United States v. O'Connor ( 1994 )


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    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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    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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    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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    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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    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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    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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    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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    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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