpose  or object  of the conspiracy,  and not
                          _______     ______

            merely  a  foreseeable  consequence  of   the  conspiratorial

            scheme.  Dennis v. United States, 384 U.S. 855, 861 (1966); 1
                     ______    _____________

            Sand et al., Modern Federal Jury Instructions   19.02 (1990).
                 ______  ________________________________

            Consider,  for example, the case  of a band  of bank robbers.

            All know that the  agreed-upon robbery will generate "income"

            that  none of  the  robbers will  report.   Yet  it would  be

            straining to describe interference with  the IRS as a purpose

            or  object of the conspiracy.   E.g., United  States v. Vogt,
                                            ____  ______________    ____

            910 F.2d 1184, 1202 (4th Cir. 1990).

                                         -7-
                                         -7-

                 This  requirement  of  purpose  accords  generally  with

            conspiracy doctrine, United States v. Alvarez, 610 F.2d 1250,
                                 _____________    _______

            1256 (5th  Cir. 1980), but  it is especially  important under

            the  defraud clause  of  section 371.    There are  not  many

            financial   crimes  without   some  implications   for  false

            reporting in someone's tax filings, if not for  tax liability

            itself.     If   section  371   embraced  every   foreseeable

            consequence  of  a conspiracy,  many  joint  financial crimes

            having no other federal nexus--and perhaps  many non-criminal

            acts as well--would automatically become federal conspiracies

            to defraud the IRS.

                 The "purpose" requirement, however,  is easier to  state

            than  to apply.  The  laundering of drug  money, for example,

            normally involves  the deliberate concealment of  the money's

            origin.   The  primary  purpose  is almost  always  to  avoid

            detection of the underlying  crime; but can a jury  also find

            an  implied secondary  objective to  conceal income  from the

            IRS?  We have held, on specific facts, that a jury could draw

            such an inference and  also find a violation of  section 371.

            E.g., United States v.  Cambara, 902 F.2d 144, 147  (1st Cir.
            ____  _____________     _______

            1990); Tarvers, 833 F.2d at 1075-76.
                   _______

                 Such cases  are the source of  Goldberg's first argument

            on this issue.  He argues, inventively, that the conspirators

            either  must  have  as  their  primary  purpose  the  aim  of

            frustrating  the IRS  or must  be agreeing  to  undertake the

                                         -8-
                                         -8-

            conduct  in question to conceal some other crime.  An example

            of the  first alternative  (primary purpose) is  Klein itself
                                                             _____

            where a web of shell companies and deceptive arrangements was

            devised to evade  taxes; the second  alternative (concealment

            of crime) captures the money laundering precedents.

                 This view of section 371 might explain a number of cases

            and  create a  barrier against  overreaching by  prosecutors.

            But  it  makes no  doctrinal sense.    A conspiracy  can have

            multiple objects, Ingram v. United States, 360 U.S. 672, 679-
                              ______    _____________

            80 (1959), and any agreed-upon object can be a purpose of the

            conspiracy and  used to  define its character.   The  central

            problem,  which  ought  not  be shirked,  is  to  distinguish

            rationally  between cases  where interfering  with government

            functions  is  a  purpose and  those  where  it  is merely  a
                       __

            foreseeable effect of joint action taken for other reasons.

                 This  effort poses  subtle  problems  in  discriminating

            "purpose" from "knowledge" and in separating the objects of a

            conspiracy from its more  remote consequences.  Volumes could

            be written on these subjects but--for cases like ours--a more

            compact  solution is  at  hand: where  the conspirators  have

            effectively agreed  to falsify  IRS documents to  misstate or

            misattribute  income,  we  think  that  (depending  upon  the

            circumstances) the factfinder may  infer a purpose to defraud

            the government by interfering with IRS functions in the sense

            endorsed by the Supreme Court in Dennis.    
                                             ______

                                         -9-
                                         -9-

                 It may well be that the conspirators in this case had no

            subjective desire--primary or secondary--to throw sand in the
                                       __

            wheels of the  IRS, let alone a subjective aim  to reduce tax

            liability.    Goldberg's argument  on  this  point, with  one

            qualification as  to the Clark conspiracy,  may be plausible.

            But  filing a  number of  false tax  documents misattributing

            income  can interfere  so  clearly and  proximately with  IRS

            functions--or at least a factfinder  could (but need not)  so

            find--that  we see  no  sharp distinction  under section  371

            between a purpose  to file  such documents and  a purpose  to

            interfere.

                 In permitting  a factfinder to equate  the two purposes,

            we  leave untouched  the general  precept, namely,  that mere

            collateral  effects of  jointly agreed-to  activity, even  if

            generally foreseeable, are not  mechanically to be treated as

            an object of  the conspiracy.  This would be a different case

            if, without  filing false tax documents,  Goldberg had agreed

            with  his partners to pay Jones under the table, knowing that

            Jones had no intention of reporting the money to the IRS.  If

            the difference is in degree, then here the degree matters.

                 This  brings us  to the  evidentiary question  raised by

            Goldberg  which we  rephrase to  accord with  our just-stated

            view of  the law:  does  the evidence in this  case show that

            Goldberg and at least one other conspirator shared  a purpose

            to interfere with IRS functions by the filing of false income

                                         -10-
                                         -10-

            reports  with the  IRS?   This  question  must be  asked  and

            answered separately  as to  each conspiracy, as  Goldberg was

            convicted of two separate  conspiracies under section 371 and

            each conviction involves a separate assessment.

                 In each conspiracy, the  illicit purpose that gives rise

            to  section 371  violation  must be  shared  by two  or  more

            conspirators.   Although the government's brief  stresses the

            evidence pertaining  to Goldberg's own role  and knowledge, a

            conspiracy to  defraud requires at  least two who  share that

            aim. Innocent third parties  may be the unwitting instruments

            of a conspiracy.   But  when it comes  to characterizing  the

            purposes or objects of  the conspiracy, it is those  that are

            shared  by  at least  two  co-conspirators that  make  up the

            illegal agreement between them.   United States v. Krasovich,
                                              _____________    _________

            819 F.2d 253, 255 (9th Cir. 1987).

                 Here, the  district court  found that  a purpose of  the

            conspirators, in  each conspiracy, was to  interfere with the

            IRS.   As  we have  said,  such a  purpose  can be  inferred,

            depending  upon the facts, where  the very acts  agreed to by

            the conspirators included the  filing of false income-related

            tax  documents.    This  purpose can  fairly  be  imputed  to

            Goldberg  who arranged  for the creation  of several  or more

            false  tax  documents  in  each scheme.    The  duration  and

            complexity of the schemes, and Goldberg's own sophistication,

            add to the inference.

                                         -11-
                                         -11-

                 There is no evidence  that Goldberg discussed the filing

            of false tax documents with other conspirators.  Yet we think

            that such  conduct was an  integral and self-evident  part of

            each  conspiracy,  permitting the  inference  that other  co-

            conspirators  shared in  that purpose.   In  the case  of the

            Scopa conspiracy,  false W-2s were  given to the  straws, who

            were  participants in  the scheme,  over an  extended period.

            Scopa himself signed a  tax return with his wife, who was one

            of the straws, that incorporated a false W-2.  

                 As  to the  Clark conspiracy,  Lango received  the false

            form 1099s, and he in turn  reported the false figures to the

            IRS.  Indeed, Lango asked that the amount be  divided so that

            it could be reported in two different years, testifying later

            that Clark had  made the  suggestion.  This  indicates a  tax

            motive  but, in addition, shows  that both men  knew that the

            filing of false  tax documents  was an integral  part of  the

            scheme,  and both shared in  this purpose with  Goldberg.  In

            sum, the  evidence supports the  trial court's findings  of a

            common purpose to interfere with IRS functions.

                 In  addition to "the danger [of injustice] inherent in a

            criminal  conspiracy charge,"  Dennis, 384  U.S. at  860, the
                                           ______

            defraud clause  of section  371  has a  special capacity  for

            abuse because of the vagueness  of the concept of interfering

            with  a proper government function.  For that reason, we have

            examined with special  care both the concept and the evidence

                                         -12-
                                         -12-

            in  this case.    But having  done so,  we conclude  that the

            conduct and purpose of the defendants, although markedly less

            sinister  than in  Klein,  could properly  be  found to  fall
                               _____

            within the outer bounds of section 371.

                 Goldberg next  challenges the admission at  trial of two

            out-of-court conversations between Lango  and Clark, in which

            they  discussed  the  false   landscaping  invoices  and  the

            solicitation  of  Goldberg's  participation  in  the  scheme.

            These statements were admitted, over Goldberg's  objection at

            trial, pursuant to Fed. R. Evid. 801(d)(2)(E), which provides

            that "a statement by  a co-conspirator of a party  during the

            course  and   in  furtherance  of  the   conspiracy"  is  not

            considered hearsay.  

                 Goldberg does not dispute that  Lango and Clark made the

            challenged  statements  during  and  in  furtherance  of  the

            conspiracy,  but  he  argues  that the  statements  were  not

            admissible  against  him because  they  were  made before  he

            joined.  He relies heavily on our opinion in United States v.
                                                         _____________

            Petrozziello, 548 F.2d 20 (1st Cir. 1977), where we said that
            ____________

            "if  it is more  likely than not  that the  declarant and the

            defendant  were  members of  a  conspiracy  when the  hearsay

            statement was made, and that the statement was in furtherance

            of the conspiracy, the hearsay is admissible."  Id. at 23.
                                                            __

                 Although this language has been cited with approval in a

            few later cases, e.g.,   United States v. McCarthy,  961 F.2d
                             ____    _____________    ________

                                         -13-
                                         -13-

            972, 976-77 (1st Cir. 1992), it  conflicts with United States
                                                            _____________

            v. Baines, 812 F.2d 41 (1st Cir. 1987).  Baines expressed the
               ______                                ______

            traditional notion  that--insofar as hearsay  is concerned--a

            late-joining conspirator takes the conspiracy as he finds it:

            "a  conspiracy  is like  a train,"  and  "when a  party steps

            aboard, he  is part of  the crew,  and assumes  conspirator's

            responsibility for the existing freight . . . ."   Id. at 42;
                                                               ___

            accord United States v. Saccoccia, 58 F.3d 754, 778 (1st Cir.
            ______ _____________    _________

            1995).

                 Frankly,  the underlying co-conspirator exception to the

            hearsay rule  makes  little sense  as  a matter  of  evidence

            policy.   No  special guarantee  of reliability  attends such

            statements,   save  to   the   extent   that  they   resemble

            declarations against  interest.   The exception  derives from

            agency  law, an analogy that  is useful in  some contexts but

            (as  the Advisory  Committee noted)  is "at  best  a fiction"

            here.  The most  that can be said is that  the co-conspirator

            exception  to  hearsay  is  of  long  standing  and  makes  a

            difficult-to-detect crime easier to  prove.  United States v.
                                                         _____________

            Gil, 604 F.2d 546, 549 (7th Cir. 1979).
            ___

                 If  starting afresh,  one  might argue  that the  narrow

            Petrozziello version of the exception should be preferred, if
            ____________

            only  because  it  accords  better with  the  companion  rule

            imposing  substantive liability  for  other crimes  committed

            during the  conspiracy; a  co-conspirator is held  liable for

                                         -14-
                                         -14-

            foreseeable  acts  of  others  done  in  furtherance  of  the

            conspiracy  but  only  if  committed  during the  defendant's

            period of  membership.   United States  v. O'Campo,  973 F.2d
                                     _____________     _______

            1015, 1021 (1st Cir. 1992).  Symmetry is at least convenient.

                 But we are not starting afresh.  The broader Baines test
                                                              ______

            describes the  traditional approach, United States  v. United
                                                 _____________     ______

            States Gypsum  Co., 333  U.S. 364, 393  (1948), presumptively
            __________________

            adopted by the Federal  Rules of Evidence.  It is followed in

            most circuits.   See 2  Saltzburg, et al.,  Federal Rules  of
                             ___               ______   _________________

            Evidence  Manual 219-22  (5th  ed. 1990)  (collecting cases).
            ________________

            Most important,  it is  the test  in most  of our  own recent

            cases,  including  Saccoccia,  decided only  19  months ago.1
                               _________

            This panel  is arguably  not free,  but is in  any event  not

            inclined, to depart from Saccoccia.
                                     _________

                 Goldberg's  next claim on appeal is  based on his motion

            filed prior to trial asking the district court to dismiss the

            indictment  on  the ground  of  selective  prosecution.   The

            district  court  denied the  motion  without  holding a  full

            evidentiary hearing.   Goldberg claims that  he alleged facts

            sufficient  to require a hearing on his complaint, and he now

                                
            ____________________

                 1See  Saccoccia, 58  F.3d at 778;  O'Campo, 973  F.2d at
                  ___  _________                    _______
            1023 n.5; United  States v.  Fields, 871 F.2d  188, 194  (1st
                      ______________     ______
            Cir. 1989); United States v. Murphy,  852 F.2d 1, 8 (1st Cir.
                        _____________    ______
            1988);  United States v. Anguilo, 847 F.2d 956, 969 (1st Cir.
                    _____________    _______
            1988); United  States v. Reynolds,  828 F.2d  46, 47-48  (1st
                   ______________    ________
            Cir.  1987); United States v. Cintolo, 818 F.2d 980, 997 (1st
                         _____________    _______
            Cir. 1987). 

                                         -15-
                                         -15-

            asks this court to remand the case so that he may have such a

            hearing.   

                 The government is allowed "broad discretion" in deciding

            whom  to prosecute, Wayte v. United States, 470 U.S. 598, 607
                                _____    _____________

            (1985), but there  are some limitations.  It is said that the

            government  may not  base  its decision  to  prosecute on  an

            "unjustifiable standard," including the  defendant's exercise

            of protected statutory and constitutional rights.  Wayte, 470
                                                               _____

            U.S. at  608.  Goldberg bases his selective prosecution claim

            on  the  theory that  he was  targeted  by the  government in

            response  to  his vigorous--and  constitutionally protected--

            lobbying activities in opposition  to the Third Harbor Tunnel

            project.

                 In seeking an evidentiary hearing, a defendant need only

            allege  "some  facts (a)  tending to  show  that he  has been

            selectively prosecuted  and  (b) raising  a reasonable  doubt

            about the  propriety of  the prosecution's purpose."   United
                                                                   ______

            States v. Saade, 652  F.2d 1126, 1135  (1st Cir. 1981).   But
            ______    _____

            the court may  refuse to  grant a hearing  if the  government

            puts forward adequate "countervailing  reasons" to refute the

            charge, id., and if  the court is persuaded that  the hearing
                    ___

            will  not be  fruitful.   Review on  appeal is  for abuse  of

            discretion.  United  States v.  Gary, 74 F.3d  304, 313  (1st
                         ______________     ____

            Cir. 1996).

                                         -16-
                                         -16-

                 Here, Goldberg  alleged that  one of the  prosecutors on

            the  case  made a  comment  to  Goldberg's  counsel during  a

            preindictment meeting to the effect that Goldberg "should not

            have won" his  fight with Frederick  Salvucci, Massachusetts'

            secretary of transportation during the tunnel planning stage.

            Goldberg  also   claimed  that  the  initials   "D.D."  on  a

            prosecution file reflect the  complicity in the investigation

            of David Davis, executive director of MassPort.   Finally, he

            pointed to  the fact that  several of his  co-conspirators in

            the  two  schemes,  including  Clark and  Lango,  were  never

            indicted.  

                 The  government filed  several affidavits  to  rebut the

            claim.   It denied that  the prosecutor in  question made the

            alleged statement to Goldberg's  attorney.  It explained that

            the  initials  "D.D."  on  the file  that  raised  Goldberg's

            suspicion in fact referred  not to David Davis but  to Denise

            Doherty,  an  FBI agent  assigned to  the  case.   In another

            district court paper, the government described the origins of

            its  investigation  into   Goldberg's  activities  and   gave

            examples  of other  recent  prosecutions for  mail fraud  and

            Klein conspiracies.
            _____

                 The district court  ultimately denied a hearing,  saying

            that Goldberg's claims  were "close to conclusory."   We have

            reviewed the complete filings of both sides and  the district

            court's  explanation.  What is  involved is a judgment call--

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            tempered on appeal by  the deferential standard of review--as

            to the force and specificity of the allegations, the strength

            of the response, and  the likelihood that a hearing  would be

            helpful.   United States v.  Lopez, 71 F.3d  954, 963-64 (1st
                       _____________     _____

            Cir.  1995).   Here,  the district  court  did not  abuse its

            discretion.

                 The claim of selectivity  was quite weak; the government

            largely explained  its choice  mainly to pursue  Goldberg and

            Scopa.   And  the rather  modest evidence of  wrongful motive

            also melted away, leaving only a single dispute.  As to this,

            four prosecutors  denied under  oath that the  alleged remark

            had been made.   But it is  in any event too  thin a reed  to

            require an evidentiary hearing, given the lack of surrounding

            evidence to support a selective prosecution claim.

                 Even less need be said about Goldberg's later  new trial

            motion,  whose summary  denial is  also cited  as error.   In

            substance  Goldberg complained  that  the government  did not

            follow its  own internal rules for tax prosecutions or reveal

            to  him information  about this  decision.   The government's

            procedures do not create substantive rights, United States v.
                                                         _____________

            Michaud, 860 F.2d 495,  499 (1st Cir. 1988), and  there is no
            _______

            substantial basis for believing that  the government withheld

            Brady material,  Brady v. Maryland,  373 U.S. 83  (1963), let
            _____            _____    ________

            alone that its actions were prejudicial.

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                                         -18-

                 Goldberg's last claim of error  concerns his sentencing.

            In   fixing  the  sentence,   the  district   court  enhanced

            Goldberg's  base offense  level  of 10,  by four  levels--two

            levels  for his role in the offense, U.S.S.G.   3B1.1(c), and

            two more levels  for obstruction of justice,  id.   3C1.1--to
                                                          ___

            arrive  at an adjusted offense  level of 14.   (All citations

            are  to  the  November   1995  edition  of  the  guidelines).

            However, the court departed downward two levels to 12 because

            it thought  Goldberg's  conduct was  outside the  "heartland"

            contemplated  by the  Klein conspiracy  sentencing guideline.
                                  _____

            Id.   2T1.9.
            ___

                 The  district  judge  stated  that  although  Goldberg's

            conduct "as  a matter of law constitutes  a Klein conspiracy,
                                                        _____

            as a matter of  sentencing law, it seems to  me inappropriate

            to  apply the  Klein  conspiracy guidelines."    He chose  to
                           _____

            depart downward  two levels because he  thought the guideline

            section for aiding and  assisting tax fraud,   2T1.4,  with a

            base  offense level  of 8  (when  the tax  loss is  $3,001 to

            $5,000), was  more reflective of Goldberg's  conduct than the

            Klein conspiracy guideline,   2T1.9, which has a base offense
            _____

            level of 10.2

                                
            ____________________

                 2The ten-month  sentence--five  months to  be served  in
            prison and five in community confinement--was the minimum end
            of  the resulting guideline range of 12.  U.S.S.G. ch. 5, pt.
            A (10-16 months at offense level 12).

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                                         -19-

                 The government, sensibly in our view,  has chosen not to

            pursue  an appeal from the downward departure.  But Goldberg,

            as is his right, challenges  the district court's decision to

            impose  a  two-level   enhancement  for  his   managerial  or

            supervisory role  in the Scopa  and Clark conspiracies.   The

            applicable guideline calls for  an increase if "the defendant

            was  an  organizer, leader,  manager,  or  supervisor in  any

            criminal activity."  U.S.S.G.    3B1.1(c).  In such a case, a

            two-level  increase applies to  joint criminal  activity that

            involved fewer  than five participants and  was not otherwise

            extensive.  Id.
                        ___

                 Goldberg  says  that  the  only  person  he  managed  or

            supervised  was his  bookkeeper, Arlene  Meucci.   Meucci, he

            argues, does  not count under  the guideline because  she was

            not  a culpable participant.  See United States v. Morillo, 8
                                          ___ _____________    _______

            F.3d  864,  872 &  n.13 (1st  Cir.  1993); U.S.S.G.    3B1.1,

            comment  n.1.    However,  at  the  sentencing  hearing,  the

            district court found that Goldberg "had a management role" in

            connection with  false payroll and tax documentation directed

            to the straw employees in the Scopa conspiracy.  

                 We review  a district court's factfinding  at sentencing

            under  a  clearly  erroneous  standard.    United  States  v.
                                                       ______________

            Thompson, 32 F.3d 1, 4 (1st Cir. 1994).  On the record before
            ________

            us,  ample evidence  shows  that Goldberg  superintended  the

            straws'  receipt of false tax  documents.  Goldberg says that

                                         -20-
                                         -20-

            Scopa  and  Clark   were  the   true  leaders   of  the   two

            conspiracies.   But a defendant need  not be at the  top of a

            criminal scheme to be a manager or supervisor.  United States
                                                            _____________

            v.  Savoie, 985  F.2d  612,  616  (1st  Cir.  1993).    Here,
                ______

            Goldberg's role was sufficient for the enhancement even if we

            assume that  Scopa conceived of  the payroll  scheme and  may

            have exercised primary supervision over the straws.

                 Affirmed.
                 ________

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