United States Court of Appeals
For the First Circuit
No. 03-1068
UNITED STATES OF AMERICA,
Appellant,
v.
DANIEL MARTIN,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Robert E. Keeton, U.S. Senior District Judge]
Before
Lipez, Circuit Judge,
Campbell, Senior Circuit Judge,
and Howard, Circuit Judge.
Diane C. Freniere, Assistant United States Attorney, with whom
Michael J. Sullivan, United States Attorney, was on brief, for
appellant.
Max D. Stern for appellee.
March 30, 2004
LIPEZ, Circuit Judge. Defendant Daniel Martin pleaded
guilty to fraud and tax evasion. The district court sentenced him
to three years of probation, with six months to be served in home
detention. The government, believing that Martin's sentence was
too lenient, appeals. It argues that the district court improperly
grouped the fraud counts with the tax evasion counts and improperly
granted downward departures for extraordinary acceptance of
responsibility and extraordinary physical impairment. Martin
counters that, because he has already served a significant portion
of his original sentence of probation, any subsequent sentence of
imprisonment would violate double jeopardy principles.
Although we disagree with Martin's double jeopardy
argument as posed, this case does raise a double jeopardy issue
that must be addressed at re-sentencing. There will be a re-
sentencing because we agree with the government that the court
erred in its grouping decision and its grant of a downward
departure for extraordinary acceptance of responsibility.
I.
From 1997 until 2000, Martin participated in a scheme to
defraud several food distributors and the DeMoulas Supermarkets
chain of more than $1.8 million. In the food merchandise industry,
food distributors often pay grocers to run promotional campaigns
for their products or place their products in preferred display
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locations. These transactions are negotiated almost entirely
between representatives of the food distributors and the grocer,
with little supervision by higher level executives. Thus, only the
representatives know if a distributor pays more, or a grocer
receives less, than the negotiated price. A representative could
easily divert funds by lying to his or her supervisors about the
actual terms of a contract.
Martin and his fellow conspirators took advantage of this
lack of oversight. Robert Stella, a salesman for the food
distributor Campbell's, stole more than $800,000 in checks written
to DeMoulas. Robert McCarthy, a food broker for Advantage ESM,
similarly stole checks destined for DeMoulas worth approximately
$490,000. Finally, Wayne Dick, a food buyer at DeMoulas, took more
than $400,000 worth of checks given to him by various food
distributors as payment to DeMoulas. Stella, McCarthy, and Dick
gave their stolen checks to Martin so he could deposit them at
Fleet Bank where Linda Dempski, a teller who was a party to the
scheme, would convert the proceeds to cash or cashiers checks.
Thus, Martin served primarily as a middleman, taking the stolen
checks and converting them to cash through his contacts at Fleet.
All told, Martin converted $1,803,990 in checks made out
to DeMoulas. Martin's share of that sum was between $582,335 and
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$660,623.1 Martin did not report this fraudulent income, and the
resulting tax loss to the government was approximately $254,500.
In May 2000, a Fleet Bank official noticed a DeMoulas
check deposited directly into Martin's personal account. From
there, the scheme unraveled quickly. DeMoulas confronted Dick
about the thefts and, soon after, Dick, Stella, and Martin
contacted DeMoulas about paying restitution. Over the next five
and a half months the three paid a total of $1,746,930 to the
victims, representing the total known loss as of December 2000.2
Martin contributed $837,491 to DeMoulas's and Campbell's losses,
and $11,000 toward Fleet's attorneys' fees, for a total of
$848,491.
1
At sentencing, the government contended that Martin received
between 50 and 60 percent of the value of each check and that,
while the exact amount that Martin received could not be
ascertained with precision, it was at least the $660,623 stated in
the presentence report. Although he did not object to the figure
in the presentence report, Martin claimed that he always received
less than half of the proceeds from each check and received a total
of only $582,335. Which figure is correct is not relevant to our
discussion of the issues in this case.
2
Dempski and McCarthy, who served as government witnesses, did
not contribute to this sum. Approximately two years later, the
government discovered that an additional $57,060 had been stolen
from DeMoulas during the course of the scheme, raising the final
total to $1,803,990. McCarthy agreed to pay the additional $57,060
as part of his plea agreement.
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II.
On July 26, 2002, Martin waived indictment and pleaded
guilty to an information charging him with nine counts of "receipt
of stolen moneys" in violation of 18 U.S.C. § 2315 (the "fraud
counts") and two counts of filing a materially false U.S. income
tax return in violation of 26 U.S.C. § 7206(1) (the "tax evasion
counts"). There was no plea agreement.
On November 21, 2002, the district court began a three
day sentencing hearing. The government argued primarily that
Martin was the central figure in the scheme, had recruited the
other participants, and was the organizer and leader of the
criminal activity. To support this view, the government offered
three cooperating witnesses--McCarthy, Stella, and Dempski--who
testified about Martin's role in the scheme. The government
further argued that, because Martin denied that he was the central
figure in the conspiracy, the court should not grant any downward
adjustment for acceptance of responsibility.
The defense offered evidence of Martin's restitution
payments and his history of physical problems resulting from
Crohn's disease. It argued that Martin's restitution payments were
so extraordinary that they justified a departure above and beyond
the normal adjustment for acceptance of responsibility recognized
in the Guidelines. It further argued that Martin's fragile health
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justified a departure based on the discouraged factor of
extraordinary physical impairment.
Finding the government witnesses unconvincing, the court
stated that the scheme, while involving several people working in
concert, was a disorganized assemblage of members concerned
primarily with their own interests. Although Martin may have
served as a middleman in the execution of the scheme, the court did
not find that he played a central role as a leader or an organizer.
Against this backdrop, the court first calculated the
sentence for the fraud counts.3 Applying U.S.S.G. § 2B1.1(a), it
set the base offense level ("BOL") at four. It added a 14 level
enhancement, pursuant to U.S.S.G. § 2B1.1(b)(1)(O), because the
amount of stolen money was between $1.5 million and $2.5 million.4
3
All references to the Sentencing Guidelines are to the
November 1998 edition. Normally, we apply the edition in effect at
the time of sentencing. See United States v. Harotunian, 920 F.2d
1040, 1041-1042 (1st Cir. 1990)("Barring any ex post facto problem,
a defendant is to be punished according to the guidelines in effect
at the time of sentencing."). However, at the time Martin
committed his offenses, the Guidelines indicated an offense level
of 18 pursuant to § 2B1.1. Editions published after the amendments
of November 2001 indicate an offense level of 22 under that
section. "Because imposition of the amended guidelines would have
resulted in a higher BOL, and thus raised ex post facto concerns,"
we apply the Guidelines in effect at the time that Martin committed
his offenses. Id. at 1042.
4
U.S.S.G. § 2B1.1 provides in part:
(a) Base Offense Level: 4
(b) Specific Offense Characteristics
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It further added a two level enhancement under U.S.S.G. §
2B1.1(b)(4)(A) for more than minimal planning.5 This resulted in
an adjusted offense level ("AOL") of 20 for the fraud counts.
For the tax evasion counts, the court applied U.S.S.G. §
2T1.1(a)(1). Pursuant to U.S.S.G. § 2T4.1(K), it set the BOL at 16
because the tax loss was between $200,000 and $325,000.6 It then
added a two point enhancement under U.S.S.G. § 2T1.1(b)(1) for
(1) If the loss exceeded $100, increase the offense level as
follows:
Loss (Apply the Greatest) Increase in Level
. . .
(O) More than $1,500,000 add 14
(P) More than $2,500,000 add 15
. . . .
5
U.S.S.G. § 2B1.1(b)(4)(A) provides: "If the offense involved
more than minimal planning, increase [the offense level] by 2
levels. . . ."
6
U.S.S.G. § 2T1.1 provides in part:
(a) Base Offense Level:
(1) Level from §2T4.1 (Tax Table) corresponding to the tax
loss; or
(2) 6, if there is no tax loss.
Because there was a tax loss of $254,500, the court set the BOL
according to the tax table in § 2T4.1, which provides:
Tax Loss (Apply the Greatest) Offense Level
. . .
(K) More than $200,000 16
(L) More than $325,000 17
. . . .
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failing to report income in excess of $10,000 derived from criminal
activity.7 Thus, the AOL for the tax evasion counts was 18.
The court found that the fraud counts embodied the same
conduct that justified the two level upward adjustment to the tax
evasion counts for failure to report criminally derived income.
Thus, the court ruled that the fraud and tax evasion counts should
be grouped pursuant to U.S.S.G. § 3D1.2(c).8 Applying U.S.S.G. §
3D1.3, the court set the grouped offense level at 20--the highest
7
U.S.S.G. § 2T1.1 provides in part:
(b) Specific Offense Characteristics
(1) If the defendant failed to report or correctly identify
the source of income exceeding $10,000 in any year from
criminal activity, increase by 2 levels. If the
resulting offense level is less than level 12, increase
to level 12.
8
U.S.S.G. § 3D1.2 provides:
All counts involving substantially the same harm shall be grouped
together into a single Group. Counts involve substantially the
same harm within the meaning of this rule:
. . .
(c) When one of the counts embodies conduct that is treated as a
specific offense characteristic in, or other adjustment to,
the guideline applicable to another of the counts.
(d) When the offense level is determined largely on the basis of
the total amount of harm or loss, the quantity of a substance
involved, or some other measure of aggregate harm, of if the
offense behavior is ongoing or continuous in nature and the
offense guideline is written to cover such behavior. . . .
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offense level of the counts in the group (the fraud counts).9 The
court then applied a three point reduction for acceptance of
responsibility pursuant to U.S.S.G. § 3E1.1, reducing the AOL to
17. If the court had ended its sentencing analysis there, the
sentencing range would have been 24-30 months.10
Instead, the court made two downward departures from the
AOL. First, it made a four point downward departure for
extraordinary acceptance of responsibility. The court made this
departure primarily because Martin had repaid his share of the
stolen money, had contributed to paying McCarthy's share, and had
contributed to both DeMoulas's and Fleet Bank's attorneys' fees.
Second, the court made an additional three point downward departure
for Martin's "exceptional physical impairments" caused by Crohn's
disease and a variety of other ailments. The resulting AOL of 10
put Martin in Zone B of the Sentencing Table, with a guideline
9
U.S.S.G. § 3D1.3 provides:
Determine the offense level applicable to each of the Groups as
follows:
(a) In the case of counts grouped together pursuant to § 3D1.2(a)-
(c), the offense level applicable to a Group is the offense
level, determined in accordance with Chapter Two and Parts A,
B, and C of Chapter Three, for the most serious of the counts
comprising the Group, i.e., the highest offense level of the
counts in the Group.
10
This guideline range applies to defendants, like Martin, who
have a Criminal History Category of I.
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range of 6-12 months. The court applied U.S.S.G. § 5B1.1(a)(2) and
§ 5C1.1(e)(3) to sentence Martin to three years probation, six
months to be served as home detention in lieu of imprisonment, and
a $1,100 special assessment.11
The government now brings this appeal pursuant to 18
U.S.C. § 3742(b). First, the government argues that the district
court erred in grouping the tax evasion and fraud counts. Next, it
argues that the four level downward departure for extraordinary
acceptance of responsibility was unwarranted. Finally, it argues
11
U.S.S.G. § 5B1.1 provides:
(a) Subject to the statutory restrictions in subsection (b) below,
a sentence of probation is authorized if:
. . .
(2) the applicable guideline range is in Zone B of the
Sentencing Table and the court imposes a condition or
combination of conditions requiring intermittent
confinement, community confinement, or home detention as
provided in subsection (c)(3) of § 5C1.1 (Imposition of
a Term of Imprisonment). . . .
U.S.S.G § 5C1.1 provides:
. . .
(c) If the applicable guideline range is in Zone B of the
Sentencing Table, the minimum term may be satisfied by --
. . .
(3) a sentence of probation that includes a condition or
combination of conditions that substitute intermittent
confinement, community confinement, or home detention for
imprisonment according to the schedule in subsection (e).
. . .
(e) Schedule of Substitute Punishments
...
(3) One day of home detention for one day of imprisonment. .
. .
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that the three level downward departure for extraordinary physical
impairment was likewise unwarranted. Before reaching these issues,
we must address Martin's contention that double jeopardy principles
preclude any sentence of imprisonment after this appeal.12
III.
At the time of this opinion, Martin has served
approximately 15 months of his three year term of probation,
including the six month portion of that term served in home
detention.13 Martin contends that, because probation and
imprisonment are alternative punishments under the sentencing
statutes, he cannot be forced to serve both kinds of punishment,
even if the initial imposition of probation rather than
imprisonment was in error. He offers two related yet separate
12
Prior to oral argument, Martin submitted a motion to dismiss
this appeal for lack of jurisdiction. He argued that the Double
Jeopardy Clause of the Fifth Amendment prohibits us from altering
his sentence from one of probation to one of incarceration, and
that we should therefore dismiss this appeal insofar as the
government sought a term of imprisonment. Even if we agreed with
Martin that the Double Jeopardy Clause prohibits imposing a term of
imprisonment, that conclusion would not affect our jurisdiction to
hear this appeal, which is securely provided by statute. See 28
U.S.C. § 1291; 18 U.S.C. § 3742(b). Martin's double jeopardy
argument questions the constraints that the Constitution places on
our sentencing authority, not our jurisdiction. We therefore
address Martin's double jeopardy claim on its merits rather than as
an initial matter of jurisdiction.
13
Home detention is a condition placed on a six month portion
of Martin's three year probationary term. See 18 U.S.C. §
3563(b)(19); U.S.S.G. § 5C1.1(c)(3).
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arguments in support of this position. First, he argues that
imposing a term of imprisonment after an appeal would cause him to
serve two punishments--first probation and then imprisonment--in
violation of the relevant statutes that authorize the court to
impose only one form of punishment or the other. Second, even if
there is no statutory bar to a sentence of imprisonment after a
successful appeal by the government, Martin argues that
constitutional double jeopardy principles require the court to
credit any time he has already served on probation against any
imprisonment imposed after an appeal. Because probation and
imprisonment are distinct forms of punishment, Martin contends that
crediting probation against imprisonment is not permissible, and
thus the court cannot reconcile his time served on probation with
a new sentence of imprisonment. We examine these arguments in
turn.
A. Statutory Constraints
Martin concedes our authority to increase a sentence on
appeal. See DeWitt v. Ventetoulo, 6 F.3d 32, 34 (1st Cir. 1993)
("The Constitution contains no general rule that prohibits a court
from increasing an earlier sentence where the court finds that it
was erroneous and that a higher sentence was required by law.").
Nevertheless, he argues that the relevant sentencing statutes
prevent the imposition of a term of imprisonment after an erroneous
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sentence of probation. He rests his argument primarily on Ex Parte
Lange, 85 U.S. (18 Wall.) 163 (1874), and In re Bradley, 318 U.S.
50 (1943), two cases in which the Supreme Court determined that a
district court may not impose both a fine and a term of
imprisonment where the statute authorizes the court to impose only
one or the other. The Supreme Court has more recently described
these cases as standing for the proposition that "a defendant may
not receive a greater sentence than the legislature has
authorized." United States v. DiFrancesco, 449 U.S. 117, 139
(1980). In this case, Martin argues that the relevant sentencing
statutes--18 U.S.C. § 3551(b) and § 3561--explicitly prevent
imposition of both probation and imprisonment.14 Because he has
already served a portion of his probationary term, Martin argues
that imposing an additional term of imprisonment would exceed the
authority provided by the sentencing statutes. We disagree.
Section 3551(b) states: "An individual found guilty of an
offense shall be sentenced . . . to-- (1) a term of probation . .
. ; (2) a fine . . . ; or (3) a term of imprisonment. . . ."
14
Martin does not contend that the statutes governing his
offenses of conviction--fraud and tax evasion--explicitly prohibit
a sentence that includes both probation and a term of imprisonment.
The statute governing receipt of stolen money, 18 U.S.C. § 2315,
authorizes a term of imprisonment up to 10 years, a fine, or both.
The statute governing tax evasion, 26 U.S.C. § 7206(1), authorizes
a term of imprisonment up to 3 years, a fine of up to $100,000, or
both. Pursuant to 18 U.S.C. § 3551(b), each of these violations
of federal law is also subject to punishment by probation.
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(emphasis added). Thus, the statute provides a choice among three
alternative punishments.15 If a court chooses to impose probation,
it does so pursuant to the terms of § 3561. That section prohibits
imposition of probation when "the defendant is sentenced at the
same time to a term of imprisonment" (emphasis added), further
emphasizing the alternative nature of incarceration and probation
in any one sentencing decision.16 Thus, both § 3551(b) and § 3561
require a district court to choose between probation and
imprisonment when imposing its original sentence.17 However, the
companion sentencing statutes explicitly recognize that a sentence
of probation is subject to appeal and may be corrected if
15
In addition to listing fines as one alternative punishment,
the statute explicitly states that "[a] sentence to pay a fine may
be imposed in addition to any other sentence." 18 U.S.C. §
3551(b).
16
18 U.S.C. § 3561 governs imposition of probation pursuant to
the Sentencing Reform Act of 1984. It provides:
(a) In general. A defendant who has been found guilty of an
offense may be sentenced to a term of probation unless--
. . .
(3) the defendant is sentenced at the same time to a term of
imprisonment for the same or a different offense that is
not a petty offense. . . .
17
Federal law treats a punishment of "probation" differently
than it treats a punishment of "supervised release." "Probation"
is an alternative punishment to incarceration. 18 U.S.C. §
3561(a). "Supervised release" is a punishment in addition to
incarceration, served after completion of a prison term. 18 U.S.C.
§ 3583. See also United States v. Mandarelli, 982 F.2d 11, 12 (1st
Cir. 1992)(describing the difference between "probation" and
"supervised release").
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erroneous. See 18 U.S.C. § 3562 ("[A] sentence of probation can
subsequently be . . . appealed and modified, if outside the
guideline range, pursuant to the provisions of section 3742. . .
."). Section 3742 in turn provides for sentencing on remand within
the proper guideline range.18 Thus, the sentencing statutes
explicitly provide for the appeal and modification of probationary
sentences that, like the sentence in this case, fall outside the
guideline sentencing range.
18
18 U.S.C. § 3742(g) was amended by the PROTECT Act on April
30, 2003. As a procedural change, the amended version applies to
all cases pending on that date, including this case. See infra
Part V.B. Section 3742(g) provides:
Sentencing upon remand. A district court to which a case is
remanded pursuant to subsection (f)(1) or (f)(2) shall resentence
a defendant in accordance with section 3553 and with such
instructions as may have been given by the court of appeals,
except that--
(1) In determining the range referred to in subsection
3553(a)(4), the court shall apply the guidelines issued by
the Sentencing Commission pursuant to section 994(a)(1) of
title 28, United States Code, and that were in effect on the
date of the previous sentencing of the defendant prior to
the appeal, together with any amendments thereto by any act
of Congress that was in effect on such date; and
(2) The court shall not impose a sentence outside the
applicable guidelines range except upon a ground that--
(A) was specifically and affirmatively included in the
written statement of reasons required by section
3553(c) in connection with the previous sentencing of
the defendant prior to the appeal; and
(B) was held by the court of appeals, in remanding the
case, to be a permissible ground of departure.
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Because the Guidelines authorize a punishment of
probation only under limited circumstances, the directive in § 3742
to resentence within the guideline sentencing range necessarily
includes the possibility that a defendant originally sentenced to
probation will, after appeal, receive a sentence of imprisonment.
A successful appeal by the government may increase the defendant's
offense level, and thus place him in a higher sentencing "zone."
See U.S.S.G. Ch. 5 Pt. A. As defendants move from the shorter
sentencing ranges in Zone A to the progressively longer ranges in
Zones B, C and D, they also lose the possibility of probation as a
punishment. In Zone A, a court may impose a probationary sentence
and no term of imprisonment. U.S.S.G. § 5C1.1(b). In Zone B, the
court may satisfy the minimum term of the guideline sentencing
range by imposing a term of imprisonment or a sentence of probation
that includes a period of community confinement or home detention.
U.S.S.G. § 5C1.1(c). In Zone C, half the term indicated by the
guideline range must be served in prison while the other half may
be served as supervised release with a condition that substitutes
community confinement or home detention. U.S.S.G. § 5C1.1(d) In
Zone D, the minimum term must be served in prison. U.S.S.G. §
5C1.1(f). This structure requires that a decision on appeal
overturning a downward departure will sometimes move the defendant
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into a higher sentencing zone, thereby affecting the availability
of a probationary sentence.
In this case, Martin would have been in Zone D (making a
prison sentence mandatory) but for the departures moving him down
to Zone B (allowing probation served under home detention as an
alternative to imprisonment). Overturning any one of the district
court's departures would move him into Zone D and require a
sentence of imprisonment.19 Although § 3551 lists imprisonment and
probation as alternative sentences, the Guidelines allow an
erroneous term of probation to be replaced by a term of
imprisonment if the correct sentencing "zone" requires it. Thus,
imposing a term of imprisonment after the government's appeal from
a sentence of probation does not exceed the authority granted to
the courts by the sentencing statutes.
B. Double Jeopardy Constraints
The Double Jeopardy Clause "absolutely requires that
punishment already exacted must be fully 'credited' in imposing a
sentence upon a new conviction for the same offense." North
Carolina v. Pearce, 395 U.S. 711, 718-19 (1969). See also Jones v.
19
The district court sentenced Martin based on an AOL of 10
which, combined with a Criminal History Category of I, places him
in Zone B. The court's smallest downward departure was three
levels, meaning that overturning even the smallest departure would
increase Martin's AOL to 13. This would place him in Zone D,
requiring a term of imprisonment within the specified guideline
sentencing range. See U.S.S.G. § 5C1.1(e).
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Thomas, 491 U.S. 376, 381-82 (1989)(holding that crediting time
already served against the final sentence fully vindicates the
defendant's double jeopardy rights). This crediting principle
applies equally to a new sentence imposed for the same conviction
after a government appeal. See Pearce, 395 U.S. at 718 (stating
that the protection against double punishment is violated "whenever
punishment already endured is not fully subtracted from any new
sentence imposed"); United States v. Bogdan, 302 F.3d 12, 17 (1st
Cir. 2002) (remanding after government appeal for resentencing
within the guideline sentencing range subject to credit for time
already served); United States v. McMillen, 917 F.2d 773, 777 (3d
Cir. 1990) (holding that defendant must be given full credit for
time served when resentenced after successful government appeal).
It also applies to sentences of probation which, although not as
harsh as imprisonment, are nonetheless "punishments" imposed for
the offenses of conviction. See Korematsu v. United States, 319
U.S. 432, 435 (1943)("[A] probation order is 'an authorized mode of
mild and ambulatory punishment. . . .'"); United States v. Bynoe,
562 F.2d 126, 128 (1st Cir. 1977)("[P]robation is nonetheless a
punishment imposed on the defendant, albeit a mild one.") Thus,
because the sentence of probation is "a punishment already exacted"
for Martin's offense, it must be credited against a new sentence of
imprisonment imposed after an appeal.
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Despite this precedent, both parties anticipate that the
Bureau of Prisons (BOP) would not give Martin credit for time
served on probation, even under the condition of home detention,
against a new sentence of imprisonment. If this anticipation is
accurate, the BOP appears to have based its policy on the Supreme
Court's decision in Reno v. Koray, 515 U.S. 50 (1995). See U.S.
Dept. of Justice, Bureau of Prisons Program Statement No. 5880.28,
p. 1-14H (Jun. 19, 1999)("[U]nder Koray, a defendant is not
entitled to any time credit off the subsequent sentence, regardless
of the severity or degree of restrictions, if such release was ...
a condition of parole, probation or supervised release.").
In Koray, the defendant pleaded guilty to money
laundering. While awaiting his sentence, he was released on bail
with the condition that he be confined to a community center. He
remained at the community center for approximately five months
before beginning his 41 month sentence of imprisonment. The BOP
refused to grant him credit for the five months spent at the
community center because that time was not "official detention"
within the meaning of 18 U.S.C. § 3585(b), which governs crediting
of time served against federal prison sentences.20
20
18 U.S.C. § 3585(b) provides:
Credit for prior custody. A defendant shall be given credit toward
the service of a term of imprisonment for any time he has spent in
official detention prior to the date the sentence commences--
-19-
The Supreme Court agreed with the BOP, finding that the
term "official detention" in 18 U.S.C. § 3585(b) did not include
time served in a community center while on bail awaiting a final
sentence. However, the Court emphasized that § 3585(b) only
governs credit for presentence confinement. Koray, 515 U.S. at 56
("Section 3585(b) provides credit for time 'spent in official
detention prior to the date the sentence commences,' ... thus
making clear that credit is awarded only for presentence restraints
on liberty.") (emphasis in the original). It also distinguished
between crediting time served while a defendant is "released" on
bail and crediting time served after a defendant is "detained" or
"sentenced." Koray, 515 U.S. at 58. Thus, Koray only addressed
the limits of 18 U.S.C. § 3585(b), and did not address the double
jeopardy implications of crediting time served on probation,
supervised release, or other punishments imposed as an initial,
(1) as a result of the offense for which the sentence was
imposed; or
(2) as a result of any other charge for which the defendant
was arrested after the commission of the offense for which the
sentence was imposed;
that has not been credited against another sentence.
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albeit erroneous, sentence.21 See Koray, 515 U.S. at 55 n.2 ("Our
task is strictly one of statutory interpretation.").
Martin argues that, even if § 3585(b) does not apply to
this case, the Supreme Court's double jeopardy jurisprudence
prevents us from crediting time served on probation against a term
of imprisonment. He cites Jones v. Thomas, 491 U.S. 376, 384
(1989), in which the Supreme Court noted that "[t]he alternative
sentences in Bradley . . . were of a different type, fine and
imprisonment. . . . [I]t would not have been possible to 'credit'
a fine against time in prison. . . ."
This impossibility of crediting does not apply to the
alternative sentences of probation, including home detention, and
imprisonment. Although probation and imprisonment are different
types of sentences, each restricts a defendant's liberty (albeit to
varying degrees) over a specific period of time, allowing the
sentencing court to compare the degree and length of restriction
when determining the proper amount of credit. Hence, we join other
courts of appeals in holding that these similarities are sufficient
to allow crediting of probation against imprisonment. See United
21
Similarly, our decision in United States v. Zackular, 945
F.2d 423, 425 (1st Cir. 1991), held that time spent in home
detention while awaiting the start of a prison term should not be
credited against that prison term. It did not address whether the
Double Jeopardy Clause requires crediting of time served on an
erroneous sentence.
-21-
States v. Carpenter, 320 F.3d 334, 345 (2d Cir. 2003) (instructing
the district court on remand to credit time served on probation
against a new sentence of imprisonment); United States v. Miller,
991 F.2d 552, 554 (9th Cir. 1993) (same); see also United States v.
Lominac, 144 F.3d 308, 318 (4th Cir. 1998)(holding that a court may
credit time erroneously served on supervised release against a new
sentence of imprisonment because both punishments restrict the
defendant's freedom over a period of time).
C. Accounting for Time Served on Probation
Having determined that Martin must receive credit for
time served on probation against any sentence of imprisonment
imposed after this appeal, we must next consider the calculation of
this credit. Facing a similar situation, in which the defendant
had completed a six-month term of home detention, the Second
Circuit explained:
Where, as here, the defendant has served time
in home detention that will not be credited
toward his new sentence [by the Bureau of
Prisons], he has served a portion of the "just
punishment for the offense," the served time
has provided a portion of the necessary
deterrent, and, if home detention is not taken
into account, he will, upon his ultimate
release, have served a longer sentence than
would a similarly situated defendant who had
been correctly sentenced under the Guidelines
in the first instance. Because the Guidelines
do not consider these mitigating
circumstances, the district court is permitted
to depart downward to account for them.
-22-
Carpenter, 320 F.3d at 345. See also United States v. Romualdi,
101 F.3d 971, 977 (3d Cir. 1996)("On remand, the district court may
want to consider whether [the six months of home detention already
served] is a factor that would warrant departure."); Miller, 991
F.2d at 554 ("[B]ecause the [Sentencing] Commission seems not to
have considered the issue of compensating for time erroneously
served, the district court [is] free to depart" to account for six
months of home detention already served).22 Other circuit courts
have required credit for punishments other than or in addition to
probation served under home detention. See Lominac, 144 F.3d at
317-18 (holding that a court must credit time erroneously served on
supervised release against a new sentence of imprisonment);
McMillen, 917 F.2d at 777 (holding that the district court must
fully credit time served on a sentence of probation, including 30
days served in a community confinement center and five months
served in home detention).
We agree that the proper means for crediting probation,
including home detention, against imprisonment is a downward
22
In Carpenter, the Second Circuit recognized that failing to
credit time served on probation against a new prison sentence "may
fall athwart the proscriptions of the Double Jeopardy Clause of the
Fifth Amendment to the Constitution," but did not address the issue
in depth. 320 F.3d 334, 345 & n.10. The courts in Romualdi and
Miller did not address the relationship between crediting probation
against imprisonment and double jeopardy.
-23-
departure by the district court upon remand.23 The amount of any
departure should depend on the specific conditions of Martin's
probation and the effect of a sentence reduction on the underlying
purposes of the Guidelines as set out in 18 U.S.C 3553(a). See
Carpenter, 320 F.3d at 346. We leave this fact-based inquiry to
the judgment of the district court.
We note, however, that "fully crediting" probation
against a subsequent sentence of imprisonment, Pearce, 395 U.S. at
717-18, does not require a day-to-day offset against time to be
served in prison. Time served in home detention is normally far
less onerous than imprisonment, and time served on probation
without home detention is even less restrictive of a defendant's
freedom.24 Thus, a sentence on remand that reduced imprisonment by
one day for each day that Martin served in home detention would be
23
United States v. Wilson, 503 U.S. 329 (1992), is not to the
contrary. In Wilson, the Court ruled that the Attorney General,
and not the sentencing court, is responsible for calculating the
amount of credit granted to defendants pursuant to 18 U.S.C. §
3585(b). Wilson, however, considered only who was authorized to
grant the credit specifically prescribed by § 3585(b). It did not
address the crediting required by the constitutional protection
against double jeopardy.
24
The record shows that Martin's home detention was not
particularly onerous. With prior approval from the probation
office, he was allowed to leave his home for medical reasons, work,
charitable activities, religious observances, family activities,
and to attend to any "ordinary necessities." After serving his six
months of home detention, Martin has been subject only to the
standard terms of probation.
-24-
too lenient to represent the punishment that Congress intended.
See Carpenter, 320 F.3d at 346; Miller, 991 F.2d at 554. The time
Martin served on probation after his period of home detention
should reduce any new sentence of imprisonment to an even lesser
degree, reflecting its less restrictive conditions. Conversely, a
sentence on remand that gave no credit for time served on probation
and imposed the maximum term of imprisonment would exceed the
maximum punishment allowed by statute, thereby violating the
Lange/Bradley line of precedent. Thus, a departure that "fully
credits" the time Martin has already served will provide less than
one-to-one credit for each day of home detention and probation.25
Finally, we hold that a departure on remand based on time
already served on probation and home detention does not conflict
25
Although U.S.S.G. § 5C1.1(e)(3) grants "[o]ne day of home
detention for one day of imprisonment," that section applies only
to sentences in Zones A, B, or C, where the sentencing range can be
served in whole or in part as a term of probation or supervised
release under the condition of home detention. This policy
judgment about the relationship between one day of home detention
and one day of imprisonment in Zones A, B, or C, whatever its
rationale, does not mean that there must be a similar day-for-day
crediting to meet constitutional double jeopardy requirements. The
obvious differences in restraint between home detention and
imprisonment remain relevant to the constitutional double jeopardy
analysis. Moreover, Martin's offense level on remand puts him in
Zone D, see infra Part VI, where the guideline sentencing range
must be fulfilled by incarceration. Applying a one-to-one ratio
would effectively apply the more lenient terms of Zones A, B, or C,
allowing Martin to serve probation where the terms of Zone D
require imprisonment. Thus, because Zone D does not allow for home
detention, the conversion ratio of § 5C1.1(e)(3) is inapplicable to
this case by the terms of the Guidelines themselves.
-25-
with recent changes to 18 U.S.C. § 3742. See P.L. 108-21, §
401(e), 117 Stat. 650, 671 (2003).26 Effective April 30, 2003, §
3742(g) provides that, upon resentencing after appeal, the district
court may only depart based on factors that were both approved by
the appellate court and that appeared as grounds for departure in
the statement of reasons issued after the original sentencing. See
supra note 18. Thus, the provision bars new departures on remand.
Nevertheless, we hold that § 3742(g) does not prohibit departures
necessary to satisfy the double jeopardy crediting requirement. A
departure on these grounds can arise, by its very nature, only upon
resentencing after appeal, and thus could not have been listed in
the original statement of reasons. Such departures do not fit
within the purpose of § 3742(g) to "prevent sentencing courts, upon
remand, from imposing the same illegal departure on a different
theory." H.R. Conf. Rep. No. 108-66, at 59 (2003), reprinted in
U.S.C.C.A.N. 683, 694. In this case, rather, the new departure is
necessary to ensure compliance with the protections afforded by the
Double Jeopardy Clause, and so is permissible. See United States
v. Lauersen, 348 F.3d 329, 344 n.16 (2d Cir. 2003) (allowing a new
departure on remand, despite the mandate of § 3742(g), because "the
26
As a procedural change under the PROTECT Act, this new
section applies to all cases pending on April 30, 2003. See infra
Part V.B.
-26-
basis for . . . [the] departure did not exist at Lauersen's initial
sentencing").
We recognize that the possibility of a prison sentence in
this case, after Martin has already served more than one third of
his probation, presents an unfortunate circumstance. However,
"some sentencing errors under the guidelines are inevitable....
[and] increasing a defendant's sentence and confining him in prison
is a typical error correction contemplated by the guidelines'
structure." Bogdan, 302 F.3d at 16-17. Allowing Martin to escape
a proper sentence because the district court chose home detention
in lieu of prison would merely compound judicial error. See United
States v. Bozza, 330 U.S. 160, 166-67 (1947)("The Constitution does
not require that sentencing should be a game in which a wrong move
by the judge means immunity for the prisoner.").
IV.
We now turn to the district court's decision to group the
tax evasion and fraud counts pursuant to U.S.S.G. § 3D1.2(c).27 The
27
Because offense levels for all nine fraud counts are
calculated pursuant to § 2B1.1, the court combined those counts
into a single group. Similarly, because the offense levels for the
two tax evasion counts are calculated pursuant to § 2T1.1, the
court grouped those counts into a second group. See U.S.S.G. §
3D1.2(d) ("Offenses covered by the following guidelines are to be
grouped under this subsection: §§ 2B1.1 . . . 2T1.1. . . ."). These
groupings are not contested in this case. The sole grouping
question in this case is whether the resulting two groups--one of
fraud counts and the other of tax evasion counts--should in turn be
grouped together so that all of the counts to which Martin pleaded
-27-
government argues that this grouping was in error, while Martin
contends that grouping was proper pursuant to either § 3D1.2(c) or
§ 3D1.2(d). Because the government objected to the grouping before
the district court, we review the court's decision de novo. See
United States v. Phillips, 952 F.2d 591, 594 (1st Cir. 1991).
A. Grouping pursuant to U.S.S.G. § 3D1.2(c)
U.S.S.G. § 3D1.2(c) requires the court to group counts
"when one of the counts embodies conduct that is treated as a
specific offense characteristic in, or other adjustment to, the
guideline applicable to another of the counts." It prevents
"double counting" by ensuring that a defendant is not punished,
either directly or through an adjustment, for the same underlying
offense in separate but "closely related" charges. U.S.S.G. §
3D1.2 cmt. n.5. The Guidelines "do not require that all of the
conduct be 'fully accounted for'"; rather, "it is enough that
conduct 'embodied' in the second offense is 'treated as an
adjustment' to the other offense." United States v. Sedoma, 332
F.3d 20, 27 (1st Cir. 2003).
In this case, U.S.S.G. § 2T1.1(b)(1) required the
district court to add two levels to the tax evasion AOL for failure
to report criminally derived income. The court believed that this
adjustment required grouping pursuant to § 3D1.2(c) because the
guilty are included in a single group.
-28-
fraudulent conduct charged in the nine fraud counts--receiving
stolen money--embodied the same conduct that was treated in the §
2T1.1(b)(1) adjustment to the tax evasion charges. The court
grouped the counts under § 3D1.2(c) to avoid "double counting" the
underlying conduct of fraudulently obtaining income.
The decision to group lowered the final AOL by two
levels. When a court groups counts pursuant to § 3D1.2(a)-(c), as
was the case here, the offense level for the group is set, pursuant
to § 3D1.3, at the highest AOL of the offenses in the group.28 In
this case, the AOL for the fraud counts was 20, while the AOL for
the tax evasion counts was 18. Thus, the AOL for the group was set
at 20. When a court does not group counts, it applies U.S.S.G. §
3D1.4 to determine the combined offense level.29 Under that
28
See supra note 9.
29
U.S.S.G. § 3D1.4 provides:
The combined offense level is determined by taking the offense
level applicable to the Group with the highest offense level and
increasing that offense level by the amount indicated in the
following table:
Number of Units Increase in Offense Level
1 None
1 1/2 add 1 level
2 add 2 levels
2 1/2 - 3 add 3 levels
3 1/2 - 5 add 4 levels
More than 5 add 5 levels
In determining the number of Units for purposes of this section:
-29-
section, the court begins with the highest AOL and then adds levels
depending on the other crimes of conviction. Because the tax
evasion AOL of 18 is one to four levels less than the fraud AOL of
20, § 3D1.4(a) requires an increase of two levels above the higher
AOL, resulting in a final AOL of 22. Thus, the district court's
decision to group gave Martin a combined AOL of 20. If the court
had not grouped the counts, Martin's combined AOL would have been
22.
The text of § 3D1.2(c), taken alone, appears to support
grouping in this case. Both the fraud counts and the adjustment to
the tax evasion AOL refer to the same conduct: the illegal receipt
of stolen funds. Thus, the fraud count "embodies conduct that is
treated as . . . [an] adjustment to" the tax evasion AOL. U.S.S.G.
§ 3D1.2(c). If we looked no further than the text of the
Guidelines, the two counts should perhaps be grouped.
We must interpret the text of the Guidelines, however, in
light of the commentary provided by the Sentencing Commission.
"[C]ommentary in the Guidelines Manual that interprets or explains
a guideline is authoritative unless it violates the Constitution or
a federal statute, or is inconsistent with, or a plainly erroneous
(a) Count as one Unit the Group with the highest offense level.
Count one additional Unit for each Group that is equally serious or
from 1 to 4 levels less serious.
. . . .
-30-
reading of, that guideline." Stinson v. United States, 508 U.S.
36, 38 (1993). According to Application Note 5 of the Commentary,
the purpose of § 3D1.2(c) is to prevent "'double counting' of
offense behavior . . . if the offenses are closely related."
U.S.S.G. § 3D1.2 cmt. n.5. See also United States v. Sedoma, 332
F.3d 20, 25-26 (1st Cir. 2003) (outlining the requirements for
grouping pursuant to § 3D1.2(c)). Thus, even when one count
embodies conduct treated as an adjustment to a second count, the
counts cannot be properly grouped under § 3D1.2(c) unless they are
"closely related."30
The fraud counts and tax evasion counts in this case are
not "closely related." The two crimes involve different victims:
the fraud counts harmed DeMoulas while the tax evasion offenses
harmed the United States. They also caused different harms: the
fraudulent scheme diverted more than $1.8 million from DeMoulas
while the failure to report income denied approximately $254,500 to
the United States Treasury. Finally, the two counts required
different conduct: the fraud counts reflect Martin's efforts to
30
In Sedoma, we wrote that "we must determine whether the
conduct embodied in [the first count] is treated as an adjustment
to the guideline applicable to [the second count]. If it is, . .
. [the adjustment] triggers the applicability of § 3D1.2(c)." 332
F.3d at 25-26. This analysis, however, is subject to the counts
being "closely related" pursuant to U.S.S.G. § 3D1.2 cmt. n.5, a
point not at issue in Sedoma. Thus, our grouping analysis in
Sedoma applies only to counts that are "closely related."
-31-
illegally divert funds through a fraudulent scheme while the tax
evasion counts reflect his failure to truthfully report his income.
Under these circumstances, we conclude that the connection between
the two crimes is too tenuous to be deemed "closely related" within
the meaning of § 3D1.2 cmt. n.5.31
Moreover, if we permitted grouping in this case, there
would be no punishment consequences for the tax evasion conduct.
As stated above, the court determines the total offense level of
grouped counts by applying U.S.S.G. § 3D1.3. In this case, where
the AOL for the fraud counts is 20 and the AOL for the tax evasion
counts is 18, the total offense level for the group would be 20--
the same offense level that would apply if Martin had pleaded
31
Our holding is in accord with other courts of appeals that
have addressed this issue. See, e.g., United States v. Peterson,
312 F.3d 1300, 1304 (10th Cir. 2002) ("We are convinced that tax
evasion and mail fraud are not closely related because the victims
of tax evasion and mail fraud are not the same, the offenses
involve distinct behaviors . . . and the harms attributable to each
crime are dissimilar."); Weinberger v. United States, 268 F.3d 346,
355 (6th Cir. 2001) (refusing to group pursuant to either §
3D1.2(c) or § 3D1.2(d) because the "fraud counts and the tax count
consisted of different elements, affected different victims and
involved different criminal conduct."); United States v. Vitale,
159 F.3d 810, 813-14 (3d Cir. 1998) (refusing to group wire fraud
and tax evasion counts pursuant to § 3D1.2(c) because "the counts
here involve different victims... different harms and different
types of conduct."). We find unconvincing the Fifth Circuit's
reasoning in United States v. Haltom, 113 F.3d 43 (5th Cir. 1997)
(holding that fraud counts should be grouped with tax evasion
counts pursuant to § 3D1.2(c)).
-32-
guilty only to the fraud counts. Thus, after grouping, Martin's
AOL would reflect no punishment for tax evasion.
By contrast, because we refuse to group the fraud and tax
evasion counts, the Guidelines require us to determine the combined
offense level pursuant to U.S.S.G. § 3D1.4. Under that section,
the fraud AOL of 20 is enhanced by two levels because of the tax
evasion counts, resulting in a combined offense level of 22. Thus,
Martin's punishment for the tax evasion counts is a two level
increase over the offense level he would have received if he had
pleaded guilty only to the fraud counts.
This outcome is consistent with an important but simple
proposition: one who receives stolen money and fails to report that
income in a tax return is generally more culpable than one who
merely receives stolen money.32 To allow grouping in this
32
We have previously articulated this principle in United
States v. Lombardi, 5 F.3d 568, 571 (1st Cir. 1993), holding that
money laundering should not be grouped with underlying fraud counts
pursuant to § 3D1.2(c), because "[o]ne who commits a fraud and
launders the money (thereby knowing of its source) is normally more
culpable than one who merely launders money knowing of its source."
5 F.3d at 571. The specific holding of Lombardi has been
effectively overruled by the 2001 amendments to the Sentencing
Guidelines. See U.S.S.G. § 2S1.1 cmt. n.6 ("In a case in which the
defendant is convicted of a count of laundering funds and a count
for the underlying offense from which the laundered funds were
derived, the counts shall be grouped pursuant to subsection (c) of
§ 3D1.2 (Groups of Closely Related Counts)"). However, the
explicit instruction to group fraud and money laundering counts,
and the absence of any similar instruction to group fraud and tax
evasion counts, may demonstrate that the Sentencing Commission does
not support a categorical rule requiring courts to group fraud and
-33-
circumstance would obscure this difference in culpability. Our
decision also finds support in the underlying purpose of §
2T1.1(b)(1). This subsection increases the punishment for failure
to report criminally derived income because "[t]ax offenses, in and
of themselves, are serious offenses" and criminally derived income
is "generally difficult to establish, so that the tax loss in cases
will tend to be substantially understated." U.S.S.G. § 2T1.1 cmt.
background. Finally, our decision is in accord with the Sentencing
Commission's statutory mandate to punish with a term of
imprisonment those defendants who derive a substantial part of
their income from criminal activity. 28 U.S.C. § 994(i)(2). By
refusing to group in this case, we ensure that Martin receives
additional punishment for his tax evasion offense.
B. Grouping pursuant to § 3D1.2(d)
Martin argues that grouping is still appropriate even if
§ 3D1.2(c) does not apply because § 3D1.2(d) provides for grouping
"when the offense level is determined largely on the basis of the
total amount of harm or loss. . . ." Because both the fraud and
tax counts require incremental enhancement based on the amount of
loss, Martin argues that they must be grouped pursuant to this
section.
tax evasion counts.
-34-
In addition to requiring that the counts be based on the
amount of harm or loss, grouping under 3D1.2(d) also requires that
the offenses be of "the same general type." U.S.S.G. § 3D1.2 cmt.
n.6. Although the commentary does not describe exactly what
factors a court should consider when determining if two offenses
are of the same general type, the application notes offer several
illustrations: multiple counts of tax evasion are of the "same
general type," as are multiple offenses dealing with
misappropriated money: larceny, embezzlement, forgery, and fraud.
The Guidelines offer no guidance, however, on the relationship
between tax evasion and the receipt of stolen money.
In our view, just as fraud and tax evasion counts are not
"closely related" within the meaning of § 3D1.2 cmt. n.5, they are
not offenses of the same general type within the meaning of § 3D1.2
cmt. n.6. As noted, the fraud and tax evasion counts cause
different harms to different victims and require different conduct
on the part of the defendant. Furthermore, while the tables that
set the offense levels both increase with the amount of loss, they
increase at different increments for tax and fraud offenses. The
different increments reflect the different nature of the crimes,
basing the offense level for fraud counts on the amount of loss to
-35-
the victim and the offense level for the tax evasion counts on the
tax loss to the government.33
Finally, grouping pursuant to § 3D1.2(d), like grouping
pursuant to § 3D1.2(c), would result in Martin receiving no
punishment for his tax evasion offense. That outcome would be
incompatible with the Guidelines' concept of incremental punishment
for each criminal offense.34 See 28 U.S.C. § 994(l) ("The
Commission shall ensure that the guidelines . . . reflect . . . the
appropriateness of imposing an incremental penalty for each
offense. . . .").
V.
Finally, we turn to the district court's two downward
departures: a four level downward departure for extraordinary
acceptance of responsibility and a three level downward departure
for extraordinary physical impairment. However, before considering
33
In a case like this one, where the defendant did not receive
the entire amount of stolen funds, the severity of the tax evasion
offense may not increase proportionally with the severity of the
fraud offense.
34
In holding that tax and fraud counts should not be grouped
pursuant to § 3D1.2(d), we are in accord with the majority of the
circuit courts of appeals to have addressed this issue. See United
States v. Shevi, 345 F.3d 675, 680-81 (8th Cir. 2003); Weinberger
v. United States, 268 F.3d 346, 353-355 (6th Cir. 2001); United
States v. Lindsey, 184 F.3d 1138, 1142-43 (10th Cir. 1999). But
see United States v. Gordon, 291 F.3d 181, 192 (2d Cir. 2002).
-36-
these departures in detail, we must first address recent changes to
our standard of review.
A. Standard of Review
Since the Supreme Court's decision in Koon v. United
States, 518 U.S. 81, 91 (1996), we have applied a three part
analysis to the review of departures from the Guidelines: "(1) we
determine whether the stated ground for departure is theoretically
permissible under the guidelines; (2) if so, we examine the record
to assess whether there is adequate factual support; and (3) we
determine the appropriateness of the degree of departure." Bogdan,
302 F.3d at 16. We conducted part one of this inquiry under a de
novo standard and applied Koon's abuse of discretion standard to
parts two and three. See United States v. Thurston, 358 F.3d 51,
70 (1st Cir. 2004).
This deferential review process changed on April 30,
2003, when provisions of the Prosecutorial Remedies and Other Tools
to End the Exploitation of Children Today Act (PROTECT Act) became
effective. Under the PROTECT Act, we still "give due regard to the
opportunity of the district court to judge the credibility of the
witnesses, and shall accept the findings of fact of the district
court unless they are clearly erroneous. . . ." 18 U.S.C §
3742(e). However, we now "review de novo the district court's
-37-
application of the guidelines to the facts." Id.; see also
Thurston, 358 F.3d at 71.
De novo review does not allow us to overrule the
Sentencing Commission's decisions about what kinds of factors may
provide an appropriate basis for departure. "[W]here the
Commission has expressly considered and forbidden or approved (even
if discouraged) a particular factor for departure, the court of
appeals is bound to accept that determination and cannot revisit
it. . . ." Thurston, 358 F.3d at 75. Rather, in a case such as
this where the court based its departures on factors that the
Commission specifically considered, we review de novo only whether
the departure "is not justified by the facts of the case." 18
U.S.C. § 3742(e)(3)(B)(iii). Nevertheless, in making this
judgment, we may "refer[] to the purposes of sentencing, the goals
of the guidelines, or other policy considerations in determining
whether, on the facts before the court, a particular defendant fits
within a particular categorical 'factor.'" Thurston, 358 F.3d at
76.
B. Application of the PROTECT Act
Martin argues that applying the PROTECT Act's de novo
standard of review in this case would violate the Supreme Court's
retroactivity jurisprudence. At the sentencing hearing, Martin
believed that the district court was inclined to depart based on
-38-
extraordinary acceptance of responsibility. Based on this belief,
and the deferential standard of review in place at the time, Martin
made the strategic decision not to testify in support of that
departure. Martin now argues that this decision created a "settled
expectation" in the narrow appellate review in place at the time of
his hearing. If he had known that the standard of review would be
de novo, he would have testified. He argues that this expectation
prevents us from applying the PROTECT Act's de novo standard to his
case. We disagree.
We have recently held that the PROTECT Act's change to
the appellate standard of review applies to cases pending when the
Act became effective on April 30, 2003. Thurston, 358 F.3d at 71-
72. We based this holding on the principle that "[t]he change of
a standard of appellate review is one in procedure for the courts;
procedural changes that do not affect substantial rights are not
usually considered impermissibly retroactive." Id. We further
reasoned that:
The PROTECT Act's alteration of the appellate
standard of review upsets no legitimate
reliance interest by a defendant; it could not
have induced alteration of the behavior that
led to the crime. We see no unfairness to
defendants in Congress's requiring a closer
look by appellate courts at whether a district
court committed an error in deciding that the
guidelines permitted a departure.
-39-
Id. (footnotes omitted). See also United States v. Mallon, 345
F.3d 943, 946 (7th Cir. 2003) (applying the de novo standard of
review retroactively because "[the PROTECT Act] changes who within
the federal judiciary makes a particular decision, but not the
legal standards for that decision."). Thus, as a procedural
change, we must apply the PROTECT Act's new standard of review
retroactively, just as we would apply a new procedural change
announced by the Supreme Court. Thurston, 358 F.3d at 71; see also
Griffith v. Kentucky, 479 U.S. 314, 322-23 (1987) ("[A]fter we have
decided a new rule in the case selected, the integrity of judicial
review requires that we apply the rule to all similar cases pending
on direct review."); Derman v. United States, 298 F.3d 34, 39 (1st
Cir. 2002) ("If the conviction is not yet final when the Supreme
Court announces the rule, then inferior courts must apply that rule
to the defendant's case.").
Martin's belief that his evidence for a departure will
not be as persuasive on appeal as it might have been does not
change our analysis. We must apply procedural changes
retroactively to all sentences that are not final, even if such
application might result in disadvantage to one of the parties.35
35
Because Martin's sentence is still subject to appeal, it is
not "final" for retroactivity purposes. See Griffith, 479 U.S. at
321 n.6 ("By 'final' we mean a case in which a judgment of
conviction has been rendered, the availability of appeal exhausted,
and the time for a petition of certiorari elapsed or a petition for
-40-
See Landgraf v. U.S.I. Film Products, 511 U.S. 244, 275 n.28 (1994)
("While we have strictly construed the Ex Post Facto Clause to
prohibit application of new statutes creating or increasing
punishments after the fact, we have upheld intervening procedural
changes even if application of the new rule operated to a
defendant's disadvantage in the particular case."); Griffith, 479
U.S. at 321-22, 328 ("[A] new rule for the conduct of criminal
prosecutions is to be applied retroactively to all cases . . . not
yet final."). However unlikely, each defendant runs the risk that
alterations in procedural rules during the adjudicative process, by
Congress or the Supreme Court, may change the consequences of
tactical trial decisions.36
certiorari finally denied.").
36
The Ninth Circuit recently rejected the argument that a
defendant "held a legitimate and reasonable expectation that there
would be an established degree of appellate deference to the
departure granted by the district court that oversaw his
proceedings below." United States v. Phillips, 356 F.3d 1086, 1099
(9th Cir. 2004). In applying the PROTECT Act retroactively, the
court wrote: "[The defendant] did not rely upon the former standard
of review at the time he committed the crime for which he was
convicted. He may have expected that a higher level of deference
would be shown to the district court's sentencing determinations,
but that fact should have prompted him to present his evidence more
carefully at trial in the event that the district court's decision
was adverse to him." Id. (emphasis in original).
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C. Downward Departure for Extraordinary Acceptance of
Responsibility
The district court granted Martin a three level downward
adjustment for acceptance of responsibility pursuant to § 3E1.1(a)-
(b). It then departed downward an additional four levels for
Martin’s “extraordinary acceptance of responsibility.” In
justifying the additional departure, the court stated that
Mr. Martin, Mr. Dick and Mr. Stella divided up
the total amount taken from the DeMoulas
enterprises family and paid it back to them.
Martin and Dick also divided up McCarthy's
share and contributed that share as well as
their own. And also there were additional
contributions of attorney's fees, and in
particular, Martin contributed to the
attorney's fees for the DeMoulas family and
for Fleet Bank, and, of course, for the
DeMoulas enterprises. On those grounds, I
will make a downward departure of four levels
from 17 to 13.
Thus, the court based its additional departure primarily on the
restitution Martin paid to his victims.
Adjustments made pursuant to § 3E1.1 account for pre-
trial restitution. U.S.S.G. § 3E1.1, cmt. n.1(c).37 "A departure
37
U.S.S.G. § 3E1.1, cmt. n.1 provides:
1. In determining whether a defendant qualifies [for a decrease
in offense level] under subsection (a), appropriate
considerations include, but are not limited to, the following:
...
(c) voluntary payment of a restitution prior to adjudication
of guilt;
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based on grounds that have already been specifically considered by
the Guidelines . . . will be treated as if the departure were based
on a discouraged factor." Bogdan, 284 F.3d at 328 n.4. Thus,
additional departures based on acceptance of responsibility,
including those based on pre-trial restitution, are only
appropriate where the factor is present "to a degree substantially
in excess of that which ordinarily is involved in the offense."
U.S.S.G. § 5K2.0; see United States v. Craven, 239 F.3d 91, 99 (1st
Cir. 2001) ("[D]ownward departures for presentence rehabilitation
are hen's-teeth rare, and our precedent makes clear that such
departures are to be granted sparingly.").
The amount of restitution is a critical factor in
determining whether a defendant’s acceptance of responsibility is
extraordinary. Courts have generally not granted departures where
the restitution was less than or equal to the amount stolen. See,
e.g., United States v. Hairston, 96 F.3d 102, 109 (4th Cir. 1996)
(holding that the payment of approximately half of the stolen funds
after indictment did not take the case out of the 'heartland');
United States v. Bean, 18 F.3d 1367, 1369 (7th Cir. 1994) (holding
that full restitution of $75,000 fraudulently obtained from a bank
did not warrant a departure in excess of that allowed by § 3E1.1).
Courts are more willing to entertain the possibility of additional
departures when the restitution exceeds the amount taken from the
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victims. See, e.g., United States v. Garlich, 951 F.2d 161, 162-63
(8th Cir. 1991) (remanding to the district court to consider
additional departure where the defendant paid $1.4 million in
restitution and the court estimated the loss to be only $253,000);
United States v. Lieberman, 971 F.2d 989, 996 (3d Cir. 1992)
(affirming downward departure where defendant agreed "to pay about
$34,000 more than he thought was owed and to which he pled
guilty").
As noted above, Martin paid more than his share of
restitution, including part of McCarthy's share and some attorneys'
fees. All told, he may have paid almost $270,000 more than he
received from the scheme. Nevertheless, Martin, together with
Stella and Dick, did not pay the injured parties more than they had
lost in the scheme, and hence more than the court could have
required under the Mandatory Victim Restitution Act of 1996 (MVRA).
The MVRA virtually assured that Martin would have to pay at least
his share of the proceeds as restitution, and the court had
authority to make all defendants jointly and severally liable for
the full $1.8 million. 18 U.S.C. § 3662A; 18 U.S.C. § 3664. Thus,
Martin's restitution, while substantial, was not necessarily more
than he would have been required to pay by the court.38
38
In this circuit, whether the MVRA authorizes the inclusion
of attorneys' fees as part of restitution remains an open question.
United States v. Richard, 234 F.3d 763, 770-71 (1st Cir. 2000).
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In addition to amount, the timing of and motivation for
restitution are important factors in determining the propriety of
a departure. See, e.g., Miller, 991 F.2d at 553-54 (holding that
a departure for extraordinary acceptance of responsibility based on
restitution must include "genuinely voluntary" payment not
"motivated primarily by . . . a desire to settle [a] civil
lawsuit"). When considering departures in the similar category of
extraordinary rehabilitation, we have said that "[t]he reason that
timing matters in rehabilitation is that a defendant who decides
independently to turn his life around likely deserves higher marks
than one who undertakes rehabilitation mainly (or at least
partially) to gain advantage in imminent criminal proceedings."
Craven, 239 F.3d at 99. Further, "[s]ome degree of pre-sentence
rehabilitation is usually to be expected from a penitent defendant.
. . . Yet such predictable reactions, while laudable, fall well shy
of what we believe is necessary to take cases out of the
heartland." United States v. Sklar, 920 F.2d 107, 116-17 (1st Cir.
1996). We believe these principles apply equally to departures
Thus, although Martin contends that the $11,000 he paid in
attorneys' fees was above what he would otherwise be required to
pay in restitution, the court might have required a payment of
attorneys' fees under the MVRA. In any case, the court's ability
to impose joint and several liability for the entire amount stolen
in the scheme makes the attorneys' fees contribution a relatively
insignificant amount in calculating whether Martin paid more than
he would otherwise have been required to contribute.
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based on extraordinary restitution, and we will usually uphold such
departures only where there is evidence of an independent
motivation to make the victim whole rather than merely the more
common motivation to reduce a sentence when faced with prosecution.
In this case, Martin’s payment of restitution came only
after the scheme had been discovered and criminal prosecution
appeared likely. In a taped telephone conversation after the
scheme had unraveled, Martin expressed hope that, by paying back
the stolen funds, he and the other participants might avoid a
criminal investigation all together. In response, Martin points
out that he proceeded with his plan for restitution even after the
government asserted that it would not recommend a departure on that
basis. Nevertheless, while Martin's desire to make his victims
whole may have been sincere, the timing of his change of heart does
not suggest the kind of rehabilitation--above and beyond the
penitence shown by most criminals when confronted with their
wrongdoing--necessary to warrant a departure for extraordinary
acceptance of responsibility. If anything, the timing suggests a
rehabilitation caused by the fear of prosecution and a harsh
sentence.
Martin’s decision to pay restitution promptly upon being
discovered, and to pay more than the amount he claims to have
received from the scheme, deserves consideration in the sentencing
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calculus. Defendants who engage in such behavior should be granted
some level of leniency. Martin was granted just that in the form
of his three level downward adjustment under § 3E1.1. An
extraordinary acceptance of responsibility, however, requires some
action that goes beyond the behavior envisioned by the § 3E1.1
adjustment, moving the case outside the "heartland" of the
Guidelines. We find no such action here.
D. Downward Departure for Physical Impairment
"Physical condition . . . is not ordinarily relevant in
determining whether a sentence should be outside the applicable
guideline range." U.S.S.G. § 5H1.4. Thus, departures based on
physical condition are discouraged. See United States v. Rivera,
994 F.2d 942, 948 (1st Cir. 1993) (listing several factors,
including physical impairment, that are discouraged bases for
departure). Nevertheless, "an extraordinary physical impairment
may be a reason to impose a sentence below the applicable guideline
range." U.S.S.G. § 5H1.4; see also United States v. Woodward, 277
F.3d 87, 92-93 (1st Cir. 2002) (recognizing the authority of the
district court to depart in the case of an extraordinary physical
impairment). A court may find such an extraordinary impairment
when imprisonment would threaten or shorten a defendant's life or
when the Bureau of Prisons would be unable to adequately meet the
defendant's medical needs. See United States v. LeBlanc, 24 F.3d
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340, 348-49 (1st Cir. 1999) (upholding the district court's refusal
to depart because "[t]here was no indication . . . that
[defendants's] life would be threatened or shortened by virtue of
being incarcerated... [or] that the Bureau of Prisons would be
unable to adequately accommodate [defendant's] medical needs.").
In this case, the district court found such extraordinary
circumstances:
Mr. Martin would be unusually susceptible to
harm in prison because of his multiple
disabilities and indeed would be extremely
vulnerable to the risk of death because of an
emergency need of medical and surgical
attention for his abdominal conditions.
After careful review of the record, we agree with the district
court's decision to depart.
For more than 30 years, Martin has suffered from Crohn's
disease, a malady of the small intestine that can cause periodic
episodes of obstruction and acute abdominal pain. If these
episodes are not treated almost immediately, they can lead to
hospitalization and potentially catastrophic surgery. Injection
with the narcotic Demerol, which Martin uses for its anti-spasmodic
properties, is the only treatment that has successfully combated
these attacks. Martin submitted a letter from his
gastroenterologist of 31 years stating that "[l]esser
antispasmodics have not been effective. Should this medication
[Demerol] not be available to him, he may well progress to full
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blown small bowel obstruction over the space of 6-12 hours
requiring treatment with intravenous fluids . . . and conceivably
urgent surgery." The record indicated that the Bureau of Prisons
(BOP) would not administer Demerol to Martin during his
incarceration, putting him at risk for a severe episode.39
In addition to Crohn's disease, Martin suffers from
suppression of his immune system as a result of the continued
steroid therapy necessary to treat Crohn's disease. A letter from
Martin's internist stated that "in view of his immune suppressive
disorder, confinement in a correctional facility . . . places Mr.
Martin at unacceptable risk for serious infectious disease." This
letter, and others submitted by the defense, describe Martin's
osteoporosis and Bell's Palsy--a chronic partial paralysis of his
face--and state that he has been hospitalized several times in
39
According to an affidavit submitted by Martin from a former
Chief U.S. Probation Officer for the District of Massachusetts, the
BOP's Health Services Administrator at the Federal Medical Center
at Devens, Massachusetts stated that, because Demerol is a narcotic
and a controlled substance, it would not be used to control
Martin's attacks. In response, the government provided a letter
from the Health Services Administrator at the BOP's Northeast
Regional Office, stating only that "alternatives to Demoril IM
[sic] are available at BOP facilities." At the sentencing hearing,
the government stated that the BOP "administer[s] drugs akin to
narcotics that are helpful to others with Crohn's disease. . . ."
Neither of these assertions by the government contradicts Martin's
contention that Demerol would not be available to him while
incarcerated.
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recent years for various ailments. Martin's internist concludes
that "[h]is health at this time is extremely fragile."
In response to this evidence, the prosecution offered two
letters from BOP officials that offered an overview of how the BOP
assesses the medical needs of prisoners. The first letter
described the general process undertaken by the BOP in assigning
prisoners to various facilities based on medical need. Although
the letter concluded that "[t]he BOP [can] provide for Mr. Martin's
medical condition," it provided no more than a cursory discussion
of the specific limitations--such as Martin's unresponsiveness to
treatments other than Demerol and his depleted immune system--that
might distinguish Martin from other inmates with Crohn's disease.
The second letter outlined the various dietary accommodations that
the BOP has undertaken for other inmates suffering from Crohn's
disease. It did not, however, specifically address Martin's case.
Something more than mere boilerplate language is necessary to
assure the court that the BOP can adequately care for Martin given
his substantial history of medical difficulty. See United States
v. Gee, 226 F.3d 885, 902 (7th Cir. 2000)(refusing to credit "a
form letter trumpeting the BOP's ability to handle medical
conditions of all kinds").
Several serious medical conditions make Martin's health
exceptionally fragile. On this record, we are not convinced that
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the BOP can adequately provide for Martin's medical needs during an
extended prison term. There is a high probability that lengthy
incarceration will shorten Martin's life span. See LeBlanc, 24
F.3d at 348-49; United States v. Long, 977 F.2d 1264, 1278 (8th
Cir. 1992)(upholding a downward departure where "the imposition of
a term of imprisonment could be the equivalent of a death sentence
for [defendant]"). Thus, the district court did not err in
departing three levels based on the discouraged factor of
extraordinary physical impairment.
VI.
The conclusions we have reached on appeal do not make the
difficult sentencing scenario in this case any easier. Because we
hold that the district court should not have grouped the fraud
counts with the tax evasion counts and that it should not have
granted a departure for extraordinary acceptance of responsibility,
the court should begin on remand with an AOL of 19.40 The court
should then apply the three level departure for Martin's
extraordinary physical impairment, lowering the AOL to 16. With
40
The calculation of the AOL is as follows: The fraud AOL
remains 20 while the tax evasion AOL, including an upward
adjustment pursuant to § 2T1.1, remains 18. The counts should not
be grouped. Thus, pursuant to § 3D1.4, the combined AOL is 22. It
is then reduced three levels, pursuant to § 3E1.1, for acceptance
of responsibility. Thus, prior to any departures, the combined AOL
is 19.
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Martin's Criminal History Category of I, this combination indicates
a Guideline Sentencing Range of 21-27 months.
Then, to comply with double jeopardy principles, the
district court must determine the appropriate level of credit that
Martin should receive for the time he has already served on
probation, including six months of home detention, and grant a
downward departure to provide for that credit. Also, the court may
wish to revisit the issue of Martin's extraordinary physical
impairment. Because we have overturned the district court's
decision to group the fraud and tax evasion counts and its decision
to depart for extraordinary acceptance of responsibility, the three
level downward departure for extraordinary physical impairment is
no longer sufficient to move Martin's AOL into Zone B where he
could avoid prison all together.41 Thus, on remand, the district
court may wish to determine whether the original three level
departure is adequate to reflect Martin's physical impairment in
light of the changed sentencing scenario and any changes in his
medical condition since his sentence was first imposed. We want to
emphasize, however, that we are not suggesting that a period of
incarceration would be inappropriate. See United States v. Hilton,
946 F.2d 955, 958 (1st Cir. 1991) ("[I]f an extraordinary physical
41
See infra note 12. An AOL of 11 or greater would require at
least some term of imprisonment. See U.S.S.G. § 5C1.1(d).
-52-
impairment is shown to exist, a sentencing court is not faced with
an all-or-nothing choice between GSR-range imprisonment or no
imprisonment, but may lawfully decide to impose a reduced prison
sentence below the GSR.").
For the foregoing reasons, we VACATE the sentence of the
district court and REMAND for resentencing consistent with this
opinion.
SO ORDERED.
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