Court Opinion

ID: 2963878
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Date Created: 2015-09-21 21:16:44.37718+00
Date Added: 2024-06-11T11:42:47.862233
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USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT

                                                     
                                                     
                                 ____________________

        No. 95-1586

                              UNITED STATES OF AMERICA,

                                 Plaintiff, Appellee,

                                          v.

                                   GARY S. GILBERG,

                                Defendant, Appellant.

                                                     
                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

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

                                                     
                                 ____________________

                                Selya, Cyr and Stahl,

                                   Circuit Judges.
                                   ______________

                                                     
                                 ____________________

             Gary C. Crossen, with whom Toni G. Wolfman, Mark D.  Rosen, Cindy
             _______________            _______________  ______________  _____
        M. Lott and Foley, Hoag & Eliot were on brief for appellant.
        _______     ___________________
             Wan J. Kim, Attorney, Department of Justice, with whom Donald  K.
             __________                                             __________
        Stern, United States Attorney,  Mark D. Seltzer, Acting  Director, New
        _____                           _______________
        England Bank Fraud Task  Force, and James  P. Gillis, Trial  Attorney,
                                            ________________
        New England Bank Fraud Task Force, were on brief for appellee.

                                                     
                                 ____________________

                                   January 31, 1996                 
                                                     
                                 ____________________

                    CYR,  Circuit Judge.   Defendant Gary S.  Gilberg chal-
                    CYR,  Circuit Judge.   
                          _____________

          lenges  several district court rulings relating  to his trial and

          sentencing for conspiring  to make, and making,  false statements

          to  financial  institutions  in order  to  procure  mortgage loan

          financing,  see 18 U.S.C.     371 & 1014.   We affirm all but the
                      ___

          restitutionary sentence. 

                                          I
                                          I

                                      BACKGROUND
                                      BACKGROUND
                                      __________

                    During  the 1980s,  after  borrowing almost  $5 million

          which he agreed to  repay from future condominium  sale proceeds,

          Gilberg launched Chancery Court, a forty-unit condominium project

          in Lynn, Massachusetts.  Condominium sales did not proceed apace,

          however,  and Gilberg  decided  to  lure  prospective  buyers  by

          promising to obtain  100% mortgage financing for  them, obviating

          the need for  down payments.  To this end,  Gilberg would inflate

          the purchase price stated on the sales agreement which he submit-

          ted to  the bank in support of the buyer's mortgage loan applica-

          tion.  A so-called "amended" sales agreement, containing the true

          purchase price, would be retained in Gilberg's private files, and

          the buyer was  told not to mention  the "amendment" to  the bank.

          On  other  occasions, Gilberg  provided  prospective  buyers with

          second mortgage  financing, which  he concealed  from the  first-

          mortgage lenders  by instructing his  attorney not to  record the

          second mortgages, or to record  them late.  Gilberg attended each

          loan  closing,  personally  signing  HUD-1 settlement  statements

          which he knew to contain  false information.  These means enabled

                                          2

          Gilberg  to  sell  thirty-seven  condominium  units,  which  were

          financed through various banks.

                    In  August 1993, Gilberg was  indicted in one count for

          conspiring to make  false statements on twenty-one  loan applica-

          tions to three FDIC-insured financial institutions, see 18 U.S.C.
                                                              ___

             371, and  in thirteen  counts for  making false  statements to

          FDIC-insured institutions, see  id.   1014.   Several condominium
                                     ___  ___

          buyers, as  well as  Gilberg's attorney,  testified that  Gilberg

          originated and orchestrated  the scheme.   The jury convicted  on

          all counts and the district court sentenced Gilberg to thirty-six

          months' imprisonment and ordered $3,635,000 in restitution.

                                          II
                                          II

                                      DISCUSSION
                                      DISCUSSION
                                      __________

          A.   The Trial Related Rulings
          A.   The Trial Related Rulings
               _________________________

               1.   "Good faith" Jury Instruction
               1.   "Good faith" Jury Instruction
                     ____________________________

                    Gilberg first contends that the final jury  instruction

          misdefined  the mens  rea  element  in 18  U.S.C.    1014,  which
                          ____  ___

          criminalizes  "knowingly mak[ing] any false statement or report .
                         _________

          . . for the purpose of influencing in any way the action of . . .
              ___ ___ _______ __ ___________

          any [FDIC-insured bank]  . . . upon any application, advance, . .

          . commitment, or  loan."  (Emphasis added.)   Gilberg argues that

          section 1014  affords a "good faith" defense  where the defendant

          knew  the statement  or report  contained  false information  but

          acted without the "bad" purpose to influence the  bank's actions.

          He proffered evidence that  he knew and believed, at  the time of

          the  various  loan  applications,  that  the  prevailing  banking

                                          3

          practice was to  approve or disapprove applications  based solely
                                                                     ______

          on the  appraised value of  the real property securing  the loan,

          rather than on whether the real estate sale itself involved price

          "discounts"  or  secondary  mortgage  financing.   Thus,  Gilberg

          argues, the district court hobbled his defense by instructing the

          jury that "a  defendant does  not act  in good faith  even if  he

          honestly holds a particular opinion or belief and, yet, knowingly

          makes false and fraudulent statements or misrepresentations." 

                    Gilberg  concededly raised  no  objection  to the  jury

          instruction.  See  Fed. R. Crim. P. 51.   Consequently, we review
                        ___

          for plain error, see Fed. R. Crim. P. 52(b), and may reverse only
                           ___

          if (i) the  final jury instruction  constituted error (ii)  which

          was or should have been "obvious" in the sense that the governing

          law was  clearly settled  to the  contrary,  and (iii)  appellant

          proves that the error resulted in "prejudice," or in other words,

          that it  affected his substantial  rights.  See United  States v.
                                                      ___ ______________

          Hurley,  63 F.3d 1,  9 (1st Cir.  1995) (citing United  States v.
          ______                                          ______________

          Olano,  113  S. Ct.  1770, 1777  (1993)).   Even  if  these three
          _____

          criteria are met, however, we do not "notice  the error unless it

          caused  `a miscarriage of justice' or [seriously] undermined `the

          integrity  or public reputation  of judicial proceedings.'"   Id.
                                                                        ___

          (citations omitted).

                    Though the statutory interpretation posited by  Gilberg

          is dubious at best, cf., e.g.,  United States v. Wilcox, 919 F.2d
                              ___  ___    _____________    ______

          109, 112 (9th Cir. 1990) ("The requisite intent [under   1014] is

          the intent to influence an action, and nothing more."), we do not

                                          4

          reach the merits.  Gilberg cites to no authority    let  alone to

          a  controlling United  States  Supreme  Court  or  First  Circuit

          decision     clearly holding  that the  "good faith"  instruction

          given below  contained  an erroneous  statement of  the mens  rea
                                                                  ____  ___

          requirement under section  1014.  See Olano,  113 S. Ct. at  1777
                                            ___ _____

          ("At  a minimum,  the Court  of Appeals  cannot correct  an error
            __  _ _______

          pursuant to  Rule 52(b) unless  the error is clear  under current

          law.") (emphasis  added).1   Hence, any  error in  the challenged

          instruction was neither "obvious,"  nor cognizable under Criminal

          Rule 52(b).  

               2.   Motion in Limine  
               2.   Motion in Limine
                    ________________

                    Gilberg  next assigns error in the district court order

          precluding  evidence that the  defrauded banks had  relied exclu-

          sively on property  appraisals in determining whether  to approve

          loan applications, and not on the apparent absence of "discounts"

          and  second  mortgage financing.    He  claims  that this  ruling

          prejudiced him because the excluded evidence would have bolstered

          his "good faith" defense.  See supra Section II.A.1.2
                                     ___ _____
                              
          ____________________

               1Morissette v. United States, 342 U.S. 246 (1952), and Cheek
                __________    _____________                           _____
          v. United States, 498  U.S. 192 (1991), are inapposite.   Even if
             _____________
          Gilberg's interpretation of  the "purpose" clause in    1014 were
          correct, he cannot seriously contend  that the one clear mens rea
                                                                   ____ ___
          element in    1014    "knowingly" communicating  false statements
                                                           _____
              does not criminalize  conduct a  normal person  readily would
          recognize as culpable.  

               2We do  not understand  Gilberg to  argue that  the excluded
          evidence was  relevant to  the discredited  "complicity" defense,
          namely, that  any bank  officials' knowing  participation in  the
          scheme would exonerate  Gilberg under   1014.   See United States
                                                          ___ _____________
          v. Johnson, 585 F.2d 119, 124 (5th Cir. 1978) (rejecting complic-
             _______
          ity  defense,  and noting  that  the  "[t]he savings  and  loan's
          awareness of the fraud is not  relevant, for its existence is not

                                          5

                    Once again  we review  for plain  error, since  Gilberg

          first raised this claim on appeal.  See Hurley, 63 F.3d at 9.  As
                                              ___ ______

          there was  no plain error  in rejecting the "good  faith" defense

          instruction, a  fortiori there  can have been  no plain  error in
                       _  ________

          excluding  evidence  offered  in  support.    Furthermore,  given

          Gilberg's concession that a representative sampling of this "good

          faith" evidence  was admitted at  trial, he has failed  to demon-

          strate  "prejudice."   Olano, 113  S. Ct.  at 1778  (noting that,
                                 _____

          unlike Rule 52(a), Rule 52(b) provides that "the defendant rather
                                                           _________

          than the  Government . .  . bears  the burden of  persuasion with

          respect to prejudice") (emphasis added).  

          B.   The Sentencing Rulings
          B.   The Sentencing Rulings
               ______________________

               1.   Amount of Loss (U.S.S.G.   2F1.1)
               1.   Amount of Loss (U.S.S.G.   2F1.1)
                    ________________________________

                    Gilberg contends  that  the  district  court  committed

          three errors  in calculating the  amount of loss under  the then-

          applicable version  of U.S.S.G.    2F1.1, and  that the  combined

          effect of its miscalculations ballooned  the total loss from $1-2

          million to the $2-5 million range, which in turn led the court to

          make a ten-level (rather than  a nine-level) upward adjustment in

                              
          ____________________

          inconsistent with the  intent to influence which a  violator of  
          1014  must possess").  Nor do we  understand Gilberg to argue for
          the  similarly discredited  "lack of  reliance" defense,  namely,
          that his  purpose to influence  was immaterial because  the banks
                                              __________
          did not, in  the end, actually  rely on his  false statements  in
          approving  the loan applications.   See United States v. Norberg,
                                              ___ _____________    _______
          612 F.2d  1, 4  (1st Cir. 1979)  (expressly rejecting such  a de-
          fense).

                                          6

          his base offense level of six.3   

                    First, Gilberg argues that  the loss calculation should

          not have  included $726,637  in accrued  mortgage loan  interest.

          See  U.S.S.G.   2F1.1,  comment. (n.7)  (excluding from  the loss
          ___

          calculation  the "interest the victim could have earned"); United
                                                                     ______

          States v.  Hoyle, 33  F.3d 415,  419 (4th  Cir. 1994).   But  the
          ______     _____

          settled  law in  this circuit  is to  the contrary.    See United
                                                                 ___ ______

          States v. Goodchild,  25 F.3d 55, 66-67 (1st  Cir. 1994) (holding
          ______    _________

          that accrued finance charges on credit cards are not lost "oppor-

          tunity costs,"  and may  be included in  amount of  loss) (citing

          United  States v.  Lowder, 5  F.3d  467, 471  (10th Cir.  1993)).
          ______________     ______

          Gilberg's attempt to distinguish Goodchild is unavailing.  As the
                                           _________

          Goodchild  panel's citation to  Lowder and other  authority makes
          _________                       ______

          clear,  we have found  no principled difference  between interest

          earned on a  credit card (a/k/a  "finance charges") and  interest
                                    _____

          earned on other types of loans.  See Hurley, 63 F.3d at 9 (noting
                                           ___ ______

          that newly-constituted panels are bound by a prior panel decision

          on  point).   Since  it was  proper  to include  the  $726,637 in

          interest as part  of the loss, the other  loss calculation errors

          raised on appeal need not be addressed because  the unimpeachable

          loss  totalled  no less  than  $2,669,065, well  within  the $2-5

          million range necessary to trigger a ten-level upward adjustment.
                              
          ____________________

               3Although  normally a  loss  determination under  U.S.S.G.  
          2F1.1 is fact-based and subject to clear error review, see United
                                                                 ___ ______
          States  v. Goodchild,  25 F.3d  55, 64  (1st Cir.  1994), Gilberg
          ______     _________
          challenges the district  court's interpretation  of a  sentencing
          guideline.   Therefore,  review is  de novo.   See id.;  see also
                                              __ ____    ___ ___   ___ ____
          United  States v.  Ovalle-Marquez,  36 F.3d  212,  221 (1st  Cir.
          ______________     ______________
          1994), cert. denied, 115 S. Ct. 1322 (1995). 
                 _____ ______

                                          7

               2.   The "Role in Offense" Enhancement
               2.   The "Role in Offense" Enhancement
                    _________________________________

                    Gilberg  challenges  the four-level  upward  adjustment

          based on his  role in the offense, see U.S.S.G.   3B1.1, contend-
                                             ___

          ing that the government  improperly singled him out for  prosecu-

          tion by  cutting deals  with the real  "leaders" of  the Chancery

          Court scheme    his  attorney and a business partner.  Second, he

          complains that the district court failed to make express findings

          of fact regarding the comparative responsibilities of the partic-
                                ___________ ________________

          ipants in  the scheme.  We  review for "clear error,"  see United
                                                                 ___ ______

          States v.  Akitoye, 923  F.2d 221, 227  (1st Cir.  1991), mindful
          ______     _______

          that "battles over a defendant's [role in the offense] . . . will

          almost always  be won  or lost  in the  district court,"   United
                                                                     ______

          States v. Graciani,  61 F.3d 70,  75 (1st Cir. 1995).   Gilberg's
          ______    ________

          case is no exception. 

                    Gilberg  concedes that  the  evidence  could support  a

          rational  inference that  he  orchestrated  the criminal  conduct

          alleged in the indictment.   The evidence disclosed that he was a

          sophisticated  real estate developer  who supplied false purchase

          prices to his  attorney, instructed his attorney  and prospective

          buyers to conceal his false statements, and secreted the documen-

          tation containing the actual terms.   Gilberg cites no  authority

             nor  is there  any     for the proposition  that a  sentencing

          court  must  compare  the responsibilities  of  all  participants
                       _______

          before imposing a  U.S.S.G.   3B1.1 enhancement against  a defen-

          dant.   Moreover, in crediting  the evidence that  Gilberg played

                                          8

          the pivotal  role in  the initial success  of the  Chancery Court

          scheme,  the district court implicitly found  that Gilberg was an

          "organizer,"  regardless  of  the precise  roles  played  by each

          cohort.   See U.S.S.G.    3B1.1, comment.  (n.4) (noting  that an
                    ___

          offense  may involve  "more than  one person  who qualifies  as a

          leader or organizer");  United States v. Tejeda-Beltran,  50 F.3d
                                  _____________    ______________

          105, 111-13 (1st  Cir. 1995) ("We hold that  retention of control

          over  other  participants,  although  sometimes  relevant  to  an

          inquiry  into the  status  of  a putative  organizer,  is not  an

          essential attribute of organizer status."); cf. U.S.S.G.   3B1.1,
                                                      __

          comment. (n.2)  (authorizing  upward  departure  for  "management

          responsibility  over the  property, assets,  or  activities of  a

          criminal  organization," even  though  defendant neither  led nor

          supervised any other participant).      3.   The Victim  and Wit-
                                                  3.   The Victim  and Wit-
                                                       ____________________

                                                  ness Protection Act
                                                  ness Protection Act
                                                  ___________________

                    Finally,  Gilberg claims  that the  restitutionary sen-

          tence overstates  victim loss because  the class of  "victims" is

          too  broad.   He points  out  that the  sentencing court  ordered

          restitution  in connection with all thirty-one loans, whereas the

          indictment charged him in relation to only twenty-one loans.  

                    The  government concedes that the last criminal conduct

          involving Gilberg took place no later than June 1990.  The Victim

          and  Witness  Protection  Act ("VWPA"),  18  U.S.C.     3663-3664

          (1990), governs restitution in criminal cases.  See, e.g., United
                                                          ___  ____  ______

          States  v. DeSalvo, 41  F.3d 505, 511  (9th Cir. 1994).   In June
          ______     _______

          1990, the VWPA provided that  the district court    in sentencing

                                          9

          "a defendant convicted  of an offense"     may order "restitution
                       _________  __ __ _______

          to  any victim  of  such offense."  18 U.S.C.    3579(a)(1)(1982)
                  ______  __  ____ _______

          (emphasis  added); see 18 U.S.C.     3579-3780 (1987), amended by
                             ___                                 _______ __

          18 U.S.C.    3663-3664 (1990).   In Hughey v. United States,  495
                                              ______    _____________

          U.S. 411  (1990), the  defendant had  been  charged, in  multiple

          counts, with theft and unauthorized use of credit cards, offenses

          which caused  victim losses  totaling $90,431.   Although  Hughey

          pled  guilty to but  one count  of unauthorized  use of  a single
                                                                     ______

          credit card, which caused $10,412 in victim loss, id. at 414, the
                                                            __

          district  court ordered $90,431  in restitution.   Reversing, the

          Supreme Court held that "the language and structure of the [VWPA]

          make plain Congress'  intent to authorize an award of restitution

          only for  the loss  caused by  the specific  conduct that  is the
          ____                               ________  _______

          basis of the offense of conviction."  Id. at 413, 422 n.5. 
          _____ __ ___ _______ __ __________    ___

                    Effective  November  29, 1990,  Congress  broadened the

          VWPA definition of "victim," see Pub. L. No. 101-647,   2509, 104
                                       ___

          Stat.  4789, 4863,  4931 (Nov.  29, 1990)  (Crime Control  Act of

          1990) (codified at  18 U.S.C.   3663(a)(2)),  thereby effectively

          overruling Hughey in part.   Section 3663(a)(2) now provides that
                     ______

          "a victim of an offense that  involves as an element a scheme,  a

          conspiracy, or a  pattern of criminal  activity means any  person
          __________                                            ___  ______

          directly harmed by the defendant's criminal conduct in the course

          of the scheme,  conspiracy, or pattern."  18  U.S.C.   3663(a)(2)

          (emphasis added). See  generally United States  v. Neal, 36  F.3d
                            ___  _________ _____________     ____

          1190, 1200 (1st Cir. 1994).   

                    The district court ordered Gilberg to  make restitution

                                          10

          to banks other than the  three FDIC-insured banks involved in the
                   _____ ____            ____________

          twenty-one insured  loans which formed  the entire basis  for the

          conspiracy  and the  substantive counts  upon  which Gilberg  was

          convicted.  The parties agree that, under the 1987 version of the
                                                        ____

          VWPA as interpreted in  Hughey, the restitution order imposed  on
                                  ______

          Gilberg  would be improper,  and that "approximately  $2 million"

          would be the maximum permissible "victim loss" calculation.  

                    The government  nonetheless contends that  the district

          court order complies with the 1990 VWPA.  See Hughey, 495 U.S. at
                                        ____        ___ ______

          413  n.1 (normally,  the  VWPA version  in  effect at  sentencing
                                                                 __________

          controls).   Gilberg responds that such a retroactive application

          of section 3663(a)(2)  to his pre-November 1990  criminal conduct

          would violate the Ex Post Facto Clause, U.S. Const. art. I,    9,
                            __ ____ _____

          cl. 3.  See Miller v.  Florida, 482 U.S. 423, 430-31 (1987);  see
                  ___ ______     _______                                ___

          also United States v. Newman, 49  F.3d 1, 10-11 (1st Cir.  1995);
          ____ _____________    ______

          United States v. Cronin, 990 F.2d 663, 666 (1st Cir. 1993). 
          _____________    ______

                    Normally, we review restitution  orders only for "abuse

          of discretion."  See  United States v. Benjamin, 30 F.3d 196, 198
                           ___  _____________    ________

          (1st Cir. 1994); United States v. Savoie, 985  F.2d 612, 617 (1st
                           _____________    ______

          Cir. 1993).  Although a  timely challenge to a retroactive appli-

          cation of  the 1990 VWPA  amendments would present a  question of
                         ____

          law  subject  to  plenary  review, see,  e.g.,  United  States v.
                                             ___   ____   ______________

          Guthrie, 64 F.3d 1510, 1514 (10th Cir. 1995); DeSalvo, 41 F.3d at
          _______                                       _______

          511; United States v. Meacham, 27  F.3d 214, 218 (6th Cir. 1994),
               _____________    _______

          Gilberg concedes that  he did not object at  sentencing.  Accord-

          ingly,  we review  only for  plain error.   See United  States v.
                                                      ___ ______________

                                          11

          Tutiven, 40 F.3d 1, 7-8 (1st Cir. 1994), cert. denied, 115 S. Ct.
          _______                                  _____ ______

          1391 (1995); United  States v. Rodriguez, 938 F.2d  319, 321 (1st
                       ______________    _________

          Cir. 1991).   As the Rule  52(b) "plain error" test  announced in

          Olano, 113 S.  Ct. at 1776-79, applies to  sentencing errors, see
          _____                                                         ___

          Benjamin,  30 F.3d  at 197;  supra Section  II.A.1, we  apply the
          ________                     _____

          Olano  "plain  error"  criteria to  the  forfeited  "victim loss"
          _____

          calculation claim asserted by Gilberg on appeal.4

                    a) "Error"
                    a) "Error"
                        _____

                    The first  Olano criterion     that  there be  "error,"
                               _____

          Olano, 113 S.  Ct. at 1777     is readily met here.   Retroactive
          _____

          application of VWPA   3663(a)(2)  would violate the Ex Post Facto
                                                              __ ____ _____

          Clause, since it would "make[] more burdensome the punishment for
                                                             __________ ___

          [Gilberg's] crime[s], after [their] commission  . . . ."  Dobbert
           _________  ________  _____  _____  __________            _______

          v. Florida, 432  U.S. 282, 292 (1977) (emphasis  added); see also
             _______                                               ___ ____

          United  States v.  Johnson, 952  F.2d 565,  585 (1st  Cir. 1991),
          ______________     _______

          cert. denied,  113 S. Ct. 58 (1992).   As an order of restitution
          _____ ______

          is part of  the criminal sentence, we reject  the suggestion that

          the November 1990 VWPA amendments may be applied against Gilberg.

          See, e.g.,  United States  v. Jewett, 978  F.2d 248,  252-53 (6th
          ___  ____   _____________     ______

          Cir. 1992)  (rejecting retroactivity argument);  see also  United
                                                           ___ ____  ______

          States v. Elliott, 62 F.3d 1304, 1313-14 (11th Cir. 1995) (same);
          ______    _______

          DeSalvo, 41 F.3d at 515 (same).
          _______
                              
          ____________________

               4Given  the concession by the government that application of
          Hughey would result  in a $1.6 million reduction  in the restitu-
          ______
          tion order, we conclude that Gilberg has shouldered his burden on
          the third Olano factor    "prejudice."  See supra Section II.A.1.
                    _____                         ___ _____
          We  therefore confine  our "plain  error" analysis  to  the three
          remaining  Olano factors (i.e.,  error, "obviousness," and "mani-
                     _____
          fest miscarriage of justice"). 

                                          12

                    b) Obviousness of Error 
                    b) Obviousness of Error
                       ____________________

                    The government  argues that retroactive  application of

          the  1990 VWPA amendments  would not constitute  "obvious" error,

          see Olano,  113 S.  Ct. at 1777,  because this  court had  yet to
          ___ _____

          weigh in  on the retroactivity  question by the time  Gilberg was
                                                   __ ___ ____  _______ ___

          sentenced, and other  courts of  appeals were  divided.   Compare
          _________                                                 _______

          Jewett, 978 F.2d at  252-53, with United States v. Rice, 954 F.2d
          ______                       ____ _____________    ____

          40  (2d Cir. 1992);  United States v. Arnold,  947 F.2d 1236 (5th
                               _____________    ______

          Cir. 1991) (per curiam).  We disagree.

                    The Rice  and Arnold  cases are  factually and  legally
                        ____      ______

          inapposite to  the present context.   The retroactivity  issue in

          Rice ultimately turned on a  different 1990 VWPA amendment    not
          ____                         _________                        ___

          implicated in  our case     which provided that "[t]he  court may

          also order restitution in any  criminal case to the extent agreed

          to by the  parties in a plea  agreement." 18 U.S.C.    3663(a)(3)
                                  ____  _________

          (emphasis  added).  The plea agreement in Rice expressly provided
                                                    ____ _________

          for  restitution both  to  victims of  the  dismissed counts  and

          victims of  uncharged criminal conduct, Rice, 954  F.2d at 41-42,
                                                  ____

          and the plea  predated both the 1990 VWPA  amendments and Hughey.
                                 ____     ____                  ___ ______

          Thus, settled  Second Circuit precedent  supported the  expansive

          victim loss  calculation agreed  to by  Rice.   Id. at  44.   The
                                                          ___

          Second Circuit rejected Rice's ex post facto argument because (1)
                                         __ ____ _____

          Rice must  have relied  on the more  onerous Second  Circuit case
               ____

          law, rather than on Hughey, when  he agreed to the broad restitu-
                              ______

          tion  commitment adopted in  the plea agreement;  and (2) section

          3663(a)(3) did not  retroactively "enhance the punishment  for an
                         ___

                                          13

          offense"  but "merely  provided  that a  specified  type of  plea

          agreement could be enforced from that point on."  Id.  
                                                            ___

                    The Fifth Circuit employed the same analysis in Arnold,
                                                                    ______

          947  F.2d at  1238 n.2,  noting that  section 3663(a)(3)  was not

          retroactive  but  "applied  prospectively  to  validate  Arnold's

          [earlier]  plea agreement."   The  government  cites no  apposite

          circuit court authority  holding that section  3663(a)(2) applies
                                                         __________

          retroactively to pre-November 1990 criminal conduct.

                    As  the  government  correctly notes,  we  have  yet to

          address this precise  question.  In Cronin, 990 F.2d  at 663, the
                                              ______

          government  did not  contend that  section  3663(a)(2) should  be

          applied  retroactively  to  pre-November   1990  conduct,  urging
                                      ____________   ____

          instead  that  Hughey  is  distinguishable  from  cases involving
                         ______      _______________

          convictions for "offense[s]"    like mail fraud    which require,
                                               ____ _____

          as an essential element, proof  of a broader "scheme to defraud."

          See  id. at  666; see also,  e.g., 18  U.S.C.   1341.   Given the
          ___  ___          ___ ____   ____

          inherent breadth  of the "offense"  of conviction in  Cronin, the
                                                                ______

          government argued that VWPA restitution was not limited to losses

          caused  by the particular  mailings designated in  the individual
                         __________  ________

          counts  upon which the defendant was  convicted, but included all

          victim losses occasioned by the  larger fraud "scheme."  Noting a

          circuit split on the issue, we sided with the  majority rule, and

          concluded  that  Hughey  barred the  broader  restitution  order.
                           ______

          Cronin, 990 F.2d at 666; see also Newman, 49 F.3d at 11 (applying
          ______                   ___ ____ ______

          Cronin pronouncement to wire fraud conviction).
          ______

                    The implicit concessions of nonretroactivity in  Cronin
                                                                     ______

                                          14

          and  Newman  apparently  stemmed from  the  government's acknowl-
               ______

          edgement that retroactive application of section 3663(a)(2) would

          have had no colorable basis  in the decisional law construing the

          Ex Post Facto Clause.  See id. at 11 n.14 (noting that, "[a]s the
          __ ____ _____          ___ ___

          offenses occurred  in 1989 and  early 1990, Newman is  subject to

          the restitution statute as it  stood prior to amendment in Novem-

          ber  of 1990").  Further, had this  court been satisfied that the

          1990  VWPA amendments were readily amenable to retroactive appli-

          cation in Cronin and Newman, we could have affirmed those restit-
                    ______     ______

          utionary sentences on that alternative ground.  See United States
                                                          ___ _____________

          v. Alzanki, 54 F.3d 994, 1008 (1st Cir. 1995), petition for cert.
             _______                                     ________ ___ _____

          filed, 64 U.S.L.W. 3298 (U.S. Oct. 16, 1995) (No. 95-619) (appel-
          _____

          late court may  affirm district court on any  ground supported by

          record); cf.  also Jewett, 978  F.2d at 252 (finding  that Hughey
                   ___  ____ ______                                  ______

          precluded broad  restitution order, before addressing VWPA retro-

          activity  question, even  though the  latter  issue had  not been

          addressed by parties).   Based on the clear  language of the 1987

          VWPA and the  unanimous circuit precedents rejecting  the govern-

          ment's retroactivity claim,  see supra Section II.B.3.a,  we hold
                                       ___ _____

          that  the error  in  this case  satisfied the  "obviousness" test

          announced in Olano.5  See United States  v. Weiner, 3 F.3d 17, 24
                       _____    ___ _____________     ______
                              
          ____________________

               5It is noteworthy  that the Olano Court  explicitly reserved
                                           _____
          decision on whether an error  that becomes clear after trial, but
          prior  to review  by  the  court of  appeals,  may be  considered
          "obvious."  Olano, 113 S. Ct. at 1777.  ("At a minimum, the Court
                      _____
          of Appeals cannot correct an  error pursuant to Rule 52(b) unless
          the error is obvious under current law.").  As in Olano,  we need
                                                            _____
          not resolve  this  question  because we  have  found,  given  the
          unanimous case law,  that it was already "obvious" at the time of
          sentencing that Gilberg should not be held  responsible under the
          __________

                                          15

          n.5 (1st  Cir. 1993) (noting that a circuit  split may rule out a

          finding that forfeited error was "obvious," even if First Circuit

          has not weighed in on issue).  

                    c) "Miscarriage of Justice"
                    c) "Miscarriage of Justice"
                        ______________________

                    Although  Olano entrusts remediation  of plain error to
                              _____

          the  sound  discretion  of the  reviewing  court,  the courts  of

          appeals "should not" exercise their discretion unless a forfeited

          error  results in  "`a miscarriage  of  justice,' or  "`seriously

          affect[s] the fairness,  integrity or public reputation  of judi-

          cial proceedings.'"   Olano, 113 S. Ct. at  1776 (citations omit-
                                _____

          ted).  

                    In all events, the VWPA expressly limits restitutionary

          relief to "victims of [the] offense [of conviction]." 18 U.S.C.  
                     _______

          3662(a)(1)  (emphasis added).   A  federal court has  no inherent

          authority to order restitution in a  criminal case; it may do  so

          only as expressly provided by statute.   DeSalvo, 41 F.3d at 511.
                                                   _______

          We have noted that when  the district court fundamentally departs

          from "obvious" sentencing principles,  "the situation corresponds

          mutatis  mutandis to  one in  which  a forfeited  error may  have
          _______  ________

          caused the  conviction of an  innocent person,  the other  rubric
                                        ________ ______

          under which  a plain and  prejudicial error should be  noticed on

          appeal."  United States v. Whiting, 28 F.3d 1296, 1312 (1st Cir.)
                    _____________    _______

          (citing  Olano,  113  S. Ct.  at  1779)  (emphasis  added), cert.
                   _____                                              _____

          denied,  115 S.  Ct. 378  (1994).   Given the  particular circum-
          ______
                              
          ____________________

          1987 VWPA for losses occasioned victims of offenses with which he
          was not  charged, nor  held retroactively  responsible under  the
          1990 VWPA amendments. See supra Section II.B.3(a), (b).  
                                ___ _____                         _

                                          16

          stances of this case, and  the substantial $1.6 million reduction

          in restitution portended  by Hughey's application, we  find plain
                                       ______

          error warranting vacatur  of the restitutionary sentence  in this

          case.6   The  restitution  award  is  reduced  to  $2,107,406.00,

          comprising  the total estimated  loss on the  twenty-one mortgage

          loans designated in the indictment.7

                    The  sentence is modified to require restitution in the
                    ___  ________ __ ________ __ _______ ___________ __ ___

          amount of $2,107,406.   The district court  judgment is affirmed,
          ______ __ __________    ___ ________ _____  ________ __ _________

          as modified. 
          __ ________
                              
          ____________________

               6Gilberg's  remaining challenges to the restitution order do
          not  meet the "plain error" standard.   First, he argues that the
          district  court erroneously  assessed  the  loss  occasioned  the
          lenders by using the price  the lender received on resale follow-
                                                 ________
          ing foreclosure,  rather than  the foreclosure  price bid  by the
                                                                ___
          lender.   This  issue has  not yet  been addressed  in the  First
          Circuit.   The  circuit  court  decisions  cited by  Gilberg  are
          inapposite,  simply holding that  the sentencing court  should be
          wary of basing  restitution on the resale price  where the lender
          acquired  real  estate at  foreclosure  but does  not  resell for
          years.  See, e.g., United States v. Holley, 23 F.3d 902, 914 (5th
                  ___  ____  _____________    ______
          Cir. 1994) (six years).  Here, however, there is no evidence that
          Gilberg's victims  held the  property for  such extended  periods
          following foreclosure.   Consequently,  any error  in the  victim
          loss calculation, or the standard employed, has not been shown to
          be "obvious."
               Second, Gilberg contends  that the district court  failed to
          make explicit findings on his  ability to pay restitution. See 18
                                                                     ___
          U.S.C.   3664(a).  Nevertheless,  we have held that such findings
          need not be  explicit.  See Newman, 49 F.3d at 10 (citing Savoie,
                                  ___ ______                        ______
          985 F.2d at 618).  Moreover, the district court supportably found
          that Gilberg's  earning potential  would enable  him to meet  his
          considerable  restitutionary obligations in  the future.   Id. at
                                                                     ___
          10-11.  

               7Since loss calculations under U.S.S.G.   2F1.1 are based on
          criteria different from the VWPA victim loss criteria, see, e.g.,
                                                                 ___  ____
          id.    2B1.3 (providing  that "relevant  conduct," for  guideline
          ___
          sentencing purposes, may encompass conduct not charged in indict-
          ment,  and conduct underlying the counts upon which defendant was
          acquitted), the  reduction in  Gilberg's restitutionary  sentence
          requires no readjustment in the offense level.  See supra Section
                                                          ___ _____
          II.B.1.

                                          17