United States v. Pelkey

Opinion

USCA1 Opinion

June 19, 1995

                                [NOT FOR PUBLICATION]



                            UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT


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No. 95-1008



                                    UNITED STATES,



                                      Appellee,



                                          v.



                                 MAE LINH PELKEY, II,



                                Defendant, Appellant.


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                     APPEAL FROM THE UNITED STATES DISTRICT COURT



                          FOR THE DISTRICT OF NEW HAMPSHIRE


[Hon. Paul J. Barbadoro, U.S. District Judge]
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                                 ____________________



                                        Before



                        Cyr, Boudin and Lynch, Circuit Judges.
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                                 ____________________



            Marc Chretien on brief for appellant.
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            Paul  M.  Gagnon,  United  States  Attorney,  and  Jean  B.  Weld,
            ________________                                   ______________

        Assistant United States Attorney, on brief for appellee.



                                 ____________________


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Per Curiam.  Following  an earlier appeal in  which this
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            court remanded for resentencing, see United States v. Pelkey,
                                             ___ _____________    ______



            29  F.3d 11  (1st Cir.  1994), the  district court  sentenced



            defendant Mae Linh Pelkey to a 37-month term of imprisonment.



            Defendant again appeals, complaining  (as she did earlier) of



            an  upward departure  undertaken  by the  court.   This  time



            around, we find no error and thus summarily affirm.  See Loc.
                                                                 ___



            R. 27.1.  



                 Defendant,  a real estate  broker and  financial adviser



            who "defrauded a number  of her friends, business associates,



            and former customers  out of more than $500,000,"  Pelkey, 29
                                                               ______



            F.3d at 12, pled guilty in 1993 to three counts of mail fraud



            and one  count of wire fraud.   See 18 U.S.C.     1341, 1343.
                                            ___



            At the  original sentencing  on October  18, 1993,  the court



            imposed a prison  term of 43  months.  It first  calculated a



            total offense level  of 17,1 which  (with a criminal  history



            category of I) yielded a sentencing range of 24 to 30 months.



            The  court  then  determined  that an  upward  departure  was



            warranted  because  the  ten-level increase  mandated  by the



            applicable provision of  the fraud loss table did  not "fully


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            1.  The total  offense level  was comprised of  the following

            elements: a base offense  level of six for fraud,  U.S.S.G.  

            2F1.1(a)  (1992);  plus  ten   levels  for  losses  exceeding

            $500,000, id.   2F1.1(b)(1); plus a two-level enhancement for
                      ___

            more than one  victim, id.   2F1.1(b)(2)(B); plus a two-level
                                   ___

            enhancement for  vulnerable victim,  id.   3A1.1;  less three
                                                 ___

            levels for acceptance of responsibility, id.   3E1.1. 
                                                     ___



capture the harmfulness" of  defendant's conduct.  U.S.S.G.  



            2F1.1, comment. (n.10) (1992).2  



                 In  support  of this  conclusion,  the  court cited  two



            factors (with primary emphasis placed on the former): (1)  as



            defendant  was or  should  have been  aware,  several of  the



            victims  were elderly  individuals  who lost  most or  all of



            their  life  savings,  with   little  prospect  of  regaining



            financial  security;  and (2)  several  victims  had suffered



            "extreme psychological  injury."   Suggesting  that the  real



            value  of the losses to the victims was closer to $10 million


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            2.  The 1992 version of application note 10 read in pertinent

            part as follows: 



                 In  cases  in  which  the  loss   determined  under

                 subsection  (b)(1)  does   not  fully  capture  the

                 harmfulness  and  seriousness  of  the  conduct, an

                 upward departure  may be  warranted.   Examples may

                 include the following:

                      (a)  the  primary objective  of the  fraud was

                 non-monetary;

                      (b) false statements were made for the purpose

                 of facilitating some other crime;

                      (c)   the   offense    caused   physical    or

                 psychological harm;

                      (d) the offense  endangered national  security

                 or military readiness;

                      (e) the offense caused a loss of confidence in

                 an important institution.



            U.S.S.G.    2F1.1, comment. (n.10)  (1992).  Effective  as of

            November 1, 1993, an amendment to note 10 added the following

            new subdivision:



                      (f)   the   offense   involved   the   knowing

                 endangerment  of  the  solvency  of  one   or  more

                 victims.



            See U.S.S.G., App. C., Amend. 482 (1993).
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                                         -3-



than to $500,000, the court departed upward by five levels to



            a total offense level of 22.  The resulting 43-month sentence



            was near the bottom of the revised sentencing range.



                 On  appeal,  we agreed  with  defendant  that the  cited



            justifications for the five-level departure  were inadequate.



            With respect  to the court's  first rationale, we  noted that



            "[t]he failure to  have a secure  financial future does  not,



            without more, rise to  the level of seriousness" contemplated



            by  the   grounds  for   departure  listed  as   examples  in



            application note  10.3  Pelkey, 29  F.3d at 15.   At the same
                                    ______



            time, we  acknowledged that there was  a distinction "between



            defrauding a 40-year-old of her life savings and defrauding a



            60-year-old  of  her savings."    Id.   That  distinction, we
                                              ___



            observed, was at least partially reflected in the enhancement



            for  vulnerable victim and would not, in any case, "warrant a



            five-level departure."   Id.  Yet  we specifically left  open
                                     ___



            the possibility that an upward departure might be appropriate



            if, on remand, "the court were to make specific findings that



            some  of the victims were unable to provide for their welfare



            or  that  the facts  present[ed]  a  situation  equal to  the



            serious caliber"  of the examples listed  in application note



            10.   Id.  We also  referred to the intervening  amendment to
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            3.  As to the  court's secondary rationale, we  held that the

            severity of the psychological injury suffered  by defendant's

            victims  was not  "so  far beyond"  that experienced  in "the

            heartland of fraud cases"  as to justify a departure  on such

            basis.  Pelkey, 29 F.3d at 16. 
                    ______



                                         -4-



note  10  which  had  added  to  that  list  of  examples  by



            encouraging  a  departure  where  "the  offense involved  the



            knowing endangerment of the solvency of one or more victims."



            Id. at  15 n.5 (quoting U.S.S.G.    2F1.1, comment. (n.10(f))
            ___



            (1993)).   We observed that  a departure on  this ground--one



            which required a finding that a defendant knowingly  pushed a
                                                      _________



            victim  into extreme financial hardship--"seem[ed] to address



            the type of harm the court was attempting to quantify."  Id.
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                 On  remand, after  receiving supplemental  evidence from



            the  parties, the  court found  that defendant  had knowingly



            endangered  the  solvency of  several  of  her  victims.   It



            therefore again departed upward, this  time by two levels, to



            reach  a total offense level  of 19.   The resulting 37-month



            sentence was within the revised sentencing range.  As she did



            below, defendant  now argues that  (1) reliance  on the  1993



            amendment  to application note 10  violated the ex post facto
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            clause;  (2) consideration  of the  government's supplemental



            affidavits was  improper,  and  the  evidence  was  otherwise



            insufficient  to   support  the  upward  departure;  and  (3)



            departing  upward due to the financial strain on the victims,



            in conjunction  with the  adjustment for  vulnerable victims,



            resulted  in  impermissible double-counting.   Each  of these



            contentions, we conclude, misses the mark.



                                Ex Post Facto Concerns
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"To  avoid  ex post  facto  difficulties,  courts should
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            'normally apply [guideline] amendments retroactively  only if



            they  clarify  a guideline,  but  not  if they  substantively



            change  a guideline.'"   United States  v. Rostoff,  ___ F.3d
                                     _____________     _______



            ___, No. 93-1376,  slip op.  at 12 (1st  Cir. 1995)  (quoting



            United  States v. Prezioso, 989 F.2d 52, 53 (1st Cir. 1993)).
            ______________    ________



            Defendant argues that the  1993 amendment to application note



            10 effected such a substantive change.   This conclusion, she



            suggests,  is  apparent from  the  language  employed by  the



            Commission, which  described this aspect of  the amendment as



            one  that "revises  the Commentary  to    2F1.1  by expanding
                       _______                                  _________



            Application Note 10 to provide guidance in cases in which the



            monetary loss does not  adequately reflect the seriousness of



            the offense."  U.S.S.G., App. C., Amend. 482 (1993) (emphasis



            added).  The fact that other changes implemented by Amendment



            482  were  characterized  as  "clarifying,"  she  adds,  only



            reinforces this interpretation.



                 We  disagree.   The distinction between  a clarification



            and a substantive  revision of the  guidelines is not  always



            "clear-cut,"  Isabel v. United  States, 980 F.2d  60, 62 (1st
                          ______    ______________



            Cir.  1992), and  the Commission's  language can  be read  to



            support  either view.4   Of greater  relevance, we  think, is



                                
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            4.  At one point, the district court appeared to suggest that

            the amendment  could be  deemed clarifying simply  because it

            involved an application note  rather than a guideline proper.

            Any such suggestion was  incidental to the court's reasoning,

            and we have  no occasion  to address it  here--other than  to



                                         -6-



the fact that the examples listed in application note 10 were



            (and are) meant to be "nonexclusive."  Pelkey, 29 F.3d at 14.
                                                   ______



            As we indicated in our  earlier decision, an upward departure



            based on unusual  financial strain incurred  by a victim  was



            permissible even before the  1993 amendment.  See id.  at 15.
                                                          ___ ___



            Indeed, other  courts have  upheld departures on  this ground



            based on the pre-1993  version of application note 10.   See,
                                                                     ___



            e.g., United States v. Kaye, 23 F.3d 50, 53-54 (2d Cir. 1994)
            ____  _____________    ____



            (affirming upward departure based on finding that defendant's



            fraud--depriving his great-aunt of her life savings--involved



            a degree  of harm  not adequately considered  by Commission);



            United States  v. Stouffer, 986  F.2d 916, 927-28  (5th Cir.)
            _____________     ________



            (affirming  departure  based  on finding  that  fraud  scheme



            caused thousands  of investors  to lose their  life savings),



            cert.  denied, 114  S. Ct. 115  (1993).   To a  large extent,
            _____________



            therefore,  the 1993  amendment simply  codified pre-existing



            practice.  Under these circumstances, retroactive application



            of the amendment  raises no  ex post facto  concerns.5   See,
                                         _____________               ___



            e.g., United States  v. Fadayini,  28 F.3d  1236, 1242  (D.C.
            ____  _____________     ________



                                
            ____________________



            observe that, after the Supreme Court's ruling that guideline

            commentary  is  generally  binding,  see  Stinson  v.  United
                                                 ___  _______      ______

            States,  113 S. Ct. 1913, 1919 (1993), other courts have held
            ______

            that "subsequent  amendments to the commentary  ... may, just

            like   the  guidelines  themselves,  present  ex  post  facto
                                                          _______________

            problems  when  applied retrospectively."   United  States v.
                                                        ______________

            Bertoli, 40 F.3d 1384, 1405 (3d Cir. 1994) (listing cases).  
            _______



            5.  As the district court  suggested in the alternative, this

            also  means  that  the   upward  departure  could  have  been

            undertaken without reliance on the intervening amendment.



                                         -7-



Cir. 1994) (applying  application note  10(f) on  retroactive



            basis, without mentioning ex post facto issue); United States
                                      _____________         _____________



            v. Strouse, ___ F. Supp. ___, 1995 WL 235568, at *5 (M.D. Pa.
               _______



            1995) (same).


Evidentiary Issues
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                 In  the  earlier appeal,  we  vacated  the sentence  and



            remanded "for  resentencing  consistent with  this  opinion."



            Pelkey,  29   F.3d  at  16.    On  remand,  over  defendant's
            ______



            objection,  the district  court  permitted the  government to



            supplement the record  with additional affidavits  from three



            of the  victims.6   Defendant now  insists that  the district



            court  exceeded the  scope of our  mandate by  permitting the



            evidentiary record to  be reopened.  Yet  our earlier opinion



            specifically  contemplated  that  the  court might  make  new



            findings of fact to support the upward departure.  See id. at
                                                               ___ ___



            15.  It was well within the court's discretion to permit both



            sides to  supplement the record in connection with this issue



            prior to its doing so.7  See, e.g., United States  v. Bell, 5
                                     ___  ____  _____________     ____



            F.3d 64,  66-67 (4th Cir. 1993).  The court on remand did not



            engage  in  a  fully  de novo  hearing  in  which  previously
                                  _______



                                
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            6.  These  victims, among others, had earlier provided victim

            impact  statements  to  the  Probation   Office,  which  were

            recounted at length in the presentence report.



            7.  The  defendant  declined  to  present  any  new  evidence

            regarding  the financial  solvency  issue, but  did take  the

            opportunity to buttress earlier evidence of rehabilitation.



                                         -8-



forfeited  issues were  resuscitated,  see  generally  United
                                                   ______________  ______



            States v. Bell,  988 F.2d  247 (1st Cir.  1993);8 indeed,  it
            ______    ____



            declined to  entertain a proposed  new sentencing enhancement



            (for  abuse of position of trust) not earlier advanced by the



            government.   And  defendant's reliance  on United  States v.
                                                        ______________



            Parker,  30 F.3d 542, 553-54 (4th Cir.), cert. denied, 115 S.
            ______                                   ____________



            Ct. 605 (1994), is misplaced, inasmuch as the government here



            was  not afforded a second opportunity to prove an element of



            the offense.  We thus see no error.9



                 Defendant's  secondary  contention in  this regard--that



            the evidence was  insufficient to support a finding  that she



            knowingly  endangered the  solvency  of one  or  more of  her



            victims--is advanced  only in  peremptory fashion and  can be



            summarily rejected.   It suffices to note  the following: (1)



            the Meuse/Laskey affidavit stated that defendant "handled all



            of our financial matters" and "knew what we had right down to



            the  last  penny  and  she  took  that  also";  and  (2)  the



            presentence  report  indicated   that  LeClair  had  provided


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            8.  Whether  a de novo hearing would have been proper in this
                           _______

            situation,  of course,  is a  question not  before us.   See,
                                                                     ___

            e.g., United States  v. Ortiz,  25 F.3d 934,  935 (10th  Cir.
            ____  _____________     _____

            1994).



            9.  Any  error in this regard would be harmless in any event.

            As the  district court  observed, the finding  that defendant

            knowingly endangered the solvency of  one or more victims was

            reasonably  inferable  from  the  evidence  contained in  the

            presentence  report.   Indeed,  defendant acknowledged  below

            that the new affidavits "paraphrase[d]" the victims'  earlier

            statements "almost completely." 



                                         -9-



defendant  with  a copy  of  his assets  and  liabilities; he



            elaborated in his affidavit that defendant "always knew about



            my  financial situation and knew  that if she  didn't give me



            back the money, I would become insolvent."  Based on this and



            substantial other evidence, the district court's finding that



            "the  departure-justifying   circumstance  actually  existed"



            cannot  be  deemed  clearly  erroneous.    United  States  v.
                                                       ______________



            Rostoff, ___ F.3d at ___, slip op. at 13.
            _______



                                   Double-Counting
                                   _______________



                 Finally,   we   reject   defendant's   contention   that



            undertaking an  upward departure for financial  impact on the



            victims,   while   simultaneously   imposing    a   two-level



            enhancement for vulnerable victims, constituted impermissible



            double-counting.  We implicitly rejected this argument in our



            earlier  decision, see Pelkey, 29  F.3d at 14-15,  as did the
                               ___ ______



            Commission  in its  1993  amendment to  application note  10.



            While  the  two  matters  do overlap,  there  remains  a core



            distinction: the vulnerable  victim adjustment focuses  on an



            individual's susceptibility to becoming a victim of crime per



            se, whereas the note 10(f) departure focuses on the extent to



            which  a victim has suffered an unusual degree of harm from a



            crime.  See, e.g., United States v. Kaye, 23 F.3d at 54.   As
                    ___  ____  _____________    ____



            such,  "the  vulnerable  victim  enhancement  does not  fully



            capture  [the] concern with the actual impact of the fraud on


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the victim."  Id.  We thus agree with the district court that
                          ___



            no double-counting occurred.



                 Affirmed.
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