United States v. O'Connor

• Court: Court of Appeals for the First Circuit
• Decided: June 22, 1994
• Docket: 93-2044
• Status: Published

Opinion

USCA1 Opinion

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

        No. 93-2044

                                    UNITED STATES,

                                      Appellee,

                                          v.

                                   ROBERT O'CONNOR,

                                Defendant, Appellant.

____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                     [Hon. Robert E. Keeton, U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                                 Selya, Circuit Judge,
                                        _____________
                      Coffin and Bownes, Senior Circuit Judges.
                                         _____________________

                                 ____________________

            Deirdre Lee Thurber for appellant.
            ___________________
            William P.  Stimson, Assistant United  States Attorney, with  whom
            ___________________
        Donald K. Stern, United States Attorney, was on brief for appellee.
        _______________

____________________

                                    June 22, 1994
                                 ____________________

BOWNES,  Senior  Circuit Judge.    Defendant Robert
                      BOWNES,  Senior  Circuit Judge.
                               _____________________

            O'Connor  and  three others  were  indicted  on eight  counts

            charging  violations of  18  U.S.C.    1343  (fraud by  wire,

            radio,  or television) and 18  U.S.C.   2  (Principals).  The

            indictment alleged that the defendants and others had devised

            a  scheme to  defraud  and obtain  money by  false pretenses,

            representations,  and promises, and had  made or caused to be

            made wire  transmissions in  interstate commerce in  order to

            carry out the fraud.

                      The  three other  defendants  pled guilty  prior to

            trial.  Defendant opted for trial and was found guilty on all

            eight counts by a jury.  This appeal followed.1

                                      THE SCHEME
                                      THE SCHEME
                                      __________

                      In  order  to understand  the  issues  on appeal  a

            description  of the  scheme  to defraud  is  necessary.   The

            progenitors of the  fraud were two real estate brokers, Barry

            and Diana Tevrow.   Its  purpose was to  secure financing  so

            individuals  could purchase  residential real  estate without

            the necessity of making  down payments.  To  effectuate this,

            the  Tevrows   engineered   successive  purchase   and   sale

            transactions of  residential properties so as  to inflate the

            ultimate purchase  prices.  Lenders would then  be induced to

            advance loans for substantially more than the properties were

            actually worth.  In order for the scheme to work, the Tevrows

____________________

            1.  Appellate counsel for defendant was not trial counsel.

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                                          2

had to persuade the buyer(s) to give false information on the

            loan  application(s) anent  their  income and  assets.   This

            required that  the Tevrows falsify documents,  such as income

            tax  withholding statements  and bank statements,  to support

            the false loan application.

                      Defendant became part of  the scheme because he was

            an experienced  real  estate  appraiser.   His  role  was  to

            appraise  the  subject  property  at  an  amount  that  would

            convince the lender that the property had sufficient value as

            collateral  to  secure  the loan.    Defendant  met with  the

            Tevrows  and they explained their scheme to him, which was to

            buy  the property in the  first instance through  a straw and

            then  immediately  resell  it  at  an  inflated  price.   The

            inflated price was determined by  adding to the initial price

            the  following amounts:  (1) $35,000; (2)  any amount of cash

            up to $15,000 that  the final purchaser wanted to  receive at

            the closing; plus (3) 20% of (1) and (2).2 

                      Defendant   was  told   that  he  had   to  prepare

            appraisals that would "come in" at the price determined under

            the  formula.   It was  agreed that  defendant would  be paid

            $1,000 for every successful closing  in addition to his usual

            fee of $250-300  for the  appraisal.  Defendant  was paid  in

____________________

            2.  We note  the  obvious,  that  the success  of  the  fraud
            depended upon the Tevrows'  obtaining buyers who were willing
            to submit false loan applications.

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                                          3

cash  or  by  money order;  at  times  defendant's "cut"  was

            deposited directly into his bank account.

                      Defendant's  experience  as  an appraiser  did  not

            extend to the North Shore area of Massachusetts.  He overcame

            this  deficiency by using Diana Tevrow, who was not a trained

            appraiser,  to  help  him.    She  obtained  a listing  sheet

            prepared by  the Multiple  Listing Service for  each property

            that  was  to  be used.    The  listing  sheet described  the

            property and gave the  seller's offering price.  Tevrow  also

            obtained a "field card" describing the property from the city

            hall in the locality  in which the property was  located. She

            took photos of the outside of  the house and made a sketch of

            its interior.  Tevrow had the further assignment of selecting

            "comparable  sales"  properties.    This   entailed  choosing

            recently sold properties whose sales prices could be  used as

            benchmarks  to help establish the value of the property to be

            used in the  fraud scheme.  Tevrow  was told by defendant  to

            select "comparable  sales properties" solely on  the basis of

            price and not to  worry about whether the properties  were in

            fact comparable in location,  appearance, structure, and size

            to  the subject  property.   According  to Tevrow,  defendant

            changed  the  description of  the  subject  property and  the

            "comparable sales"  properties so that it  appeared that they

            were similar.

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                                          4

No issue has been  raised as to the  sufficiency of

            the evidence.   There  are only  two issues on  appeal:   the

            giving of a willful blindness instruction and sentencing.  

WILLFUL BLINDNESS
                                  WILLFUL BLINDNESS
                                  _________________

                      Defendant makes three  claims on willful blindness.

            His  first is that the  "silence of the  record regarding the

            Court's decision to charge willful blindness requires vacatur

            and remand."  Defendant  is claiming that there is  no record

            showing that the district  court complied with Fed.  R. Crim.

            P. 303 by notifying defendant of its proposed action upon the

____________________

            3.  Rule 30.  Instructions
                Rule 30.  Instructions
                        At the close of the evidence or at such
                      earlier  time  during  the trial  as  the
                      court reasonably directs,  any party  may
                      file  written  requests  that  the  court
                      instruct the jury on the law as set forth
                      in the requests.  At the same time copies
                      of  such requests  shall be  furnished to
                      all  parties.    The court  shall  inform
                                       ________________________
                      counsel  of its proposed  action upon the
                      _________________________________________
                      requests  prior to their arguments to the
                      _________________________________________
                      jury.   The court  may instruct  the jury
                      _____
                      before   or   after  the   arguments  are
                      completed or at both times.  No party may
                      assign as error any portion of the charge
                      or omission therefrom  unless that  party
                      objects thereto before  the jury  retires
                      to   consider    its   verdict,   stating
                      distinctly the matter to which that party
                      objects and the grounds of the objection.
                      Opportunity  shall be  given to  make the
                      objection out of the hearing of the jury,
                      and on  request of any party,  out of the
                      presence of the jury.  

            (Emphasis ours.)

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                                          5

requests for instructions,  specifically the  one on  willful

            blindness, prior to the parties' arguments to the jury.

                      This claim  is decisively rejected  by the  record.

            There was a jury charge conference on March 9, two days prior

            to the  submission of the case to  the jury on March  11.  At

            the conference a willful  blindness instruction was discussed

            at length by the court and the parties.  The discussion ended

            by the court informing the prosecutor that defendant objected

            to  the  willful blindness  instruction  as  proposed by  the

            court.  Then followed this colloquy between the court and the

            prosecutor:

                         MR. POVICH:   Well,  at this point  in
                      time I am not going  -- I'm not going  to
                      fight  his  objection, but  I  reserve my
                      right depending on how things go.

                         THE  COURT:  All right.  . . .    I'll
                      tell you  what I'll do  with it.   If  he
                      puts on a case that causes you to want to
                      request  it, you'll let  me know before I
                      charge  the jury  and  also  give me  the
                      substitute  language, either  reinstating
                      what  I  now have  or  whatever different
                      language you want.

                      On the next day, March 10, the court gave counsel a

            copy  of  its proposed  jury  charge.    The proposed  charge

            contained the same willful blindness instruction given to the

            jury  the next  day.   The docket  notes for  March 11  show:

            "Colloquy re: draft of instructions  on willful blindness.  D

            objects  to giving instruction but not  to the specific form.

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Jury brought  in.  Govt  & D present closing.   Court charges

            the jury."

                      The record  establishes:  that  a willful blindness

            instruction was  discussed at  the jury charge  conference on

            March 9; that a draft of the court's jury charge containing a

            willful  blindness  instruction   was  given  to  defendant's

            counsel  on March 10; and  that on March  11, defense counsel

            objected,  prior to  final  argument, to  giving the  willful

            blindness instruction  but not to  its specific form.   There

            was  no violation by the district court of the requirement of

            Fed. R. Crim. P.  30 that, "[t]he court shall  inform counsel

            of  its proposed  action  upon the  requests  prior to  their

            arguments to the jury."

                      Before    getting   to    defendant's   substantive

            objections  to  the willful  blindness instruction,  we first

            consider the  government's claim that a  proper objection was

            not made,  as required by Fed. R. Crim. P. 30, to the willful

            blindness instruction  after the charge was  given and before

            the  jury retired  for deliberations.   At  the close  of his

            instructions  the court asked if there were any objections to

            the charge.  The following colloquy then took place:

                         MR.   McMAHON:      Your  Honor,   the
                      defendant is satisfied with the exception
                      of  the willful blindness  charge and his
                      objections have been duly recorded in two
                      of my memorandums.

                         THE COURT:   Well, you're required  to
                      make them again now after it's given.

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                                          7

MR. McMAHON:  I'm making them now.

                         THE   COURT:       All  right.    That
                      objection is overruled.

                      Rule 30 explicitly states in pertinent part:

                      No party may assign as  error any portion
                      of  the  charge  or   omission  therefrom
                      unless that party objects  thereto before
                      the jury retires to consider its verdict,
                      stating  distinctly  the matter  to which
                      that party objects and the grounds of the
                      objection.

            Despite being warned  by the court,  defense counsel did  not

            state the grounds  of the objection.   The case  law in  this

            circuit  requires strict  compliance  with the  words of  the

            Rule:

                      As we have repeatedly held, Fed.R.Crim.P.
                      30 means  what it says.  A  party may not
                      claim error in the judge's charge to  the
                      jury  unless  that party  "objects" after
                      the judge gives the charge but before the
                      "jury retires," and,  when objecting  the
                      party must  "stat[e] . . . distinctly the
                      matter  to which  that party  objects and
                      the grounds of that objection."

            United  States v. Wilkinson, 926 F.2d 22, 26 (1st Cir. 1991).
            ______________    _________

            That the grounds for the objection were filed in writing with

            the court prior to the time the charge was given, matters not

            a  whit.  See United States v.  Coady, 809 F.2d 119, 123 (1st
                      ___ _____________     _____

            Cir. 1987).  In a recent civil case, Poulin v. Greer, 18 F.3d
                                                 ______    _____

            979,  982  (1st  Cir.  1994),  we  discussed  at  length  the

            consequences of failing to  follow the strictures of  Fed. R.

            Civ. P.  51, which is identical to  Fed. R. Crim. P.  30.  We

            pointed  out   that  failure  to  object   after  the  charge

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"constitutes  waiver of the objection."   Id.   We also noted
                                                      ___

            that the  rule was binding on both the court and attorney and

            that  a  statement  by  the court  "'after  the  charge  that

            objections  made prior to it  will be saved  does not absolve

            the  attorney from  following the  strictures of  the rule.'"

            Id.(quotingMcGrath v.Spirito,733 F.2d967, 969(1stCir. 1984)).
            ___        _______   _______

                      The failure  of defendant to follow  the command of

            Rule  30 means  that our  review is  limited to  plain error.

            Poulin, 18 F.3d at 982; United States v. Latorre, 922 F.2d 1,
            ______                  _____________    _______

            10 (1st Cir.  1990).   Defendant took the  position at  trial

            that he was "never told what  was going on with this scheme."

            He further  testified that  he believed the  information that

            was provided him about the properties was true.  Such a claim

            cries out for a willful  blindness instruction, when there is

            evidence to  the contrary, as  there was  in abundance  here.

            See infra at 3-4.
            ___ _____

                      The trial  court  may instruct  the  jury
                      concerning   willful  blindness   when  a
                      defendant claims a lack of knowledge, the
                      facts support an inference of defendant's
                      conscious course of deliberate ignorance,
                      and  the instruction,  taken as  a whole,
                      cannot be  misunderstood  by a  juror  as
                      mandating the inference of knowledge.

            United States v. Brandon,  17 F.3d 409, 452 (1st  Cir. 1994);
            _____________    _______

            United States v.  Jones, 10  F.3d 901, 906  (1st Cir.  1993).
            _____________     _____

            Viewed in the perspective of plain error, we find that it was

            not plain error  to give a willful blindness  instruction and

            that the form of the instruction was not plainly erroneous.

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SENTENCING
                                      SENTENCING
                                      __________

                      After  a  lengthy  sentencing  hearing   the  court

            allowed  a  two-level  decrease  under  U.S.S.G     3B1.2(b),

            finding  that  defendant  was  a  minor  participant  in  the

            offense.  This was not recommended in the presentence report.

            Defendant's adjusted offense level was 19.  Because he was in

            Criminal  History Category  I,  the  applicable  imprisonment

            range was 30 to  37 months with a supervised release range of

            24 to 36 months.  The fine range was $6,000 to $60,000.   The

            maximum restitution  figure was $1,266,883.75.   The  special

            assessment was $50  for each of the eight counts  for a total

            sum of $400.00.

                      The sentence given was:  30 months imprisonment; 24

            months  of   supervised  release;   no  fine   was  assessed;

            restitution  in the  amount  of $40,000  was  ordered, and  a

            special assessment of $400 was levied.  Defendant claims that

            the sentence was incorrectly calculated for two reasons:  the

            court  failed  to consider  U.S.S.G.     1B1.3(a)(1); and  it

            failed to allow a downward departure  under U.S.S.G.   2F1.1.

            We find  that defendant's sentencing error  claims are barred

            for procedural reasons.

                      We  start  with  the  court's  alleged  failure  to

            consider U.S.S.G.   1B1.3(a)(1).  This guideline provides: 

                      (B)  in  the  case   of  a   jointly
                           undertaken criminal activity (a
                           criminal      plan,     scheme,
                           endeavor,     or     enterprise

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undertaken by  the defendant in
                           concert with others, whether or
                           not  charged as  a conspiracy),
                           all reasonably foreseeable acts
                           and  omissions   of  others  in
                           furtherance   of  the   jointly
                           undertaken criminal activity,

                      that  occurred  during the  commission of
                      the offense of conviction, in preparation
                      for  that offense,  or in  the course  of
                      attempting   to    avoid   detection   or
                      responsibility for that offense;

            Defendant   argues   that  in   sentencing,  as   opposed  to

            determining   conviction,   a  co-conspirator   defendant  is

            responsible  only  for  those  acts  which  were   reasonably

            foreseeable by him.  This is undoubtedly correct.  See United
                                                               ___ ______

            States v. Balogun,  989 F.2d 20, 22 (1st Cir.  1993).  And it
            ______    _______

            is  clear that the district court did not consider U.S.S.G.  

            1B1.3(1)(B) in  sentencing defendant.   But it is  also clear

            that  the court was never asked to consider this guideline at

            the sentencing hearing or prior to it.

                      The initial presentence report determined  the loss

            due to  charged conduct  to be  $1,061,264.00.   The  revised

            presentence  report, made  in response  to objections  by the

            government, included  losses due  to uncharged  conduct which

            increased the loss to $1,266,883.75.   There was no objection

            by defendant  to the  original  presentence report.   At  the

            sentencing hearing defense counsel was  asked by the court if

            he  had  any  objections  to  the  proposed  revision of  the

            presentence  report.  His response was:  "No, your Honor, not

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                                          11

from  the defendant."    We  have  read  the  record  of  the

            sentencing hearing carefully; defense counsel never mentioned

            or alluded to U.S.S.G.   1B1.3(1)(B).

                      "We  do  not review  sentencing  guideline disputes

            which were not preserved before  the district court."  United
                                                                   ______

            States  v. Shattuck,  961  F.2d 1012,  1015 (1st  Cir. 1992).
            ______     ________

            "Time and again we have held that facts stated in presentence

            reports are deemed admitted if they are not challenged in the

            district court."   United States  v. Bregnard, 951  F.2d 457,
                               _____________     ________

            460 (1st Cir.  1991); see  also United States  v. Dietz,  940
                                  ___  ____ _____________     _____

            F.2d 50, 55 (1st Cir. 1991).  

                      There are,  therefore, no appealable grounds for us

            to  consider  the  application  of  U.S.S.G.     1B1.3(a)(1).

            Defendant  relies  on Balogun  for  his  contention that  the
                                  _______

            sentence  be remanded for the district  court to consider the

            guideline.   But Balogun makes  it evident that the defendant
                             _______

            in that  case  raised the  question of  the applicability  of

            U.S.S.G.   1B1.3(a)(1) in  the district court.  Balogun,  989
                                                            _______

            F.2d at 22.

                      Defendant fares no better  on his argument that the

            court should  have departed  downward under the  authority of

            U.S.S.G.   2F1.1, Commentary 10, which provides:

                      In  a few instances,  the loss determined
                      under subsection (b)(1) may overstate the
                      seriousness  of the  offense.   This  may
                      occur,  for  example  where  a  defendant
                      attempted to negotiate an instrument that
                      was so  obviously fraudulent that  no one

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                                          12

would seriously consider honoring it.  In
                      such cases,  a downward departure  may be
                      warranted.

                      We will  assume that by referring  to United States
                                                            _____________

            v.  Gregorio, 956 F.2d 341  (1st Cir. 1992),  which refers to
                ________

            U.S.S.G.    2F1.1 at  pages 344-45, defendant  preserved this

            issue  for appeal.  We note that after referring to Gregorio,
                                                                ________

            defense  counsel  apparently shifted  gears  to  argue for  a

            downward departure under U.S.S.G.   5K2.0.  

                      The  court  made  it  abundantly  clear during  the

            sentencing  hearing that it was  fully aware of  its power to

            depart downward  on the amount of  loss but would not  do so.

            In  fact, the  court  discussed the  applicability of  United
                                                                   ______

            States  v.  Rivera,  994  F.2d  942  (1st  Cir.  1993), which
            ______      ______

            discusses at length the power of the district court to impose

            a  sentence  that  departs  from the  sentencing  guidelines.

            Under such a scenario we have no jurisdiction to consider the

            court's  refusal  to depart  downward  (or  upward).   United
                                                                   ______

            States v. LeBlanc, No. 93-1847, slip op. at 18 (1st Cir.  May
            ______    _______

            24, 1994) (as a  general rule decision not  to depart is  not

            appealable);  United States v. Gifford, 17 F.3d 462, 473 (1st
                          _____________    _______

            Cir.  1994) (no  appeal from  district court's  discretionary

            decision  not to  depart from  guidelines); United  States v.
                                                        ______________

            Sepulveda, 15 F.3d  1161, 1202 (1st Cir.  1993) (a sentencing
            _________

            judge's informed  decision not to depart  is a non-appealable

            event).

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The judgment below is Affirmed.
                                            Affirmed.
                                            _________

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