United States v. Cali

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

No. 95-2271

UNITED STATES,

Appellee,

v.

PHILIP M. CALI,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Robert E. Keeton, U.S. District Judge]

Before

Lynch, Circuit Judge,

Aldrich and Bownes, Senior Circuit Judges.

John P. Ward with whom David Duncan and Zalkind, Rodriguez, Lunt

& Duncan were on brief for appellant.

Brian T. Kelly, Assistant United States Attorney, with whom

Donald K. Stern, United States Attorney, were on brief for appellee.

June 25, 1996

BOWNES, Senior Circuit Judge. On June 1, 1995,
BOWNES, Senior Circuit Judge.

defendant-appellant Philip Cali ("Cali") pled guilty to count

sixty-nine of a seventy-one count indictment charging him

with operating an illegal gambling business in violation of

18 U.S.C. 1955, 2. Cali now appeals the fifteen-month

sentence of imprisonment he received, contending that the

district court enhanced the prison term mandated by the

Sentencing Guidelines ("Guidelines") because of the erroneous

view that U.S.S.G. 3B1.1 permits a base offense level

adjustment for mere management of assets or property. Cali

also maintains that the district court's alternative holding

that upward departure was appropriate because his conduct

fell outside section 3B1.1's heartland was clearly erroneous.

We agree that mere management of assets is insufficient for a

base offense level adjustment under section 3B1.1, but find

that the district court's alternative determination cures any

defect in its holding. Accordingly, we affirm. Jurisdiction

stems from 18 U.S.C. 3742.

I.
I.

THE FACTS
THE FACTS

We consider the facts as set forth in the

unobjected-to portions of the Presentence Investigation

Report ("PSI") and the transcript of the sentencing hearing.

See, e.g., United States v. Peppe, 80 F.3d 19, 20 (1st Cir.

1996); United States v. Grandmaison, 77 F.3d 555, 557 (1st

-2-
2

Cir. 1996). On October 15, 1993, Philip Cali was arrested

pursuant to count sixty-nine of a seventy-one count

indictment charging him with conducting, financing, managing,

supervising, directing, and owning all or part of an illegal

gambling business which involved five or more persons between

October 1986 and December 1992. The result of an eight year

Massachusetts State Police ("State Police") investigation

into large-scale racketeering conspiracies, the indictment

named nine individuals, four of whom -- Joseph Yerardi

("Yerardi"), William Maguire ("Maguire"), Anthony Grabiec Jr.

("Grabiec"), and Salvatore M. DeAngelis ("DeAngelis") -- were

charged in count sixty-nine with Cali. Cali, who is sixty-

five and has a criminal history which includes convictions

for gambling-related activities, was not charged in any of

the indictment's other counts.

During the course of their racketeering

investigation, the State Police obtained authorization to

intercept phone conversations over a cellular telephone

utilized by Yerardi from June to August 1991. Their

surveillance of the telephone revealed that Yerardi presided

over extensive loansharking and gambling businesses. The

gambling business, which operated under the auspices of

Boston's Winter Hill Gang and generated funds for Yerardi's

loansharking business, included over twenty-five bookmaking

agents, two principal offices, and had a gross daily revenue

-3-
3

of $2,000.00. Though Yerardi headed the gambling enterprise,

Maguire was its principal supervisor and the individual

responsible for collecting money owed to the organization and

paying out money owed to agents and bettors.

Transcripts of numerous calls between Yerardi and

Cali intercepted by the State Police revealed that Cali and

DeAngelis played the same role in the gambling enterprise,

though they operated out of different locations. Yerardi

stationed Cali, who frequently placed bets with the business

and was often one of its debtors, at one of the business's

principal bookmaking offices to receive calls from the

various agents. The agents, who identified themselves by

code only and received a percentage of the business's profits

as compensation, communicated information about sporting

event bets to Cali. After taking and recording that

information, Cali transmitted it directly to Yerardi, with

whom he was in daily telephone contact. The majority of the

calls intercepted by the State Police were made by Yerardi to

Cali at the bookmaking office.

Cali often reviewed betting results with and

reported agents' makeup figures -- those monies that have to

be worked off before any money can be paid out -- to Yerardi

during these telephone conversations. He also assisted in

charting bets for the gambling business. Charting involves

tracking daily bets made by agents and monitoring the

-4-
4

business's projected risk of loss on individual sporting

events. Though Cali answered directly to Yerardi and was

responsible for completing charting analyses, there is no

evidence that he received a percentage of the business's

profit or played any role in setting policy regarding odds or

bet placement.

On June 1, 1995, Cali pled guilty to participating

in the operation of an illegal gambling business. The

district court scheduled a sentencing hearing and prior

thereto received a PSI from the Probation Department. The

PSI prepared by the Probation Department, to which both the

government and Cali registered objections, recommended a

total adjusted guideline offense level of ten. This

recommendation reflects a two level decrease in the base

offense for acceptance of responsibility. See U.S.S.G.

2E3.1(a); 3E1.1. The PSI concluded, based on the information

provided by the government and the defendant's description of

his duties that an adjustment for role in the offense would

not be warranted.

The Probation Department assigned Cali three

criminal history points for prior gambling convictions and,

as a result, placed him in Criminal History Category II. The

district court, however, later found that the Probation

Department had erroneously assigned Cali criminal history

points for offenses committed while working for Yerardi and

-5-
5

identified the appropriate criminal history category as I.

Placement in Criminal History Category I, at a total adjusted

offense level of ten, results in a sentencing range of six to

twelve months. II.
II.

THE SENTENCING HEARING
THE SENTENCING HEARING

At the sentencing hearing, Cali requested a

downward departure on the grounds that both he and his wife

suffered, inter alia, from serious heart conditions and

largely supported themselves on Social Security income

benefits that would be unavailable to them for any period

that Cali was incarcerated. The government disputed the

contention that Cali was entitled to departure on this basis

and objected to the two-point adjustment for acceptance of

responsibility recommended by the Probation Department.

Additionally, the government objected to the PSI's failure to

add four levels under section 3B1.1(a) for supervisory role,

arguing that an enhancement was warranted because Cali

managed people and assets within that guideline's meaning.

The government also argued that the Criminal History Category

I assignment Cali received did not adequately reflect the

seriousness of his past criminal history.

The district court denied the objections and

requests made by both Cali and the government. It refused

Cali's request for a health-related departure, concluding

that the factors cited by the defense did not, "separately or

-6-
6

together, justify departure." It also rejected the

government's objection to the two-point adjustment for

acceptance of responsibility recommended by the PSI.

Finally, the court found that the severity of Cali's criminal

history was not underrepresented by the amended criminal

history calculation and denied the government's request for a

four-level adjustment under section 3B1.1(a).

Nevertheless, the court found that Cali's role in

Yerardi's gambling enterprise warranted some enhancement in

his sentence and concluded, over Cali's objection, that a

three level increase in the offense level was appropriate.

It found that section 3B1.1(b) and Application Note 2's role

in the offense provisions permitted him to make a direct

adjustment to Cali's base offense level, but added that,

should this Court determine that section 3B1.1 does not

permit such an adjustment, it would employ an upward

departure, under United States v. Rivera, 994 F.2d 942 (1st

Cir. 1993), to impose a sentence outside the range prescribed

by the Guidelines to reach the same final sentence. Either

calculus results in a total adjusted offense level of

thirteen, which corresponds to a sentencing range of twelve

to eighteen months.

Accordingly, the court sentenced Cali to a fifteen-

month term of imprisonment and two years of supervised

release. It assessed Cali $50.00, as required by statute,

-7-
7

and imposed a fine of $3,000.00, without interest. In light

of Cali's medical problems, the court also made a

recommendation that Cali be placed in a facility, as close to

Massachusetts as possible, where adequate medical treatment

would be available to him.

III.
III.

STANDARD OF REVIEW
STANDARD OF REVIEW

Appellate review of a district court's application

of the Guidelines is a two-part process. United States v.

Joyce, 70 F.3d 679, 681 (1st Cir. 1995), cert. denied, 116 S.

Ct. 1556 (1996). We first determine the applicability of the

guideline to a particular case de novo. United States v.

McCarthy, 77 F.3d 522, 535 (1st Cir. 1996); United States v.

St. Cyr, 977 F.2d 698, 701 (1st Cir. 1992). After

determining the guideline's scope and meaning, we review the

district court's factual determinations for clear error,

"giv[ing] due deference to the district court's application

of the guidelines to the facts." Joyce, 70 F.3d at 681; see

also Koon v. United States, Nos. 94-1644, 94-8842, 1996 WL

315800 at * 8 (U.S. June 13, 1996); McCarthy, 77 F.3d at 535;

St. Cyr, 977 F.2d at 701. Because "[t]he determination of a

defendant's role in an offense is fact-specific," Joyce, 70

F.3d at 682, we will only disturb the district court's

findings regarding Cali's role in Yerardi's gambling

enterprise if they are clearly erroneous or based on a

-8-
8

mistake of law. See United States v. Frankhauser, 80 F.3d

641, 653 (1st Cir. 1996); United States v. Rostoff, 53 F.3d

398, 413 (1st Cir. 1995); United States v. Tejada-Beltran, 50

F.3d 105, 110-11 (1st Cir. 1995).

IV.
IV.

DISCUSSION
DISCUSSION

The small, but nevertheless real, difference

between a twelve and fifteen month prison term is ultimately

what is at stake in this appeal. Cali contends that he is

entitled to a reduction in his fifteen-month sentence because

twelve months is the maximum prison term he should have

received under the Guidelines. In support of this, he

maintains that the district court erroneously concluded that

section 3B1.1(b) permits a base offense level enhancement in

the absence of a finding that a defendant organized, lead,

managed, or supervised one or more participants in an illegal

enterprise involving five or more participants.

Additionally, Cali argues that the court's alternative

holding -- that an upward departure was appropriate in the

event section 3B1.1 precluded adjustment -- was clearly

erroneous because his conduct falls squarely within the

heartland of 18 U.S.C. 1955 offenses. We begin by

reviewing the claim that, absent a finding that a defendant

managed individuals, U.S.S.G. 3B1.1(b) precludes an

-9-
9

enhancement in the base offense level and discuss the

requirements for a 3B1.1 upward departure thereafter.

U.S.S.G. 3B1.1(b) Role in the Offense Adjustments
U.S.S.G. 3B1.1(b) Role in the Offense Adjustments

U.S.S.G. 3B1.1 punishes defendants in large-scale

criminal enterprises according to their relative

responsibility, meting out the most severe sentences to

individuals who hold leadership or management positions.

Tejada-Beltran, 50 F.3d at 111; United States v. Fones, 51

F.3d 663, 665 (7th Cir. 1995); United States v. Parmelee, 42

F.3d 387, 395 (7th Cir. 1994), cert. denied sub nom. Brozek-

Lukaszuk, 116 S. Ct. 63 (1995). The district court used this

guideline to elevate Cali's sentence on the theory that

section 3B1.1(b) permits an enhancement in a defendant's base

offense level for both management of individuals and assets.

Cali assigns error, contending that an enhancement in base

offense level can only be based on a finding that the

defendant managed other individuals. The government concedes

this point, but maintains that Cali's argument is moot

because the district court found that Cali's responsibilities

in Yerardi's gambling business included managing individuals,

as well as assets.

To make sense of these positions, we briefly review

section 3B1.1 and its history. Section 3B1.1 provides:

Based on the defendant's role in the
offense, increase the offense level as
follows:

-10-
10

(a) If the defendant was an organizer or
leader of a criminal activity that
involved five or more participants or was
otherwise extensive, increase by 4
levels.
(b) If the defendant was a manager or
supervisor (but not an organizer or
leader) and the criminal activity
involved five or more participants or was
otherwise extensive, increase by 3
levels.
(c) If the defendant was an organizer,
leader, manager, or supervisor in any
criminal activity other than described in
(a) or (b), increase by 2 levels.

Prior to 1993, courts were split as to whether a finding that

a criminal-enterprise defendant managed individuals was a

prerequisite to a section 3B1.1 base offense level

adjustment. See United States v. McFarlane, 64 F.3d 1235,

1237 (8th Cir. 1995). This Circuit took the view that "the

defendant must have exercised some degree of control over

others involved in the commission of the offense or . . .

must have been responsible for organizing others for the

purpose of carrying out the crime." United States v. Fuller,

897 F.2d 1217, 1220 (1st Cir. 1990); see also United States

v. Fuentes, 954 F.2d 151, 153 (3d Cir.), cert. denied, 504

U.S. 977 (1992); United States v. Mares-Molina, 913 F.2d 770,

773 (9th Cir. 1990). Other courts concluded that "a

defendant who did not supervise people [could] be considered

a manager or supervisor within the meaning of 3B1.1(b)."

United States v. Chambers, 985 F.2d 1263, 1267 (4th Cir.),

-11-
11

cert. denied, 114 S. Ct. 107 (1993); see also United States

v. Grady, 972 F.2d 889 (8th Cir. 1992).

On November 1, 1993, the Sentencing Commission

("Commission") weighed into this debate by issuing Amendment

500, which amended section 3B1.1 to include Application Note

2. That application note provides:

To qualify for an adjustment under this
section, defendant must have been the
organizer, leader, manager, or supervisor
of one or more other participants. An
upward departure may be warranted,
however, in the case of a defendant who
did not organize, lead, manage, or
supervise another participant, but who
nevertheless exercised management
responsibility over the property, assets,
or activities of a criminal organization.

Thus, Amendment 500 offered something to courts on both sides

of the section 3B1.1 debate. It made it clear, in accord

with the position we embraced in Fuller, 897 F.2d at 1220,

that section 3B1.1 adjustments are unavailable unless the

record shows that the defendant managed one or more

individuals, but also states that a finding that a defendant

managed assets instead of individuals could be a basis for

upward departure. Ironically, this attempt to define section

3B1.1's contours and operation created the dispute which lies

at the heart of this appeal.

Application Note 2 explains that section 3B1.1

adjustments and departures require different factual

findings, but does not clarify how, if at all, these devices

-12-
12

differ in terms of the sentencing calculation they mandate.

At the sentencing hearing, Cali argued that section 3B1.1

adjustments involve enhancements in the base offense level,

whereas section 3B1.1 departures involve enhancements in the

total adjusted offense level and must adhere to the framework

for Guidelines departures established by this Circuit in

Rivera, 994 F.2d at 942. The district court agreed that

section 3B1.1 adjustments effectuate increases in a

defendant's base offense level. See, e.g., United States v.

Capers, 61 F.3d 1100, 1109 (4th Cir. 1995), cert. denied, No.

95-7022, 1995 WL 752222 (U.S. May 20, 1996); Fones, 51 F.3d

at 669-70; McFarlane, 64 F.3d at 1239-40. It was not

persuaded, however, that the Commission intended to limit

section 3B1.1 departures to changes in the total adjusted

offense level:

THE COURT: My primary view of the matter
. . . is that the appropriate way to read
these guidelines is that that word
"departure" in Application Note 2 was not
being used in the technical sense of a
kind of departure that is controlled by
Rivera, by the decision-making structure

controlled by Rivera. Instead it's

talking about a calculation of the total
offense level.

The court reasoned that had the Commission intended the term

"departure" to have the same meaning in the role in the

offense context as it does elsewhere in the Guidelines, it

would have discussed role in the offense departures in

Chapter 5, Part K, of the Guidelines, which is explicitly

-13-
13

devoted to departures, and not in Chapter 3, Part B, which

primarily deals with base offense level adjustments. See

U.S.S.G. Chap. 3, Part B, Introductory Commentary ("This part

provides adjustments to the offense level based upon the role

the defendant played in committing the offense."). The

district court, therefore, held that both section 3B1.1

adjustments and departures affect base offense level.

This was error. We cannot agree, given the

circumstances surrounding the Commission's promulgation of

Application Note 2, that the sentence-calculation difference

between section 3B1.1 adjustments and departures "is . . .

inconsequential." See McFarlane, 64 F.3d at 1239. Simply

because role-in-the-offense departures are discussed in

Chapter 3, Part B, instead of Chapter 5, Part K, is not

persuasive evidence of an intent to treat section 3B1.1

adjustments and departures the same for sentence calculation

purposes. See Rivera, 994 F.2d at 948 ("Specific individual

guidelines may also encourage departures."). The language of

Application Note 2 persuades us that the two devices are, in

fact, different: section 3B1.1 adjustments are mandatory and

subject to the tripartite test set out by that guideline,

whereas departures made pursuant to that guideline are

discretionary. As the Eighth Circuit explained in United

States v. McFarlane, 64 F.3d 1235, 1239 (8th Cir. 1995):

If the sentencing court concludes that a
defendant has managed or supervised one

-14-
14

or more participants in a criminal
enterprise involving five or more total
participants, an adjustment is mandated -
- the court must enhance the defendant's
sentence by three levels. If, on the
other hand, the sentencing court
concludes that the defendant has merely
exercised a managerial role over the
property, assets, or activities of a
criminal enterprise involving five or
more participants, the court is possessed
of a certain degree of discretion
regarding the enhancement of the
defendant's sentence -- "[a]n upward
departure may be warranted."

We hold that section 3B1.1(b) and Application Note

2 preclude "management responsibility over property, assets,

or activities as the basis" for an enhancement to a

defendant's base offense level. See United States v.

Greenfield, 44 F.3d 1141, 1146 (2d Cir. 1995). Because the

government contends that the factual predicate for a section

3B1.1(b) adjustment exists in this case, we do not

immediately decide the question of whether section 3B1.1

departures must be analyzed under the Rivera framework.

Instead, we focus on whether the district court found that

Cali managed one or more individuals in a criminal enterprise

involving five or more participants and, if so, whether that

finding was clearly erroneous. See Tejada-Beltran, 50 F.3d

at 110.

Section 3B1.1(b) only applies where the record

shows that a defendant operated as a "manager or supervisor

and the criminal activity involved five or more participants

-15-
15

or was otherwise extensive." U.S.S.G. 3B1.1(b). Though

the Guidelines provide a list of seven factors -- which is

neither exhaustive nor imbued with "talismanic significance"

-- to assist courts in determining whether a defendant acted

as a leader or organizer within the meaning of section

3B1.1(a), United States v. Talladino, 38 F.3d 1255, 1260 (1st

Cir. 1994); see also Joyce, 70 F.3d at 683; Tejada-Beltran,

50 F.3d at 111; U.S.S.G. 3B1.1, Application Note 4, they do

not define "[t]he terms 'manager' and 'supervisor'." Joyce,

70 F.3d at 682. In the past, we have required some "degree

of control or organizational authority over others" to

support a section 3B1.1(b) adjustment. Fuller, 897 F.2d at

1220. Immediate or direct control over subordinates or

partners, while certainly an important factor to consider, is

not, however, a prerequisite to finding a defendant deserving

of added culpability or punishment. See Frankhauser, 80 F.3d

at 654; Tejada-Beltran, 50 F.3d at 112; United States v.

Payne, 63 F.3d 1200, 1212 (2d Cir. 1995), cert. denied, 116

S. Ct. 1056 (1996); Greenfield, 44 F.3d at 1146-47.

"Managerial status [generally] attach[es] if there is

evidence that a defendant, in committing the crime, exercised

control over, or was otherwise responsible for overseeing the

activities of, at least one other person." United States v.

Savoie, 985 F.2d 612, 616 (1st Cir. 1993); see also United

States v. Munoz, 36 F.3d 1229, 1240 (1st Cir. 1994), cert.

-16-
16

denied sub nom. Martinez v. United States, 115 S. Ct. 1164

(1995); see also United States v. Webster, 54 F.3d 1, 8 (1st

Cir. 1995); United States v. Castellone, 985 F.2d 21, 26 (1st

Cir. 1993).

The government contends that the court clearly

found that Cali served as a manager or supervisor in the

gambling enterprise and that this finding was adequately

supported by the transcripts of the conversations between

Yerardi and Cali intercepted by the State Police, Cali's

acceptance of responsibility statement, and affidavits

provided by State Trooper Tutungian. See Joyce, 70 F.3d at

682 (government must prove role in the offense by a

preponderance of the evidence and may do so by relying on

circumstantial evidence). Our review of the record, however,

reveals that the court's findings on this issue were less

than clear: there is a discrepancy between the findings the

district court made from the bench at Cali's sentencing

hearing and those it offered in its subsequent written

judgment.

Transcripts of the sentencing hearing suggest that

the court did conclude that Cali managed people and assets

for Yerardi's gambling business:

THE COURT: I find that the defendant's
role was more than simply that of record
keeper. He was that, as described in one
part of the testimony that's been
referred to as the trial of the Grabiec
case, but that was not the limit of his

-17-
17

participation. And it is my finding that
he was also coordinating the efforts of
others and the reports of others and
putting that together and advising
Yerardi about managerial decisions in the
operation of this ongoing enterprise over
a substantial length of time.
Those findings, in my view, under an
appropriate interpretation of the
guidelines support a three-point upward
adjustment in the calculation of the
total offense level so as to raise that
total offense level by three points from
the way it was calculated by the
presentence investigation report and thus
move it up to 13.

But the written judgment summarizing the court's findings and

decisions regarding the adjustments and departures requested

by the government and Cali does not cite management or

supervision of individuals as part of Cali's offense. It

omits the reference to individuals and refers only to Cali's

alleged

-18-
18

management of assets:

Government objection to failure of PSI to
add four levels under 3B1.1(a) for
alleged supervisory role is rejected, but
I find (over defendant's objection) that
an upward adjustment of 3 levels is
appropriate under 3B1.1(b) and
Application Note 2, because the defendant
exercised a degree of management
responsibility over property and assets,
under the direction of the principal
organizer and leader.

The government invites us to ignore this

discrepancy and to focus instead on the district court's oral

explanation of its sentencing decisionmaking. Ordinarily, we

would accept such an invitation. "Where . . . [a] district

court's oral expression of its sentencing rationale varies

materially from its subsequent written expression of that

rationale, appellate courts have tended to honor the former

at the expense of the latter." United States v. Muniz, 49

F.3d 36, 42 n.5 (1st Cir. 1995); see also United States v.

Tramp, 30 F.3d 1035, 1037 (8th Cir. 1994); United States v.

Hicks, 997 F.2d 594, 597 (9th Cir. 1993); United States v.

Roberts, 933 F.2d 517, 519 n.1 (7th Cir. 1991)(citing cases);

United States v. Khoury, 901 F.2d 975, 977 (11th Cir. 1990).

We decline, however, to do so in this instance.

Because the written judgment and the district

court's alternative holding -- that Cali's management of

assets warranted an upward departure from the sentence

prescribed under the Guidelines -- both focus on management

-19-
19

of assets and do not mention management of individuals at

all, we think it would be imprudent to adhere to the oral

pronouncement made in this case. Furthermore, the need to

resolve the conflict in the district court's 3B1.1 decisions

by remanding for clarification or to decide whether the

record could even support a finding that Cali managed

individuals -- an issue about which we have considerable

doubt -- is obviated by the existence of the secondary

holding. It provides an alternative basis for upholding the

fifteen-month sentence Cali received. We do not decide

whether a sufficient factual predicate existed to find that

the defendant was a manager of other individuals within the

meaning of section 3B1.1. We proceed, instead, to a

discussion of the district court's upward departure holding.

U.S.S.G. 3B1.1(b) Role in the Offense Departures
U.S.S.G. 3B1.1(b) Role in the Offense Departures

As an alternative to its upward adjustment holding,

the district court held that the asset management Cali

conducted during his involvement in Yerardi's gambling

business justified a three-level upward departure, under

section 3B1.1(b), to impose a sentence corresponding to a

total adjusted offense level of thirteen. The district court

found that Cali operated as more than a bookie or mere record

keeper and that the threats of violence which marked

Yerardi's gambling and loansharking businesses took Cali's

conduct outside the heartland of other section 3B1.1(b)

-20-
20

offenses. Cali assigns error. He argues, first, that the

facts of his case do not support a conclusion that he managed

assets and, second, that the record, to the extent it

reflects asset management at all, does not suggest that his

conduct falls outside the heartland of section 3B1.1(b)

offenses. See Rivera, 994 F.2d at 947. The government

contends that Rivera's heartland analysis does not apply and

urges us to accept the district court's findings of fact.

Before addressing these arguments, we discuss the

rules pertaining to departures from sentences prescribed by

the Guidelines. Prior to the Court's recent decision in Koon

v. United States, Nos. 94-1664, 94-8842, 1996 WL 315800 (U.S.

June 13, 1996), appellate courts were expected to engage in a

three-part departure analysis. See United States v.

Campbell, 61 F.3d 976, 984 (1st Cir. 1995), cert. denied, 116

S. Ct. 1556 (1996); Rostoff, 53 F.3d at 404; United States v.

Jackson, 30 F.3d 199, 202 (1st Cir. 1994). We first

conducted plenary review of whether the circumstances of the

case were, in principle, of a kind that the Guidelines

permitted the district court to consider, "with 'full

awareness of, and respect for the trier's superior "feel" for

the case' . . . ." Rivera, 994 F.2d at 951-52 (quoting

United States v. Diaz-Villafane, 874 F.2d 43, 50 (1st Cir.

1989)); see also United States v. Bennett, 60 F.3d 902, 904

(1st Cir. 1995); United States v. Pelkey, 29 F.3d 11, 14 (1st

-21-
21

Cir. 1994). We then reviewed the district court's departure-

related findings of fact for clear error. Pelkey, 29 F.3d at

14. Finally, we assessed the reasonableness of the departure

taken. Id.

Koon effectively merges the first and second stages

of our departure analysis into one, and instructs that our

review of the legal conclusions and factual determinations

underlying the district court's departure decision be

conducted under a unitary abuse-of-discretion standard. See

Koon, 1996 WL 315800 at *9. "That a departure decision, in

an occasional case, may call for a legal determination does

not mean, as a consequence, that parts of the review must be

labeled de novo while other parts are labeled an abuse of

discretion." Id. at *9-10. Thus, the analysis we must

conduct in evaluating departure decisions entails reviewing,

under an abuse of discretion standard, the district court's

determination that the case presents features that make it

sufficiently unusual to take it out of the applicable

guideline's heartland. See id. at *12. Abuse of discretion

review necessarily "includes review to determine that the

[district court's exercise of] discretion was not guided by

erroneous legal conclusions." Id. at 10. Additionally, our

analysis, like our pre-Koon review process, requires us to

assess the reasonableness of the departure taken.

-22-
22

Decisions to depart from sentences prescribed by

the Guidelines are generally only permitted in cases in which

unusual or atypical circumstances justify individualizing a

sentence more than the relatively narrow strictures that the

Guidelines permit. United States v. Calderon, 935 F.2d 9, 11

(1st Cir. 1991); see also Koon, 1996 WL 315800 at *7; 18

U.S.C. 3553(b). In general, departure decisions fall into

one of three categories: forbidden, discouraged, and

encouraged. Grandmaison, 77 F.3d at 560. "Forbidden

departures are those based, inter alia, on race, sex,

national origin, creed, religion, or socioeconomic status."

Id.; Rivera, 994 F.2d at 948-49; U.S.S.G. 5H1.10, 5H1.12.

"The Sentencing Commission . . . has expressly precluded

departure on these grounds, even where they make a case

atypical or extraordinary." Grandmaison, 77 F.3d at 560.

"Discouraged departures involve factors which were considered

by the Commission--such as age, family ties and

responsibilities, employment record, good works, or physical

condition--but which present themselves to an extraordinary

degree in a particular case." Id. "Encouraged departures,

in contrast, involve considerations not previously taken

into account by the Commission." Id.

The departure analysis "varies depending on the

category in which the feature [or activity] justifying

departure falls." United States v. DeMasi, 40 F.3d 1306,

-23-
23

1323 (1st Cir. 1994), cert. denied sub nom. Bonasia v. United

States, 115 S. Ct. 947 (1995). Cali maintains that the

starting point for our review of the district court's

departure decision must be an inquiry into whether his

conduct was more egregious than that of other section

3B1.1(b) offenders. The government disputes this and

contends that such an investigation is unnecessary in the

role-in-the-offense context because section 3B1.1(b)

departures are encouraged. We agree with the government.

Section 3B1.1 departures are clearly encouraged by

the Commission. The language of Application Note 2 -- that

"upward departure may be warranted . . . in the case of a

defendant who . . . exercised management responsibility over

the property, assets, or activities of a criminal

organization" -- endorses management of assets as a

permissible basis for upward departure. This endorsement and

our determination that section 3B1.1 does not incorporate

asset management as a sentencing factor lead us to the

conclusion that the district court was authorized to depart

without first engaging in the analysis Cali urges. Where the

Commission has explicitly identified certain activities or

conduct as a factor not adequately taken into account in its

formulation of a particular guideline and that guideline does

not incorporate that factor at all, we can be confident that

the departure undertaken was not unreasonable. See Koon,

-24-
24

1996 WL 315800 at *8; Rivera, 994 F.2d at 948; see also

United States v. Diaz-Martinez, 71 F.3d 946, 952-53 (1st Cir.

1995)(reviewing encouraged U.S.S.G. 2K2.1 upward

departure); Rostoff, 53 F.3d at 406 (reviewing encouraged

U.S.S.G. 2F1.1 downward departure); United States v.

Quinones, 26 F.3d 213, 218 (1st Cir. 1994)(reviewing

encouraged U.S.S.G. 5K2.8 upward departure). Resort to the

"heartland" analysis generally reserved for discouraged

departures is, therefore, unnecessary. See Koon, 1996 WL

315800 at *8; McFarlane, 64 F.3d at 1240; United States v.

Mendez-Colon, 15 F.3d 188, 190-91 (1st Cir. 1994)(Breyer,

C.J.); compare DeMasi, 40 F.3d at 1323 (describing process

for comparing cases involving discouraged reasons for

departure). Management of a large-scale criminal

enterprise's assets is conduct which, under Application Note

2 to section 3B1.1 and hence as a matter of law, places a

defendant outside the heartland of offenses by individuals

who participate in large-scale criminal enterprises but who

do not manage assets. See Rivera, 994 F.2d at 948.

Having concluded that the relevant circumstances of

Cali's case constitute an encouraged basis for departure

under the Guidelines, we proceed to the next stage in our

analysis. Cali asserts that the district court erroneously

found that he managed gambling assets. While Cali paints a

persuasive picture of his role in Yerardi's gambling

-25-
25

business, we cannot say that the district court abused its

discretion. "[W]hen there are two plausible views of the

record, the sentencing court's adoption of one such view

cannot be clearly erroneous." St. Cyr, 977 F.2d at 706; see

also Munoz, 36 F.3d at 1240; United States v. Brewster, 1

F.3d 51, 55 (1st Cir. 1993); Savoie, 985 F.2d at 616.

The government presented evidence which was a solid

basis for the district court to conclude that Cali managed

assets and was more than a mere "bookie" or "telephone

operator" in Yerardi's business. The record reveals that

the information Cali recorded and analyzed was an asset or

possession of great value to the gambling enterprise. See

Webster's II New Riverside University Dictionary 131 (1994).

It also shows that Cali fielded calls from and placed bets

for various agents, as a bookie might do, but also directly

reviewed betting and makeup figures with the individual who

presided over the gambling enterprise, Yerardi, and

participated in "charting" -- i.e., assessing the

organization's risk of loss. Compare Parmelee, 42 F.3d at

395 (control of plane inherent in role of pilot for criminal

enterprise). Though Yerardi seems to have made the decisions

about when and whom to chart, the record suggests that the

responsibility for keeping the organization's records,

calculating the business's risk of loss on particular events,

and assisting Yerardi in assessing the organization's overall

-26-
26

financial health primarily rested with Cali and his

counterpart, DeAngelis. The transcripts of calls intercepted

by the State Police, in particular, suggest that Cali

exercised discretion or control over the organization's

information and that Yerardi heavily relied on Cali's

expertise and special knowledge of the business's operations.

We, therefore, do not think the district court's conclusion

that Cali managed assets or enjoyed executive status within

the gambling enterprise implausible.

Nor do we think the extent of the departure taken

by the district court unreasonable. Quinones, 26 F.3d at

219. The three-level upward departure taken from the

sentence tabulated under the Guidelines represents a three-

month increase in the maximum sentence Cali could have

received and an even smaller increase in the actual time Cali

will serve in prison. Because of this, the reasons given for

the upward departure, and the deference due the special feel

the district court developed for this case in presiding over

the legal proceedings for Cali's co-conspirators, we find

that the upward departure the district court imposed was

reasonable. See Rostoff, 53 F.3d at 409 (judgment call for

decision regarding extent of departure is ultimately the

district court's).

V.
V.

CONCLUSION
CONCLUSION

-27-
27

For the foregoing reasons, Cali's fifteen-month

sentence of imprisonment is affirmed.
affirmed

-28-
28