United States v. Starck

• Court: Court of Appeals for the First Circuit
• Decided: September 4, 1992
• Docket: 92-1791
• Status: Published

Opinion

USCA1 Opinion

          September 4, 1992     [NOT FOR PUBLICATION]

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

___________________

No. 92-1791

UNITED STATES,
                                      Appellee,

                                          v.

                                  ROBERT E. STARCK,
                                Defendant, Appellant.

__________________

          No. 92-1792

UNITED STATES,
                                      Appellee,

                                          v.

                                NATHANIEL M. MENDELL,
                                Defendant, Appellant.

                                ______________________

                    APPEALS FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                     [Hon. William G. Young, U.S. District Judge]
                                             ___________________

                                 ___________________

                                        Before

                             Torruella, Cyr, and Boudin,
                                   Circuit Judges.
                                   ______________

                                 ___________________

Richard C. Driscoll, Jr. on Memorandum in Support of Motions
               _______________________
          for Release on Bail Pending Appeal. 
               A. John  Pappalardo, United  States  Attorney, and  Mark  J.
               ___________________                                 ________
          Balthazard,   Special  Assistant   United  States   Attorney,  on
          __________
          Memorandum  in Opposition to Motions for  Release on Bail Pending
          Appeal. 

__________________

                                 __________________ 

Per  Curiam.   Defendants  Robert  Starck  and Nathaniel
                 ___________

            Mendell  move for  release pending  appeal of  their criminal

            convictions.   For  the  following reasons,  the motions  are

            denied.

                                          I.

                 The indictment charged Starck  and Mendell with fraud in

            connection with  their attempt  to convert  a Cape Cod  motel

            which they owned into a time-share facility.   In particular,

            it alleged  that they (along  with a third  codefendant) made

            false representations in order to induce persons to buy time-

            share leases.   Two basic misrepresentations  were alleged to

            have been made: (1) that the motel, Village Green by the Sea,

            was  affiliated with  a time-share  exchange company,  Resort

            Condominiums  International, Inc. (RCI),  an arrangement that

            would permit purchasers to trade their time at  Village Green

            for  that at other resorts throughout the world; and (2) that

            Village Green  was financially viable and  would be available

            for  use for 99 years.   Following a  five-week trial, Starck

            was convicted of fourteen counts of  mail fraud, in violation

            of 18 U.S.C.    1341,  and one count  of inducing  interstate

            transportation to  obtain property by fraud,  in violation of

            18 U.S.C.    2314.   Mendell was  convicted of ten  counts of

            mail  fraud.   The  defendants were  sentenced to  concurrent

            terms of 27 months incarceration as to each count.

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Having  been  released   on  bail   pending  trial   and

            sentencing,  Starck and  Mendell  were ordered  to report  to

            prison on July 14, 1992.   On July 8, they filed applications

            below for  release pending  appeal, which the  district court

            denied on  July 10.   They then  filed motions in  this court

            seeking (1) release pending  appeal and (2) immediate release

            pending decision on the underlying bail motions.  On July 13,

            we denied the motions for immediate release, and ordered that

            memoranda be  submitted on  an expedited basis  regarding the

            underlying motions.   In addition to  the parties' memoranda,

            we now have the benefit of the trial transcript.  

                                         II.

                 The district  court found,  and the government  does not

            dispute, that neither defendant  is likely to flee or  pose a

            danger  to the safety of  any other person  or the community.

            The  sole   question   is  thus   whether   defendants   have

            established,  pursuant to  18  U.S.C.    3143(b)(1)(B),  that

            their  appeals raise  a substantial  question of law  or fact

            likely to  result in  (1) reversal,  (2) an  order for a  new

            trial,  (3)  a  sentence that  does  not  include  a term  of

            imprisonment,  or  (4)  a  reduced  sentence  to  a  term  of

            imprisonment less  than the total of the  time already served

            plus  the  expected  duration  of  the  appeal  process.    A

            "substantial"  question in this context is  one that is close

            or could very  well be decided the other way.   United States
                                                            _____________

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v. Bayko, 774  F.2d 516, 523  (1st Cir. 1985).   As they  did
               _____

            below, defendants  identify  three general  issues  that  are

            alleged to  be "substantial."1   We  agree with  the district

            court that none of these satisfies the Bayko standard.  
                                                   _____

                 1.  Sufficiency of the Evidence
                     ___________________________

                 The  first   issue  involves  the  sufficiency   of  the

            evidence.  Their challenge in this regard is directed, not to

            any   specific  count(s), but  rather to  the alleged  scheme

            underlying  the indictment  as  a  whole.    They  claim,  in

            particular,  that the  evidence was  inadequate to  show that

            they (1) made any false statements to prospective buyers, (2)

            otherwise  had any intent to defraud, or (3) ever "devised" a

            scheme  to defraud within the  meaning of 18  U.S.C.   1341.2

            Based  on a preliminary review  of the record,  we find these

            assertions unpersuasive.

____________________

            1.  Each  of the  arguments  advanced is  applicable to  both
            Starck and Mendell (who are represented by the same  attorney
            on appeal).  

            2.  18 U.S.C.   1341 provides in pertinent part:

                      Whoever, having devised or intending to devise
                 any scheme or artifice to defraud, or for obtaining
                 money or  property by means of  false or fraudulent
                 pretenses,  representations,  or promises,  ... for
                 the purpose of executing such scheme or artifice or
                 attempting to  do so, places in any post office ...
                 any  matter  or  thing   whatever  to  be  sent  or
                 delivered  by  the  Postal  Service,  or  takes  or
                 receives therefrom,  any such  matter or  thing, or
                 knowingly causes  to be  delivered by mail  ... any
                 such matter or thing, [shall be guilty of a crime].

                                         -5-

"A denial of a motion for judgment of acquittal based on

            the insufficiency  of the evidence is  subject to deferential

            review."  United  States v. Lopez, 944 F.2d 33,  39 (1st Cir.
                      ______________    _____

            1991).

                 We  assess the  sufficiency  of the  evidence as  a
                 whole,  including all reasonable inferences, in the
                 light most favorable to the verdict, with a view to
                 whether a  rational trier of fact  could have found
                 the defendant guilty beyond a reasonable doubt.  We
                 do not weigh  witness credibility, but  resolve all
                 credibility issues  in favor  of the verdict.   The
                 evidence  may be  entirely circumstantial  and need
                 not   exclude   every   reasonable  hypothesis   of
                 innocence; that is, the factfinder may decide among
                 reasonable interpretations of the evidence.

            United States v.  Batista-Polanco, 927 F.2d 14, 17  (1st Cir.
            _____________     _______________

            1991) (citations  omitted).   We have examined  the arguments

            made  by  defendants in  their  motion  papers together  with

            pertinent portions of the transcript.  It would not serve any

            useful  purpose to  recite  the evidence  at  this time  but,

            without prejudice  to the defendants' appeals  on the merits,

            we  are  unable  to say  at  this  preliminary  stage that  a

            substantial issue  is presented  by  defendants' claims  that

            they  lacked knowledge  of the  misrepresentations  or lacked

            fraudulent intent.

                 Finally,   defendants'   further  suggestion   that  the

            elements  of 18  U.S.C.   1341  were not  established appears

            equally insubstantial.   "The government need  not prove that

            the  defendant devised  the  fraudulent scheme;  but it  must

            prove 'willful participation in  the scheme with knowledge of

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its  fraudulent nature  and  with intent  that these  illicit

            objectives be achieved.'"  United States v. Serrano, 870 F.2d
                                       _____________    _______

            1, 6 (1st  Cir. 1989)  (quoting United States  v. Price,  623
                                            _____________     _____

            F.2d  587,  591  (9th  Cir.),  cert.  denied,  449  U.S. 1016
                                           _____________

            (1980)).  Based  on our own preliminary  assessment, there is

            adequate   evidence   that   the  defendants   were   willful

            participants in the alleged fraudulent scheme.

                 2.  Applicability of the Sentencing Guidelines
                     __________________________________________

                 Defendants next  contend that the  sentencing guidelines

            should not apply to their offenses.  Noting that the purchase

            and  sale agreement for  Village Green was  signed in October

            1987,  they   argue  that  the  alleged   scheme  to  defraud

            necessarily  began  prior  to   the  effective  date  of  the

            guidelines (November  1, 1987).  This  argument overlooks the

            fact  that the scheme charged in the indictment is alleged to

            have  begun  "sometime in  March  1988"  (shortly before  the

            closing  on the sale).   In any  event, it is  clear that the

            guidelines  apply  to   "straddle"  offenses  that  commenced

            before, but continued  after, November 1,  1987.  See,  e.g.,
                                                              ___   ____

            United  States v. Wallen,  953 F.2d 3, 5  n.6 (1st Cir. 1991)
            ______________    ______

            (per  curiam); United States v. Fazio, 914 F.2d 950, 959 n.14
                           _____________    _____

            (7th  Cir.   1990)  (collecting  cases).     We  perceive  no

            substantial issue in this regard.

                 3.  Application of the Sentencing Guidelines
                     ________________________________________

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Finally,  defendants raise  two  issues  concerning  the

            application of the  guidelines to their cases.3   First, they

            challenge  the  district  court's findings  concerning  their

            roles  in the offense.   At sentencing, the  court found that

            both defendants  were "organizers or leaders"  of the alleged

            scheme to  defraud, and consequently increased  their offense

            levels by four levels under U.S.S.G.   3B1.1(a).  At a second

            hearing two days later,  the court reconsidered this finding.

            It  took  note of  evidence  that  defendants approached  the

            project  with "initial  good  faith," that  they resorted  to

            fraud  only after getting  "trapped in a  losing scheme," and

            that the  project "started  off as an  entrepreneurial matter

            ... and  then turned into an extensive  fraud."  Accordingly,

            the  court  found  that  defendants were  not  organizers  or

            leaders but  rather "managers or supervisors,"  and thus were

            subject  to a three (rather than four) level increase under  

            3B1.1(b).   Defendants challenge this  finding, claiming that

            they were entitled to a four-level reduction in their offense

            level under    3B1.2(a) due  to their "minimal"  role in  the

            scheme.    Such  a  seven-level swing,  they  observe,  would

            produce sentences of probation.

____________________

            3.  In the district court, defendants  also apparently argued
            that  (1) they  were entitled  to a  two-level reduction  for
            acceptance of  responsibility, and  (2) they should  not have
            received  a two-level  increase for  obstruction of  justice.
            Neither  of these contentions has been pursued in the motions
            before us.  

                                         -8-

We  see  no  substantial  issue  in this  regard.    The

            district   court's   role-in-the-offense   determination   is

            reviewed only for clear  error.  See, e.g., United  States v.
                                             ___  ____  ______________

            Panet-Collazo,  960 F.2d  256,  261 (1st  Cir. 1992);  United
            _____________                                          ______

            States v. Ocasio, 914 F.2d 330,  333 (1st Cir. 1990).   Given
            ______    ______

            that defendants  were the owners  of Village Green,  with the

            ultimate authority to  direct the sales program, and based on

            our preliminary review of the evidence, we  think it unlikely

            that  the district court clearly  erred in this  regard.  And

            defendants' suggestion in particular that they were  entitled

            to a four-point downward adjustment as "minimal" participants

            would  seem to  fly  in the  face  of the  record.   Such  an

            adjustment "is  intended to cover defendants  who are plainly

            among  the least culpable of those involved in the conduct of

            a group," U.S.S.G.   3B1.2, commentary (n.1), and is meant to

            "be used infrequently," id. (n.2).
                                    ___

                 Defendants' second argument in this regard relies on the

            statutory directive that  the guidelines should  "reflect the

            general  appropriateness of  imposing a  sentence  other than

            imprisonment in  cases  in which  the  defendant is  a  first

            offender who has not been convicted of a crime of violence or

            an otherwise serious offense ...."  28 U.S.C.   994(j).  They

            contend that  the offense  levels enumerated  in    2F1.1 for

            crimes involving  fraud and deceit  contravene this  mandate.

            And they  argue that, as  a result,  they were entitled  to a

-9-

downward departure and to sentences of  probation.  Yet their

            description  of the offenses here as not "serious" would seem

            a dubious one.  In any event, a discretionary decision not to

            depart  downward  from   the  guidelines'  sentencing   range

            ordinarily presents  no appealable issue.   See, e.g., United
                                                        ___  ____  ______

            States v.  Harotunian, 920 F.2d  1040, 1044 (1st  Cir. 1990).
            ______     __________

            Defendants have offered no reason why this jurisdictional bar

            would not apply here.   Accordingly, this issue would  appear

            less than substantial as well.

                 The motions  of Robert Starck and  Nathaniel Mendell for
                 ________________________________________________________

            release on bail pending appeal are denied.   
            __________________________________________

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