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USCA1 Opinion
May 07, 1993 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 92-1074
UNITED STATES,
Appellee,
v.
JULIO CESAR PADIN-TORRES,
Defendant, Appellant.
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ERRATA SHEET
The opinion of this Court issued on March 16, 1993, is ammended
as follows:
On the cover sheet, the attorneys for the appellant should read
as follows: " Guilermo J. Ramos-Luina with whom Harry Anduze
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Montano and Maria H. Sandoval were on brief for appellant.
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March 16, 1993 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 92-1074
UNITED STATES,
Appellee,
v.
JULIO CESAR PADIN-TORRES,
Defendant, Appellant.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jose Antonio Fuste, U. S. District Judge]
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Before
Breyer, Chief Judge,
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Aldrich, Senior Circuit Judge,
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and Boudin, Circuit Judge.
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Guillermo J. Ramos-Luina with whom Harry Anduze Montano and
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Maria H. Sandoval were on brief for appellant.
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Luis A. Plaza, Assistant United States Attorney, with whom
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Daniel F. Lopez Romo, United States Attorney, was on brief for
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appellee.
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March 16, 1993
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BOUDIN, Circuit Judge. Defendant Julio Cesar Padin
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Torres ("Padin") pleaded guilty to three counts of an
indictment for offenses related to his operation of a
mortgage lending institution. Padin was sentenced to prison
and ordered to pay $825,000 in restitution to the government.
He now appeals, challenging these sanctions. For the reasons
that follow, we modify the restitution order and otherwise
affirm.
Padin was charged in a thirteen-count indictment with
conversion of federal funds, mail fraud, submission of false
statements, and obstruction of justice. 18 U.S.C. 641,
1341, 1001, 1515. The charges grew out of Padin's operation
of Prudential Mortgage Corporation ("Prudential"), a mortgage
lender participating as an "issuer" of securities guaranteed
by the Government National Mortgage Association, commonly
known as "Ginnie Mae." In addition to managing the
corporation, Padin was Prudential's president and principal
stockholder.
In accordance with its agreement with Ginnie Mae,
Prudential was required to make monthly payments of principal
and interest to holders of securities issued by Prudential
and guaranteed by Ginnie Mae. Prudential was also obligated
to turn over to individual investors lump sum payments by the
federal government for defaulted government-insured mortgages
issued by Prudential. Beginning in 1980 and continuing
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through 1987 Padin, in violation of the agreement with Ginnie
Mae, withheld payment of the lump sums collected from the
federal government on defaulted mortgages and owed to
individual investors. A portion of the funds was used to
cover the monthly dividends owed to all of Prudential's
Ginnie Mae investors, with the remainder being diverted to
corporate and personal bank accounts.
Padin masked the scheme by representing to the
government that the monies paid for defaulted mortgages were
being passed onto investors. At the same time, he led
investors to believe that the mortgages in default were still
alive. The fraud came to light when Prudential began to
default on the monthly dividends. The resulting loss to the
government, excluding collateral expenditures, totaled
approximately $11.5 million, the amount paid out to Ginnie
Mae insured investors to cover Prudential's default.
Padin entered an initial plea of not guilty but later
changed his plea to guilty on one count each of conversion of
federal funds, mail fraud, and the filing of false
statements. The remaining counts were dismissed pursuant to
a plea agreement. As required by Rule 11, the district court
conducted a change of plea hearing. Fed. R. Crim. P. 11.
Before accepting his guilty plea, the district court advised
Padin, among other things, that he was subject to a maximum
total fine of $21,000--$1,000 on the mail fraud count and
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$10,000 each on the conversion and false statement counts.
At no time during the plea hearing did the district court
mention that an order of restitution was also a possibility.
The sentencing hearing which followed later was largely
consumed by Padin's efforts to establish that much of the
diverted funds were used to keep Prudential afloat and only a
small portion of the total was diverted to Padin's personal
use. The court then imposed sentence. The sentence included
a 15-year term of imprisonment and an order compelling Padin
to pay $852,000 in restitution to the government. This
appeal ensued.
Padin first contends that the district court in imposing
sentence relied on irrelevant and mistaken information. See
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United States v. Curran, 926 F.2d 59, 61 (1st Cir. 1991)
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(defendant has right not to be sentenced on the basis of
false information). Padin claims that the court improperly
considered allegations that he withheld disclosure of
accounting ledgers subpoenaed by the government, and that the
amount of losses claimed by the government was unsupported.
A trial court has very broad discretion to decide what
information is relevant for sentencing purposes. United
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States v. Geer, 923 F.2d 892, 897 (1st Cir. 1991). The so-
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called "allegations"--that important ledgers were missing--
were supported by the testimony of a government auditor, who
further stated that the government's audit was hampered by
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the lack of access to the documents. Padin's failure to
produce the requested ledgers or plausibly account for their
whereabouts was a relevant circumstance that the district
court could consider in imposing sentence. See Roberts v.
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United States, 445 U.S. 552 (1980) (trial court may properly
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consider as a sentencing factor defendant's refusal to
cooperate with law enforcement officials).
As to the amount of government losses, Padin did not
deny that the government had paid $11.5 million to Ginnie Mae
insured investors to cover Prudential's default. Rather,
Padin claimed that this figure overstated the loss to the
government because, according to Padin, he used some of the
converted federal funds to sustain mortgages that would
otherwise have fallen into default. As the district court
pointed out, however, the number of would-be defaults, if
any, could only be determined by reference to the ledgers
which Padin failed to provide. Under these circumstances,
the auditor's testimony as to the basic loss of $11.5 million
was sufficient. See United States v. Zuleta-Alvarez, 922
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F.2d 33, 36 (1st Cir. 1990), cert. denied, 111 S.Ct. 2039
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(1991).
Finally, Padin takes exception to the district judge's
reliance on a Sentencing Guidelines work sheet that was not
disclosed to Padin until after sentence was imposed.
Although Padin's offense was not governed by the Sentencing
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Guidelines, the district judge permissibly looked to certain
guidelines factors in determining Padin's sentence. See
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United States v. Twomey, 845 F.2d 1132, 1135 (1st Cir. 1988).
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The work sheet reflects that the district judge determined
that Padin had obstructed justice and abused a position of
trust, and that Padin was given no credit for acceptance of
responsibility. The obstruction finding was based on Padin's
withholding of the financial ledgers.
We find no error in the district court's use of the
undisclosed work sheet. To be sure, a defendant is entitled
to notice of factual information that will affect his
sentence as well as an opportunity to respond, see United
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States v. Hernandez, 896 F.2d 642, 644 (1st Cir. 1990), but
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Padin was afforded this right. While the work sheet itself
was not disclosed prior to sentencing, Padin had ample notice
of the underlying negative information reflected in the
document.1 Additionally, the parties were advised well
ahead of sentencing that the district court would consider
the Sentencing Guidelines in imposing sentence. As for
acceptance of responsibility, it is a mitigating factor and
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1The charge that Padin impeded justice by withholding
accounting ledgers was set forth as a count in the indictment
and reiterated in the pre-sentence report released to Padin
in advance of sentencing. The pre-sentence report also
contained the probation officer's assessment that Padin had
abused a position of trust.
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it was up to Padin's counsel to raise the issue with the
district court if Padin hoped to obtain credit on this score.
In addition to attacking his sentence as a whole, Padin
challenges the restitution order on several grounds. The
principal ground is that the district court, in taking
Padin's guilty plea, neglected to first inform him that
restitution could be imposed as part of his sentence. Fed.
R. Crim. P. 11(c)(1) provides that in addition to much else,
the court must tell the defendant prior to his plea of the
maximum penalties, including "when applicable, that the court
may also order the defendant to make restitution to any
victim of the offense." The government concedes that this
warning was not given.
This objection is raised for the first time on appeal.
Padin's counsel asserts that he was caught off guard:
restitution was not mentioned until the judge imposed
sentence at the conclusion of the sentencing hearing, and
final judgement was entered that same day. The error is not
disputed, and is apparent on the face of the record without
further findings. Rule 11 objections, so far as they affect
the "knowing" character of the plea, are treated with extra
solicitude. United States v. Parra-Ibanez, 936 F.2d 588, 593
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(1st Cir. 1991). Under all of the circumstances, we will
consider the issue under the "plain error" doctrine.
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The government says that the error, even if plain, was
not prejudicial because Padin must have known that
restitution was an issue, given the attention devoted to the
amount of the government's loss. Most of that attention
occurred after the plea was taken. More important, the
amount of the loss was clearly pertinent to the severity of
the prison term, so there was good reason for this attention
regardless of restitution. Cf. U.S.S.G. 2B1.1(b)(1)(1992).
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If the government could show from the record that at the time
of his plea Padin actually knew that restitution was a
possibility, this would be a different case. It has not done
so.
The more difficult problem stems from the warning given
to Padin before his plea that $21,000 in fines might be
imposed. A number of circuits have held that a warning of
fines can render harmless the failure to warn of restitution,
at least so long as any payments actually ordered do not
exceed the figure stated to the defendant at the time of his
plea. E.g., United States v. Fox, 941 F.2d 480 (7th Cir.
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1991), cert. denied, 112 S. Ct. 1190 (1992); United States v.
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Miller, 900 F.2d 919, 921 (6th Cir. 1990). The Second
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Circuit has taken the opposite view, reasoning that a
defendant might sometimes decide not to plead guilty if he
knew that restitution, and not just a fine of comparable
amount, was possible. United States v. Khan, 857 F.2d 85 (2d
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Cir. 1988), modified on reh'g, 869 F.2d 661 (2d Cir. 1989),
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cert. denied, 111 S. Ct. 682 (1991).
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In our view, whether an omitted Rule 11 warning is
prejudicial or harmless turns on the circumstances and we see
no reason to lay down a general rule. In this case, no
reason has been suggested to us why Padin's choice to plead
would have been different if he had been told that $21,000
might be imposed as restitution, rather than as a fine.
Indeed, usually restitution is the more attractive label from
the defendant's standpoint, since it reduces the defendant's
civil liability to the victim. In this case, we think the
Rule 11 violation, although plain, was also harmless to the
extent of $21,000 and harmful beyond that amount. Since
Padin had been told at the plea hearing that this was the
maximum fine on all three counts, warning of a much larger
amount could reasonably have affected his decision to plead.
The government now says that Padin was actually subject to a
fine of $250,000 on each count, but no one claims that he was
so advised at the time he pled.
The question remains whether a remand is required. The
government has made plain in its brief that it prefers to
retain the guilty plea even at the cost of losing any
restitution. This is an understandable choice, especially
because the government may still have an independent civil
claim against Padin for its losses. At the same time, the
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choice of sentence is normally a matter for the district
court. In theory, had it known that the restitution ordered
was unavailable, the district court could have chosen to
impose a longer prison sentence--the maximum was 20 years--or
even given Padin a corrected warning as to sanctions,
allowing him at the same time to withdraw his guilty plea if
he chose.
In this case, we think a remand would be a useless
formality. The government has made it clear that annulling
or reducing the restitution ordered is its preferred outcome
if the court finds prejudicial error. We cannot imagine that
the district court would increase the existing fifteen-year
sentence, let alone reopen the guilty plea, simply because
the amount of direct restitution is reduced and the
government remitted to a civil suit. Padin himself has no
basis for complaint since under the modified judgment he is
obliged to pay no more than he was warned of at the time of
his guilty plea.
Padin's brief contesting his sentence contains many
separate arguments, some of which overlap while others are
mooted by our resolution. We have addressed Padin's
principal contentions and considered the others without
finding further error. The judgment is modified by reducing
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the restitution ordered to $21,000, and is otherwise
affirmed.
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Document Info
Docket Number： 92-1074
Filed Date： 5/10/1993
Precedential Status： Precedential
Modified Date： 9/21/2015