United States v. Lawrence Neadle, Jr.

72 F.3d 1104, 1995 WL 749562

• Court: Court of Appeals for the Third Circuit
• Decided: January 29, 1996
• Docket: 94-7417
• Status: Published

Opinions

OPINION OF THE COURT

ROTH, Circuit Judge:

Appellant Lawrence Neadle, Jr., pled guilty to one count of mail fraud. At sentencing, the district court imposed a sixty-month term of imprisonment and a three-year term of supervised release. On appeal, Neadle contends that the district court misapplied the United States Sentencing Guidelines (“Guidelines”) in its calculation of the victims’ loss under U.S.S.G. § 2Fl.l(b) and its upward departure based on the amount of that loss. He also alleges that the court erred in granting an upward departure based on psychological harm to the victims and on loss of confidence in the insurance industry. We hold that the district court properly calculated the loss arising from the appellant’s fraud and that it did not err in its upward departure based on the amount of loss. We find, however, that the district court erred in its conclusion to depart upward for psychological harm/loss of confidence. We will, therefore, for the reasons stated below, vacate defendant’s sentence and remand for resentencing pursuant to this opinion.

I.

A.

The appellant, Lawrence M. Neadle, Jr., and two co-defendants were indicted on one count of conspiracy and eight counts of mail and wire fraud on November 18,1992. After one co-defendant was acquitted, a superseding indictment charged Neadle and the other co-defendant with substantially the same offenses. Count I of the Superseding Indictment charged them with a conspiracy in violation of 18 U.S.C. § 371; Counts II and III charged them with mail fraud in violation of 18 U.S.C. § 1341; and Counts IV through IX charged them with wire fraud in violation of 18 U.S.C. § 1343.

In October 1993, Neadle changed his plea to Count II of the superseding indictment (mail fraud) from not guilty to guilty. Pursuant to the plea agreement, the remaining counts against him were dismissed at sentencing. On July 6, 1994, the district court sentenced Neadle to sixty months imprisonment and placed him under supervised release for a three-year period upon his release from prison. Neadle was released pending appeal and filed his notice of appeal the next day.

The charges against Neadle arose from his creation of the American Property and Casualty Insurance Company (“AMPAC”). Nea-dle was chief executive officer of the company. In late 1987, he applied to the Division of Banking and Insurance of the Virgin Islands (“Insurance Division”) for a license to form AMPAC. At that time, the Insurance Division required an insurance company to have a minimum capital of $450,000, an initial surplus capital of $250,000, and a bond of $500,000. Neadle provided the Insurance Commissioner with a surety bond for $500,-000 but misrepresented the amount of the company’s initial capital.¹

On January 5,1988, Neadle caused a letter to be sent through the United States mail to the Insurance Division, stating that AMPAC had unencumbered certificates of deposit in the sum of $700,000 in the Naples Federal Savings and Loan Association (“Naples Federal”) in Naples, Florida. In fact, however, the certificates were encumbered, as Neadle was fully aware. Unaware of the deception, the government of the Virgin Islands in January 1988 issued AMPAC a license to do business in that territory.

After obtaining the loan for the certificates of deposit, AMPAC paid interest on the loan of $2,300 a month. AMP AC’s quarterly reports to the Insurance Division, however, listed the $700,000 in encumbered certificates as an asset but did not list that amount as an offsetting liability, and the reports did not include the interest payments.

In September 1989, Hurricane Hugo hit the Virgin Islands. AMPAC was unable to meet the resulting claims of its policyholders. The Virgin Islands government established the Hurricane Hugo Fund Program to pay the claims for AMPAC and American Alliance, the other Virgin Islands insurance company that failed as a result of claims arising out of the hurricane.

B.

At the July 12, 1993, pre-trial hearing in this matter, witnesses testified regarding the Insurance Division’s capital requirements. Derek Hodge, the Lieutenant Governor and Insurance Commissioner of the Virgin Islands at that time, testified that he would not have certified a company to do business without the $700,000 minimum in capital and paid-in surplus. Hodge also stated that he followed guidelines, promulgated by the National Association of Insurance Commissioners, requiring all insurance companies to maintain a solvency ratio of three to two in premiums to surplus. He further testified • regarding the methods he used to ensure that insurance companies doing business in the Virgin Islands complied with the requirements. He stated that, among other things, he reviewed audits conducted by Insurance Commission examiners, who reviewed quarterly financial statements submitted by the companies.

Deverita Sturdivant, Director of the Insurance Division from January 1987 through the end of 1989, testified that the $700,000 minimum capital requirement applied to new businesses. She stated that once a company started writing policies, the compa-' ny might need to increase its capital to ensure the proper premium dollars to surplus ratio. Sturdivant testified further that had she discovered that AMPAC did not meet the minimum capital requirement, the Insurance Division could have demanded that unencumbered assets be infused into the company or, in the alternative, that the company be liquidated.

In May 1994, the district court held a • hearing to address the defense objections to the Presentence Investigation and Report. Ricardo Luaces, a claims examiner employed by the Insurance Division from 1989 to 1993, testified that the gross figure for Hurricane Hugo losses incurred on property insured by AMPAC was $37,655,038. The adjusted Hurricane Hugo claims of AMPAC policyholders amounted to $24,438,748. Roland Riviere, an independent insurance adjuster retained to assist in adjusting the claims of AMPAC’s insureds for Hugo-related damage, quoted the same figure.

John McDonald, the Chief Examiner for the Insurance Division during the time that the Insurance Division compiled Hugo-related claims, testified that the best estimate of non-Hugo related claims .on AMPAC was $500,000. He further testified that, in early 1988, the Insurance Division had discovered that AMPAC had no general ledger — the basic accounting format in which debits and credits are captured — so that AMPAC’s assets and liabilities could not be determined. At that time, the Commission also detected a commingling of funds between AMPAC and Caribbean Mutual, another of Neadle’s companies. McDonald testified that the Commission directed Neadle to correct these accounting problems but that by the time of the hurricane, there were still no accounting records from which AMPAC’s assets could be determined. McDonald confirmed, however, that one of Neadle’s accountants, Norman Erasso, had begun implementing the requested accounting procedures. Erasso, however, left the territory when Hugo struck and did not return.

Neadle testified that, as of the date of the hurricane, he had reinsurance of $4 million. He contended the reinsurer had assured him that this amount would be adequate, based on previous hurricane damage in the Virgin Islands.

C.

At sentencing, the district court applied the 1988 edition of the Sentencing Guidelines, the version which the parties had accepted as being in effect on the date of the offense.² The court found that because Neadle “ob-tamed his license [to issue insurance] by fraud and trickery,” he was responsible for a loss of $20,438,748, which represented the adjusted claims of $24,438,748, less AMPAC’s $4 million in reinsurance. Appendix (“App.”) at 399-400. Pursuant to § 2Fl.l(b)(L) of the 1988 Guidelines, the base level for fraud offenses was 6; if the loss exceeded $5,000,000, an eleven level increase was to be added to the base. The court granted this eleven level increase.

Pursuant to U.S.S.G. § 2Fl.l(b)(2), the court also awarded a two level increase on the alternative grounds that the crime involved more than minimal planning or more than one victim. The court concluded

that the offense was by its nature more complex than simple; that the defendant did take significant affirmative steps to conceal the offense; that the offense itself required planning and the falsification of a series of documents; and that these acts involved a series of discrete decisions, clearly not opportune in nature.

App. at 404-05. Moreover, the court stated “that the hundreds of policyholders and the government comprise the victims of the offense.” App. at 405. The court granted a two level decrease for Neadle’s acceptance of responsibility.

The court then departed upward from the guideline offense level on two grounds. First, pursuant to U.S.S.G. § 2F1.1, comment 10, the court found that the fact that the loss amounts were substantially above the highest amount listed in the Guidelines ($5,000,000) warranted an upward departure. Looking by analogy to the 1993 amendments to the Guidelines, the court departed upward a further five levels (from level 11 to 16), which corresponded to the increase under the 1993 version of the Guidelines for a loss exceeding $20,000,000. Second, the court found U.S.S.G. § 2F1.1, comment 9, to warrant an upward departure of one level for the “psychological harm risked or caused by the offense” and one level for “the loss of confidence in an important institution.”

In sum, the court departed upward seven levels from an offense level of 17 to an offense level of 24, which corresponded to a guideline sentencing range of from 51 to 63 months. The court then imposed a sentence of 60 months.

II.

The District Court of the Virgin Islands had jurisdiction pursuant to 18 U.S.C. § 3241. We have jurisdiction, pursuant to 28 U.S.C. § 1291, to review a final order of a district court and, pursuant to 18 U.S.C. § 3742, to review a sentence imposed under the United States Sentencing Guidelines. We exercise plenary review over legal questions concerning the meaning of sentencing guidelines but apply the clearly erroneous standard to factual determinations underlying their application. United States v. Daddona, 34 F.3d 163 (3d Cir.), cert. denied, — U.S. -, 115 S.Ct. 515, 130 L.Ed.2d 421 (1994); United States v. Katora, 981 F.2d 1398, 1401 (3d Cir.1992).

III.

We first address Neadle’s challenge to the district court’s interpretation of “loss” as it is calculated pursuant to U.S.S.G. § 2Fl.l(b), an issue over which this court exercises plenary review. See United States v. Badaracco, 954 F.2d 928 (3d Cir.1992). We conclude that the district court properly calculated the loss, arising from the appellant’s fraud, to be $20,438,748, that figure being the net, adjusted $24,438,748 loss to victims whose property was insured with AMPAC at the time that Hurricane Hugo struck St. Croix, reduced by the amount of AMPAC’s reinsurance ($4 million).

In his appeal, Neadle raises two grounds for challenging the district court’s calculation of the amount of loss. First, he argues that, after obtaining the license to form AMPAC, he intended to run the company in a proper, business-like way. Second, he contends that the property losses suffered by AMPAC policy holders resulted from an unforeseeable act of God, so that he would have been unable to pay the claims even in the absence of his fraud. Therefore, he maintains, the loss figure should not be used to increase his sentence pursuant to U.S.S.G. § 2F1.1.

The district court based its computations upon the actual loss suffered by the AMPAC policyholders, rather than upon the loss which Neadle intended to inflict, see U.S.S.G. § 2F1.1, comment 7 (1993) (“if an intended loss that the defendant was attempting to inflict can be determined, this figure will be used if it is greater than the actual loss”)³ or upon the offender’s gross gain from committing the fraud, see Badaracco, 954 F.2d at 936 (breaeh of fiduciary duty by officer of a financial institution may justify using the “gross gain” alternative to estimate loss). The court also sentenced Neadle based on the loss as of the date of sentencing, see United States v. Kopp, 951 F.2d 521, 531 (3d Cir.1991), rather than the loss as of the date of the offense, see Shaffer, 35 F.3d at 115, so that the reinsurance Nea-dle had contracted for was subtracted from the loss.

Neadle characterizes the case as analogous to a contract case in which he was planning to perform, albeit after obtaining the contract by fraudulent means.⁴ He argues that because he did not intend to inflict any loss, no dollar amount is attributable to him. App. at 397. He emphasizes that when the government requested that he provide $500,000 cash in lieu of the $500,000 bond required by law, he complied. Moreover, he notes that his accountant, Erasso, had begun to comply with the government’s accounting suggestions but left the Virgin Islands when Hugo struck. Finally, he maintains that he attempted to get adequate reinsurance coverage and that he did not engage in, and the government did not prove that he engaged in, day-to-day fraud in the operation of AM-PAC.

Contrary to Needle’s argument, however, there is strong record support that Neadle not only misrepresented the amount of his initial capital investment but also engaged in fraudulent conduct to perpetuate his business. During the eighteen month period in which AMPAC sold insurance policies, the Insurance Division could not locate basic accounting records from which it could assess the company’s assets and liabilities. Moreover, examiners found a commingling of funds between AMPAC and another of Nea-dle’s companies, Caribbean Mutual. In addition, the company continued to file financial statements that fraudulently concealed the fact that AMPAC’s $700,000 in certificates of deposit at Naples Federal were encumbered assets. Finally, although Neadle obtained reinsurance, no reinsurer could adequately assess AMPAC’s true reinsurance requirements unless the reinsurer was provided with basic records indicating AMPAC’s assets and liabilities. The deceitful and slipshod way in which Neadle ran the business supports the district court’s attribution of responsibility to him for the losses. We' conclude that the actual loss caused to AMPAC policyholders by the fraud was the proper basis for the loss computation under § 2Fl.l(b).⁵

We also find Neadle’s argument that Hurricane Hugo was an act of nature beyond his control and that the property losses occasioned thereby should not be used in calculating his sentence to be without force. Hurricanes are a continuing threat in the Caribbean. Coverage for hurricane damage is a type of coverage which is often specifically sought, albeit not always easily found, in that area. Moreover, the insurance policies at issue contained express coverage of hurricane-related property losses. Neadle did not attempt to sell hurricane coverage in Chicago or in Wichita; he sold it in the Caribbean, a hurricane zone.

Moreover, as we have previously held in Kopp, it is not appropriate to reduce the amount of the loss, as computed under the Guidelines, in order to reflect other causes of the loss which were beyond the defendant’s control. 951 F.2d at 531. See U.S.S.G. § 2Fl.l(b), comment 11. An intervening force that increases a fraud-related loss will not decrease the loss valuation but will only provide possible grounds for a downward departure. Kopp, 951 F.2d at 531.

To the extent that the defendant’s objection to the loss computation in this case can be construed to be a request for a downward departure based on the nature of the risk involved, the district court clearly rejected that request in the court’s determination to depart upward in computing the amount of the loss. The district court, in determining to depart upward due to the underrepresen-tation of the loss in the 1988 version of the Guidelines, cited United States v. Monaco, 23 F.3d 793 (3d Cir.1994). App. at 411. In that case, we vacated the district court’s judgment and remanded for resentencing after clarifying the scope of the court’s power to depart downward based on application note 11 to U.S.S.G. § 2F1.1. We stated that “a wrongdoer should [not] completely escape a sentencing enhancement if his scheme involved a substantial risk of loss merely because, under his own rosy scenario, no loss was intended.” Monaco, 23 F.3d at 799 n. 10. We held that the court’s discretion to depart downward pursuant to application note 11 is limited by the inherent risk of loss in the perpetrator’s fraud, explaining that “risk is one of the losses that a perpetrator of fraud imposes on his victims.” Id.

We believe that the district court properly considered the risk, in this case of a hurricane, an act of God, imposed on AMP AC’s insureds because of the defendant’s fraudulent conduct. Had Neadle expressly made a request for a downward departure for an act of God, the court would have been proper in denying it. In holding AMP AC out as insuring against a known risk, defendant extracted premiums from unsuspecting policyholders who believed that they were securing protection when in fact that protection was an empty shell. Moreover, defendant’s misrepresentations persisted throughout the period AMP AC was operating.

Neadle’s arguments obscure the fact that but for his fraud, he would not have been in the insurance business. By deceiving the government concerning the $700,000 certificates of deposit, by submitting fraudulent quarterly financial statements, and by failing to maintain financial records, Neadle misled the government for approximately a year and a half. Had such fraudulent conduct not occurred, AMPAC would not have begun to operate as an insurance broker in the Virgin Islands and would not have continued to do so without maintaining adequate accounting records. The district court recognized a clear causal connection between the fraud and the policy holders losses. See App. at 399-400.

Our decision finds support in United States v. Robichaux, 995 F.2d 565 (5th Cir.), cert. denied, — U.S. -, 114 S.Ct. 322, 126 L.Ed.2d 268 (1993). In Robichaux, the Fifth Circuit addressed a similar case in which mail and wire fraud led to the failure of an insurance company. The defendant, Edward Robichaux, misrepresented that securities he had assigned to an insurance company were unencumbered assets. Without the assets, the company “would have been undercapital-ized and thus barred from any further insurance business.” Id. at 567. The Louisiana Insurance Commission retained an independent firm to audit the company. Robichaux verified to that firm the company’s ownership of the securities in question. Relying on the verification, the auditors issued a favorable report. Approximately two years later, the insurance company was declared insolvent. Id. Robichaux argued that, for purposes of the Sentencing Guidelines, he should be held responsible only for the commissions he had been paid by the insurance company after he had made the fraudulent assignment of assets to it. The district court, however, held him responsible for the losses attributable to the company’s failure. The Fifth Circuit agreed, holding that it was not clearly erroneous for the district court to find that the losses attributable to the insurance company’s failure resulted from the defendant’s actions in placing fraudulent securities on the company’s books. Id. at 571. The court concluded that it was

not clearly erroneous to assume that if [the independent auditor] had not issued a favorable audit for [the insurer], which only occurred because of [the insurer’s] fraudulently inflated balance sheet, the Commission would have acted to liquidate the firm at an earlier date and minimized the losses.

Id. The court upheld the district court’s loss estimate — an estimate of the loss that the state of Louisiana suffered as a result of the insurance company’s failure — as reasonable and not clearly erroneous. Id.

Similarly, we find not clearly erroneous the district court’s conclusion that Neadle’s inadequate financing and recording at AMPAC caused the government of the Virgin Islands to license AMPAC and to permit it to remain in business which in turn caused the policy holders’ Hugo-related losses. We will affirm the district court’s loss figure, because it is a reasonable estimate of the harm which resulted from Neadle’s fraudulent scheme and which reasonably could be expected to result from a scheme which insured for hurricane damage in the Caribbean hurricane zone.

IV.

We next must consider whether the court erred by reading U.S.S.G. § 2F1.1, Application Note 9, to warrant an upward departure of one level for the “psychological harm risked or caused by the offense” and one level for “the loss of confidence in an important institution.” Since we are reviewing the district court’s application of particular facts to a departure approved by the Sentencing Commission, we review only for clear error. United States v. Astorri, 923 F.2d 1052, 1058 (3d Cir.), cert. denied, 502 U.S. 970 (1991). We conclude that the evidence is insufficient to warrant an upward departure on either ground.

A district court may impose a sentence outside the sentence range prescribed by the Sentencing Guidelines where “the court finds that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines that should result in a sentence different from that described.” 18 U.S.C. § 3553(b). Application Note 9 to U.S.S.G. § 2F1.1 provides a nonexclusive list of circumstances in which the loss calculated pursuant to U.S.S.G. § 2F1.1 — the provision establishing the base level for offenses involving fraud or deceit — “does not fully capture the harmfulness and seriousness of the conduct.” Among the examples of circumstances in which upward departures may be warranted are those on which the district court relied, instances in which “the offense caused or risked physical or psychological harm”⁶ and instances in which “the offense caused a loss of confidence in an important institution.”

At sentencing, the court granted a one point upward departure based on “the psychological and social impact [of Neadle’s offense] on the people of the Virgin Islands.” An upward departure based on psychological harm is appropriate only “[i]f a victim or victims suffered psychological injury much more serious than that normally resulting from the commission of the offense.” U.S.S.G. § 5K2.3. The Guidelines state that

[n]ormally, psychological injury would be sufficiently severe to warrant application of this adjustment only when there is a substantial impairment of the intellectual, psychological, emotional, or behavioral functioning of a victim, when the impairment is likely to be of an extended or continuous duration, and when the impairment manifests itself by physical or psychological symptoms or by changes in behavior patterns.

Id.

A district court is to be given considerable deference in assessing psychological impact on victims. United States v. Astorri, 923 F.2d at 1058-59. However, the court must not merely speculate regarding psychological harm. In the instant case, the record is barren of evidence regarding physical or psychological harm sustained by the victims. We do not find any evidence of the sort of “chronic substantial impairment of a victim’s mental functioning” upon which this court has relied in upholding upward departures based on psychological injury. See id. at 1059 (upholding upward departure for psychological harm where evidence showed, among other things, that victim suffered from high blood pressure and remained under doctor’s care as a result of defendant’s actions). Therefore, we cannot find that the victims suffered psychological or physical harm, which exceeded that occurring in the heartland of fraud offenses, to such a degree as to justify an upward departure.⁷

The court also granted a one point upward departure on the grounds that “[t]he offense itself contributed materially to the destruction of the reputation of the insurance industry in the territory.” App. at 410. The court stated that “[tjhere is no doubt in the court’s mind that Neadle’s acts contributed substantially to a loss of confidence in an important institution.” App. at 411. Again, the court based the upward departure not on sworn testimony but on an unsupported judicial conclusion.⁸ Such judicial speculation cannot provide the basis for an upward departure.

V.

We conclude that the district court correctly calculated the loss arising from Neadle’s fraud as the net, adjusted loss to those victims whose property was insured with AM-PAC at the time Hurricane Hugo struck St. Croix, reduced by the amount of the company’s reinsurance. Nevertheless, we will vacate the judgment of sentence and remand this ease for resentencing, because the district court improperly increased Neadle’s guideline sentence by two levels, based on caused or risked physical or psychological harm and on loss of confidence in the insurance industry.

1 . Subsequently, the Insurance Division became concerned about the surety company, which had issued the bond, and required Neadle to post the $500,000 in cash. Neadle complied.

2 . In fact, since the date of the mail fraud offense was January 5, 1988, the date of the mailing, see United States v. Seligsohn, 981 F.2d 1418, 1425 (3d Cir.1992), the 1987 edition of the Sentencing Guidelines was in effect at the date of the offense. The parties have accepted the 1988 edition as applicable, and Neadle has not raised any ex post facto issue. Because we are confident that the result is the same under either the 1988 or 1987 version, and because the 1988 guidelines contain several useful clarifying amendments, we refer to that version in this opinion. The district court would properly apply the version of the Guidelines in effect at the date of the offense because, at the time of sentencing, § 2F1.1 of the Guidelines had been amended by adding four new offense level increases for losses exceeding 10, 20, 40 and 80 million dollars. This amendment would call for a 16 level increase over the base offense level for the loss as calculated here, rather than the 11 level increase which had been in effect until November 1989. See, e.g., United States v. Corrado, 53 F.3d 620, 622-23 (3d Cir.1995) (if application of guidelines in effect at sentencing results in more severe penalty than that in effect at time of offense, earlier version controls; applying a guideline amendment that enhances the penalty offends the ex post facto clause of the United States Constitution).

3 . In a fraud case, the intended loss may be no loss at all, when fraud is committed to obtain a contract or a license or a loan to do business which the offender hopes will succeed — as the defendant here claims was his intent. See e.g. United States v. Shaffer, 35 F.3d 110, 113 (3d Cir.1994). However, under the Guidelines, intended loss is relevant in the loss computation only if the intended loss is greater than the actual loss.

4 . The government portrays this fraud case as analogous to a simple theft case, arguing that the "property” taken was the receipt of the license to sell casualty insurance in the Virgin Islands, which resulted in the Hugo-related losses. The Government argues that "the sentencing court could properly have assessed the loss occasioned by the appellant’s fraud as being the value of all property insured by AMPAC, including property that was not damaged by Hurricane Hugo." Even if we were to accept the Government’s position, this court has held that "[t]he fraud guideline ... has never endorsed sentencing based on the worst-case scenario potential loss.” Kopp, 951 F.2d at 529.

5 .We do not agree with the dissent that the loss to the policyholders here was not caused, at least in part, by Neadle’s fraud in obtaining the license to do business. The dissent implies that the individuals, who purchased policies from AM-PAC, could not have purchased insurance coverage from any other source and for that reason did not suffer any loss from the damage done by Hurricane Hugo which they would not otherwise have suffered. However, despite the tightness of the insurance market in the Virgin Islands, the record before us does not support the supposition, and Neadle does not claim, that there was no other insurance coverage available in the Virgin Islands market for the AMPAC policy holders.

6 . Neadle argues that the district court improperly applied the 1988 edition of the Guidelines to this ground of departure. The 1993 edition of the Guidelines provides that an upward departure may be warranted where "the offense caused reasonably foreseeable, physical or psychological harm or severe emotional trauma.” U.S.S.G. § 2F1.1, comment 10(c). Neadle suggests that the 1993 provision should apply, because it clarifies, rather than substantively changes, the 1988 language. We need not consider this argument, because we do not find evidence of psychological harm within the meaning of the Guidelines in any event.

7 . See United States v. Pelkey, 29 F.3d 11, 15-16 (1st Cir.1994) (finding that victims' feelings of lack of trust, frustration, shock, and depression were not "so far beyond the heartland of fraud offenses as to constitute psychological harm within the meaning of the Policy Statement in § 5K2.3 or” the application note to § 2F1.1); United States v. Mandel, 991 F.2d 55, 58-59 (2d Cir.1993) (finding psychological injuries of victims insufficient to warrant upward departure from base offense level where "both the base offense level for fraud and the vulnerable-victim adjustment had already taken into account the harm to the victims”).

8 . The lack of evidence supporting this ground for departure is evident from the record of the hearing at which Neadle raised his objections to the Presentence Report. Asked for evidence regarding loss of confidence in the industry, the government attorney merely cited conversations with fifteen AMPAC insureds who "did not hold the insurance industry in very high regard,” meetings "with people on the street,” and evidence from "reading newspapers.” App. at 230-31. Indeed, based on the hearing, the court weakened the original language of the report to state broadly that the offense "contributed to the general decline in the confidence and esteem held for the insurance industry.” App. at 231.