Court Opinion

ID: 2962317
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:56:13.714681+00
Date Added: 2024-06-11T11:42:27.919017
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                              _________________________          No. 93-1577                              UNITED STATES OF AMERICA,                                      Appellee,                                          v.                                  WILLIAM W. LILLY,                                Defendant, Appellant.                              __________________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                [Hon. Walter Jay Skinner, Senior U.S. District Judge]                                          __________________________                              __________________________                                        Before                                Selya, Circuit Judge,                                       _____________                            Coffin, Senior Circuit Judge,                                    ____________________                               and Cyr, Circuit Judge.                                        _____________                              __________________________               Mark M. Freeman and Rappaport,  Freeman & Pinta on brief for               _______________     ___________________________          appellant.               A. John  Pappalardo, United  States Attorney,  and Brien  T.               ___________________                                _________          O'Connor,  Assistant United  States Attorney,  on  brief for  the          ________          United States.                              _________________________                                   January 4, 1994                              _________________________                    SELYA,  Circuit   Judge.    In  this  criminal  appeal,                    SELYA,  Circuit   Judge.                            _______________          defendant-appellant  William W.  Lilly claims  that the  district          court engaged in impermissible "double counting" when calculating          the  guideline sentencing  range (GSR)  applicable  to his  case.          Concluding  that  Lilly's  assignment of  error  lacks  force, we          affirm the judgment below.                                          I                                          I                    The facts relevant to this appeal are not now disputed.          Lilly,  a  successful developer,  fell  on hard  times  after the          collapse of a  boom market in real estate.  He began to play fast          and loose, courting trouble on several fronts.  See, e.g., United                                                          ___  ____  ______          States  v.  Lilly, 983  F.2d  300  (1st  Cir.  1992)  (describing          ______      _____          appellant's  prosecution  for  bank  fraud).   On  May  21, 1991,          Lilly's  woes   mounted:    a  federal  grand  jury  returned  an          indictment against him and two cohorts,  Sheldon Stone and Gerald          Sarro.   The  indictment  focused  on  a  condominium  conversion          project in  Claremont, New Hampshire.   It charged all  three men          with conspiracy, 18  U.S.C.  371 (1988),  and also charged  Lilly          with  fifty-four substantive counts of making false statements to          a federally  insured financial  institution, in  violation of  18          U.S.C.  1014 (1988).                    On  December 4, 1991,  the grand jury  returned another          indictment accusing Lilly and five codefendants, Robert O'Connor,          Gina Lonardo, Mark  Lonardo, Barry Tevrow,  and Diane Tevrow,  of          having perpetrated eight counts of wire fraud, in violation of 18          U.S.C.  1343  (1988).  These  charges involved a  so-called "land                                          2          flip" scheme,1  separate from  the Claremont  boondoggle.   After          considerable skirmishing, not material  here, the two indictments          were consolidated and Lilly pled guilty to all counts on February          25, 1993.                                          II                                          II                    In respect to many crimes, particularly "white  collar"          crimes, the sentencing guidelines use the amount of the actual or          intended loss  as an important  indicium in fixing  a defendant's          offense level  and, hence, his  GSR. See, e.g., United  States v.                                               ___  ____  ______________          Tardiff,  969 F.2d  1283, 1285  (1st Cir.  1992) ("In  respect to          _______          fraud  crimes,  the   applicable  offense   level  increases   in          proportion to  the monetary  magnitude of  the loss."); see  also                                                                  ___  ____          U.S.S.G.  2F1.1(b)(1).2   Here,  the district  court, faced  with          several  proposed scenarios, determined that the aggregate amount          of the monetary loss stemming from appellant's involvement in the          two schemes equalled  $1,750,000   a total reached  by evaluating          the land-flip  losses at $1,000,000  and the Claremont  losses at                                        ____________________               1We  have  described  a  land  flip  as  "an  intricate  and          sophisticated scheme . . . under which real property is purchased          for a low price, immediately resold  at a much higher price to  a          straw or fictitious buyer, and the higher resale price is used as          the basis for obtaining a  mortgage loan that finances the entire          transaction."  United States v.  Cassiere, 4 F.3d 1006, 1010 (1st                         _____________     ________          Cir. 1993).               2A  sentencing court  customarily applies the  guidelines in          effect on the date of sentencing.  See United States v. Bell, 953                                             ___ _____________    ____          F.2d  6, 7 (1st Cir. 1992); United States v. Harotunian, 920 F.2d                                      _____________    __________          1040,  1041-42  (1st  Cir.  1990).   Accordingly,  this  case  is          controlled by the November 1992 edition of the guidelines.                                          3          $750,000.3  This computation  increased appellant's base  offense          level  from  six  to  eighteen.    See  U.S.S.G.   2F1.1(b)(1)(M)                                             ___          (providing  a twelve-level  upward  adjustment  for fraud  crimes          involving more than $1,500,000, up to and including $2,500,000).                    After  holding appellant  responsible  for the  overall          amount of the  combined losses, the  court increased his  offense          level by  two  levels because  his  offenses involved  more  than          minimal  planning, see  U.S.S.G.   2F1.1(b)(2)(A),  and  by  four                             ___          additional  levels  because  he  played  a  leading  role  in the          Claremont scheme, see  U.S.S.G.  3B1.1(a) (providing for  a four-                            ___          level increase if a defendant  acts as an "organizer" or "leader"          in an extensive  criminal enterprise).   The loss valuation,  the          planning adjustment,  and the role-in-the-offense  adjustment all          adversely affected  appellant's  GSR  and,  hence,  his  60-month          sentence (a sentence within, but near the low end of, the GSR).                                         III                                         III                    On appeal, Lilly makes only a single argument.  He says          that the district court impermissibly "double counted" because it          used  his position  as the  kingpin  in the  Claremont scheme  to          increase his offense  level in two different ways,  first, as the          basis for  attributing the full amount  of the loss to  him, and,                                        ____________________               3Appellant disputed both figures in the district court, but,          on appeal, he does not challenge the district court's findings as          to  the  amounts  involved.    Consequently,  we  deem  all  such          arguments, together with  any other arguments asserted  below but          not resurrected in this  court, to be waived.   See United States                                                          ___ _____________          v. Slade, 980 F.2d 27, 30  n.3 (1st Cir. 1992); United States  v.             _____                                        _____________          St. Cyr, 977 F.2d 698, 701 (1st Cir. 1992).          _______                                          4          second,   as  the   basis  for   an   upward  role-in-the-offense          adjustment.4     We   reject   appellant's   construct  for   two          independently sufficient reasons.                                          A                                          A                    At the outset,  we note that appellant's  claim suffers          from  a  fatal strain  of  procedural default.    While appellant          voiced a  double counting concern  below   he contended  that the          planning adjustment,  U.S.S.G.  2F1.1(b)(2)(A),  overlapped with,          and represented  double counting of, his leadership  role, id. at                                                                     ___           3B1.1(a)    he did  not raise the  contention he  advances here.          For  all intents  and purposes,  that  ends the  matter.5   Legal          arguments cannot be  interchanged at will.  See  United States v.                                                      ___  _____________          Dietz, 950  F.2d 50, 55  (1st Cir. 1991) ("A  criminal defendant,          _____          dissatisfied  with the district court's rulings at sentencing yet          persuaded that his original arguments lacked merit, cannot switch          horses  mid-stream in  hopes  of  locating  a  swifter  steed.").          Mindful  of this  principle,  "[w]e  have  repeatedly  ruled,  in          connection with sentencing  as in other contexts,  that arguments          not seasonably addressed to the trial court may not be raised for          the first time in an appellate venue."  Id.; accord United States                                                  ___  ______ _____________                                        ____________________               4In support of this argument,  appellant points out that the          district  court,  when  sentencing   the  two  other   "Claremont          defendants," assigned lesser  amounts of loss  to them, with  the          result  that  the  loss  attributed  to  appellant  exceeded  the          aggregate loss attributed to others.               5Lilly's  original complaint has not been renewed on appeal.          It is,  in any event, jejune.  See  United States v. Balogun, 989                                         ___  _____________    _______          F.2d   20,  23-24  (1st  Cir.  1993)  (rejecting  complaint  that          supervisory  role adjustment constituted  double counting in view          of upward adjustment for more than minimal planning).                                          5          v. Ortiz, 966 F.2d 707, 717 (1st Cir. 1992), cert. denied, 113 S.             _____                                     _____ ______          Ct. 1005 (1993);  United States v. Uricoechea-Casallas,  946 F.2d                            _____________    ___________________          162, 166 (1st Cir. 1991);  United States v. Pilgrim Market Corp.,                                     _____________    ____________________          944 F.2d  14, 21 (1st Cir. 1991); United  States v. Fox, 889 F.2d                                            ______________    ___          357, 359 (1st Cir. 1989).                    In  order  to  preserve   sentence-related  points  for          appeal,  litigants must raise  them squarely in  the lower court.          Appellant  cannot pass  this test;  indeed, he  concedes that  he          never   explained  his  current  version  of  a  double  counting          objection to  the district court.   The mere fact  that appellant          made  a different double counting argument  below, addressed to a          different offense level  adjustment, does not exempt him from the          operation of the raise-or-waive rule.  Thus, the appeal is by the          boards.6                                          B                                          B                    The  second  fly  in appellant's  ointment  is  that no          double counting occurred in this case.  We explain briefly.                      The  amount  of  loss  attributable   to  a  particular          participant in a jointly undertaken  criminal activity is the sum          of  the amount  of  loss  he personally  caused  (or intended  to                                        ____________________               6Of  course,  even  though  a  defendant  fails to  raise  a          particular  argument  at  the disposition  hearing  in  the lower          court, his  sentence can still be  reversed on the  basis of that          argument if the error is "plain."  The criteria for a  finding of          plain error  in the  sentencing context  are, however,  rigorous.          See  United States  v. Olano,  113 S.  Ct. 1770,  1777-79 (1993);          ___  _____________     _____          United States v. Olivier-Diaz, ___  F.3d ___, ___ (1st Cir. 1993)          _____________    ____________          [No. 93-1306,  slip op.  at 10];  see  also United  States v.  La                                            ___  ____ ______________     __          Guardia, 902 F.2d 1010, 1012-13 (1st Cir. 1990).  For the reasons          _______          stated infra, appellant cannot satisfy these exacting standards.                 _____                                          6          cause),  and, under the relevant conduct rubric, U.S.S.G.  1B1.3,          the loss (actual  or intended) stemming from acts  by others that          were   reasonably  foreseeable  by  him  and  were  committed  in          furtherance of the  conspiracy.7   See U.S.S.G.   1B1.3(a)(1)(B);                                             ___          id., comment.  (n.2); see also  United States v. Moore,  923 F.2d          ___                   ___ ____  _____________    _____          910, 917  (1st Cir.  1991).   It follows  that the  measure of  a          defendant's accountability for  transactions in which he  was not          personally involved "is  usually congruent with the  scope of his          agreement   with  the   other   participants   in  the   criminal          enterprise."  United States v. Garcia,  954 F.2d 12, 16 (1st Cir.                        _____________    ______          1992).  In other words, the scope of a  participant's agreement            rather than his  place in the conspiracy's hierarchy   determines          the amount of  loss properly laid at his  doorstep for sentencing          purposes.                    To be sure,  there is  an overlap  between "scope"  and          "role."  It  stands to  reason that  the majordomo  of a  scheme,          having  set  the  stage,  probably  will  be  saddled  with  more          "relevant  conduct" than  a bit player.   That  overlap, however,          does not  mean that adjusting  for a leadership  role necessarily          portends  double counting  in a  case  where the  amount of  loss          influences the offense level.   The two enhancements do not march                                        ____________________               7Generally  speaking, a sentencing  court looks  to intended                                                                   ________          loss as well as actual  loss.  See U.S.S.G.  1B1.3(a)(3) (stating                          ______         ___          that relevant  conduct includes, inter  alia, "all harm  that was                                           _____  ____          the  object  of  [the] acts  and  omissions"  comprising relevant          conduct);  See  also  U.S.S.G.   2F1.1,  comment.  (n.9)  (cross-                     ___  ____          referencing  U.S.S.G.  2X1.1);  U.S.S.G.  2X1.1,  comment. (n.4).          Here, the court          chose to focus on actual loss, and neither party assigns error to          that choice.                                          7          in  lockstep8  and,  moreover, serve  different  purposes  in the          sentencing calculus.          This  case  illustrates  the point.          Section  2F1.1(b)(1) is  aimed at  measuring the  gravity  of the          offense.    It  does  so  by formulating  a  sliding  scale  that          increases  a defendant's probable  punishment in rough proportion          to  the  victims' financial  loss  (actual or  intended).   Thus,          amount of loss becomes a proxy for the seriousness of an offense.          See,  e.g.,  U.S.S.G.   2F1.1(b),  comment.  (n.10)   (suggesting          ___   ____          consideration of a departure if  the amount of loss overstates or          understates a crime's seriousness).                    Conversely, the  role-in-the-offense adjustment  is not          concerned  with specific offense  characteristics like  amount of          loss;  it is  aimed instead  at  measuring the  culpability of  a          defendant's   conduct  in  the  commission  of  the  offense  and          increasing  (or reducing) the  punishment in rough  proportion to          the defendant's involvement.  The adjustment proposes, in effect,          to  treat   less  harshly   those  persons   within  a   criminal          organization who  are on the fringes, i.e.,  "minor" or "minimal"                                                ____          participants,  see U.S.S.G.   3B1.2, and  to  treat more  harshly                         ___          those who, although guilty of participating only in the self-same          offense,  bear   greater  "relative   responsibility"  and   who,          therefore, "present a greater danger to the public" and "are more                                        ____________________               8Take,  for   example,  two  participants   in  a   criminal          enterprise, one the  mastermind and one a  bottom-rung underling.          The former is an organizer and  leader; the latter is not.   Yet,          both  may  be chargeable  with  the entire  amount  of loss  in a          particular case, say,  if the underling is a  forger who, knowing          the plan, follows the mastermind's  lead and doctors the critical          paperwork, thus consummating the fraud.                                          8          likely  to recidivate."   U.S.S.G.   3B1.1,  comment. (backg'd.).          Thus,  role becomes  a  proxy  for the  degree  of an  offender's          culpability.                      We  think this regime  lies well within  the Sentencing          Commission's   power.    Sentencing   factors  do  not   come  in          hermetically sealed  packages, neatly wrapped  and segregated one          from another.   Rather,  several factors may  draw upon  the same          nucleus  of  operative  facts  while  nonetheless  responding  to          discrete  concerns.    Consequently,  a  degree  of  relatedness,          without more, does not comprise double  counting.  So it is here:          although calculating  the amount of  loss for which  appellant is          responsible requires some examination into what role he played in          the overall  scheme, the  upward adjustment  for leadership  does          not, by  dint of  the loss-evaluation  inquiry  alone, equate  to          double counting.   Compare, e.g., United  States v. Balogun,  989                             _______  ____  ______________    _______          F.2d 20, 23-24  (1st Cir. 1993) (differentiating  between conduct          undergirding supervisory role adjustment and conduct undergirding          sentence enhancement for more than minimal planning).  The  proof          of this pudding is that, if Lilly had  organized exactly the same          scheme and provided  leadership to exactly the  same accomplices,          but  bilked  investors or  lenders  out of  appreciably  more (or          appreciably  less) money, the  amount of loss  would change, thus          altering  his   offense  level     but   the  role-in-the-offense          enhancement would remain constant.                                          C                                          C                    We add  an eschatocol of  sorts.  Even if  the district                                          9          court's  actions usefully  could be  described in  some sense  as          double  counting      and  we  doubt  the  accuracy   of  such  a          characterization, see supra  Part III(B)   appellant would face a                            ___ _____          further hurdle.          Double   counting   in   the  sentencing          context  "is a  phenomenon that  is less  sinister than  the name          implies."   United  States v.  Zapata,  1 F.3d  46, 47  (1st Cir.                      ______________     ______          1993).  Since double counting is often perfectly proper, see id.,                                                                   ___ ___          the guidelines themselves are the most helpful aid in the task of          separating  permissible  double counting  from  its impermissible          counterpart.   The  Sentencing Commission  has  not been  bashful          about  explicitly  banning   double  counting  in  a   number  of          instances.     See,   e.g.,  U.S.S.G.    3A1.1,  comment.   (n.2)                         ___    ____          (discussing  "vulnerable victim"  enhancement); U.S.S.G.   3A1.3,          comment. (n.2) (discussing  enhancement relating to  restraint of          victim); U.S.S.G.   3C1.2, comment.  (n.1) (discussing  "reckless          endangerment" enhancement).   We  believe the  Commission's ready          resort to explicitly stated  prohibitions against double counting          signals that courts  should go quite  slowly in implying  further          such prohibitions where none are  written.9  Accord United States                                                       ______ _____________                                        ____________________               9Some  circuits have  held that  double  counting is  always          permissible   except  when  it  is  expressly  forbidden  by  the          guidelines.  See, e.g., United States v.  Reese, 2 F.3d 870, 894-                       ___  ____  _____________     _____          95 (9th Cir. 1993), petition for cert. filed (Oct. 28, 1993) (No.                              ________ ___ _____ _____          93-6552); United States  v. Ellen, 961 F.2d 462,  468 (4th Cir.),                    _____________     _____          cert. denied, 113  S. Ct. 217 (1992); United  States v. Williams,          _____ ______                          ______________    ________          954 F.2d 204,  208 (4th Cir. 1992).   That view is,  however, not          without its detractors.  See,  e.g., United States v. Hudson, 972                                   ___   ____  _____________    ______          F.2d  504, 507  (2d  Cir. 1992)  (declining to  follow Williams);                                                                 ________          United  States v.  Romano,  970  F.2d 164,  167  (6th Cir.  1992)          ______________     ______          (similar); cf. United States v.  Fuller, 897 F.2d 1217, 1222 (1st                     ___ _____________     ______          Cir. 1990) (voicing concern about  whether a single factor can be          double counted in setting a defendant's offense level).  We leave                                          10          v. Wong,  3 F.3d  667, 670-71  (3d Cir. 1993);  United States  v.             ____                                         _____________          Sanders,  982 F.2d  4,  8  (1st Cir.  1992)  (per curiam),  cert.          _______                                                     _____          denied, 113 S. Ct. 2937 (1993); United States v. Rocha,  916 F.2d          ______                          _____________    _____          219, 243 (5th Cir. 1990), cert.  denied, 111 S. Ct. 2057  (1991);                                    _____  ______          United States v. Goolsby, 908 F.2d 861, 863 (11th Cir. 1990).             _____________    _______                    In the situation at hand, the  guidelines not only fail          expressly to  outlaw double  counting, but also  imply the  exact          opposite.   They specifically  instruct that  persons who  commit          fraud offenses ought  to receive sentences commensurate  with the          amount of loss for which they are responsible, and that those who          marshal criminal enterprises  ought to  receive extra  punishment          for their  leadership roles.  We think that when, as now, neither          an  explicit prohibition against double counting nor a compelling          basis for implying  such a prohibition exists,  clearly indicated          adjustments  for  seriousness  of the  offense  and  for offender          conduct can both be imposed, notwithstanding that the adjustments          derive in some measure from  a common nucleus of operative facts.          See, e.g., Balogun,  989 F.2d at 23-24; United  States v. Newman,          ___  ____  _______                      ______________    ______          982 F.2d 665,  673 (1st Cir. 1992),  cert. denied, 114 S.  Ct. 59                                               _____ ______          (1993); Sanders,  982 F.2d at  8; see also  Zapata, 1 F.3d  at 50                  _______                   ___ ____  ______          (holding  that where the guidelines provide for the consideration          of  a single factor in the  calculation of both offense level and          criminal   history  category,   either  expressly   or  by   fair          implication, double counting is permissible).                                        ____________________          this question open,  as the case at  hand can be resolved  by the          application of less controversial principles.                                          11                                          IV                                          IV                    We  need go  no further.   Concluding,  as we  do, that          appellant's  assignment of error is  without merit, we affirm the          judgment below.          Affirmed.          Affirmed.          ________                                          12