United States v. Rizzo

For the First Circuit

No. 96-2002

UNITED STATES,

Appellee,

v.

ANTHONY J. RIZZO,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge]

Before

Torruella, Chief Judge,
Cyr, Senior Circuit Judge,
and Stahl, Circuit Judge.

James H. Budreau for appellant.
John M. Griffin
, Assistant United States Attorney, with whom
Donald
K. Stern, United States Attorney, was on brief for appellee.

August 11, 1997

STAHL,
Circuit Judge
. Defendant-appellant Anthony J.

Rizzo appeals the thirty-seven month sentence that the district

court imposed upon him after he pleaded guilty to several

counts involving possessing, negotiating, and uttering

counterfeit securities in violation of 18 U.S.C. SS 371, 513.

Finding no merit to Rizzo's arguments, we affirm.

Facts

We consider the facts as set forth in "the

presentence report, the sentencing transcript[,] and various

other materials before the district court." United States v.

Gill, 99 F.3d 484, 485 (1st Cir. 1996).

The counterfeit scheme in which Rizzo was involved

was designed to operate as follows: Rizzo supplied counterfeit

checks to Ronald A. Moore, who forwarded them to Joseph

Savarese. The checks were made payable to Savarese's business,

Thermal Shield of New England ("Thermal Shield"). Savarese was

to deposit the counterfeit checks in his business' bank

accounts and then withdraw the funds after the checks had

cleared. Rizzo, Moore, and Savarese were to share in the

illegal proceeds from the counterfeit checks.

During the course of the scheme in 1992, Rizzo

provided Savarese with five checks that were fraudulent

reproductions of actual corporate checks. Moore operated as

the middleman between Rizzo and Savarese for the first three

checks; Rizzo dealt directly with Savarese for the final two

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checks. The companies whose checks had been counterfeited

neither issued these checks nor authorized the disbursement of

any funds to Thermal Shield.

In April 1992, Rizzo, Moore, and Savarese conducted

their first illegal transaction. Moore gave Savarese a

$160,00.00 counterfeit check that Rizzo had provided him

listing Thermal Shield as payee and Hasbro, Inc. as payor.

Savarese then deposited the counterfeit check into the Thermal

Shield account at the Winthrop, Massachusetts branch of New

World Bank and delivered the deposit slip to Moore. After the

check cleared, Savarese withdrew the $160,000.00 proceeds from

the check. There being little honor among the dishonest, it

was not until Moore made threatening statements to Savarese on

several occasions that he provided Moore with approximately

$40,000.00 of the illicit proceeds to be shared with Rizzo as

their portion of the illegal booty.

Prior to the Hasbro check transaction, for reasons

not entirely clear in the record, Savarese had contacted agents

of the Federal Bureau of Investigations ("FBI") concerning the

counterfeit check scheme. The FBI agents instructed Savarese

that under no circumstances was he to become involved with the

Hasbro check. Savarese did not follow these instructions, and

the FBI agents subsequently discovered Savarese's participation

in negotiating the first counterfeit check. Following the

Hasbro check transaction, Savarese began cooperating with the

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FBI in connection with the Bureau's investigation of the

counterfeit check scheme. During this time, the FBI, with the

knowledge of Savarese and the assistance of security officials

at the Bank of Boston, established a "shell" account in the

name of Thermal Shield at the Bank of Boston.

Emboldened by their success with the Hasbro check,

Rizzo, Moore, and Savarese agreed to negotiate additional

counterfeit checks drawn on unsuspecting corporations. On June

2, 1992, Moore gave Savarese two counterfeit checks from Rizzo;

one in the amount of $47,750.00 naming New Wave Transport

(U.S.A.) as payor and one in the amount of $47,785.00 naming

The American Experience West Corp. as payor. Savarese

deposited the checks in the Thermal Shield account at the Bank

of Boston and delivered the deposit slip to Moore. On June 9,

1992, upon Moore's urging, Savarese visited the Bank of Boston

in an effort to withdraw the funds from the two counterfeit

checks. By previous arrangement between the FBI and the Bank

of Boston, the teller furnished Savarese with a letter stating

that his account was closed.

On July 1, 1992, Savarese met directly with Rizzo.

During one conversation, Rizzo told Savarese that they would

"do two more." Several days later, Rizzo gave Savarese two new

counterfeit checks, one in the amount of $9300.00 naming the

Great Atlantic and Pacific Tea Company, Inc. as payor and one

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in the amount of $9,275.00 naming Waldbaum, Inc. as payor. The

conspirators never negotiated either of these two checks.

Procedural Background

On December 14, 1995, a federal grand jury returned

a three-count superseding indictment alleging that Rizzo

engaged in a counterfeit check scheme. The indictment stated

that Rizzo illegally conspired with co-defendant Ronald A.

Moore and others to obtain cash through the negotiation of

counterfeit corporate securities, in violation of 18 U.S.C. S

371. The indictment further alleged two counts of uttering and

possessing counterfeited securities of a corporation, in

contravention of 18 U.S.C. S 513.

On May 10, 1996, Rizzo entered a plea of guilty to

all three counts. Following Rizzo's plea, the United States

Probation Officer prepared a Presentence Report, which

recommended an adjusted offense level of sixteen for Rizzo's

participation in the counterfeit check scheme. The base

offense level under U.S.S.G. S 2F1.1 was six and the Report

suggested several enhancements. First, the Report recommended

an eight-level increase because the intended loss from the

scheme exceeded $200,000.00. See U.S.S.G. S 2F1.1(b)(1)(I).

The Presentence Report calculated the amount of loss under

1. On December 14, 1993, Savarese was convicted and sentenced
to sixty-three months imprisonment. Savarese's conviction and
sentence reflected his involvement in the negotiation of the
Hasbro check.

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U.S.S.G. S 2F1.1 by using the actual loss of $160,000.00 from

the Hasbro check and adding the intended loss of $113,950.00,

representing the total of the four other checks involved in the

scheme. The next suggested enhancement entailed a two-level

increase, which reflected the fact that the offense involved

more than minimal planning. See U.S.S.G. S 2F1.1(b)(2)(A).

Finally, the Presentence Report recommended a three-level

increase because Rizzo committed the offense while awaiting

sentencing on a 1992 federal conviction.
See U.S.S.G. S 2J1.7.

The Presentence Report recommended reducing the resulting

offense level of nineteen to sixteen because Rizzo demonstrated

acceptance of responsibility. See U.S.S.G. S 3E1.1(a),(b)(2).

The Presentence Report computed Rizzo's criminal

history category as a IV. This computation included Rizzo's

1992 federal conviction for negotiating counterfeit checks and

using stolen credit cards and false identification, for which

he had been sentenced to thirty-three months' imprisonment on

September 17, 1992. Rizzo completed the sentence on February

3, 1995, at which time he began a period of supervised release.

Rizzo's criminal history computation also reflected a 1989

conviction in Charlestown District Court for possession of a

firearm without proper identification.

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Rizzo filed numerous objections to the Presentence

Report. Of importance for purposes of this appeal, Rizzo

argued for a downward departure, asserting that his case fell

outside the heartland of the Guidelines because he was unable

to request concurrent federal sentences due to the fact that

the thirty-three month sentence imposed in September 1992 had

been discharged by the time he was indicted in this case. In

support of this assertion, Rizzo advanced two arguments:

first, he contended that the government purposefully delayed

the indictment in the instant case until after he completed his

thirty-three month sentence for his 1992 conviction in order to

circumvent U.S.S.G. S 5G1.3(c); second, he claimed that the

government was aware of the instant counterfeit check offenses

when he was sentenced in September 1992 for his prior crimes,

but improperly failed to inform the district court of the new

offenses at the 1992 sentencing so that the sentencing judge

could consider them as relevant conduct. According to Rizzo,

if the government properly had informed the court of the

relevant conduct involving this case, the court then "would

have combined the two cases." If the court had combined the

two cases, this process would have "result[ed] in a level 20

2. Rizzo lodged a total of nine objections to the Presentence
Report. We discuss only those arguments which bear upon the
subject matter of this appeal.

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for the combined cases." A level twenty carries a sentencing

range of thirty-seven to forty-six months, which is at least

twenty-four and potentially thirty-three months shorter than

the total of seventy months Rizzo received on the two separate

indictments.

Also of importance for purposes of this appeal, Rizzo

insisted that he should not have been subject to an eight-level

increase reflecting the intended loss. According to Rizzo, the

$273,950.00 of counterfeit checks involved in the scheme were

"generated through a government sting operation," and, thus,

"no loss was capable of occurring as a matter of law."

On July 19, 1996, following an hour-long sentencing

hearing at which Rizzo voiced his objections to the Presentence

Report, the district court (Gorton, J.) accepted the

recommendations contained in the Report and declined to depart

downward from the suggested adjusted offense level of sixteen.

The district court sentenced Rizzo to thirty-seven months'

imprisonment and three years of supervised release. Thirty-

three months of the imprisonment term were to run concurrently

3. Given our disposition of this appeal, we need not recite
the process Rizzo set forth to arrive at a total offense level
of twenty.

4. An offense level of sixteen permits the sentencing judge to
sentence the defendant to a period of incarceration ranging
from thirty-three months to forty-one months. The sentence
that Judge Gorton imposed in this case (thirty-seven months)
thus falls precisely in the middle of the possible
incarceration terms Rizzo faced at sentencing.

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on counts one, two, and three, and four months of the term were

to run consecutively, pursuant to 18 U.S.C. S 3147. The

district court also ordered Rizzo to pay $12,500 in

restitution.

Standard of Review

"[O]ur review of the legal conclusions and factual

determinations underlying the district court's departure

decision [is] . . . conducted under a unitary abuse-of-

discretion standard." United States
v.
Cali, 87 F.3d 571, 580

(1st Cir. 1996). "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. (quoting
Koon v.
United States
, 116 S. Ct.

2035, 2045 (1996)). When the issue is whether or not the

district court believed it had authority to depart, we have

held that "[w]hat the district court thought was the scope of

its authority [to depart from the guidelines] is perhaps a

question of fact, but it is one that we must answer ourselves,

by reviewing the sentencing transcript. Whether the district

court's belief was mistaken is plainly a legal question that we

5. 18 U.S.C. S 3147 concerns "person[s] convicted of an
offense committed while released pursuant to this chapter," and
provides that "[a] term of imprisonment imposed pursuant to
this section shall be consecutive to any other sentence of
imprisonment." As noted above, at the time Rizzo committed the
crimes underlying this appeal, he was on release awaiting
sentencing for his 1992 conviction.

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review de novo." United States v. Saldana, 109 F.3d 100, 103

(1st Cir. 1997).

"Appellate review of a district court's application

of the Guidelines is a two-part process. We first determine

the applicability of the guideline to a particular case de

novo. 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.'"
Cali, 87 F.3d at

575 (internal citations omitted) (quoting United
States v.

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

Ct. 1556 (1996)).

Discussion

On appeal, Rizzo advances two arguments that he

raised both in his objections to the Presentence Report and

during his sentencing hearing. First, he contends that the

district court erred when it denied his request for a downward

departure pursuant to U.S.S.G. S 5K2.0
and U.S.S.G. S 5G1.3(c)

6. U.S.S.G. S 5K2.0 provides in pertinent part: "Under 18
U.S.C. S 3553(b) the sentencing court may impose a sentence
outside the range established by the applicable guideline, if
the court finds 'that there exists an aggravating or mitigating
circumstance of a kind, or to a degree, not adequately taken
into consideration by the Sentencing Commission in formulating
the guidelines that should result in a sentence different from
that described.'"

7. U.S.S.G. S 5G1.3(c) states: "(Policy Statement) In any
other case, the sentence for the instant offense may be imposed
to run concurrently, partially concurrently, or consecutively
to the prior undischarged term of imprisonment to achieve a

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because "the record in the instant case fails to reveal whether

the court understood that the present case fell outside of the

guideline's heartland and that it had the discretion to depart

downward." Second, Rizzo insists that the district court

arrived at an incorrect adjusted offense level because it

misapplied U.S.S.G. S 2F1.1 in calculating the loss

attributable to him. We address Rizzo's arguments in turn.

A. Downward Departure

As we previously have stated, "a criminal defendant

cannot ground an appeal on the sentencing court's discretionary

decision not to depart below the GSR. . . . [A]ppellate

jurisdiction[, however,] may attach if it appears that the

failure to depart stemmed from the sentencing court's mistaken

impression that it lacked the legal authority to deviate from

reasonable punishment of the instant offense." Rizzo bases
much of his argument on a snippet of commentary to this section
stating "[d]eparture would be warranted when independent
prosecutions produce anomalous results that circumvent or
defeat the intent of the guidelines." This commentary,
however, was deleted from the Guidelines in 1989. Because
Rizzo was sentenced in 1996, the November 1995 Guidelines apply
to this case. See
United States
v.
DiSanto, 86 F.3d 1238, 1254
n.26 (1st Cir. 1996), cert. denied, 117 S. Ct. 1109 (1997);
United
States v. Springer, 28 F.3d 236, 237 (1st Cir. 1994).
Moreover, there is no
ex
post
facto problem because S 5G1.3(c)
did not change after Rizzo committed the offenses underlying
this appeal. See
United States
v.
Aymelek, 926 F.2d 64, 66 n.1
(1st Cir. 1991).

8. U.S.S.G. S 2F1.1(b)(1) concerns increases to the base
offense level of six applicable to offenses involving fraud or
deceit and necessitates increases to this base offense level
depending on the amount of loss resulting from the fraud or
deceit.

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the guideline range." United States v. Gifford, 17 F.3d 462,

473 (1st Cir. 1994). Rizzo asserts both that the district

court believed that it lacked the legal authority to depart and

that the court's belief was mistaken. The record reveals

little to buttress his assertion that the district court

believed it lacked authority to depart downward. To support

his assertion that the district court was mistaken, Rizzo

contends that a court may depart downward pursuant to U.S.S.G.

S 5G1.3(c) and U.S.S.G. S 5K2.0 when the government delays an

indictment until after a defendant completes a previous federal

sentence or when the government "had full knowledge of the

facts and circumstances related to the instant case prior to

the sentencing in that previous case" but failed to apprise the

court of such facts and circumstances.

9. Specifically, Rizzo points to the following question that
the district court asked during the sentencing hearing as
evidence that the court believed it lacked authority to depart:
"Do you have any law, statutory or otherwise in this regard,
that requires the government to call such relevant conduct to
the attention of the sentencing court?" Rizzo's counsel then
directed the court to a section of the commentary to U.S.S.G.
S 5G1.3 that was deleted in 1989: "[A] departure would be
warranted when independent prosecutions produce anomalous
results that circumvent or defeat the intent of the
guidelines." See supra note 7. The court then responded by
questioning Rizzo's counsel about this commentary: "It ought
to be in the guideline manual, shouldn't it?" The court
ultimately denied Rizzo's request for a downward departure,
stating: "To the extent that this is in support of a motion
for a downward departure, that motion is denied." From this
interchange, Rizzo concludes that the district court did not
think that it possessed the authority to depart downward.

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"We are obliged to review a trial court's actions as

they are made manifest in the record." United
States v.

Tavano, 12 F.3d 301, 304 (1st Cir. 1993);
see
United States
v.

Morrison, 46 F.3d 127, 130 (1st Cir. 1995) ("When determining

whether the sentencing court merely refused to exercise its

discretionary power to depart, we consider the totality of the

record and the sentencing court's actions as reflected

therein."). The record in this case does not support Rizzo's

claim that the district court believed it lacked authority to

depart downward.

Rizzo, both in his objections to the Presentence

Report and during his sentencing hearing, clearly enunciated

his position that his case fell outside the heartland of the

guidelines and thus warranted a downward departure pursuant to

U.S.S.G. S 5K2.0 and U.S.S.G. S 5G1.3. During the sentencing

hearing, for instance, Rizzo's counsel explained that "[a]ll of

this is, even the reference to . . . 5G.3 is in reference to a

downward departure. . . . And, again, I think, because of the

facts, it does take it out of the heartland of the guidelines."

During the course of the sentencing hearing, the district

court questioned Rizzo's counsel concerning this argument. The

court repeatedly manifested its understanding of Rizzo's

argument, initially stating: "you argue that under Sections

5G1.3 and 5G1.2, pertaining to the sentencing on multiple

counts of conviction, that the present offense should run

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concurrently with Mr. Rizzo's prior offense. Is that basically

it?" Later in the discussion, the court asked Rizzo's counsel,

"Do you have any law, statutory or otherwise, that will guide

the Court in this regard, that requires the government to call

such relevant conduct to the attention of the sentencing

court?" After Rizzo's counsel presented his argument and the

district court subjected him to questioning, the government

responded to Rizzo's argument at length during the sentencing

hearing. After listening to both parties on the subject of a

downward departure pursuant to U.S.S.G. S 5K2.0 and U.S.S.G. S

5G1.3, the district court ruled: "To the extent that that is

in support of a motion for a downward departure, that motion is

denied."

"[I]f a district court desired to depart but thought

this course forbidden by explicit guideline language, one would

expect the court to cast its refusal in these terms." United

States v. DeCosta, 37 F.3d 5, 8 (1st Cir. 1994); see United

States v. Grandmaison, 77 F.3d 555, 565 (1st Cir. 1996)

(indicating that if the record is ambiguous concerning the

district court's awareness of its discretion to depart

downward, "that ambiguity, without more, would not be enough to

make the district court's refusal to depart appealable"). In

this case, unlike in DeCosta, the district court made

absolutely no remark that could be construed to indicate that

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it thought it lacked the authority under the guidelines to

depart downward.

[W]e have suggested that a sentencing
court state, where appropriate, "that it
has considered the mitigating factors
urged but does not find them sufficiently
unusual to warrant a departure in the case
at hand." If a sentencing court neglects
to use such language, however, the
sentencing decision is not necessarily
ripe for remand or review. Sentencing
courts
have
had
abundant
opportunity
to
become
experienced with the Guidelines and
familiar
with
their
authority
to
make
discretionary decisions regarding whether
to depart.

Morrison, 46 F.3d at 132 (internal citations and footnote

omitted) (emphasis added) (quoting (
DeCosta, 37 F.3d at 8). As

in
Morrison, "viewed in harmony with its context, the [district

court's decision not to] depart[] reflects no misapprehension

on the part of the district court as to its departure power,

but simply its decision not to exercise that power in the

present case." Id. at 132-33; see United
States v. DiIorio,

948 F.2d 1, 9 (1st Cir. 1991) ("[W]e think it apparent from

this record that the court understood its authority to depart

downward[], and yet concluded . . . that the specific

provisions of the Guideline that DiIorio wished to invoke

simply did not permit departure under the circumstances of her

case.").

10. While we do not believe the record supports Rizzo's
contention that the district court did not understand that it
had authority to depart downward in this case, we note that the
district court could have avoided much trouble in this case if

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Because we find that the record contains no evidence

that the district court believed it lacked authority to depart

downward in this case, we pause only briefly to address Rizzo's

arguments supporting his plea for such a departure. Initially,

we note that with respect to his contention that U.S.S.G. S

5G1.3 provided authority for the district court to depart

downward, S 5G1.3 applies only to "undischarged terms of

imprisonment." See
United States
v.
McHan, 101 F.3d 1027, 1040

(4th Cir. 1996), cert. denied, No. 96-8994, 1997 WL 275967

(June 16, 1997);
Prewitt v.
United States
, 83 F.3d 812, 817-18

(7th Cir. 1996). In this case, Rizzo had discharged the

thirty-three month term of imprisonment resulting from his 1992

convictions prior to being sentenced for his 1995 federal

indictment.

Similarly, Rizzo's argument that the government

improperly delayed indicting Rizzo until he served his thirty-

three month term of imprisonment for the 1992 convictions is

unavailing in light of
United States
v.
Saldana, 109 F.3d 100,

104 (1st Cir. 1997). In
Saldana, a federal grand jury indicted

the appellant following his release after serving twenty months

of a thirty-month state sentence. The federal grand jury

it had heeded the suggestions of DeCosta and Morrison. See
DeCosta, 37 F.3d at 8 (suggesting that the "district court
say--where this is the case--that it has considered the
mitigating factors urged but does not find them sufficiently
unusual to warrant a departure in the case at hand");
Morrison,
46 F.3d at 132 (same).

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indicted the appellant based on conduct that occurred

approximately two years previously, prior to his conviction and

sentencing in the state case. The district court sentenced the

appellant to seventy months' imprisonment. See id. at 102.

The appellant claimed, inter alia, that "if he had

been charged with the federal offense while still serving his

state sentence, the federal sentence would, under U.S.S.G. S

5G1.3(c), have been set to run concurrently with the state

sentence." Id. In Saldana, we reasoned that "deliberate

tampering to increase a sentence would be a concern, but the

ordinary accidents of acceleration or delay are part of the

fabric of criminal proceedings." Id. at 104. Affirming

appellant's sentence, we held that "in the present case, the

delay was neither extreme nor implicitly sinister." Id.

As in Saldana, nothing in the record indicates that

the delay in this case was sinister. Rizzo indicated that he

possessed no evidence concerning the government's motive in

waiting to indict him until 1995. During the sentencing

hearing, in fact, Rizzo's counsel conceded "I'm not pointing

the finger at the government in terms of its conduct."

Furthermore, in light of the precedent in this circuit, we do

not believe that the delay in this case was "extreme." See

Saldana, 109 F.3d at 102-04 (involving two-year delay);
United

States v.
McCoy, 977 F.2d 706, 711 (1st Cir. 1992) (finding no

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17

due process violation in case of three and one-half year delay

between conduct at issue and return of federal indictment).

Rizzo's contention that the government knew of the

facts of the offenses underlying this appeal at the time of his

1992 sentencing and improperly withheld this information from

the sentencing court also is unpersuasive. We previously have

explained:

Undercover operations comprise a valuable,
and generally lawful, weapon in the
government's ar[senal]. Thus, courts
should proceed with caution in staking out
rules that will hinder government agents
who seek lawfully to set such ruses in
motion. "Despite the fact that undercover
operations by their nature involve
elements of furtiveness, duplicity, and
manipulation, we have never held that such
initiatives are per se unfair. To the
contrary, we think that the Executive
Branch is free, within
broad
limits, to
set such snares for unwary criminals."

United
States v. Gibbens, 25 F.3d 28, 31 (1st Cir. 1994)

(internal citations omitted) (emphasis added) (quoting United

States v.
Gifford, 17 F.3d 462, 470-71 (1st Cir. 1994)). Given

the wide latitude we afford the government in conducting sting

operations, "the burden of showing sentencing factor

manipulation [necessarily] rests with the defendant. As with

other fact-sensitive sentencing issues, the burden of proof

must be carried by a preponderance of the evidence."
Gibbens,

11. Particularly in light of Rizzo's failure to provide an
adequate explanation, we agree with the government that Rizzo's
non-disclosure argument essentially constitutes an accusation
of sentencing factor manipulation on the part of the

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25 F.3d at 31-32 (internal citations omitted); see United

States v. Montoya, 62 F.3d 1, 4 (1st Cir. 1995) (indicating

that the "standard is very high" and cautioning that "garden

variety manipulation claims are largely a waste of time").

In this case, Rizzo offered no evidence whatsoever of

any bad faith on the government's behalf. During Rizzo's

sentencing hearing, his counsel explicitly stated that he did

not have evidence concerning the government's motive in

protecting the information pertaining to Rizzo's "relevant

conduct" during the 1992 sentencing. At one point, Rizzo's

counsel admitted: "I can't probe into the minds of the

government at the time." Later in the hearing, Rizzo's counsel

explained: "[W]e can't speculate about whatever the reasons

were for the government not raising it at that time."

Rizzo also failed to direct the district court (and

now fails to point this court) to any authority requiring the

government to "call such relevant conduct to the attention of

the sentencing court." For its part, the government explained

that it did not reveal Rizzo's "relevant conduct" to the 1992

government. See United
States v. Montoya, 62 F.3d 1, 4 (1st
Cir. 1995) (indicating that sentencing factor manipulation
encompasses "vast range of circumstances"); United
States v.
Connell, 960 F.2d 191, 196 n.8 (1st Cir. 1992) ("Governmental
misconduct that shapes the contours of the crime and thus
delimits the available sentencing options . . . can, in a
suitable case, furnish the basis for downward departure.");
see
also United
States v. Okey, 47 F.3d 238, 240 (7th Cir. 1995)
("Sentencing manipulation occurs when the government engages in
improper conduct that has the effect of increasing a
defendant's sentence.").

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sentencing court because it "had a specific investigative plan

. . . to move from Mr. Rizzo to . . . find out who the

participants were in this counterfeit check ring who were

spreading [fraudulent] paper all throughout the city." This

explanation is plausible given the record in this case and

particularly Rizzo's numerous references to others in the

scheme to whom he was responsible. See
Gibbens, 25 F.3d at 31

(crediting government's explanation that it "was hoping, based

on appellant's allusions to a supposed business partner, to

land a bigger fish"). We thus find that the district court did

not commit an abuse of discretion in refusing to depart

downward on the grounds that the government somehow manipulated

Rizzo's 1992 sentence; Rizzo simply failed to carry his burden

of proof with respect to his allegation of sentencing factor

manipulation. See id. at 32; Montoya, 62 F.3d at 4.

B. Loss Calculation

The district court sentenced Rizzo based on the total

$273,950.00 value of the five counterfeit checks given to

Savarese in 1992. Pursuant to U.S.S.G. S 2F1.1(B)(1)(I), the

district court increased Rizzo's base offense level of six by

eight levels because the loss involved in the scheme fell

between $200,000.00 and $350,000.00.

Rizzo objected to the eight-level increase both in

his objections to the Presentence Report and during his

sentencing hearing. Rizzo argued that the $273,950.00 was

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generated through a government sting operation. Distorting the

record, Rizzo asserted that "all the checks were deposited into

the government's shell corporation . . . . Therefore, Mr.

Rizzo's guidelines should not be increased by 2F1.1(b)(1) as no

loss was capable of occurring as a matter of law." Perhaps

recognizing the flaw in his earlier assertion, on appeal Rizzo

alters his argument slightly, insisting that he "should only

have been responsible for at most $160,000 under S 2F1.1 since

the other amounts were incapable of being lost and/or had not

been completed as a substantive offense." Because a loss

calculation of $160,000.00 necessitates a seven-level increase

pursuant to U.S.S.G. S 2F1.1(b)(1)(H), rather than an eight-

level increase pursuant to U.S.S.G. S 2F1.1(b)(1)(I), Rizzo

maintained that his "total offense level should have been 15

instead of 16."

Rizzo rests his argument that actual rather than

intended loss represents the appropriate calculation for

purposes of U.S.S.G. S 2F1.1(b)(1) on two cases,
United States

v.
Galbraith, 20 F.3d 1054 (10th Cir.),
cert.
denied, 513 U.S.

889 (1994), and United
States v. Watkins, 994 F.2d 1192 (6th

Cir. 1992). In Galbraith, the appellant contended that

"because his offense was committed in response to an undercover

sting operation structured so there was no possibility of loss

to a victim, the intended or probable loss was zero."

Galbraith, 20 F.3d at 1059. Reasoning that "[b]ecause this was

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an undercover sting operation which was structured to sell

stock to a pension fund that did not exist, defendant could not

have occasioned any loss even if the scheme had been

completed," the Tenth Circuit ruled that the applicable loss

calculation for purposes of U.S.S.G. S 2F1.1(b)(1) was zero.

Id.

The Galbraith court's rationale is inapplicable to

this case. Unlike the fictitious victim in Galbraith, the

intended victims of Rizzo's counterfeit check scheme were

actual corporations. Moreover, the fact that the conspirators

managed to deposit the first check and then to withdraw the

entire $160,000.00 demonstrates that Rizzo could have

"occasioned" a loss "if the scheme had been completed" with

respect to the remaining four checks. If, for instance,

Savarese again had determined to flout the FBI's instructions,

it appears that the conspirators could have successfully

negotiated the other checks totaling $113,950.00.

As with
Galbraith, we find
Watkins' treatment of the

appropriate loss calculation under U.S.S.G. S 2F1.1(b)(1)

unpersuasive in the context of Rizzo's appeal. In
Watkins, the

Sixth Circuit enunciated three factors that must be present for

an amount of loss to be relevant under U.S.S.G. S 2F1.1:

"First, as application note 7 instructs, the defendant must

have intended the loss. Second, it must have been possible for

the defendant to cause the loss. Third, the defendant must

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have completed or been about to complete but for interruption,

all of the acts necessary to bring about the loss." Watkins,

994 F.2d at 1196. Contrary to Rizzo, we believe that these

three factors were satisfied in this case. First, as Rizzo

admits, he intended the $273,950.00 loss. Second, the

conspirators' success with the $160,000.00 check demonstrates

that it was possible for the defendant to cause the loss.

Third, Rizzo provided Savarese with five checks totalling

$273,950.00 and urged him to deposit these checks and then to

remove the funds from the Thermal Shield account, thus

"complet[ing] . . . but for interruption, all of the acts

necessary to bring about the loss." We therefore find that

even if the Watkins factors were dispositive of this appeal,

the circumstances of this case were such that $273,950.00, not

$160,000.00, would represent the proper figure for purposes of

calculating loss pursuant to U.S.S.G. S 2F1.1(b)(1).

Because Watkins does not guide our analysis of this

issue, we add a few words about our interpretation of U.S.S.G.

S 2F1.1(b)(1). Application Note 7 to U.S.S.G. S 2F1.1 states

in pertinent part: "Consistent with the provisions of S 2X1.1

(Attempt, Solicitation or Conspiracy), if an intended loss that

the defendant was attempting to inflict can be determined, this

figure will be used if it is greater than the actual loss." In

this case, Rizzo admits that he intended to inflict $273,950.00

of loss. According to Application Note 7, therefore,

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$273,950.00 represents the appropriate amount for purposes of

calculating loss under U.S.S.G. S 2F1.1 in this case.

In United
States v. Egemonye, 62 F.3d 425, 428-29

(1st Cir. 1995), furthermore, we addressed the issue of

intended loss in the context of U.S.S.G. S 2F1.1. The
Egemonye

appellant was charged with conspiracy and other offenses

relating to the possession and use of stolen credit cards.
See

id. at 426. Pursuant to U.S.S.G. S 2F1.1(b)(1)(H), the

district court computed the loss at $242,950.00, "representing

the aggregate credit limit of the 51 credit cards purchased .

. . in the four transactions," despite the fact that the

appellant never inflicted any actual loss with many of the

stolen credit cards that he purchased. Id. at 426-27. As in

the instant case, the appellant was sentenced within the

guidelines range to thirty-seven months' imprisonment.
See
id.

at 427. Rejecting the appellant's argument that the district

court's loss calculation based on the limits of all of the

credit cards was "unrealistic," we concluded that on the

"record the use of the aggregate card limits as a measure of

intended and potential loss was [not] clearly erroneous." Id.

at 429. We explained that "[w]here there is good evidence of

actual intent and some prospect of success, we do not think

that a court needs to engage in more refined forecasts of just

how successful the scheme was likely to be." Id.

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Given the evidence of Rizzo's intent and the prospect

of future success manifested by his initial success with the

$160,000.00 check, we do not find that the district court's use

of the $273,950.00 figure for purposes of calculating loss

under U.S.S.G. S 2F1.1(b)(1) was clearly erroneous.
See
United

States v. Carrington, 96 F.3d 1, 7 (1st Cir. 1996), cert.

denied, 117 S. Ct. 1328 (1997); Egemonye, 62 F.3d at 429.

Conclusion

For the reasons stated above, we affirm the sentence

that the district court imposed.

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