United States v. Cali
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Opinion
USCA1 Opinion
UNITED STATES COURT OF APPEALS UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT FOR THE FIRST CIRCUIT
____________________
No. 95-2271
UNITED STATES,
Appellee,
v.
PHILIP M. CALI,
Defendant, Appellant.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Robert E. Keeton, U.S. District Judge] ___________________
____________________
Before
Lynch, Circuit Judge, _____________
Aldrich and Bownes, Senior Circuit Judges. _____________________
____________________
John P. Ward with whom David Duncan and Zalkind, Rodriguez, Lunt ____________ _____________ _________________________
& Duncan were on brief for appellant. ________
Brian T. Kelly, Assistant United States Attorney, with whom ________________
Donald K. Stern, United States Attorney, were on brief for appellee. _______________
____________________
June 25, 1996
____________________
BOWNES, Senior Circuit Judge. On June 1, 1995, BOWNES, Senior Circuit Judge. _____________________
defendant-appellant Philip Cali ("Cali") pled guilty to count
sixty-nine of a seventy-one count indictment charging him
with operating an illegal gambling business in violation of
18 U.S.C. 1955, 2. Cali now appeals the fifteen-month
sentence of imprisonment he received, contending that the
district court enhanced the prison term mandated by the
Sentencing Guidelines ("Guidelines") because of the erroneous
view that U.S.S.G. 3B1.1 permits a base offense level
adjustment for mere management of assets or property. Cali
also maintains that the district court's alternative holding
that upward departure was appropriate because his conduct
fell outside section 3B1.1's heartland was clearly erroneous.
We agree that mere management of assets is insufficient for a
base offense level adjustment under section 3B1.1, but find
that the district court's alternative determination cures any
defect in its holding. Accordingly, we affirm. Jurisdiction
stems from 18 U.S.C. 3742.
I. I.
THE FACTS THE FACTS _________
We consider the facts as set forth in the
unobjected-to portions of the Presentence Investigation
Report ("PSI") and the transcript of the sentencing hearing.
See, e.g., United States v. Peppe, 80 F.3d 19, 20 (1st Cir. ___ ____ _______________________
1996); United States v. Grandmaison, 77 F.3d 555, 557 (1st _____________________________
-2- 2
Cir. 1996). On October 15, 1993, Philip Cali was arrested
pursuant to count sixty-nine of a seventy-one count
indictment charging him with conducting, financing, managing,
supervising, directing, and owning all or part of an illegal
gambling business which involved five or more persons between
October 1986 and December 1992. The result of an eight year
Massachusetts State Police ("State Police") investigation
into large-scale racketeering conspiracies, the indictment
named nine individuals, four of whom -- Joseph Yerardi
("Yerardi"), William Maguire ("Maguire"), Anthony Grabiec Jr.
("Grabiec"), and Salvatore M. DeAngelis ("DeAngelis") -- were
charged in count sixty-nine with Cali. Cali, who is sixty-
five and has a criminal history which includes convictions
for gambling-related activities, was not charged in any of
the indictment's other counts.
During the course of their racketeering
investigation, the State Police obtained authorization to
intercept phone conversations over a cellular telephone
utilized by Yerardi from June to August 1991. Their
surveillance of the telephone revealed that Yerardi presided
over extensive loansharking and gambling businesses. The
gambling business, which operated under the auspices of
Boston's Winter Hill Gang and generated funds for Yerardi's
loansharking business, included over twenty-five bookmaking
agents, two principal offices, and had a gross daily revenue
-3- 3
of $2,000.00. Though Yerardi headed the gambling enterprise,
Maguire was its principal supervisor and the individual
responsible for collecting money owed to the organization and
paying out money owed to agents and bettors.
Transcripts of numerous calls between Yerardi and
Cali intercepted by the State Police revealed that Cali and
DeAngelis played the same role in the gambling enterprise,
though they operated out of different locations. Yerardi
stationed Cali, who frequently placed bets with the business
and was often one of its debtors, at one of the business's
principal bookmaking offices to receive calls from the
various agents. The agents, who identified themselves by
code only and received a percentage of the business's profits
as compensation, communicated information about sporting
event bets to Cali. After taking and recording that
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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. 95-2271
UNITED STATES,
Appellee,
v.
PHILIP M. CALI,
Defendant, Appellant.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Robert E. Keeton, U.S. District Judge] ___________________
____________________
Before
Lynch, Circuit Judge, _____________
Aldrich and Bownes, Senior Circuit Judges. _____________________
____________________
John P. Ward with whom David Duncan and Zalkind, Rodriguez, Lunt ____________ _____________ _________________________
& Duncan were on brief for appellant. ________
Brian T. Kelly, Assistant United States Attorney, with whom ________________
Donald K. Stern, United States Attorney, were on brief for appellee. _______________
____________________
June 25, 1996
____________________
BOWNES, Senior Circuit Judge. On June 1, 1995, BOWNES, Senior Circuit Judge. _____________________
defendant-appellant Philip Cali ("Cali") pled guilty to count
sixty-nine of a seventy-one count indictment charging him
with operating an illegal gambling business in violation of
18 U.S.C. 1955, 2. Cali now appeals the fifteen-month
sentence of imprisonment he received, contending that the
district court enhanced the prison term mandated by the
Sentencing Guidelines ("Guidelines") because of the erroneous
view that U.S.S.G. 3B1.1 permits a base offense level
adjustment for mere management of assets or property. Cali
also maintains that the district court's alternative holding
that upward departure was appropriate because his conduct
fell outside section 3B1.1's heartland was clearly erroneous.
We agree that mere management of assets is insufficient for a
base offense level adjustment under section 3B1.1, but find
that the district court's alternative determination cures any
defect in its holding. Accordingly, we affirm. Jurisdiction
stems from 18 U.S.C. 3742.
I. I.
THE FACTS THE FACTS _________
We consider the facts as set forth in the
unobjected-to portions of the Presentence Investigation
Report ("PSI") and the transcript of the sentencing hearing.
See, e.g., United States v. Peppe, 80 F.3d 19, 20 (1st Cir. ___ ____ _______________________
1996); United States v. Grandmaison, 77 F.3d 555, 557 (1st _____________________________
-2- 2
Cir. 1996). On October 15, 1993, Philip Cali was arrested
pursuant to count sixty-nine of a seventy-one count
indictment charging him with conducting, financing, managing,
supervising, directing, and owning all or part of an illegal
gambling business which involved five or more persons between
October 1986 and December 1992. The result of an eight year
Massachusetts State Police ("State Police") investigation
into large-scale racketeering conspiracies, the indictment
named nine individuals, four of whom -- Joseph Yerardi
("Yerardi"), William Maguire ("Maguire"), Anthony Grabiec Jr.
("Grabiec"), and Salvatore M. DeAngelis ("DeAngelis") -- were
charged in count sixty-nine with Cali. Cali, who is sixty-
five and has a criminal history which includes convictions
for gambling-related activities, was not charged in any of
the indictment's other counts.
During the course of their racketeering
investigation, the State Police obtained authorization to
intercept phone conversations over a cellular telephone
utilized by Yerardi from June to August 1991. Their
surveillance of the telephone revealed that Yerardi presided
over extensive loansharking and gambling businesses. The
gambling business, which operated under the auspices of
Boston's Winter Hill Gang and generated funds for Yerardi's
loansharking business, included over twenty-five bookmaking
agents, two principal offices, and had a gross daily revenue
-3- 3
of $2,000.00. Though Yerardi headed the gambling enterprise,
Maguire was its principal supervisor and the individual
responsible for collecting money owed to the organization and
paying out money owed to agents and bettors.
Transcripts of numerous calls between Yerardi and
Cali intercepted by the State Police revealed that Cali and
DeAngelis played the same role in the gambling enterprise,
though they operated out of different locations. Yerardi
stationed Cali, who frequently placed bets with the business
and was often one of its debtors, at one of the business's
principal bookmaking offices to receive calls from the
various agents. The agents, who identified themselves by
code only and received a percentage of the business's profits
as compensation, communicated information about sporting
event bets to Cali. After taking and recording that
information, Cali transmitted it directly to Yerardi, with
whom he was in daily telephone contact. The majority of the
calls intercepted by the State Police were made by Yerardi to
Cali at the bookmaking office.
Cali often reviewed betting results with and
reported agents' makeup figures -- those monies that have to
be worked off before any money can be paid out -- to Yerardi
during these telephone conversations. He also assisted in
charting bets for the gambling business. Charting involves
tracking daily bets made by agents and monitoring the
-4- 4
business's projected risk of loss on individual sporting
events. Though Cali answered directly to Yerardi and was
responsible for completing charting analyses, there is no
evidence that he received a percentage of the business's
profit or played any role in setting policy regarding odds or
bet placement.
On June 1, 1995, Cali pled guilty to participating
in the operation of an illegal gambling business. The
district court scheduled a sentencing hearing and prior
thereto received a PSI from the Probation Department. The
PSI prepared by the Probation Department, to which both the
government and Cali registered objections, recommended a
total adjusted guideline offense level of ten. This
recommendation reflects a two level decrease in the base
offense for acceptance of responsibility. See U.S.S.G. ___
2E3.1(a); 3E1.1. The PSI concluded, based on the information
provided by the government and the defendant's description of
his duties that an adjustment for role in the offense would
not be warranted.
The Probation Department assigned Cali three
criminal history points for prior gambling convictions and,
as a result, placed him in Criminal History Category II. The
district court, however, later found that the Probation
Department had erroneously assigned Cali criminal history
points for offenses committed while working for Yerardi and
-5- 5
identified the appropriate criminal history category as I.
Placement in Criminal History Category I, at a total adjusted
offense level of ten, results in a sentencing range of six to
twelve months. II. II.
THE SENTENCING HEARING THE SENTENCING HEARING ______________________
At the sentencing hearing, Cali requested a
downward departure on the grounds that both he and his wife
suffered, inter alia, from serious heart conditions and _____ ____
largely supported themselves on Social Security income
benefits that would be unavailable to them for any period
that Cali was incarcerated. The government disputed the
contention that Cali was entitled to departure on this basis
and objected to the two-point adjustment for acceptance of
responsibility recommended by the Probation Department.
Additionally, the government objected to the PSI's failure to
add four levels under section 3B1.1(a) for supervisory role,
arguing that an enhancement was warranted because Cali
managed people and assets within that guideline's meaning.
The government also argued that the Criminal History Category
I assignment Cali received did not adequately reflect the
seriousness of his past criminal history.
The district court denied the objections and
requests made by both Cali and the government. It refused
Cali's request for a health-related departure, concluding
that the factors cited by the defense did not, "separately or
-6- 6
together, justify departure." It also rejected the
government's objection to the two-point adjustment for
acceptance of responsibility recommended by the PSI.
Finally, the court found that the severity of Cali's criminal
history was not underrepresented by the amended criminal
history calculation and denied the government's request for a
four-level adjustment under section 3B1.1(a).
Nevertheless, the court found that Cali's role in
Yerardi's gambling enterprise warranted some enhancement in
his sentence and concluded, over Cali's objection, that a
three level increase in the offense level was appropriate.
It found that section 3B1.1(b) and Application Note 2's role
in the offense provisions permitted him to make a direct
adjustment to Cali's base offense level, but added that,
should this Court determine that section 3B1.1 does not
permit such an adjustment, it would employ an upward
departure, under United States v. Rivera, 994 F.2d 942 (1st ________________________
Cir. 1993), to impose a sentence outside the range prescribed
by the Guidelines to reach the same final sentence. Either
calculus results in a total adjusted offense level of
thirteen, which corresponds to a sentencing range of twelve
to eighteen months.
Accordingly, the court sentenced Cali to a fifteen-
month term of imprisonment and two years of supervised
release. It assessed Cali $50.00, as required by statute,
-7- 7
and imposed a fine of $3,000.00, without interest. In light
of Cali's medical problems, the court also made a
recommendation that Cali be placed in a facility, as close to
Massachusetts as possible, where adequate medical treatment
would be available to him.
III. III.
STANDARD OF REVIEW STANDARD OF REVIEW __________________
Appellate review of a district court's application
of the Guidelines is a two-part process. United States v. ________________
Joyce, 70 F.3d 679, 681 (1st Cir. 1995), cert. denied, 116 S. _____ _____ ______
Ct. 1556 (1996). We first determine the applicability of the
guideline to a particular case de novo. United States v. __ ____ _________________
McCarthy, 77 F.3d 522, 535 (1st Cir. 1996); United States v. ________ ________________
St. Cyr, 977 F.2d 698, 701 (1st Cir. 1992). After _________
determining the guideline's scope and meaning, we review the
district court's factual determinations for clear error,
"giv[ing] due deference to the district court's application
of the guidelines to the facts." Joyce, 70 F.3d at 681; see _____ ___
also Koon v. United States, Nos. 94-1644, 94-8842, 1996 WL ____ ______________________
315800 at * 8 (U.S. June 13, 1996); McCarthy, 77 F.3d at 535; ________
St. Cyr, 977 F.2d at 701. Because "[t]he determination of a ________
defendant's role in an offense is fact-specific," Joyce, 70 _____
F.3d at 682, we will only disturb the district court's
findings regarding Cali's role in Yerardi's gambling
enterprise if they are clearly erroneous or based on a
-8- 8
mistake of law. See United States v. Frankhauser, 80 F.3d ___ _____________________________
641, 653 (1st Cir. 1996); United States v. Rostoff, 53 F.3d ________________________
398, 413 (1st Cir. 1995); United States v. Tejada-Beltran, 50 _______________________________
F.3d 105, 110-11 (1st Cir. 1995).
IV. IV.
DISCUSSION DISCUSSION __________
The small, but nevertheless real, difference
between a twelve and fifteen month prison term is ultimately
what is at stake in this appeal. Cali contends that he is
entitled to a reduction in his fifteen-month sentence because
twelve months is the maximum prison term he should have
received under the Guidelines. In support of this, he
maintains that the district court erroneously concluded that
section 3B1.1(b) permits a base offense level enhancement in
the absence of a finding that a defendant organized, lead,
managed, or supervised one or more participants in an illegal
enterprise involving five or more participants.
Additionally, Cali argues that the court's alternative
holding -- that an upward departure was appropriate in the
event section 3B1.1 precluded adjustment -- was clearly
erroneous because his conduct falls squarely within the
heartland of 18 U.S.C. 1955 offenses. We begin by
reviewing the claim that, absent a finding that a defendant
managed individuals, U.S.S.G. 3B1.1(b) precludes an
-9- 9
enhancement in the base offense level and discuss the
requirements for a 3B1.1 upward departure thereafter.
U.S.S.G. 3B1.1(b) Role in the Offense Adjustments U.S.S.G. 3B1.1(b) Role in the Offense Adjustments ___________________________________________________
U.S.S.G. 3B1.1 punishes defendants in large-scale
criminal enterprises according to their relative
responsibility, meting out the most severe sentences to
individuals who hold leadership or management positions.
Tejada-Beltran, 50 F.3d at 111; United States v. Fones, 51 ______________ _______________________
F.3d 663, 665 (7th Cir. 1995); United States v. Parmelee, 42 _________________________
F.3d 387, 395 (7th Cir. 1994), cert. denied sub nom. Brozek- _____ ______ ___ ____ _______
Lukaszuk, 116 S. Ct. 63 (1995). The district court used this ________
guideline to elevate Cali's sentence on the theory that
section 3B1.1(b) permits an enhancement in a defendant's base
offense level for both management of individuals and assets.
Cali assigns error, contending that an enhancement in base
offense level can only be based on a finding that the
defendant managed other individuals. The government concedes
this point, but maintains that Cali's argument is moot
because the district court found that Cali's responsibilities
in Yerardi's gambling business included managing individuals,
as well as assets.
To make sense of these positions, we briefly review
section 3B1.1 and its history. Section 3B1.1 provides:
Based on the defendant's role in the
offense, increase the offense level as
follows:
-10- 10
(a) If the defendant was an organizer or
leader of a criminal activity that
involved five or more participants or was
otherwise extensive, increase by 4
levels.
(b) If the defendant was a manager or
supervisor (but not an organizer or
leader) and the criminal activity
involved five or more participants or was
otherwise extensive, increase by 3
levels.
(c) If the defendant was an organizer,
leader, manager, or supervisor in any
criminal activity other than described in
(a) or (b), increase by 2 levels.
Prior to 1993, courts were split as to whether a finding that
a criminal-enterprise defendant managed individuals was a
prerequisite to a section 3B1.1 base offense level
adjustment. See United States v. McFarlane, 64 F.3d 1235, ___ ___________________________
1237 (8th Cir. 1995). This Circuit took the view that "the
defendant must have exercised some degree of control over
others involved in the commission of the offense or . . .
must have been responsible for organizing others for the
purpose of carrying out the crime." United States v. Fuller, _______________________
897 F.2d 1217, 1220 (1st Cir. 1990); see also United States ___ ____ _____________
v. Fuentes, 954 F.2d 151, 153 (3d Cir.), cert. denied, 504 ___________ _____ ______
U.S. 977 (1992); United States v. Mares-Molina, 913 F.2d 770, _____________________________
773 (9th Cir. 1990). Other courts concluded that "a
defendant who did not supervise people [could] be considered
a manager or supervisor within the meaning of 3B1.1(b)."
United States v. Chambers, 985 F.2d 1263, 1267 (4th Cir.), __________________________
-11- 11
cert. denied, 114 S. Ct. 107 (1993); see also United States _____ ______ ___ ____ _____________
v. Grady, 972 F.2d 889 (8th Cir. 1992). ________
On November 1, 1993, the Sentencing Commission
("Commission") weighed into this debate by issuing Amendment
500, which amended section 3B1.1 to include Application Note
2. That application note provides:
To qualify for an adjustment under this
section, defendant must have been the
organizer, leader, manager, or supervisor
of one or more other participants. An
upward departure may be warranted,
however, in the case of a defendant who
did not organize, lead, manage, or
supervise another participant, but who
nevertheless exercised management
responsibility over the property, assets,
or activities of a criminal organization.
Thus, Amendment 500 offered something to courts on both sides
of the section 3B1.1 debate. It made it clear, in accord
with the position we embraced in Fuller, 897 F.2d at 1220, ______
that section 3B1.1 adjustments are unavailable unless the
record shows that the defendant managed one or more
individuals, but also states that a finding that a defendant
managed assets instead of individuals could be a basis for
upward departure. Ironically, this attempt to define section
3B1.1's contours and operation created the dispute which lies
at the heart of this appeal.
Application Note 2 explains that section 3B1.1
adjustments and departures require different factual
findings, but does not clarify how, if at all, these devices
-12- 12
differ in terms of the sentencing calculation they mandate.
At the sentencing hearing, Cali argued that section 3B1.1
adjustments involve enhancements in the base offense level,
whereas section 3B1.1 departures involve enhancements in the
total adjusted offense level and must adhere to the framework
for Guidelines departures established by this Circuit in
Rivera, 994 F.2d at 942. The district court agreed that ______
section 3B1.1 adjustments effectuate increases in a
defendant's base offense level. See, e.g., United States v. ___ ____ ________________
Capers, 61 F.3d 1100, 1109 (4th Cir. 1995), cert. denied, No. ______ _____ ______
95-7022, 1995 WL 752222 (U.S. May 20, 1996); Fones, 51 F.3d _____
at 669-70; McFarlane, 64 F.3d at 1239-40. It was not _________
persuaded, however, that the Commission intended to limit
section 3B1.1 departures to changes in the total adjusted
offense level:
THE COURT: My primary view of the matter
. . . is that the appropriate way to read
these guidelines is that that word
"departure" in Application Note 2 was not
being used in the technical sense of a
kind of departure that is controlled by
Rivera, by the decision-making structure ______
controlled by Rivera. Instead it's ______
talking about a calculation of the total
offense level.
The court reasoned that had the Commission intended the term
"departure" to have the same meaning in the role in the
offense context as it does elsewhere in the Guidelines, it
would have discussed role in the offense departures in
Chapter 5, Part K, of the Guidelines, which is explicitly
-13- 13
devoted to departures, and not in Chapter 3, Part B, which
primarily deals with base offense level adjustments. See ___
U.S.S.G. Chap. 3, Part B, Introductory Commentary ("This part
provides adjustments to the offense level based upon the role
the defendant played in committing the offense."). The
district court, therefore, held that both section 3B1.1
adjustments and departures affect base offense level.
This was error. We cannot agree, given the
circumstances surrounding the Commission's promulgation of
Application Note 2, that the sentence-calculation difference
between section 3B1.1 adjustments and departures "is . . .
inconsequential." See McFarlane, 64 F.3d at 1239. Simply ___ _________
because role-in-the-offense departures are discussed in
Chapter 3, Part B, instead of Chapter 5, Part K, is not
persuasive evidence of an intent to treat section 3B1.1
adjustments and departures the same for sentence calculation
purposes. See Rivera, 994 F.2d at 948 ("Specific individual ___ ______
guidelines may also encourage departures."). The language of
Application Note 2 persuades us that the two devices are, in
fact, different: section 3B1.1 adjustments are mandatory and
subject to the tripartite test set out by that guideline,
whereas departures made pursuant to that guideline are
discretionary. As the Eighth Circuit explained in United ______
States v. McFarlane, 64 F.3d 1235, 1239 (8th Cir. 1995): ___________________
If the sentencing court concludes that a
defendant has managed or supervised one
-14- 14
or more participants in a criminal
enterprise involving five or more total
participants, an adjustment is mandated -
- the court must enhance the defendant's
sentence by three levels. If, on the
other hand, the sentencing court
concludes that the defendant has merely
exercised a managerial role over the
property, assets, or activities of a
criminal enterprise involving five or
more participants, the court is possessed
of a certain degree of discretion
regarding the enhancement of the
defendant's sentence -- "[a]n upward
departure may be warranted."
We hold that section 3B1.1(b) and Application Note
2 preclude "management responsibility over property, assets,
or activities as the basis" for an enhancement to a
defendant's base offense level. See United States v. ___ __________________
Greenfield, 44 F.3d 1141, 1146 (2d Cir. 1995). Because the __________
government contends that the factual predicate for a section
3B1.1(b) adjustment exists in this case, we do not
immediately decide the question of whether section 3B1.1
departures must be analyzed under the Rivera framework. ______
Instead, we focus on whether the district court found that
Cali managed one or more individuals in a criminal enterprise
involving five or more participants and, if so, whether that
finding was clearly erroneous. See Tejada-Beltran, 50 F.3d ___ ______________
at 110.
Section 3B1.1(b) only applies where the record
shows that a defendant operated as a "manager or supervisor
and the criminal activity involved five or more participants
-15- 15
or was otherwise extensive." U.S.S.G. 3B1.1(b). Though
the Guidelines provide a list of seven factors -- which is
neither exhaustive nor imbued with "talismanic significance"
-- to assist courts in determining whether a defendant acted
as a leader or organizer within the meaning of section
3B1.1(a), United States v. Talladino, 38 F.3d 1255, 1260 (1st __________________________
Cir. 1994); see also Joyce, 70 F.3d at 683; Tejada-Beltran, ___ ____ _____ ______________
50 F.3d at 111; U.S.S.G. 3B1.1, Application Note 4, they do
not define "[t]he terms 'manager' and 'supervisor'." Joyce, _____
70 F.3d at 682. In the past, we have required some "degree
of control or organizational authority over others" to
support a section 3B1.1(b) adjustment. Fuller, 897 F.2d at ______
1220. Immediate or direct control over subordinates or
partners, while certainly an important factor to consider, is
not, however, a prerequisite to finding a defendant deserving
of added culpability or punishment. See Frankhauser, 80 F.3d ___ ___________
at 654; Tejada-Beltran, 50 F.3d at 112; United States v. ______________ _________________
Payne, 63 F.3d 1200, 1212 (2d Cir. 1995), cert. denied, 116 _____ _____ ______
S. Ct. 1056 (1996); Greenfield, 44 F.3d at 1146-47. __________
"Managerial status [generally] attach[es] if there is
evidence that a defendant, in committing the crime, exercised
control over, or was otherwise responsible for overseeing the
activities of, at least one other person." United States v. ________________
Savoie, 985 F.2d 612, 616 (1st Cir. 1993); see also United ______ ___ ____ ______
States v. Munoz, 36 F.3d 1229, 1240 (1st Cir. 1994), cert. ________________ _____
-16- 16
denied sub nom. Martinez v. United States, 115 S. Ct. 1164 ______ ___ ____ __________________________
(1995); see also United States v. Webster, 54 F.3d 1, 8 (1st ___ ____ ________________________
Cir. 1995); United States v. Castellone, 985 F.2d 21, 26 (1st ___________________________
Cir. 1993).
The government contends that the court clearly
found that Cali served as a manager or supervisor in the
gambling enterprise and that this finding was adequately
supported by the transcripts of the conversations between
Yerardi and Cali intercepted by the State Police, Cali's
acceptance of responsibility statement, and affidavits
provided by State Trooper Tutungian. See Joyce, 70 F.3d at ___ _____
682 (government must prove role in the offense by a
preponderance of the evidence and may do so by relying on
circumstantial evidence). Our review of the record, however,
reveals that the court's findings on this issue were less
than clear: there is a discrepancy between the findings the
district court made from the bench at Cali's sentencing
hearing and those it offered in its subsequent written
judgment.
Transcripts of the sentencing hearing suggest that
the court did conclude that Cali managed people and assets
for Yerardi's gambling business:
THE COURT: I find that the defendant's
role was more than simply that of record
keeper. He was that, as described in one
part of the testimony that's been
referred to as the trial of the Grabiec
case, but that was not the limit of his
-17- 17
participation. And it is my finding that
he was also coordinating the efforts of
others and the reports of others and
putting that together and advising
Yerardi about managerial decisions in the
operation of this ongoing enterprise over
a substantial length of time.
Those findings, in my view, under an
appropriate interpretation of the
guidelines support a three-point upward
adjustment in the calculation of the
total offense level so as to raise that
total offense level by three points from
the way it was calculated by the
presentence investigation report and thus
move it up to 13.
But the written judgment summarizing the court's findings and
decisions regarding the adjustments and departures requested
by the government and Cali does not cite management or
supervision of individuals as part of Cali's offense. It
omits the reference to individuals and refers only to Cali's
alleged
-18- 18
management of assets:
Government objection to failure of PSI to
add four levels under 3B1.1(a) for
alleged supervisory role is rejected, but
I find (over defendant's objection) that
an upward adjustment of 3 levels is
appropriate under 3B1.1(b) and
Application Note 2, because the defendant
exercised a degree of management
responsibility over property and assets,
under the direction of the principal
organizer and leader.
The government invites us to ignore this
discrepancy and to focus instead on the district court's oral
explanation of its sentencing decisionmaking. Ordinarily, we
would accept such an invitation. "Where . . . [a] district
court's oral expression of its sentencing rationale varies
materially from its subsequent written expression of that
rationale, appellate courts have tended to honor the former
at the expense of the latter." United States v. Muniz, 49 _______________________
F.3d 36, 42 n.5 (1st Cir. 1995); see also United States v. ___ ____ _________________
Tramp, 30 F.3d 1035, 1037 (8th Cir. 1994); United States v. _____ _________________
Hicks, 997 F.2d 594, 597 (9th Cir. 1993); United States v. _____ ________________
Roberts, 933 F.2d 517, 519 n.1 (7th Cir. 1991)(citing cases); _______
United States v. Khoury, 901 F.2d 975, 977 (11th Cir. 1990). ________________________
We decline, however, to do so in this instance.
Because the written judgment and the district
court's alternative holding -- that Cali's management of
assets warranted an upward departure from the sentence
prescribed under the Guidelines -- both focus on management
-19- 19
of assets and do not mention management of individuals at
all, we think it would be imprudent to adhere to the oral
pronouncement made in this case. Furthermore, the need to
resolve the conflict in the district court's 3B1.1 decisions
by remanding for clarification or to decide whether the
record could even support a finding that Cali managed
individuals -- an issue about which we have considerable
doubt -- is obviated by the existence of the secondary
holding. It provides an alternative basis for upholding the
fifteen-month sentence Cali received. We do not decide
whether a sufficient factual predicate existed to find that
the defendant was a manager of other individuals within the
meaning of section 3B1.1. We proceed, instead, to a
discussion of the district court's upward departure holding.
U.S.S.G. 3B1.1(b) Role in the Offense Departures U.S.S.G. 3B1.1(b) Role in the Offense Departures __________________________________________________
As an alternative to its upward adjustment holding,
the district court held that the asset management Cali
conducted during his involvement in Yerardi's gambling
business justified a three-level upward departure, under
section 3B1.1(b), to impose a sentence corresponding to a
total adjusted offense level of thirteen. The district court
found that Cali operated as more than a bookie or mere record
keeper and that the threats of violence which marked
Yerardi's gambling and loansharking businesses took Cali's
conduct outside the heartland of other section 3B1.1(b)
-20- 20
offenses. Cali assigns error. He argues, first, that the
facts of his case do not support a conclusion that he managed
assets and, second, that the record, to the extent it
reflects asset management at all, does not suggest that his
conduct falls outside the heartland of section 3B1.1(b)
offenses. See Rivera, 994 F.2d at 947. The government ___ ______
contends that Rivera's heartland analysis does not apply and ______
urges us to accept the district court's findings of fact.
Before addressing these arguments, we discuss the
rules pertaining to departures from sentences prescribed by
the Guidelines. Prior to the Court's recent decision in Koon ____
v. United States, Nos. 94-1664, 94-8842, 1996 WL 315800 (U.S. ________________
June 13, 1996), appellate courts were expected to engage in a
three-part departure analysis. See United States v. ___ ___________________
Campbell, 61 F.3d 976, 984 (1st Cir. 1995), cert. denied, 116 ________ _____ ______
S. Ct. 1556 (1996); Rostoff, 53 F.3d at 404; United States v. _______ ________________
Jackson, 30 F.3d 199, 202 (1st Cir. 1994). We first _______
conducted plenary review of whether the circumstances of the
case were, in principle, of a kind that the Guidelines
permitted the district court to consider, "with 'full
awareness of, and respect for the trier's superior "feel" for
the case' . . . ." Rivera, 994 F.2d at 951-52 (quoting ______
United States v. Diaz-Villafane, 874 F.2d 43, 50 (1st Cir. ________________________________
1989)); see also United States v. Bennett, 60 F.3d 902, 904 ___ ____ _________________________
(1st Cir. 1995); United States v. Pelkey, 29 F.3d 11, 14 (1st _______________________
-21- 21
Cir. 1994). We then reviewed the district court's departure-
related findings of fact for clear error. Pelkey, 29 F.3d at ______
14. Finally, we assessed the reasonableness of the departure
taken. Id. ___
Koon effectively merges the first and second stages ____
of our departure analysis into one, and instructs that our
review of the legal conclusions and factual determinations
underlying the district court's departure decision be
conducted under a unitary abuse-of-discretion standard. See ___
Koon, 1996 WL 315800 at *9. "That a departure decision, in ____
an occasional case, may call for a legal determination does
not mean, as a consequence, that parts of the review must be
labeled de novo while other parts are labeled an abuse of
discretion." Id. at *9-10. Thus, the analysis we must ___
conduct in evaluating departure decisions entails reviewing,
under an abuse of discretion standard, the district court's
determination that the case presents features that make it
sufficiently unusual to take it out of the applicable
guideline's heartland. See id. at *12. Abuse of discretion ___ ___
review necessarily "includes review to determine that the
[district court's exercise of] discretion was not guided by
erroneous legal conclusions." Id. at 10. Additionally, our ___
analysis, like our pre-Koon review process, requires us to ____
assess the reasonableness of the departure taken.
-22- 22
Decisions to depart from sentences prescribed by
the Guidelines are generally only permitted in cases in which
unusual or atypical circumstances justify individualizing a
sentence more than the relatively narrow strictures that the
Guidelines permit. United States v. Calderon, 935 F.2d 9, 11 _________________________
(1st Cir. 1991); see also Koon, 1996 WL 315800 at *7; 18 ___ ____ ____
U.S.C. 3553(b). In general, departure decisions fall into
one of three categories: forbidden, discouraged, and
encouraged. Grandmaison, 77 F.3d at 560. "Forbidden ___________
departures are those based, inter alia, on race, sex, _____ ____
national origin, creed, religion, or socioeconomic status."
Id.; Rivera, 994 F.2d at 948-49; U.S.S.G. 5H1.10, 5H1.12. ___ ______
"The Sentencing Commission . . . has expressly precluded
departure on these grounds, even where they make a case
atypical or extraordinary." Grandmaison, 77 F.3d at 560. ___________
"Discouraged departures involve factors which were considered
by the Commission--such as age, family ties and
responsibilities, employment record, good works, or physical
condition--but which present themselves to an extraordinary
degree in a particular case." Id. "Encouraged departures, ___
in contrast, involve considerations not previously taken
into account by the Commission." Id. ___
The departure analysis "varies depending on the
category in which the feature [or activity] justifying
departure falls." United States v. DeMasi, 40 F.3d 1306, _________________________
-23- 23
1323 (1st Cir. 1994), cert. denied sub nom. Bonasia v. United _____ ______ ___ ____ _________________
States, 115 S. Ct. 947 (1995). Cali maintains that the ______
starting point for our review of the district court's
departure decision must be an inquiry into whether his
conduct was more egregious than that of other section
3B1.1(b) offenders. The government disputes this and
contends that such an investigation is unnecessary in the
role-in-the-offense context because section 3B1.1(b)
departures are encouraged. We agree with the government.
Section 3B1.1 departures are clearly encouraged by
the Commission. The language of Application Note 2 -- that
"upward departure may be warranted . . . in the case of a
defendant who . . . exercised management responsibility over
the property, assets, or activities of a criminal
organization" -- endorses management of assets as a
permissible basis for upward departure. This endorsement and
our determination that section 3B1.1 does not incorporate
asset management as a sentencing factor lead us to the
conclusion that the district court was authorized to depart
without first engaging in the analysis Cali urges. Where the
Commission has explicitly identified certain activities or
conduct as a factor not adequately taken into account in its
formulation of a particular guideline and that guideline does
not incorporate that factor at all, we can be confident that
the departure undertaken was not unreasonable. See Koon, ___ ____
-24- 24
1996 WL 315800 at *8; Rivera, 994 F.2d at 948; see also ______ ___ ____
United States v. Diaz-Martinez, 71 F.3d 946, 952-53 (1st Cir. ______________________________
1995)(reviewing encouraged U.S.S.G. 2K2.1 upward
departure); Rostoff, 53 F.3d at 406 (reviewing encouraged _______
U.S.S.G. 2F1.1 downward departure); United States v. __________________
Quinones, 26 F.3d 213, 218 (1st Cir. 1994)(reviewing ________
encouraged U.S.S.G. 5K2.8 upward departure). Resort to the
"heartland" analysis generally reserved for discouraged
departures is, therefore, unnecessary. See Koon, 1996 WL ___ ____
315800 at *8; McFarlane, 64 F.3d at 1240; United States v. _________ ________________
Mendez-Colon, 15 F.3d 188, 190-91 (1st Cir. 1994)(Breyer, ____________
C.J.); compare DeMasi, 40 F.3d at 1323 (describing process _______ ______
for comparing cases involving discouraged reasons for
departure). Management of a large-scale criminal
enterprise's assets is conduct which, under Application Note
2 to section 3B1.1 and hence as a matter of law, places a
defendant outside the heartland of offenses by individuals
who participate in large-scale criminal enterprises but who
do not manage assets. See Rivera, 994 F.2d at 948. ___ ______
Having concluded that the relevant circumstances of
Cali's case constitute an encouraged basis for departure
under the Guidelines, we proceed to the next stage in our
analysis. Cali asserts that the district court erroneously
found that he managed gambling assets. While Cali paints a
persuasive picture of his role in Yerardi's gambling
-25- 25
business, we cannot say that the district court abused its
discretion. "[W]hen there are two plausible views of the
record, the sentencing court's adoption of one such view
cannot be clearly erroneous." St. Cyr, 977 F.2d at 706; see _______ ___
also Munoz, 36 F.3d at 1240; United States v. Brewster, 1 ____ _____ __________________________
F.3d 51, 55 (1st Cir. 1993); Savoie, 985 F.2d at 616. ______
The government presented evidence which was a solid
basis for the district court to conclude that Cali managed
assets and was more than a mere "bookie" or "telephone
operator" in Yerardi's business. The record reveals that
the information Cali recorded and analyzed was an asset or
possession of great value to the gambling enterprise. See ___
Webster's II New Riverside University Dictionary 131 (1994). _________________________________________________
It also shows that Cali fielded calls from and placed bets
for various agents, as a bookie might do, but also directly
reviewed betting and makeup figures with the individual who
presided over the gambling enterprise, Yerardi, and
participated in "charting" -- i.e., assessing the
organization's risk of loss. Compare Parmelee, 42 F.3d at _______ ________
395 (control of plane inherent in role of pilot for criminal
enterprise). Though Yerardi seems to have made the decisions
about when and whom to chart, the record suggests that the
responsibility for keeping the organization's records,
calculating the business's risk of loss on particular events,
and assisting Yerardi in assessing the organization's overall
-26- 26
financial health primarily rested with Cali and his
counterpart, DeAngelis. The transcripts of calls intercepted
by the State Police, in particular, suggest that Cali
exercised discretion or control over the organization's
information and that Yerardi heavily relied on Cali's
expertise and special knowledge of the business's operations.
We, therefore, do not think the district court's conclusion
that Cali managed assets or enjoyed executive status within
the gambling enterprise implausible.
Nor do we think the extent of the departure taken
by the district court unreasonable. Quinones, 26 F.3d at ________
219. The three-level upward departure taken from the
sentence tabulated under the Guidelines represents a three-
month increase in the maximum sentence Cali could have
received and an even smaller increase in the actual time Cali
will serve in prison. Because of this, the reasons given for
the upward departure, and the deference due the special feel
the district court developed for this case in presiding over
the legal proceedings for Cali's co-conspirators, we find
that the upward departure the district court imposed was
reasonable. See Rostoff, 53 F.3d at 409 (judgment call for ___ _______
decision regarding extent of departure is ultimately the
district court's).
V. V.
CONCLUSION CONCLUSION __________
-27- 27
For the foregoing reasons, Cali's fifteen-month
sentence of imprisonment is affirmed. affirmed ________
-28- 28
Related
United States v. Mendez-Colon
15 F.3d 188 (First Circuit, 1994)
United States v. Pelkey
29 F.3d 11 (First Circuit, 1994)
United States v. Jackson
30 F.3d 199 (First Circuit, 1994)
United States v. Delgado-Munoz
36 F.3d 1229 (First Circuit, 1994)
United States v. Talladino
38 F.3d 1255 (First Circuit, 1994)
United States v. Webster
54 F.3d 1 (First Circuit, 1995)
United States v. Bennett
60 F.3d 902 (First Circuit, 1995)
United States v. Joyce
70 F.3d 679 (First Circuit, 1995)
United States v. Diaz-Martinez
71 F.3d 946 (First Circuit, 1995)
United States v. McCarthy
77 F.3d 522 (First Circuit, 1996)
United States v. Grandmaison
77 F.3d 555 (First Circuit, 1996)
United States v. Peppe
80 F.3d 19 (First Circuit, 1996)
United States v. Wilfredo Diaz-Villafane
874 F.2d 43 (First Circuit, 1989)
United States v. Leonard R. Fuller
897 F.2d 1217 (First Circuit, 1990)
United States v. George M. Khoury
901 F.2d 975 (Eleventh Circuit, 1990)
United States v. Santiago Mares-Molina
913 F.2d 770 (Ninth Circuit, 1990)
United States v. Clarence Roberts, Jr.
933 F.2d 517 (Seventh Circuit, 1991)
United States v. Nelson Valencia Calderon
935 F.2d 9 (First Circuit, 1991)
United States v. Daniel Pedrosa Fuentes
954 F.2d 151 (Third Circuit, 1992)
United States v. Audonis Grady
972 F.2d 889 (Eighth Circuit, 1992)
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