United States v. O'Connor

UNITED STATES COURT OF APPEALS
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

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

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

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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