United States v. Smith

UNITED STATES COURT OF APPEALS
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT

No. 94-1326

UNITED STATES,

Appellee,

v.

JAMES K. SMITH,

Defendant, Appellant.

No. 94-1327

UNITED STATES,

Appellee,

v.

ROBERT COHEN,

Defendant, Appellant.

No. 94-1328

UNITED STATES,

Appellee,

v.

AMBROSE DEVANEY,

Defendant, Appellant.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

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

Before

Selya, Circuit Judge,

Bownes, Senior Circuit Judge,

and Stahl, Circuit Judge.

Charles W. Rankin, with whom Rankin & Sultan, Sheldon Krantz, and

Piper & Marbury, were on brief for appellant Robert Cohen; Joseph J.

Balliro, with whom Balliro, Mondano & Balliro, P.C., was on brief for

appellant James K. Smith; and Emmanual N. Papanickolas, for appellant

Ambrose Devaney.
Paul G. Levenson, Assistant United States Attorney, with whom

Donald K. Stern, United States Attorney, and Victor A. Wild, Assistant

United States Attorney, were on brief for appellee.

February 10, 1995

BOWNES, Senior Circuit Judge. After a joint trial,
BOWNES, Senior Circuit Judge.

defendants James Smith, Robert Cohen, and Ambrose Devaney

were convicted of defrauding two federal credit unions and

other related offenses. Although some aspects of the trial

give us pause, we affirm the convictions and sentences.

I. FACTS
I. FACTS

We review the facts in the light most favorable to

the government. United States v. Ford, 22 F.3d 374, 382 (1st

Cir.), cert. denied, 115 S. Ct. 257 (1994). Between December

1985 and March 1991, James Smith, Richard Mangone, Robert

Cohen, and Ambrose Devaney fraudulently obtained tens of

millions of dollars in real estate loans from the Barnstable

Community Federal Credit Union (BCCU) and the Digital

Employees Federal Credit Union (Digital). Smith, a real

estate developer, and Mangone, President of Digital, were co-

founders of BCCU. Robert Cohen was general counsel to both

credit unions. Smith and Mangone controlled much of BCCU's

lending through Lynn Vasapolle, a coconspirator who was

BCCU's manager. Devaney was a real estate developer, the

only defendant who was an outsider to the credit unions.

The loans were used in part to finance the purchase

of commercial real estate on Cape Cod. To circumvent the

credit unions' policies restricting "insider" loans or

limiting maximum borrowing by an individual, Smith, Mangone,

and Devaney formed more than a dozen nominee trusts to create

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the impression that the loans were going to many different

borrowers. Cohen, who served as closing attorney for the

credit unions, prepared the trust instruments and closing

binders. He also instructed Vasapolle what documents to

include in her BCCU files.

The conspirators concealed their interest in the

trusts by representing the trustees as putative owners. At

Mangone's direction, Vasapolle prepared false certificates of

beneficial interest on a blank form that Cohen had provided.

There was evidence that in some cases Cohen directly

submitted false certificates to BCCU, while maintaining

parallel sets of genuine and false certificates in his files.

In one case where he served as trustee, Cohen signed a

certificate misrepresenting himself and his wife as the

beneficiaries of the trust.

For their part, Smith and Vasapolle prepared false

financial statements for BCCU showing that the trustees

qualified for the loans. Smith altered the purchase and sale

agreements, sometimes inflating the purchase price by

millions of dollars, in order to obtain larger loans. The

excess loan proceeds were usually deposited in Cohen's client

account, transferred to one of Smith's accounts, and then

distributed to Smith, Mangone, and Devaney.

In the late 1980's, the real estate market on Cape

Cod collapsed. Unable to sell the properties and faced with

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mounting debts, Smith, Mangone, and Devaney resorted to a

pyramid scheme. Cohen created new trusts that purported to

buy subdivisions from the old trusts; the sham "sales" were

in turn financed by new loans from the credit unions. By

March 1991, when BCCU was seized by regulators from the

National Credit Union Administration (NCUA), the outstanding

balance on the Smith-Mangone-Devaney loans had reached forty

to sixty million dollars.

On September 12, 1992, Smith, Mangone, Cohen, and

Devaney were indicted for conspiracy (18 U.S.C. 371) to

commit bank fraud (18 U.S.C. 1344); unlawful receipt of

monies by a credit union officer (18 U.S.C. 1006); and

unlawful monetary transactions (money laundering) (18 U.S.C.

1957). Each defendant was also charged with various

offenses underlying the conspiracy. The case was tried on a

redacted indictment that included a conspiracy count, seven

bank fraud counts, seven parallel unlawful receipt counts

(which concerned Mangone alone), and the money laundering

charges. Vasapolle testified under a plea agreement and

explained the workings of the conspiracy.

Smith and Mangone were convicted on all counts.

Cohen was convicted on all counts except for four money

laundering counts. Devaney was convicted of conspiracy,

three counts of bank fraud and one count of money laundering.

Mangone fled before sentencing. Smith was sentenced to

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fifteen years imprisonment and three years supervised

release, and ordered to pay up to twenty million dollars in

restitution. Cohen was sentenced to ten years imprisonment.

Devaney was sentenced to thirty-seven months imprisonment and

three years supervised release, and was ordered to pay up to

ten million dollars in restitution.

II. DISCUSSION
II. DISCUSSION

These appeals turn largely on whether the

defendants should have been severed for separate trials under

Fed. R. Crim. P. 14. Cohen also argues that certain

evidentiary rulings and jury instructions deprived him of a

fair trial. Devaney argues that various counts of the

indictment were multiplicitous, and that the evidence was

insufficient to support his convictions. Each defendant

challenges his sentence on various grounds.

A. Bruton error
A. Bruton error

We begin with Smith's claim of error under Bruton

v. United States, 391 U.S. 123 (1968) -- the heart of his

argument for severance. Bruton held that, because of the

substantial risk that a jury, despite contrary instructions,

will look to a codefendant's incriminating extrajudicial

statement in determining a defendant's guilt, admission of

the codefendant's statement in a joint trial violates the

defendant's right of cross-examination under the

Confrontation Clause of the Sixth Amendment. Id. at 126. As

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the Court emphasized in Richardson v. Marsh, 481 U.S. 200,

208 (1987), Bruton error occurs where the codefendant's

statement "'expressly implicate[s]'" the defendant, leaving

no doubt that it would prove "'powerfully incriminating'"

(quoting Bruton, 391 U.S. at 124 n.1, 135). There is no

Bruton error if the statement becomes incriminating "only

when linked with evidence introduced . . . at trial."

Richardson, 481 U.S. at 208. See United States v.

Limberopoulos, 26 F.3d 245, 253 (1st Cir. 1994) (Bruton

protects against the "powerfully incriminating effect of [a

nontestifying] accomplice pointing the finger directly at

another"; by contrast, "inferential incrimination . . . can

be cured by limiting instructions").

Against this backdrop, we turn to the claimed

Bruton error. The trial began on May 17, 1993. During the

government's case, Vasapolle testified that she, Cohen,

Smith, and Mangone met twice after the BCCU takeover to

discuss the possibility of removing or destroying loan

documents from the BCCU's and Cohen's files. Cohen allegedly

agreed to remove some of his documents, but advised his

coconspirators that it would be impossible to purge all of

the files. He also refused to destroy any documents because

to do so would be an obstruction of justice.

On June 28, 1993, the last day of testimony, Cohen

called Professor Richard Huber, an authority on professional

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responsibility. Huber testified subject to a limiting

instruction that his testimony "has nothing to do with . . .

Mr. Smith [and] Mr. Devaney." According to Huber, Cohen

called him in late March of 1991 and "indicated that he had a

serious problem with professional responsibility that was

facing him and he would like to have an opportunity to

discuss it." Cohen met with Huber on April 4, 1991. Huber

testified:

Mr. Cohen explained that he had been
involved as a lawyer for a banking
institution . . . . [O]n the 23rd of
March [1991], a former officer of the
bank, a former director of the bank, and
a bank manager came in and spoke to him .
. . concerning activities that involved
them and their work at the bank.
***
[E]ssentially it amounted to the issue
that certain documents had been changed,
the information had been changed, figures
had been changed, data had been changed,
that this had been done after preparation
by Mr. Cohen and after they had been
presumptively completed, as far as he was
concerned, and were in file -- in his
files, the bank files. He indicated that
it was a possibility, though he wasn't
certain, as I can recall this, that there
may have been also forgeries, in terms of
signatures including possibly his own.

But the main thrust . . . was that
documentation which he had prepared and
which was complete and on file, had been
changed by these three people in their
indication to him when they met with him.

Cohen asked "whether he could reveal any of this

information, which had been received from these persons as

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clients." Huber advised him that "there was no way in which

he could reveal confidences at that point in time," but that

he could do so "if it was necessary to protect himself, that

is, where he would be charged with crime or where he would be

sued civilly."

After Huber testified, Cohen's codefendants moved

for a mistrial, citing Bruton. The court deferred its ruling

until Cohen's next witness had testified. Just before

Cohen's closing argument, the court instructed counsel "[not

to] argue what Cohen said to Huber," because that evidence

would be stricken. The court then stated, "[Y]ou may argue

what Huber said to Cohen." The next day, the court

instructed the jury that Huber's testimony of what Cohen

"said to him about other persons [is] . . . stricken

entirely." Left in evidence was "the fact that Mr. Cohen

went to Huber, the fact that he made disclosures to Mr. Huber

. . . and the testimony of Mr. Huber about what he said to

Mr. Cohen . . . ." As it explained at sidebar, the court

submitted the case to the jury because the Bruton error (if

any) occurred during the last day of testimony in a lengthy

trial, and might be mooted by an acquittal. In addition, the

harmfulness of the error would be more apparent in light of

the verdicts.

All of the defendants were convicted, and Smith

moved for a new trial. The district court opined that there

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had been an "egregious error" under Bruton. In the court's

view, however, the Bruton evidence was "merely cumulative" of

the government's case and therefore harmless beyond a

reasonable doubt.

In the classic Bruton scenario, Cohen would have

made a detailed confession of bank fraud, naming Smith as an

accomplice. The government could not introduce such an

incriminating statement at a joint trial, even against Cohen

alone. In fact, Cohen -- not the government -- offered his

own statement that three unnamed clients came to him and

essentially confessed to bank fraud. The government

emphasizes the self-serving nature of this evidence, while

Smith dwells on the power of a confession offered to one's

own attorney at a time of presumed confidence. To us, these

factors seem more or less a wash. We shall assume without

deciding that the district court correctly found that Bruton

error had occurred.1 Cohen's statement could be found to be

1. The government asks us to hold that the Bruton statement

must actually name the defendant. We regard this as an open
question that we need not answer at this time. See

Richardson, 481 U.S. at 211 n.5 ("We express no opinion on

the admissibility of a confession in which the defendant's
name has been replaced with a symbol or neutral pronoun.");
United States v. Cleveland, 590 F.2d 24, 28 n.4 (1st Cir.

1978) ("A Bruton problem is, of course, not necessarily

avoided merely by deleting names."). Cf. United States v.

Limberopoulos, 26 F.3d 245, 253 (1st Cir. 1994)

(codefendant's statements "neither name nor impugn

[defendant] directly") (emphasis added). But see United

States v. DiGregorio, 605 F.2d 1184, 1190 (1st Cir.) ("where

the confession does not name a codefendant, it may be

admitted under Cleveland solely against the confessor"),

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"powerfully incriminat[ing]" on its face, even without

"inferential incrimination" from other evidence in the case.

Richardson, 481 U.S. at 208.

We are nonetheless convinced that any error was

harmless beyond a reasonable doubt. See Harrington v.

California, 395 U.S. 250 (1969) (Bruton errors are subject to

harmless-error analysis under Chapman v. California, 386 U.S.

18 (1967)). The jury convicted all the defendants on the

conspiracy count, and Cohen on most of the substantive

counts. Even if the jury threw the curative instructions to

the wind2 and considered the stricken testimony as evidence

against Smith, the scenario which implicates Bruton, it could

not have believed Cohen's claim that the unnamed clients

confessed to him at the close of the conspiracy. No one

confesses to a partner in crime. Cf. DiGregorio, 605 F.2d at

1190 (finding any error in admitting codefendant's statement

harmless; noting that the defendant was acquitted of the

substantive act of participating in the shooting).

Admittedly, Cohen's statement might tend to

incriminate Smith and Devaney by showing that the co-

conspirators met to discuss damage control. In this sense,

cert. denied, 444 U.S. 937 (1979).

2. We recognize, of course, the strong presumption that
jurors will follow the trial court's limiting instructions.
See, e.g., United States v. Sepulveda, 15 F.3d 1161, 1185

(1st Cir. 1993), cert. denied, 114 S. Ct. 2714 (1994).

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however, the statement falls far outside the pale of the

"powerfully incriminating" evidence that produces Bruton

errors. Vasapolle had already testified in detail to the

coconspirators' meetings in the wake of the BCCU takeover.

Thus, once Cohen's statement is considered as something other

than an account of the codefendants' confessions, it becomes

merely cumulative of the government's case and could not have

produced Bruton error. See DiGregorio, 605 F.2d at 1190

(fact that a codefendant's admission tended to corroborate

government's case against the defendant is insufficient,

standing alone, to trigger Bruton); United States v. Rawwad,

807 F.2d 294, 296 (1st Cir. 1986) ("[t]he mere fact of

corroboration is not enough to warrant finding a Bruton

violation"), cert. denied, 482 U.S. 909 (1987).

The right of confrontation ensures that a criminal

defendant can cross-examine his or her accusers. Had Cohen

testified to the confession himself, Smith's cross-

examination of Cohen would have sought to show that no

confession ever occurred. The verdicts suggest that the

jury, if it considered this evidence, found just that. The

jury, even if it disregarded the limiting instructions,

plainly did not believe Cohen's claim that his codefendants

had confessed to him. It is clear, therefore, that any

Bruton error was harmless beyond a reasonable doubt.

B. Severance
B. Severance

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We now consider whether the district court should

have granted a severance based on the alleged prejudice

created by a joint trial. "[A] district court should

grant a severance under Rule 14 only if there is a serious

risk that a joint trial would compromise a specific trial

right of one of the defendants, or prevent the jury from

making a reliable judgment about guilt or innocence." Zafiro

v. United States, 113 S. Ct. 933, 938 (1993). The denial of

a motion for severance "'will be overturned only if [the

district court's] wide discretion is plainly abused,'" United

States v. O'Bryant, 998 F.2d 21, 25 (1st Cir. 1993) (quoting

United States v. Natanel, 938 F.2d 302, 308 (1st Cir. 1991),

cert. denied, 112 S. Ct. 986 (1992)), "'depriv[ing] defendant

of a fair trial [and] resulting in a miscarriage of

justice.'" United States v. Tejeda, 974 F.2d 210, 219 (1st

Cir. 1992) (quoting United States v. McLaughlin, 957 F.2d 12,

18 (1st Cir. 1992)).

1. Antagonistic defenses
1. Antagonistic defenses

Smith and Devaney argue that their defenses were

antagonistic to Cohen's. In his opening statement, counsel

for Cohen characterized his client as an innocent third

party, forced by the government to play the role of an

assistant prosecutor. "Mr. Cohen's theory of defense is if

this [the bank fraud] happened, then he was not part of it."

(Emphasis added.) Counsel also stated that the codefendants

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had falsified loan documents; that Smith asked Cohen to

destroy certain files; and that Cohen, stunned by these

revelations, sought the advice of a law professor regarding

his professional responsibility.

Opening statements, of course, are not evidence.

The true level of antagonism between the defenses is measured

by the evidence actually introduced at trial. See United

States v. Torres-Maldonado, 14 F.3d 95, 104-05 (1st Cir.),

cert. denied, 115 S. Ct. 193 (1994). Moreover, "mere

antagonism of defenses does not require severance." United

States v. Yefsky, 994 F.2d 885, 896 (1st Cir. 1993). See

United States v. Angiulo, 897 F.2d 1169, 1195 (1st Cir.)

(collecting cases in which we have denied severance despite

"sharply antagonistic defense theories"), cert. denied, 498

U.S. 845 (1990). "[T]he tension between defenses must be so

great that a jury would have to believe one defendant at the

expense of the other." Yefsky, 994 F.2d at 897 (citing

United States v. Arruda, 715 F.2d 671, 679 (1st Cir. 1983)).

We recognize that this is not a case of mere

tattling or "finger-pointing" between defendants. Cohen

offered testimony suggesting that Smith (among other

codefendants) had actually confessed to him. For several

reasons, however, Smith has not made the "strong showing of

prejudice," McLaughlin, 957 F.2d at 18, required to obtain a

severance.

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We emphasize that the key testimony antagonistic to

Smith -- what Cohen allegedly told Huber -- is not part of

this case. That testimony was originally admitted only in

Cohen's case, and only for the fact that Cohen had made

certain assertions to Huber -- not for the truth of those

assertions. We have found the testimony harmless, even if it

may have been wrongly admitted initially. See supra, section

II.A. Finally, the district court struck the testimony

altogether. Assuming that some prejudice remained for

purposes of severance, see Zafiro, 113 S. Ct. at 938 (Bruton-

related problems "might present a risk of prejudice")

(emphasis added), Rule 14 "does not require severance even if

prejudice is shown; rather, it leaves the tailoring of the

relief to be granted, if any, to the district court's sound

discretion." Id.

As our Bruton discussion shows, the jury

demonstrated by its verdicts that it did not believe Cohen's

"confession" defense, assuming that it improperly considered

it at all. Cf. Zafiro, 113 S. Ct. at 939 (finding

convictions supported by the evidence and rejecting claim

that the jury found at least one of the defendants guilty

without regard to whether the government proved its case

beyond a reasonable doubt) and 940 (Stevens, J., concurring)

("in any event, the jury in this case obviously did not

believe Soto and Zafiro, as it convicted both of them.

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Accordingly, there is no basis . . . for concluding that the

the[ir] testimony . . . prejudiced their codefendants.").

Moreover, if the jury in fact followed the limiting

instructions, there was simply no significant evidence that

was antagonistic to Smith. It in no way appears that the

jury "unjustifiably infer[red]" -- from the alleged

antagonism alone -- that both Smith and Cohen were guilty.

United States v. Talavera, 668 F.2d 625, 630 (1st Cir.),

cert. denied, 456 U.S. 978 (1982).

In sum, Smith, the only appellant arguably

incriminated by Huber's testimony about what Cohen said to

him, failed to demonstrate strong prejudice from the joint

trial on the basis of Bruton and the antagonistic defenses.

His and Devaney's parallel arguments for severance must

therefore be rejected.

2. Codefendant testimony
2. Codefendant testimony

Cohen argues that the joint trial deprived him of

Smith's exculpatory testimony. In support of Cohen's

pretrial motion for severance, Smith furnished two affidavits

representing that, if he were tried first, he would testify

on Cohen's behalf at a later trial.

To obtain a severance on the basis of a

codefendant's testimony, the defendant must demonstrate: (1)

a bona fide need for the testimony; (2) the substance of the

testimony; (3) its exculpatory nature and effect; and (4)

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that the codefendant will in fact testify if the cases are

severed. United States v. Drougas, 748 F.2d 8, 19 (1st Cir.

1984). We shall refer to these as the "first-tier" Drougas

factors. Upon such a showing, the district court should (1)

examine the significance of the testimony in relation to the

defendant's theory of defense; (2) consider whether the

testimony would be subject to substantial, damaging

impeachment; (3) assess the counter arguments of judicial

economy; and (4) give weight to the timeliness of the motion.

Id. These are "second-tier" Drougas factors.

The district court found that Cohen had satisfied

the first tier of criteria under Drougas.3 It denied the

motion for severance, however, because Smith's proffered

testimony was "more circumstantially than directly"

exculpatory. The court also weighed two other factors --

3. If the offer to testify is conditioned on the order of
the separate trials, there is an open question whether the
codefendant's availability meets Drougas' first-tier

requirements. We note, however, that several of our sister
circuits have ruled that an offer to testify, conditioned on
one defendant being tried before the other, fails to satisfy
the elements of a prima facie case for severance. See, e.g.,

United States v. Washington, 969 F.2d 1073, 1080 (D.C. Cir.

1992), cert. denied, 113 S. Ct. 1287 (1993); United States v.

Blanco, 844 F.2d 344, 352-53 (6th Cir.), cert. denied, 486

U.S. 1046 (1988); United States v. Haro-Espinosa, 619 F.2d

789, 793 (9th Cir. 1979); United States v. Becker, 585 F.2d

703, 706 (4th Cir. 1978), cert. denied, 439 U.S. 1080 (1979).

Here, the district court found that Cohen had satisfied this
requirement, notwithstanding Smith's conditional proffer.
Because the court correctly denied severance on the basis of
second-tier Drougas factors, see infra, we need not consider

whether such a conditional proffer necessarily fails the
Drougas test.

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concerns for judicial economy in a lengthy conspiracy trial,

and the fact that Cohen himself could testify to some of the

issues raised by Smith. It decided that these factors

militated against severance.

The district court relied primarily upon factors

specifically authorized by Drougas. Judicial economy is

obviously not dispositive, but it is important in a lengthy

conspiracy trial. Most tellingly, the district court found

that under the second tier of Drougas factors, Smith's

artfully-worded affidavits were not significant when

considered in relation to Cohen's theory of defense. Smith

averred that there was "no agreement . . . wherein Cohen

agreed to provide documentation" to the credit unions "that

he knew was prepared in such a way so as to conceal . . . the

true recipients" of the loans. This adds little to Cohen's

plea of not guilty. To be "significan[t] in relation to the

defendant's theory of defense," Drougas, 748 F.2d at 19, the

codefendant's proffer has to do more than assert ultimate

facts. Cf. United States v. Ford, 870 F.2d 729, 732 (D.C.

Cir. 1989) (conclusory statements did not meet burden of

establishing the exculpatory "nature and effect" of the

codefendant's testimony). It should furnish facts that could

significantly advance the theory of defense. With its first-

hand exposure to the case, the trial court is in the best

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position to make this assessment. See O'Bryant, 998 F.2d at

25.

Cohen argues that it was an abuse of discretion for

the district court to consider his ability to testify to the

issues raised by the Smith affidavits. First, his own

testimony would necessarily seem self-serving; second, a

defendant's right not to testify might be infringed if his

ability to testify is given significant weight by a court

performing a Drougas analysis. We assume that the

defendant's ability to testify is an improper factor under

Drougas. The district court, however, was primarily

dissatisfied with Smith's proffer. See infra. Because

severance could have been denied on that basis alone, we do

not think the court accorded "significant weight" to an

improper factor. United States v. Gallo, 20 F.3d 7, 14 (1st

Cir. 1994) (quoting United States v. Roberts, 978 F.2d 17, 21

(1st Cir. 1992)).

Smith's affidavits were admittedly not without

exculpatory value. The second affidavit stated that "Robert

Cohen sent closing packages to Lynn Vasapolle . . . which

included copies of the Certificate of Beneficial Interest in

which the names of some of the co-defendants were included"

(emphasis added). Vasapolle allegedly informed Cohen in or

about 1989 that BCCU would no longer require such

certificates to be included in the closing packages.

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Finally, Smith averred that "despite the instructions from

Cohen[,] Vasapolle would alter and remove files from BCCU."

As the following colloquy shows, however, even the most

promising portions of Smith's affidavits offer less than

meets the eye:

Court: I understand that that's a

significant part of [Cohen's] defense.

Counsel: Yes, it is, your Honor.

Court: That the closing packages were

all sent in an appropriate form.

Counsel: Exactly.

Court: And after they left Mr. Cohen's

hands, this witness and other
conspirators altered them. I have been
looking in these affidavits for support
for that proposition. And while there is
some circumstantial evidence that is
consistent with that proposition, nowhere

does Mr. Smith say that. Paragraph 3 [of

the second affidavit] doesn't say it,
especially if we're talking [about] the
period once the investigation [of BCCU]
started.

(Emphasis added.)

We think that the district court's on-the-spot

assessment of severability was beyond reproach. We recognize

that there were "very real arguments" in favor of severance,

such that in the exercise of its discretion, the court could

have ordered separate trials. The very closeness of the

question, however, convinces us that there was no abuse of

discretion.

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Finally, Devaney argues that severance should have

been granted because he wished to call Cohen as a witness to

show that he relied in good faith upon the advice of counsel.

This argument was not made to the district court and,

therefore, has been waived. United States v. Zannino, 895

F.2d 1, 17 (1st Cir.), cert. denied, 494 U.S. 1082 (1990).

We note that Devaney's initial motion for severance argued

that Cohen's anticipated testimony would be antagonistic, not

exculpatory.

C. Reputation evidence
C. Reputation evidence

Cohen challenges the district court's ruling that

he could not elicit evidence of his reputation for

truthfulness and veracity until he had taken the stand.

Irene Petri, a paralegal and secretary for Cohen's law firm,

was called as a witness by both the government and Cohen.

Cross-examining Petri during the government's case, counsel

for Cohen asked whether she had formed an opinion about

Cohen's reputation for truthfulness and veracity. The

district court sustained the government's objection and

instructed counsel to "[m]ove on." At sidebar, the court

explained:

Mr. Zalkind, first, I don't take kindly
to your trying to get reputation evidence
from this witness before your fellow's
testified. His reputation's not at issue
here, he has to take the stand before his
reputation for truth and veracity is at
issue.

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Cohen never took the stand. He made no attempt to revisit

the issue when he called Petri as a defense witness, and he

called none of the character witnesses on his trial list. In

fact, he failed to raise the issue in several post-trial

motions for new trial and acquittal. Seven months after the

trial and on the eve of sentencing, Cohen moved for release

pending appeal and raised the issue for the first time.

The government concedes that even if a criminal

defendant does not testify, evidence of his truthfulness and

veracity may be admitted where such character traits are

"pertinent" to the case. See Fed. R. Evid. 404(a)(1); United

States v. Lilly, 983 F.2d 300, 306 (1st Cir. 1992). But the

erroneous ruling did not, as Cohen claims, "place[] an entire

facet of the defense off-limits." Even before the government

rested, the court openly questioned its prior ruling that

Cohen should take the stand before recalling Petri to testify

to statements he had made in her presence. "Suppose Mr.

Cohen doesn't testify . . . . I'm hesitant to condition

things on his testifying. He has an absolute right not to

testify." True, the district court did not refer

specifically to reputation testimony; but under these

circumstances, the challenged ruling must be considered

provisional, not final.

In its order denying Cohen's motion for release

pending appeal, the district court found the erroneous ruling

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22

harmless in light of "the ability of defense counsel to

return to the issue and proffer such evidence afresh." We

agree with this assessment. Counsel should have attempted to

offer reputation evidence, either through Petri, whom he

recalled, or the other character witnesses. Cf. United

States v. Holmquist, 36 F.3d 154, 162-66 (1st Cir. 1994)

(exclusion of evidence pursuant to a provisional in limine

pretrial order may be challenged on appeal only if the party

unsuccessfully attempted to offer such evidence in accordance

with the terms specified in the order); Earle v. Benoit, 850

F.2d 836, 847 (1st Cir. 1988) (preliminary ruling such as a

ruling in limine does not excuse failure to make an offer of

proof). In short, Cohen abandoned the issue at trial.

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23

D. The striking of Huber's direct testimony
D. The striking of Huber's direct testimony

As counsel for Cohen was about to make his closing

argument, the district court made the following ruling:

"[T]hose things which Huber testified that Cohen said to him

. . . I'm striking that out so don't argue what Cohen said to

Huber. You may argue what Huber said to Cohen." Cohen

claims that he would have taken the stand had he known that

his statements to Huber would be stricken; the ruling thus

deprived him of his right to testify in his own defense.

We are not persuaded. The striking of Huber's

testimony may have upset his trial strategy, but it did not

render Cohen less able to testify. Cohen never moved to

reopen the evidence so that he could take the stand. Under

these circumstances, we see no deprivation of the right to

testify in one's own defense.

Before the conclusion of closing arguments, Cohen

filed an affidavit stating that he "would have chosen to

testify" had he known that his testimony was necessary for

the admission of Huber's entire testimony. In his reply

brief, Cohen argues that his affidavit was the "functional

equivalent" of a motion to reopen evidence, assuming such a

motion was required, and that the district court should have

inquired whether Cohen wished to testify. Nothing in the

affidavit or in counsel's arguments to the district court,

however, suggested that Cohen still wished to take the stand.

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24

Cohen also argues that the stricken portion of

Huber's testimony was admissible for the fact that it was

made and for his state of mind, not for the truth of anything

asserted. Any error in this evidentiary ruling was harmless.

The jury was instructed that it could consider "the fact that

Mr. Cohen went to Huber, the fact that he made disclosures to

Mr. Huber . . . and the testimony of Mr. Huber about what he

said to Mr. Cohen . . . ." The jury had heard from Vasapolle

that the codefendants made several disclosures during their

post-takeover meeting that apparently took Cohen by surprise.

In light of Huber's admitted testimony that Cohen could not

yet "reveal . . . this information, which had been received

from these three persons as clients," the jury could have

reconstructed the apparent purpose of Cohen's consultation.

There was an adequate evidentiary basis for the jury to infer

Cohen's then-existing state of mind, even assuming that the

stricken part of Huber's testimony was admissible for that

purpose. Indeed, counsel for Cohen argued this point in his

closing as if the stricken testimony were still in evidence:

This is a case of a lawyer who has now
heard his clients admitting to crimes.
What does he do next? What's his state
of mind? . . . .

[H]e then went to the . . . professor.
And after having this long conversation
with him, the professor told him you
cannot disclose this information until
such a time comes when maybe you may have
to.

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The court's ruling striking the testimony of what

Cohen said to Huber may not have come at an ideal time; but

Huber's testimony seemed to catch everyone -- even counsel

for Cohen -- by surprise.4 We conclude that the court's

effort to control the fallout from its Bruton ruling did not

unduly prejudice Cohen's right to present his defense.

E. Multiplicity of charges
E. Multiplicity of charges

Devaney argues that the indictment was

multiplicitous in various ways. His first claim, that Count

1 (conspiracy) was multiplicitous with all of the substantive

counts, ignores the principle that "conspiracy to commit an

offense and the subsequent commission of that crime normally

do not merge into a single punishable act." Iannelli v.

United States, 420 U.S. 770, 777 (1975).

We think the other claims of multiplicity are

similarly unfounded. The bank fraud counts (Counts 2-6) were

not multiplicitous with each other, even though they relate

to a single scheme to defraud, because separate trusts,

trustees, properties, and sums of money were involved. Each

loan transaction was a separate execution of the fraudulent

scheme. United States v. Brandon, 17 F.3d 409, 421 n.8 (1st

Cir.), cert. denied, 115 S. Ct. 80 (1994).

4. Counsel for Cohen: "Frankly, I never prepared the
professor. I just said let's have your best memory. I saw
him out here for about ten minutes and that was it. What he
remembered was, quite frankly, pretty astonishing to me, he
has an excellent memory."

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26

The money laundering counts were not multiplicitous

with the bank fraud counts. Bank fraud and money laundering

do not constitute a single offense within the meaning of the

test of Blockburger v. United States, 284 U.S. 299 (1932).

Money laundering (technically, an unlawful "monetary

transaction") is defined as knowingly engaging "in a monetary

transaction in criminally derived property . . . ." 18

U.S.C. 1957. There is no requirement that the defendant

must have committed the crime (here, the bank fraud) from

which the property was "derived." In fact, Congress

"intended money laundering to be a separate crime distinct

from the underlying offense that generated the money." United

States v. LeBlanc, 24 F.3d 340, 346 (1st Cir.), cert. denied,

115 S. Ct. 250 (1994).

Finally, the four money laundering counts were not

multiplicitous of each other merely because they flow from a

single transaction that took place in a single day. The time

period is of no moment. Each count charges a discrete

"transfer . . . of funds" to a distinct payee "by, through,

or to a financial institution" within the meaning of the

statute. 18 U.S.C. 1957(f)(1).

F. The sufficiency of evidence
F. The sufficiency of evidence

Devaney argues that the district court in effect

acquitted him on Count 1 (conspiracy) when it made an

evidentiary finding under Fed. R. Evid. 801(d)(2)(E) and

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27

United States v. Petrozziello, 548 F.2d 20 (1st Cir. 1977),

that certain alleged coconspirator statements were not

admissible against Devaney because the court did not "find by

a fair preponderance of the evidence that Mr. Devaney is a

co-conspirator in the overarching or big or continuing

conspiracy . . . ." Petrozziello rulings are not findings on

whether the evidence is sufficient for a count to go to the

jury. See United States v. Pitocchelli, 830 F.2d 401, 403

(1st Cir. 1987) (district court properly excluded

coconspirator's hearsay statements while refraining from

disturbing jury finding of conspiracy). The district court

plainly held that there was sufficient evidence for the

conspiracy charge against Devaney to go to the jury.5

Devaney argues that there was insufficient evidence

to support his conviction on Count 1 (conspiracy), Counts 5-7

(bank fraud), and Count 19 (money laundering). In making

this argument, he bears "the heavy burden of demonstrating

that no reasonable jury could have found [him] guilty beyond

a reasonable doubt." United States v. Innamorati, 996 F.2d

456, 469 (1st Cir.), cert. denied, 114 S. Ct. 409 (1993). We

review the evidence in the light most favorable to the

5. Because Devaney was never, as he claims, "functional[ly]
. . . acquitt[ed]" of the conspiracy count, we need not
address his claims of double jeopardy and collateral
estoppel, or his contention that the Petrozziello ruling

compelled a directed verdict of acquittal on the substantive
counts of bank fraud.

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28

government, "drawing all plausible inferences in its favor

and resolving all credibility determinations in line with the

jury's verdict." Id.

1. The overarching conspiracy
1. The overarching conspiracy

The evidence against Devaney tended to show the

following. Devaney owned a one-third interest along with

Smith and Mangone in eleven of the trusts that had received

"participation" loans.6 He also owned a one-third interest

in some of the trusts that were involved in sham "rollover"

sales. In all, Devaney received nearly one million dollars

in excess proceeds from the fraudulent loans.

Devaney, the only outsider to the credit unions,

was valuable to the conspiracy precisely because he was an

outsider. Devaney's role in the conspiracy can be summarized

as follows: he (1) identified the target properties and

negotiated for their purchase by Mangone, Smith, and himself;

(2) falsely represented that he and his wife were the sole

owners of trusts that were jointly owned by Smith and

Mangone; (3) signed purchase and sale agreements with

inflated purchase prices that were submitted to BCCU; (4)

recruited putative borrowers, and signed indemnification

agreements assuring them that they would not be liable for

loans; (5) concealed from Digital's loan officer the fact

6. Participation loans were loans administered by BCCU and
largely funded by Digital, the "participating" institution.
These loans ranged from $1,200,000 to over $4,000,000.

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29

that Mangone, president of Digital, was a beneficiary of one

of the trusts; and (6) signed a purchase and sale agreement

as the purported buyer in a rollover sale from one trust to

another. From this evidence, the jury reasonably found that

Devaney provided the "front" for the grand conspiracy.

2. Bank fraud
2. Bank fraud

In light of the district court's Petrozziello

finding, Devaney argues that certain (unspecified) statements

and acts of his alleged coconspirators should have been

excluded from the case against him, leaving insufficient

evidence to support his conviction of bank fraud. This

argument is made in so perfunctory a manner that it must be

deemed abandoned. Zannino, 895 F.2d at 17. Devaney makes no

effort to isolate any evidence erroneously admitted against

him, or to show that the district court's limiting

instructions were somehow inadequate.

Devaney argues that he made no material

misrepresentation under 18 U.S.C. 1344(2) because neither

credit union had a written policy requiring the disclosure of

trust beneficiaries.7 We agree that 1344(2) requires a

7. 18 U.S.C. 1344 provides: "Whoever knowingly executes,
or attempts to execute, a scheme or artifice --

(1) to defraud a financial institution; or

(2) to obtain . . . moneys . . . [from] a financial
institution, by means of false or fraudulent pretenses,
representations, or promises; [shall be guilty of an offense
against the United States]." Although we have held that

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30

material misrepresentation. See, e.g., United States v.

Davis, 989 F.2d 244, 247 (7th Cir. 1993); United States v.

Sayan, 968 F.2d 55, 61 n.7 (D.C. Cir. 1992). Devaney

nonetheless misses the forest for the trees. It is

inconceivable that the inflated loans would have been issued

had the credit unions known, not only the identity of the

true owners of the trusts (the only misrepresentation Devaney

addresses), but also the true purchase price of the

properties, and the fact that one of the loans for which

Devaney was convicted was used to finance a sham "rollover"

sale between two of his trusts. There was sufficient

evidence to show that Devaney "made false statements or

misrepresentations to obtain money" from the credit unions.

Brandon, 17 F.3d at 424 (explaining 18 U.S.C. 1344(2)).

3. Money laundering
3. Money laundering

Devaney argues that the evidence did not show that

he knowingly engaged in a monetary transaction involving

criminally derived funds, i.e., the proceeds from the

fraudulent loan to the Curtis Village Realty Trust II. He

claims that the loan proceeds at issue came from an earlier,

legitimate loan to the Curtis Village trust -- not from the

fraudulent BCCU loan.

1344(1) does not require a material misrepresentation, United

States v. Fontana, 948 F.2d 796, 802 (1st Cir. 1991), the

district court did not so instruct the jury, and we do not
rely upon 1344(1) here.

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31

We have already upheld Devaney's conviction on the

parallel count of bank fraud, see supra, and we now reject

Devaney's argument of mistaken identity. The government's

financial auditor traced the proceeds from the BCCU loan to a

$100,000 check payable to Devaney. Thus, the jury reasonably

found that Devaney had received funds that were "criminally

derived." 18 U.S.C. 1957(a). The jury also reasonably

inferred that Devaney "knowingly" received his share of the

fraudulent loan. Id.

G. Waiver of motion for mistrial
G. Waiver of motion for mistrial

Devaney asserts that he was denied due process

because the district court held two conferences on his motion

for mistrial in his absence and accepted his waiver of

possible mistrial despite telltale signs that the waiver was

not intelligent, voluntary, and knowing.

As a threshold matter, we doubt that the Due

Process Clause prohibits counsel from waiving a pending

motion for mistrial on behalf of an absent defendant.

Devaney waived, not a mistrial ruling in hand, but one in the

bush. Moreover, the record does not show whether Devaney was

in fact absent from the courtroom when counsel entered the

waiver, or whether he made an informed decision after full

consultation with counsel. Devaney's extra-record

allegations are more properly made to the district court as

part of a claim of ineffective assistance of counsel. We see

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32

no due process violation in the district court's acceptance

of the waiver.

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33

H. Ineffective assistance of counsel
H. Ineffective assistance of counsel

Lacking a sufficiently developed record with

respect to the waiver of mistrial, as well as trial counsel's

alleged conflict of interest, we think that Devaney's claim

of ineffective assistance should first be raised in the

district court. See United States v. Daniels, 3 F.3d 25, 26-

27 (1st Cir. 1993).

I. Jury instructions
I. Jury instructions

Cohen challenges the jury instructions on various

grounds.

1. Duty to disclose
1. Duty to disclose

Cohen argues that the district court erred in

instructing the jury that "failure to disclose a material

fact may . . . constitute a false or fraudulent

misrepresentation" under 18 U.S.C. 1344 if the defendant

was under "a general professional or specific contractual

duty to make the disclosure," knew that the disclosure had to

be made, and failed to make the disclosure with the specific

intent to defraud.

In United States v. Cassiere, 4 F.3d 1006, 1022-23

(1st Cir. 1993), we approved a virtually identical

instruction regarding duty to disclose. Cohen argues that

the instruction was erroneous in this case because there was

no evidence regarding an attorney's duty of disclosure, and

because the jury may have confused Cohen's efforts to protect

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34

the confidence of his clients with acts of fraudulent

misrepresentation.

These objections, which are unique to Cohen's

defense, were not preserved below. We therefore review the

instruction only for plain error. See Fed. R. Crim. P. 30

(grounds for objection to charge must be stated distinctly);

United States v. O'Connor, 28 F.3d 218, 220-21 (1st Cir.

1994).

The instruction regarding duty to disclose was not

plainly erroneous, if it was erroneous at all. Cohen

surmises that the jury "punished" him for withholding

privileged client information from federal regulators. A

more plausible explanation of the verdict, one that does not

presume jury confusion, is that Cohen was convicted on the

evidence of his affirmative misrepresentations.

2. Fraudulent intent
2. Fraudulent intent

In United States v. Gens, 493 F.2d 216, 222 (1st

Cir. 1974), which involved willful misapplication of funds by

a bank officer under 18 U.S.C. 656, we held that "where the

named debtor is both financially capable and fully

understands that it is his responsibility to repay, a loan to

him cannot -- absent other circumstances -- properly be

characterized as [illegal], even if bank officials know he

will turn over the proceeds to a third party" (emphasis

added). Invoking Gens in the bank fraud context, Cohen

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35

argues that the district court erred in not giving a proposed

instruction that would have required proof that --

the trustee who made the representation
and who signed individually as the
borrower or guarantor on the loan did not
believe that the credit union could look
to him for payment of any deficiency on
the loan, and the particular defendant
you are considering was responsible for
giving the trustee that belief.

The trustee's belief, and the defendant's assurances of non-

liability, would certainly constitute evidence of bank fraud;

such evidence, however, is not an element of the offense.

See United States v. Brennan, 994 F.2d 918, 924 n.14 (1st

Cir. 1993) (explaining Gens; absence of evidence of

assurances to the named debtor would not mandate reversal

under misapplication statute). The district court did not

err in refusing to give the requested instruction. Moreover,

"other circumstances," including the dual sets of

certificates of beneficial interest found in Cohen's files,

support the jury finding of fraudulent intent. Gens, 493

F.2d at 222.

3. Willful blindness
3. Willful blindness

Cohen argues that the district court should have

corrected the prosecutor's closing argument regarding his

willful blindness. During the March 23, 1991 meeting at

Cohen's office, Vasapolle asked how she could explain the

fake trustee financial statements in BCCU's files. Cohen,

who was unaware of these statements, became upset and said,

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36

"I don't think I want to hear this." Cohen then "got up and

left and took a walk." In his closing, the prosecutor argued

that Cohen's conduct illustrated his willful blindness.

Cohen made an objection, but only after the prosecutor had

moved on to a more general illustration.

Even if the objection was preserved, we see no

error in permitting the argument of willful blindness.

Vasapolle testified that during the same meeting, Cohen

explained that "the only thing he [Cohen] could do" to

protect the conspirators "would be to take the certificate of

beneficial interests out of the file . . . . And he did

agree to take them out." The jury could have inferred from

this evidence that Cohen pledged to do his part to conceal

the conspiracy, and then deliberately walked out to avoid

hearing the plans of his coconspirators.

4. Trust provisions
4. Trust provisions

The district court instructed the jury that under

Massachusetts law, there is nothing inherently wrong or

improper about using nominee trusts to buy and sell real

estate:

A trust is a legal instrument. Its terms
are intended to govern the conduct of the
participants. To violate these terms
isn't a crime. Civil liability may
attach, but it's not a crime. But you
may consider any evidence of violating or
ignoring the terms of a trust as bearing
on the intent of the person you're
considering with respect to the crimes
charged.

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37

Cohen argues that the district court erred by

refusing to instruct the jury that "a written contract could

be changed any time by the parties orally." The district

court also rejected a requested instruction that "oral

changes in [trust] membership are permissible."

We see no error in this decision. Even assuming

that beneficial interests in a real estate nominee trust can

be orally conveyed, the district court's instruction is not

contrary: a legitimate oral modification of a trust is not

evidence that the defendants "violat[ed] or ignor[ed] the

terms of a trust." At any rate, there was no evidence of any

oral modification, and the district court was not required to

give a proposed instruction merely because it would have been

more favorable to the defendant.

5. Reasonable doubt and presumption of innocence
5. Reasonable doubt and presumption of innocence

Invoking the Supreme Court's recent decision in

Victor v. Nebraska, 114 S. Ct. 1239 (1994), Cohen argues that

the district court should have explained the concept of

reasonable doubt to the jury. Victor is consistent with our

holding in United States v. Olmstead, 832 F.2d 642, 646 (1st

Cir. 1987), cert. denied, 486 U.S. 1009 (1988), that district

courts need not define the concept of reasonable doubt so

long as the phrase is not buried as an aside. See United

States v. Neal, 36 F.3d 1190, 1202-04 (1st Cir. 1994)

(reviewing recent Supreme Court decisions). The Constitution

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38

"neither prohibits trial courts from defining reasonable

doubt nor requires them to do so as a matter of course."

Victor, 114 S. Ct. at 1243 (citations omitted).

Cohen also argues that the district court erred by

refusing to reinstruct the jury on the presumption of

innocence at the end of the case. Although the closing

instruction on presumed innocence could have been more

explicit, the totality of the instructions assures us that

the jury did not "retire[] to deliberate less than fully

aware of the presumption of innocence." United States v. Van

Helden, 920 F.2d 99, 102 (1st Cir. 1990) (quoting United

States v. Ruppel, 666 F.2d 261, 274-75 (5th Cir.), cert.

denied, 458 U.S. 1107 (1982)). The district court repeatedly

stated that the government bore the burden of proving its

case beyond a reasonable doubt; gave a forceful opening

instruction on the presumption of innocence; reminded the

jury at the end of the case that each of the defendants

"started the trial presumed innocent"; and admonished the

jury that to treat the indictment as evidence against the

accused would be to "violate your oath as jurors."

J. Cumulative error
J. Cumulative error

Cohen argues that the cumulative impact of his

assigned errors requires reversal, even if the individual

errors do not. Because we have found no abuse of discretion

in the denial of Cohen's motion for severance, and harmless

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39

error, if error at all, only in the striking of Huber's

direct testimony, the argument of cumulative error fails.

See Brandon, 17 F.3d at 456 (rejecting similar argument where

review of trial proceedings as a whole revealed no "pervasive

unfairness or any error or combination of errors that

deprived defendants of due process").

K. Sentences
K. Sentences

1. Aggravating role
1. Aggravating role

Cohen argues that the district court clearly erred

in finding that he was a supervisor or manager of extensive

criminal activity. See U.S.S.G. 3B1.1(b). In United

States v. Ovalle-Marquez, 36 F.3d 212, 225 (1st Cir. 1994),

cert. denied, 1995 WL 21668, we noted that a defendant "is a

manager or supervisor where he 'exercised some degree of

control over others involved in the commission of the crime

or he [was] responsible for organizing others for the purpose

of carrying out the crime'" (quoting United States v. Fuller,

897 F.2d 1217, 1220 (1st Cir. 1990)). To warrant the three-

level adjustment under 3B1.1(b), "the defendant . . . must

have 'organize[d] at least one [other] criminally responsible

individual.'" United States v. Dietz, 950 F.2d 50, 53 (1st

Cir. 1991) (dictum) (quoting United States v. DeCicco, 899

F.2d 1531, 1537 (7th Cir. 1990) (internal citation omitted)).

The district court found that Cohen had "organized"

Vasapolle. Vasapolle testified that Cohen instructed her

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40

regarding the mechanics of the participation loans -- for

example, what documents to include in the BCCU files, and

what checks to issue following a closing. These acts, which

Cohen calls "ministerial," were not illegal per se, but they

were performed under Cohen's instruction by someone who was

unquestionably a knowing participant in the crime. Bank

fraud by nature rests upon ministerial acts. The district

court's finding that Cohen "organized" Vasapolle was not

clearly erroneous.

We feel compelled to make one clarification. The

prosecutor seriously distorted the record during the

sentencing hearing when he suggested that Cohen told

Vasapolle to "get [the blank certificates of beneficial

interest] signed." Vasapolle testified that she was

instructed by Mangone to obtain a short form certificate of

beneficial interest from Cohen. Mangone -- not Cohen --

asked her to fill out the certificates with the names of the

trustees and their spouses. Before the prosecutor made his

misrepresentation, however, the district court had already

found Cohen to be a manager or supervisor. The court also

properly rejected the government's recommendation of a four-

level adjustment for an "organizer or leader," based on

evidence that Mangone had the greater control over Vasapolle.

2. Ex post facto clause
2. Ex post facto clause

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Cohen argues that the district court violated the

ex post facto clause of the Constitution by imposing a four-

level enhancement under U.S.S.G. 2F1.1(b)(6)(A) for conduct

jeopardizing the safety and soundness of a financial

institution. "Barring any ex post facto problem, a defendant

is to be punished according to the guidelines in effect at

the time of sentencing." United States v. Harotunian, 920

F.2d 1040, 1041-42 (1st Cir. 1990).

Section 2F1.1(b)(6)(A) took effect on November 1,

1990, after all of the loans described in the indictment had

closed. The conspiracy to defraud charged in Count 1,

however, allegedly extended into March 1991; and the district

court found that Cohen's "criminal conduct" -- meaning the

charged conduct of which he was convicted -- "continued well

after the enactment of these guidelines." See United States

v. Bennett, 37 F.3d 687, 699 (1st Cir. 1994) (distinguishing

charged conduct from relevant conduct for ex post facto

purposes). There was evidence that in early 1991, Cohen

actively misled BCCU regarding the status of the New

Adventures Realty Trust loan. Because the offense of

conviction continued after November 1, 1990, the district

court did not violate the ex post facto clause by applying

2F1.1(b)(6)(A). See United States v. Arboleda, 929 F.2d 858,

870-71 (1st Cir. 1991).

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42

Cohen argues that the relevant question is not when

his offense of conviction ended, but whether any of his

criminal acts after November 1, 1990 substantially

jeopardized the safety and soundness of a financial

institution. Assuming that Cohen has correctly framed the

question, we think the four-level enhancement was still

proper. By trying to throw BCCU and federal regulators off

the scent, Cohen substantially jeopardized their ability to

detect and recoup bad loans that BCCU had already made.

3. Double counting
3. Double counting

Cohen argues that the district court engaged in

improper "double counting" under the guidelines when it made

upward adjustments for more than minimal planning (two

levels), supervisory role (three levels), abuse of position

of trust (two levels), jeopardizing the soundness of a

financial institution (four levels), and the amount of loss

(fifteen levels). "[I]n the sentencing context double

counting is not rare -- and the practice is often perfectly

proper." United States v. Pierro, 32 F.3d 611, 622 (1st Cir.

1994), cert. denied, 63 U.S.L.W. 3539 (1995). Cohen makes no

effort to show that double counting in fact occurred, or that

either "an explicit prohibition against double counting []or

a compelling basis for implying such a prohibition exists" in

his case. United States v. Lilly, 13 F.3d 15, 19 (1st Cir.

1994) (noting that "several [guideline] factors may draw upon

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43

the same nucleus of operative facts while nonetheless

responding to discrete concerns"). Accordingly, we deem the

argument waived. Zannino, 895 F.2d at 17.

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44

4. Obstruction of justice
4. Obstruction of justice

Smith argues that the district court erred in

making a two-level adjustment for obstruction of justice

under U.S.S.G. 3C1.1. The court based its decision on

Smith's destruction of certain documents. According to

Vasapolle, Smith stated that "he was going to burn [his

closing books] in his fireplace." The government also

recovered two pages from a document that Smith had thrown

away, including the face page of a purchase and sale

agreement on which the price had been changed with correction

fluid. On these facts, the district court's finding that

Smith in fact intentionally destroyed documents was not

clearly erroneous.

Smith also argues that the documents he discarded

were merely copies of other documents already obtained by the

government, and therefore immaterial to his case. Smith

overlooks the purchase and sale agreement, which is unique,

material evidence of his participation in the bank fraud.

See U.S.S.G. 3C1.1, comment. (n.5) (evidence is material if

it "would tend to influence or affect the issue under

determination").

5. Downward departure
5. Downward departure

Smith argues that the district court should have

considered a downward departure based on, among other things,

the multiple causes of the monetary loss ascribed to him.

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Smith makes no claim that the district court mistakenly

believed it lacked the authority to depart downward. We

therefore have no jurisdiction to review its refusal to do

so. United States v. Hernandez, 995 F.2d 307, 314 (1st

Cir.), cert. denied, 114 S. Ct. 407 (1993).

6. Restitution
6. Restitution

Devaney argues that the district court abused its

discretion when it ordered him to pay restitution "not to

exceed ten million dollars." The district court was required

to consider the financial resources of the defendant and his

earning ability, among other factors. See 18 U.S.C.

3664(a); United States v. Springer, 28 F.3d 236, 239 (1st

Cir. 1994).

In his allocution, Devaney attested to his past

success as a developer of million-dollar properties. This

implies substantial (if now diminished) earning ability.

Although the court found that Devaney "doesn't have any

money," it noted that Devaney had "ke[pt] his ill-gotten

gains." Significantly, the exact amount and schedule of

restitution were left open by the district court. In framing

a flexible order that can respond to Devaney's changing

financial status, the district court did not abuse its

considerable discretion. See United States v. Lombardi, 5

F.3d 568, 573 (1st Cir. 1993).

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III. CONCLUSION
III. CONCLUSION

The defendants' convictions and sentences are

Affirmed.
Affirmed.

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