Court Opinion

ID: 2961875
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:49:08.494885+00
Date Added: 2024-06-11T11:42:22.529997
License: Public Domain

USCA1 Opinion

	

          March 29, 1993    UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 92-2025                              UNITED STATES OF AMERICA,                                      Appellee,                                          v.                                   PETER J. REGAN,                                Defendant, Appellant.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. A. David Mazzone, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                                Boudin, Circuit Judge,                                        _____________                            Aldrich, Senior Circuit Judge,                                     ____________________                              and Stahl, Circuit Judge.                                         _____________                                 ____________________            George F.  Gormley with  whom John  D.  Colucci was  on brief  for            __________________            _________________        appellant.            Ralph F.  Boyd, Jr., Assistant  United States  Attorney, with whom            ___________________        Robert  J.  Lynn,  Assistant  United  States  Attorney,  and  A.  John        ________________                                              ________        Pappalardo, United States Attorney, were on brief for appellee.        __________                                 ____________________                                    March 29, 1993                                 ____________________                      ALDRICH, Senior Circuit Judge.   Defendant Peter J.                               ____________________            Regan,  who pled guilty to 55 counts of bank embezzlement (18            U.S.C.   656)  on February 18,  1992 with no  reservations or            conditions  now relevant,  appeals with  respect to  his U.S.            Sentencing Guidelines  sentence of 40 months,  (a) because he            was not allowed a  hearing on oral testimony with  respect to            his claimed deduction on  account of diminished capacity; (b)            because he  was sentenced under guidelines  issued later than            the dates of some of his actions, and  (c) because there were            enhancements  made  for  abuse of  trust  and  for more  than            minimum planning.  We affirm.                      Defendant,  during   the  period  covered   by  the            indictment, viz.,  November, 1987  to  July 16,  1991, was  a            senior vice president in charge  of the Special Loan Services            Division  of  the Shawmut  National Bank.    As head  of this            division,  defendant directly  supervised and  controlled the            collection  and   "work-out"   of  delinquent   and   problem            commercial loans.   Because of the individuality of this work            and   defendant's   seniority,    he   was    extraordinarily            unsupervised,  all the way from his actions in causing debits            or credits to Shawmut's cash  collateral account, down to his            maintaining personal custody of the files.  During the period            in  question he exercised this freedom in a number of manners            so as to embezzle some $2,500,000 from the Bank.  On July 16,                                         -2-            1991, by reason of a conspicuous act, he was  discovered.  He            was promptly indicted and, in due course, pleaded guilty.                                 Diminished Capacity                                 ___________________                      Defendant  first  challenges  the district  court's            refusal to hold an evidentiary hearing on his  entitlement to            a   downward  departure   for  diminished   mental  capacity.            Sentencing Guidelines   5K2.13 provides as follows:                        5K2.13.    Diminished Capacity  (Policy                                   ___________________                      Statement)                      If the defendant committed  a non-violent                      offense     while      suffering     from                      significantly reduced mental capacity not                      resulting from voluntary  use of drugs or                      other intoxicants, a  lower sentence  may                      be  warranted  to reflect  the  extent to                      which reduced mental capacity contributed                      to   the   commission  of   the  offense,                      provided  that  the defendant's  criminal                      history  does  not  indicate a  need  for                      incarceration to protect the public.            The  burden of  proving causation  is on  the defendant,  and            there can be no appeal from the district court's  denial of a            reduction.  United States  v. Lauzon, 938 F.2d 326,  331 (1st                        _____________     ______            Cir.),  cert. denied, 112 S.Ct. 450  (1991); United States v.                    ____________                         _____________            Shattuck, 961 F.2d  1012 (1st Cir.  1992).  However,  "[w]hen            ________            any factor  important  to  the  sentencing  determination  is            reasonably in dispute, the parties shall be given an adequate            opportunity to present information to the court regarding the            factor."  U.S.S.G.   6A1.3(a).  Except with respect to cross-            examination,  post,  defendant   does  not  claim  that   his                          ____                                         -3-            presentation  was substantively  curtailed; his  complaint is            that the refusal to hear it on oral testimony was an abuse of            discretion.  United States v. Gerante, 891 F.2d 364, 367 (1st                         _____________    _______            Cir. 1989); see also Fed. R. Crim. P. 32(a)(1).                        ___ ____                      In the  written record  there was the  pre-sentence            report  containing a  lengthy  statement  from defendant  and            favoring and unfavoring opinions of experts.  The court chose            to accept the latter, concluding,                      I have no confidence at all . . . in that                      defense.  I have  no doubt that this case                      has had a severe and traumatic effect  on                      Mr. Regan, but I  fear that that all took                      place  after he  was  caught.   I do  not                      believe   he   was   diminished  in   his                      capacity.   I accept the report of Doctor                      Strasburger.   And  during the  course of                      his   criminal   conduct,   he  was   not                      diminished in his capacity.            We review the  evidence as the  best approach to  defendant's            contention that  the court  abused its discretion  in denying            oral presentation.   Basically, defendant contends diminished            capacity produced  a delusional  conviction that  the country            was faced with economic, and hence political, chaos for which            he must fortify  himself.  In the late 1970s  and early 1980s            he  stored  dried foods  in  his  cellar, ultimately  several            years' supply,  stored firewood,  and  made arrangements  for            water and  other necessities.   These were all  acquired with            defendant's  own  earnings.   Commencing  in  November  1987,            however, defendant  exercised what  the record shows  to have            been highly  skillful and comprehensive methods  -- hence the                                         -4-            55  counts  -- to  divert Bank  funds.   Their  ingenuity and            effective concealment, evoking no suspicions, show remarkable            ability.  The proceeds largely were salted away in Swiss bank            accounts.    Shortly after  his  discovery  and discharge  by            Shawmut, defendant voluntarily entered McLean Hospital, where            he  was found  to  be profoundly  disturbed.   At  first  his            condition was too serious to assist in his defense, but after            two admissions he sufficiently recovered,  and ultimately was            allowed to plead.                      In  connection with  the  coming  sentence  hearing            defendant  submitted records from McLean Hospital and letters            from three  psychiatrists.   The earliest  was from  a McLean            Hospital doctor, Joseph Triebwasser, dated August 9, 1991, at            which time defendant was  severely psychotic, indicating that            this severe illness was  consistent with his alleged criminal            activities prior  to his  admission.   This brief letter  was            addressed  to insurance  coverage  and is  of no  substantial            value.  On November 21, 1991 Dr. Martin J. Kelly addressed  a            letter  to  the  court  with  relation  to  defendant's  then            inability  to  participate in  legal  activities.   This  was            followed  by  a  letter  from Dr.  Kelly  with  reference  to            sentencing, dated December 13, 1991 in which the doctor spoke                                         -5-            of  defendant's  competence, his  high intelligence,  and his            ability                      to function, except when  it deteriorates                      into  psychosis as  it has  from time  to                      time over the past 10 years. . . .[1]                           It  is  difficult  to  say  that Mr.                      Regan did not have the capacity  to known                      (sic) the nature and  quality of his acts                      or did not have the capacity to know that                      what he  was doing was wrongful  in light                      of  his  own  behavior, his  capacity  to                      function  at work, and  as mentioned, his                      intelligence.  But, the behaviors seem to                      me  in   large  measure  driven   by  his                      psychiatric  problems which  occasionally                      deteriorate to the point of faulty realty                      testing  and  frank psychosis.   However,                      for  much of the past 10 years he has not                                                            ___                      been  in a  psychotic  state  and  during                      those  periods  was   also  involved   in                      hoarding money as well as  provisions and                      arming  himself  in  anticipation of  the                      looming  economic collapse  and resultant                      anarchy.  (Emphasis in original).            This was followed  by a letter  from Dr. Pierre  V. Mayer  in            which he said,                      I  wanted to  let  you know  that I  have                      received    Dr.   Kelly's    report   and                      essentially agree with  his findings.  (I                      would qualify this  by adding  that I  am                      not convinced that Mr. Regan did not have                      some degree of psychosis over the past 10                      years).                      This less  than forceful opinion was  followed by a            further letter from Dr. Kelly.                                            ____________________            1.  We  interject  here  that  there is  no  evidence  beyond            medical  opinion, except  from  defendant  himself, that  his            abilities  ever deteriorated  or  faltered.   His  associates            never observed such.                                         -6-                      In response, the government submitted a report from            Dr. Larry  H.  Strasburger.   After  indicating that  he  had            reviewed defendant's personal  history as given to  him in an            interview   and  the   medical  records,  the   letters  from            defendant's experts, and interviews with officers at the Bank            who  had  dealt  with  defendant,  the  doctor  concluded  as            follows:                           There  was no  information available                      to this examiner which  would corroborate                      the existence of a psychosis prior to Mr.                      Regan's hospitalization in July  of 1991.                      While  delusional  beliefs and  psychotic                      thinking may  have been present  prior to                      the    discovery     of    Mr.    Regan's                      embezzlement,  these  phenomena were  not                      evidenced   to   the  coworkers   whom  I                      interviewed.    They   stated  that   Mr.                      Regan's  capacity  to  think clearly  and                      effectively  was  an  extraordinary  one,                      quite  at  variance  with  the  psychotic                      mental state documented  on his  hospital                      admissions and during my  interviews with                      him.   It  is entirely  possible,  indeed                      even  likely,  that  his   psychosis  was                      precipitated  by  the  discovery  of  his                      misappropriation of funds.                           Even were Mr.  Regan's psychosis  to                      have  existed  prior to  his embezzlement                      coming  to  light, the  evidence  that it                      affected his thinking and  diminished his                      mental  capacity is  confined to  his own                      statements.    The bank  officers  whom I                      interviewed describe him as  an extremely                      effective   thinker,    negotiator,   and                      problem  solver.   Even  were he  to have                      held  delusional  ideas,   there  is   no                      evidence  that  his cognitive  capacities                      were  impaired  by  them.   It  is  quite                      possible that, even if he had entertained                      delusions,    he    could    also    have                      misappropriated funds simply for personal                      gain.  Given the information available to                                         -7-                      me, it is  not possible  to resolve  this                      question from a psychiatric perspective.                      Prior to the sentencing  hearing defendant moved to            present oral testimony of the  doctors and for permission  to            cross-examine Dr. Strasburger.  The court denied this motion.            At  the  hearing,  after  briefly  stating  its  reasons  for            concurring with  Dr. Strasburger, it  expressed its  ultimate            conclusion previously quoted.                      Following its  decision from  the bench, the  court            allowed defendant to  file an  offer of proof  to permit  the            court to  reconsider.  Thereafter defendant  filed a further,            two page letter  from Dr.  Kelly, and a  seven page,  single-            space, letter from Dr. Mayer.  The former added little.   The            second  was full and detailed, but, at bottom, did not change            the picture; there remained  two views.  We  have, therefore,            an  experienced   judge,  who  spoke  thoughtfully,  "I  have            reviewed  this record  very  carefully, and  I  have done  it            several  times over the past week."  The record was unusually            extensive.  In  addition he agreed to  receive further proof,            and no doubt equally  considered it.  That this  evidence was            not allowed  to  be  presented orally  was  well  within  the            court's  discretion.   United  States v.  Pugliese, 805  F.2d                                   ______________     ________            1117,  1123 (2d  Cir.  1986).    See  also  U.S.S.G.    6A1.3                                             ___  ____            Commentary.                      There  remains that  defendant was  not allowed  to            cross-examine  Dr. Strasburger.   We  have never  held it  an                                         -8-            abuse of discretion  to deny cross-examination in  sentencing            hearings.   E.g., United  States v. Zuleta-Alvarez,  922 F.2d                        ____  ______________    ______________            33,  36 (1st Cir. 1990), cert. denied, 111 S.Ct. 2039 (1991).                                     ____________            This  would not be the case to  begin.  While offers of proof            are not  normally required in connection with cross-examining            a  hostile witness, see United States  v. Colonial Motor Inn,                                ___ _____________     ___________________            Inc., 440 F.2d  1227, 1228 (1st Cir. 1971),  this was an area            ____            where defendant should well  know what he would ask or try to            elicit from  Dr. Strasburger.  Cf. United States v. Shattuck,                                           __  _____________    ________            ante.    In  his  offer  of  proof  he  made  no  substantive            ____            suggestions.  We see no error.                      In closing  this aspect, this  is not a  case where            the defendant  was of general diminished  capacity, but quite            the  contrary.  His extreme  views were on  a single subject,            and  even here they merely pursued opinions that were held by            other  doomsayers, and envisioned  conditions not  unknown to            history.  Defendant had read  depressing books, and his  work            in the Bank was with economic entities that were moribund, or            nearly so.  Even  if a reduced sentence could be warranted in            the  case of a  single delusion,  it does  not follow  that a            delusion means psychosis.  In any event, according to his own            expert, defendant continued his conduct, which he knew to  be            wrongful,  during  intervals  when,  concededly,  he was  not            psychotic.   This  is an unusual  case, and we  have given it            much  attention, but  the  court had  defendant's case  fully                                         -9-            before it, and we believe that to complain about  a breach of            discretion in not receiving it orally is truly frivolous.                                         -10-                                  Continuing Offense                                  __________________                      During Regan's embezzlement  activities the  United            States Sentencing  Guidelines   2B1.1(b)(1) was  amended with            the result  of increasing the base level  enhancement for the            amount here  embezzled from  twelve levels  to fifteen.   See                                                                      ___            U.S.S.G.  Manual, Appendix  C,  pp. 39-40,  Amendment No.  99            (effective  Nov. 1, 1989).   The court applied the amendment,            and   defendant  complains   this  was   an  ex   post  facto                                                         __   ____  _____            deprivation.   The ex post  facto clause of  the Constitution                               __ ____  _____            "forbids the application  of any law  or rule that  increases            punishment for  pre-existing  conduct."    United  States  v.                                                       ______________            Havener,  905 F.2d 3, 5  (1st Cir. 1990);  Miller v. Florida,            _______                                    ______    _______            482 U.S. 423 (1987).  Where a "continuing offense"  straddles            the  old and new law, however, applying the new is recognized            as constitutionally sound.   E.g., United States v. Arboleda,                                         ____  _____________    ________            929 F.2d 858, 871 (1st Cir. 1991).  See also United States v.                                                ___ ____ _____________            Fazio,  914 F.2d 950, 959  n. 14 (7th  Cir. 1990) (collecting            _____            cases).  We agree with the defendant that the cases relied on            by the government can arguably be  distinguished in the sense            that  all involved  true straddles  where the  offense itself            began  before   the  increase   in  sentence   but  concluded            afterwards.   The  government  says  that  this was  all  one            scheme, though  variously  carried out,  to  use  defendant's            office  to embezzle from his employer.   However, pursuant to            the substitute indictment,  defendant was formally  sentenced                                         -11-            for some  offenses that  were completed before  the guideline            increase  and, if the prior guideline were applied (either to            all  the  counts  or  through  some  "blended"  method),  his            sentence would be lower.                      Nevertheless,  we think it  constitutional that the            defendant be subject to the sentence actually imposed even if            no increased  penalty is  permitted for the  convictions that            occurred before the guideline increase.  Under the guidelines            the prior  acts of embezzlement were  "relevant conduct" that            would enhance defendant's sentence for the embezzlements that            occurred after  the guideline  increase even if  he had  been            convicted   only    on   the   latter   counts.      U.S.S.G.                        ____               1B1.3(a)(2); 3D1.2(b),  (d).   These two  guidelines taken            together  base  the sentence  on  the  full amount  embezzled            during  the same  course of conduct  or as  part of  the same            scheme  or plan even if a defendant is indicted and convicted            on just one  of the counts.   See  U.S.S.G.   3D1.2, Note  4,                                          ___            example  4.     In   this  instance,  however   pleaded,  the            defendant's embezzlements  were manifestly  part of the  same            ongoing scheme of embezzlements.                      The  guidelines'  criminal  history provisions  are            routinely   applied  to   increase   sentences   based   upon            convictions that occurred before the guidelines were adopted.            Cf.  United  States v.  Ykema, 887  F.2d  697, 700  (6th Cir.            __   ______________     _____            1989),  cert. denied, 493 U.S.  1062 (1990); United States v.                    ____________                         _____________                                         -12-            Cusack, 901  F.2d 29, 32  (4th Cir.  1990).   For example,  a            ______            repeat offender statute may increase the sentence for a later            crime based  on convictions that occurred  before the statute            was  enacted.   See  United  States v.  Ykema,  ante, (citing                            ___  ______________     _____   ____            cases).  In  those cases, as in  this one, the  defendant has            fair warning at the  time he commits his later acts  that the            prior  ones may or will  be used in  determining his sentence            for the  latter ones.  Cf. Amaral v. I.N.S., 977 F.2d 33, 36-                                   __  ______    ______            37 (1st Cir. 1992).   Accordingly, there is no ex post  facto                                                           __ ____  _____            violation in this case.   It may be that  some of defendant's            earlier 40 month  sentences could not be supported,  but they            are  to be  served  concurrently, and  as  defendant has  not            suggested prejudice we do not pursue the matter.                                     Enhancements                                     ____________                      Finally, defendant complains that there should have            been  no enhancements  under U.S.S.G.    3B1.3 "for  abuse of            trust,"   and  under    2B1.1(b)(4)  for  more  than  minimum            planning.  Defendant, in talking about  abuse of trust, which            he says  is already  included in embezzlement,  neglects that              3B1.3   includes  "special   skill."     The  court   dealt            unanswerably  with  defendant's  special  skill.    Defendant            complains,  equally  unwarrantably,  that  the  size  of  the            embezzlement,   for  which   his   sentence  was   increased,            necessarily assumed  planning, so  that to  add more for  the                                         -13-            planning was  redundant.  There  could be  no end  to such  a            contention.                      Affirmed.                      ________                                         -14-