United States v. Epstein

United States Court of Appeals
For the First Circuit

No. 02-2436
UNITED STATES OF AMERICA,
Appellee,

v.

S. JOEL EPSTEIN,
Defendant, Appellant.

No. 03-1133
UNITED STATES OF AMERICA,
Appellee,

v.

JOHN F. HANDEL,
Defendant, Appellant.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]

Before
Boudin, Chief Judge,
Torruella and Selya, Circuit Judges.

Syrie D. Fried, Assistant Federal Public Defender, for
appellant Handel.
John J. Barter, for appellant Epstein.
Kirby A. Heller, Attorney, Department of Justice, with whom
Michael J. Sullivan, United States Attorney, and Carmen M. Ortiz,
Assistant United States Attorney, were on brief, for appellee.

October 18, 2005
 TORRUELLA, Circuit Judge. Defendants-appellants S. Joel

Epstein and John Handel were convicted after a jury trial in the

United States District Court for the District of Massachusetts for

offenses related to a scheme to defraud the owners of timeshare

units. They now appeal, challenging both their convictions and

their sentences. We affirm.

I. Background

The scheme that led to the appellants' convictions

involved companies located in various parts of the country. Resort

Investment Trust (RIT) and Swiss American Bank, called "buyers,"

were Florida-based telemarketing companies that solicited timeshare

owners to sell their units and buy appraisals. Employees for these

companies called timeshare owners with offers to buy their units,

provided that the owners submitted certain documents related to

their timeshares, including a recent appraisal. The owners were

led to believe that their units would be purchased once they

provided an appraisal, and that they would be reimbursed for the

costs of the appraisal. The telemarketer then informed the owner

that the appraisal must be performed by an independent company, and

offered to refer the owner to Multiple Listing Service (MLS).1 An

employee from MLS then contacted the owner, provided the names and

1
The acronym was designed to deceive the owners into believing
that they were dealing with the familiar multiple listing service
organizations that are used by real estate brokers across the
country, when in fact there was no connection.

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prices of four different appraisal companies, and asked the owner

to choose one. The appraisal companies included Resort

Condominiums International (RCI), based in Hyannis, Massachusetts,

and International Appraisals (IA), based in Rhode Island. The MLS

employee stressed that the appraisal companies were highly

experienced and had personnel in the area of the timeshares who

would perform on-site inspections of the properties. In fact, all

of the recommended companies were part of the scheme, and there was

no relation between the location of the companies and that of the

timeshare. The telemarketers merely rotated the names of these

companies and the prices they charged, typically $399. MLS

employees repeated that the buying company would reimburse the

owner for the cost of the appraisal.

Owners were then contacted by an employee of an Appraisal

Referral Center (ARC), called a "closer", who introduced himself as

an employee of the appraisal company that the victim had previously

selected. The ARC telemarketer took the owner's credit card number

and told the owner that an appraiser would be assigned to the

property, that the buying company would be notified of the

appraisal, which would trigger a letter of intent to buy the

timeshare, and that the letter would not commit the owner, but

would commit the buying company. The ARC telemarketer then faxed

the owner's information to the appraisal company that the owner had

previously selected, which charged $399 to the owner's credit card

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and sent information about the unit to Comparative Research (an

unaffiliated firm), which prepared a market analysis report for

$7.50. Comparative Research sent the report back to the appraisal

company, where a licensed real estate appraiser signed it. The

appraisal company then sent the purported appraisal to the owner.

At this point, the fraud was complete. The companies

neither reimbursed the appraisal fee nor bought the timeshares.

Owners who complained had to call repeatedly, found that numbers

had been disconnected, and were told to resubmit paperwork. In the

event that an offer was actually made, it was for considerably less

than what was promised.

The appraisal companies sent some of the collected funds

to American Investment Monitoring Services (AIMS), which was a

bill-paying operation that took in and disbursed funds to the other

companies. At some point, AIMS stopped operating and Consolidating

Consortium International (CCI) took over. The appraisal companies

also sent $35 per appraisal to MLS, and transferred funds to an

account in the Bahamas held by Donald Gonzcy, the mastermind of the

scheme. During the course of the scheme, approximately 38,600

appraisals were sold at a cost of $399 each, for a total of over

$15 million. Although Epstein started as a buyer for RIT in 1998,

he quickly assumed a significant role in the overall operation.

Working under the alias Joe Kelley, he ran another buying company

based in Texas called Global Referral Service. Epstein was also

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the president of ARC, the vice president of AIMS, and the president

of CCI. His duties in these various capacities included hiring and

supervising telemarketers, providing them scripts for the calls,

devising responses to common customer complaints, and tracking

financial transactions and data related to the companies.

Handel began working for RCI, run by Gonzcy's future son-

in-law Michael Upton, in 1998. Handel came to the office every

seven to ten days to sign the purported appraisals, usually signing

between 100 and 150 appraisals at a time. These reports, generated

by Comparative Research, contained the number of bedrooms and

bathrooms in a unit, the amenities on the property, the unit's

condition, and a comparison to three other properties in the area.

They also provided an estimate of the market value of the unit, and

a blank that purported to be the date of the inspection and of the

report. Handel spent a few seconds per report and inserted the

date that he signed as the date of inspection. RCI paid him five

dollars for each appraisal that he signed. At some point during

his employment, Handel allegedly became concerned with the volume

of appraisals RCI dealt with and asked Upton about the legitimacy

of the operation and whether any timeshares were being bought.

Upton assured him that Gonzcy was buying many of the timeshares.

At some point Handel asked RCI to begin issuing his checks in his

wife's name.

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 As part of his duties at RCI, Handel was responsible for

responding to customer complaints. These complaints were placed in

a file folder and contained phone messages and letters from owners,

often dissatisfied with mistakes in the appraisal or because no on-

site inspection had been done.2

Handel performed similar work for IA, which was based in

Rhode Island and owned by Gonzcy's son Scott. Handel, who was not

a licensed real estate agent in Rhode Island, met Scott in a Burger

King parking lot and signed the IA appraisals with the name "James

Rose".

On February 7, 2001, a grand jury issued a fifty-count

indictment charging Epstein, Handel, Gonzcy, and several others

with various counts. On July 18, 2001, a grand jury issued a

superseding fifty-nine count indictment. On June 24, 2002, a jury

trial commenced against Epstein, Handel, and Gonzcy in the United

States District Court for the District of Massachusetts. On

July 2, 2002, Gonzcy pleaded guilty to the charges against him, and

trial proceeded against Epstein and Handel. On July 12, 2002, the

district court dismissed nineteen of the counts in the superseding

indictment pursuant to a motion by the government.

2
In Handel's brief, he characterizes the complaints as "phone
messages and irate letters from timeshare owners expressing
displeasure about RCI's services: that the appraisal was only a
market analysis, that the whole scheme was a scam, etc."

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 On July 18, 2002, the jury convicted Epstein of one count

of conspiracy to commit mail and wire fraud, in violation of 18

U.S.C. § 371; seven counts of mail fraud, in violation of 18 U.S.C.

§ 1341; five counts of wire fraud, in violation of 18 U.S.C.

§ 1343; and five counts of money laundering, in violation of 18

U.S.C. § 1956(a)(1)(A)(i). The jury convicted Handel of five

counts of mail fraud. The district court sentenced Epstein to 108

months of imprisonment, 36 months of supervised release, and a

special assessment of $1,700. The district court sentenced Handel

to 36 months of imprisonment, 36 months of supervised release, a

fine of $98,500, and a special assessment of $500. Both defendants

appealed, arguing that their convictions should be overturned or

that they should be re-sentenced.

II. Discussion

A. Evidentiary Issues

Epstein and Handel argue that the district court erred in

admitting certain evidence during trial. In order to preserve a

claim of evidentiary error for appeal, "a timely objection . . . ,

stating the specific ground of objection," must appear in the

record. Fed. R. Evid. 103(a)(1). We review the district court's

decisions on the admissibility of evidence as to preserved claims

for abuse of discretion. See United States v. Mercado Irizarry,

404 F.3d 497, 500 (1st Cir. 2005). If we find an error, "[i]t is

settled that a non-constitutional evidentiary error is harmless

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(and, therefore, does not require a new trial) so long as it is

highly probable that the error did not influence the verdict."

United States v. Flemmi, 402 F.3d 79, 95 (1st Cir. 2005) (internal

quotations and modifications omitted).

For unpreserved errors, the standard of review is that of

plain error. United States v. Barone, 114 F.3d 1284, 1294 (1st

Cir. 1997). The plain error standard requires the appellate court

to "find [1] that there is error [2] that is plain and [3] that

affects substantial rights. When these three elements are

satisfied, an appellate court may exercise its discretion to

correct the error . . . only if the forfeited error seriously

affects the fairness, integrity or public reputation of judicial

proceedings." Id. (citing United States v. Olano, 507 U.S. 725,

732, 736 (1993)) (internal quotations and citation omitted). For

the third prong, the defendant has the burden of showing prejudice

or that the error "affected the outcome of the district court

proceedings." United States v. Colón-Muñoz, 192 F.3d 210, 222 (1st

Cir. 1999).

1. Epstein

During trial, Peter Train, an employee for one of the

buying companies involved in the conspiracy, testified about a

cartoon he had given to a co-worker, Linda Alongi. The cartoon

depicted a laughing hyena saying "I want to buy your timeshare,"

with the words "head buyer" appearing directly beneath the hyena.

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Train testified that Alongi hung the cartoon on the wall above her

desk, and that Epstein spoke with Alongi at her desk while the

cartoon was on the wall. There was no testimony that Epstein

actually saw or ever discussed the cartoon, and on cross

examination, Train admitted that he had no personal knowledge that

Epstein ever saw the cartoon.

The district court admitted the cartoon into evidence on

the ground that if Epstein saw the cartoon, and the operation was

"on the up and up," Epstein would have been shocked by the cartoon

and would have taken corrective action. Epstein's counsel

objected, arguing that the cartoon was unduly prejudicial under

Fed. R. Evid. 403 and that there was no evidence that Epstein had

ever seen the cartoon.

Epstein now claims that the district court abused its

discretion in admitting the cartoon, arguing that there was

insufficient foundation to conclude that Epstein manifested an

adoption or belief in the truth of the cartoon. For our present

purposes we will assume, without deciding, that the district court

abused its discretion in admitting the cartoon into evidence.

However, after carefully reviewing the record, we believe that any

error that may have occurred was harmless, as it is highly probable

that the error did not influence the verdict against Epstein. See

Flemmi, 402 F.3d at 95.

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 Epstein argues that the cartoon was especially

prejudicial against him because (1) it was pictorial in form,

whereas most of the other documents admitted were printed

materials, ledgers, or contracts, and (2) it was presented in the

hope of establishing that the people involved in the conspiracy

were callous and heartless. We disagree. First, the cartoon was

one of over 200 documents admitted in the case against Epstein, and

the testimony regarding the cartoon was extremely brief in relation

to the rest of the trial. Second, other evidence regarding

Epstein's knowledge of and involvement in the scheme was

overwhelming. See United States v. Tejeda, 974 F.2d 210, 215 (1st

Cir. 1992) (finding harmless error because of overwhelming evidence

of guilt). Besides the documents, there was testimony from many

witnesses regarding Epstein's involvement in the conspiracy.

Together, the testimony and documents established that Epstein

worked as an executive for at least four of the companies involved

in the conspiracy, handled and tracked the financial data for the

companies, produced scripts for the telemarketers, and was well

aware of the numerous complaints against the companies. In light

of the numerous documents and witness testimony against Epstein, we

believe that it is virtually certain that the admission of the

cartoon did not influence the verdict against him. We therefore

conclude that any error was harmless.

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 2. Handel

During the government's case in chief, it introduced

Handel's 1999 tax return into evidence. On the return, Handel

indicated that he earned $30,490 in business income and that his

business was appraisals. However, the return did not indicate

approximately $15,000 that Handel received in the name of his wife.

Handel did not immediately object to the tax return's admission

into evidence, but subsequently filed a motion to strike, arguing

that the tax return's admission violated Fed. R. Evid. 404(b)

because it could constitute evidence of other crimes or bad acts,

namely, that Handel filed a false tax return. In denying the

motion to strike, the district court stated that the return was

"part and parcel of [Handel's] conduct relative to this case," and

also assured Handel that it would "not permit the government to

argue propensity from the filing of the income tax return."

During the defense's case, Handel testified that he had

acted in good faith when signing the appraisals. On cross-

examination, the government questioned Handel about the

misstatement on the return. The government also questioned Handel

about a $3,900 business deduction he had claimed on the 1999 return

for mileage expenses. Handel objected, arguing that the

government's questioning violated Fed. R. Evid. 404(b). The

district court stated that it was not admitting the evidence under

Rule 404(b), but rather under Rule 608(b) as permissible

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impeachment with previously admitted extrinsic evidence. Handel

did not object to the cross-examination under Rule 608(b), and

continued to argue his objection under Rule 404(b), which the judge

denied. On the stand, Handel ultimately admitted that the business

deduction on the tax form was a mistake.

Handel does not now argue that the admission of the tax

form was improper. Instead, Handel reiterates his argument that

the use of the tax return for cross-examination was improper under

Rule 404(b)3 because it was evidence of a prior bad act. We

disagree. "Rule 404(b), by its very terms, excludes only extrinsic

evidence -- evidence of other crimes, wrongs, or acts -- whose

probative value exclusively depends upon a forbidden inference of

criminal propensity. Evidence intrinsic to the crime for which the

defendant is on trial, accordingly, is not governed by Rule

404(b)." United States v. Manning, 79 F.3d 212, 218 (1st Cir.

1996) (internal citation and quotation marks omitted). The judge

found that the tax return was "part and parcel of [Handel's]

3
Fed. R. Evid 404(b) states:

Evidence of other crimes, wrongs, or acts is not
admissible to prove the character of a person in order to
show action in conformity therewith. It may, however, be
admissible for other purposes, such as proof of motive,
opportunity, intent, preparation, plan, knowledge,
identity, or absence of mistake or accident, provided
that upon request by the accused, the prosecution in a
criminal case shall provide reasonable notice in advance
of trial, or during trial if the court excuses pretrial
notice on good cause shown, of the general nature of any
such evidence it intends to introduce at trial.

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conduct relative to this case." Handel's tax return was

intertwined with the crime because the tax return reports the

income that he received from the fraudulent scheme. Further, the

fact that Handel did not include all of his income suggests that he

had knowledge of the fraudulent scheme. The judge did not abuse

his discretion in finding the tax return to be part and parcel of

the crime and properly allowed the evidence as intrinsic to the

crime and not governed by Rule 404(b).

Handel now argues for the first time that the cross-

examination violated Rule 608(b).4 Because Handel did not specify

4
At the time of trial, Fed. R. Evid 608(b) read:

Specific instances of the conduct of a witness, for
the purpose of attacking or supporting the witness'
credibility, other than conviction of crime as provided
in rule 609, may not be proved by extrinsic evidence.
They may, however, in the discretion of the court, if
probative of truthfulness or untruthfulness, be inquired
into on cross-examination of the witness (1) concerning
the witness' character for truthfulness or
untruthfulness, or (2) concerning the character for
truthfulness or untruthfulness of another witness as to
which character the witness being cross-examined has
testified.
The giving of testimony, whether by an accused or by
any other witness, does not operate as a waiver of the
accused's or the witness' privilege against
self-incrimination when examined with respect to matters
that relate only to character for truthfulness.

In 2003, Rule 608(b) was amended by substituting "character
for truthfulness" in place of "credibility." The amendment
intended to clarify that the absolute prohibition on extrinsic
evidence applies only when the sole reason for proffering that
evidence is to attack or support the witness' character for
truthfulness. See United States v. Abel, 469 U.S. 45 (1984).

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at trial that he objected to the cross-examination under Rule

608(b), he has not preserved the claim, and this court will review

only for plain error. To show plain error, Handel must show that

he was prejudiced. Any prejudice that Handel would have suffered

from a violation of Rule 608(b) is that the jury would think

negatively of Handel's credibility. However, Handel cannot claim

this prejudice in light of other evidence at trial more damaging to

his credibility. Handel admitted that on three separate occasions

he submitted documents to the Massachusetts Real Estate Board,

"under pains and penalties of perjury," where he was required to

state his previous criminal convictions and did not do so. Handel

was convicted twice for "operating a motor vehicle to endanger" and

once for "attaching the wrong plates to a motor vehicle." Handel

claimed that he honestly believed that the convictions related to

motor vehicles were excluded, but Handel also claimed that the

mileage deduction on his tax return was a mistake. In addition,

the three convictions were admitted into evidence at trial, and the

judge gave a limiting instruction, stating that the prior

convictions were relevant only for evaluating Handel's credibility.

Thus, Handel has not borne the burden of showing plain error.

B. Willful Blindness Instruction

Epstein and Handel both argue that the district court

erred in giving the jury a willful blindness instruction in the

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course of its instructions on mail fraud.5 "A willful blindness

instruction is appropriate 'if [1] a defendant claims a lack of

knowledge, [2] the facts suggest a conscious course of deliberate

ignorance, and [3] the instruction, taken as a whole, cannot be

misunderstood as mandating an inference of knowledge.'" United

States v. Coviello, 225 F.3d 54, 70 (1st Cir. 2000) (quoting United

States v. Richardson, 14 F.3d 666, 671 (1st Cir. 1994)). "In

determining whether the facts suggest the type of deliberate

avoidance warranting an instruction, we must consider whether the

record evidence reveals 'flags' of suspicion that, uninvestigated,

suggest willful blindness." Id.

1. Epstein

Epstein argues that the district court erred because he

was led to believe that Gonzcy was an experienced and successful

businessman and that the timeshares were being purchased in the

Bahamas. First, this argument supports the district court's

instruction, as Epstein is claiming a lack of knowledge that the

scheme was fraudulent. Second, the facts of the case supported an

inference that Epstein consciously chose deliberate ignorance of

5
The parties argue about whether review on this issue should be
de novo or abuse of discretion. Varying language appears in our
own cases and in decisions of the circuits and may reflect the
different aspects of the willful blindness problem in dispute in
the individual cases. In all events, whether in this case we
reviewed the matter de novo or under a far more deferential
standard, the result would be the same, so we leave the issue to a
case where it turns out to matter.

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the fraudulent scheme. Since he started in the organization at one

buying company and ran another, he must have been well aware that

the buying companies almost never purchased the time shares, nor

did they refund the appraisal fees, despite contrary assurances

from telemarketers at various stages of the scheme. As the

individual responsible for tracking the companies' financial data,

he must have been well aware that they were interdependent, despite

claims to the contrary, and that their sole source of income was

the sale of appraisals upon referrals originating exclusively from

buying companies. In addition, as the individual responsible for

producing the sales pitches and answers to common customer

concerns, he must have been well aware both of the fraudulent

promises and of the myriad customer complaints. Third, the

instruction did not mandate an inference of knowledge but rather

clearly spelled out that the government had to overcome several

hurdles before the jury could find that the defendant was willfully

blind, and that only then the jury could infer knowledge. We

therefore find that the district court did not err in giving the

willful blindness instruction regarding Epstein.

2. Handel

Handel argues that the district court erred in giving the

willful blindness instruction because he had no knowledge of

several of the misrepresentations in the pitch made to timeshare

owners: that the owners would be reimbursed for the cost of the

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appraisals, that the appraisal companies were independent, and that

on-site inspections were being done by appraisers in the field. In

addition, he argues that for another element of the pitch -- that

the timeshares would be purchased by one of the companies -- he was

not willfully blind because he asked his boss whether any units

were being purchased.

As we have noted, a claim that a defendant lacked

knowledge supports a willful blindness instruction, as it is the

first of the three prerequisites to a willful blindness

instruction. Therefore, Handel's claim that he lacked knowledge of

the misrepresentations cuts in favor of the willful blindness

instruction. The relevant inquiry then becomes whether "the facts

suggest a conscious course of deliberate ignorance" on the part of

the defendant. Coviello, 225 F.3d at 70 (internal citation and

quotation marks omitted). The record evidence in this case reveals

several "flags" of suspicion that, uninvestigated, suggest willful

blindness.

The sheer volume of appraisals that Handel signed was a

red flag. Handel admits in his brief that he found the volume

"remarkable," and that "it raised concerns in his mind" to the

point where he asked his boss Michael Upton whether any timeshares

were being purchased. Handel argues that his inquiry and Upton's

response show that the willful blindness instruction was

inappropriate. However, while the jury was free to consider

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Handel's actions in determining whether he was willfully blind, the

fact that Handel asked Upton whether the properties were being sold

supports a willful blindness instruction. On the one hand, the

questioning strongly supports Handel's own argument that he had

cause for concern. On the other hand, it would have been clear

that the questioning was unlikely to result in a truthful response,

since any admission by Upton would directly implicate him and his

future father-in-law. Although experienced in the realty business,

Handel took no further steps to determine whether Upton's "belief"

that the properties were being purchased was a good-faith one.

Customer complaints, which Handel answered as part of his

duties at RCI, also constituted a red flag. These complaints

included phone messages and letters from owners, often dissatisfied

because no on-site inspection had been done and charging that "the

whole scheme was a scam." Despite these complaints, Handel never

inquired into how the appraisals were produced or who produced

them; he merely showed up and signed the appraisals, spending only

a few seconds on each one.

Other red flags included (1) the fact that the appraisals

he signed stated that they were based on on-site inspections even

though Handel had not made any such inspections and never inquired

whether they were made;6 (2) the fact that he knew nothing about

6
Handel states in his brief that Upton never discussed with him
about making on-site visits. He also states that many of the
complaints that he handled were from customers upset because no on-

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the company producing the reports, its methods or the training of

it employees, and never asked Upton about it; (3) the fact that

Upton and Gonzcy generated such a large number of appraisals so

quickly even though Handel knew that both were inexperienced in the

real estate business; (4) the fact that he was not questioned when

he signed the appraisals for Gonzcy using a false name; and (5) the

fact that he was not questioned when he asked RCI to issue

paychecks in his wife's name. In sum, we think the record evidence

reveals an ample number of flags to meet the second prerequisite

for the willful blindness instruction. We therefore find that the

instruction was proper with respect to Handel.

C. Sentencing

Epstein and Handel both argue that they were improperly

sentenced under the Federal Sentencing Guidelines. Their claims

arise from the Supreme Court's partial invalidation of the

Guidelines in United States v. Booker. 125 S. Ct. 738, 756 (2005).

In Booker, the Court upheld a "defendant's [Sixth Amendment] right

to have the jury find the existence of any particular fact that the

law makes essential to his punishment." Id. at 749 (internal

quotation marks omitted); see also Blakely v. Washington, 542 U.S.

296 (2004); Apprendi v. New Jersey, 530 U.S. 466 (2000). Applying

this principle to the Federal Sentencing Guidelines, the Court held

site visit was made. Handel never asked Upton why on-site
inspections were not being made, despite the fact that the
appraisals he signed stated they were.

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that because the Guidelines are "mandatory" and have the "force and

effect of laws," any fact justifying a higher sentence must be

found by the jury. Booker, 128 S. Ct. at 750. In contrast, "when

a trial judge exercises his discretion to select a specific

sentence within a defined range, the defendant has no right to a

jury determination of the facts that the judge deems relevant."

Id. To remedy the constitutional violation, the Booker Court

invalidated "the provision of the federal sentencing statute that

makes the Guidelines mandatory", "mak[ing] the Guidelines

effectively advisory." Id. at 756-57. A Booker error thus occurs

when the judge finds sentencing facts and imposes a sentence under

the mandatory sentencing guidelines. Id.

Epstein and Handel correctly argue that their sentences

violated the rule of Booker. In Epstein's case, the amount of loss

for his conspiracy, mail fraud, wire fraud, and money laundering

convictions was found by the judge. In addition, the judge also

applied several sentencing enhancements, including "more than

minimal planning" and "use of mass-marketing." Similarly, in

Handel's case, the judge determined the amount of loss and an

enhancement for "more than minimal planning." Because these

sentencing facts were found by the judge under mandatory

Guidelines, Epstein's and Handel's sentences violated the Booker

rule.

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 "[A] Booker error . . . is preserved if the defendant

below argued Apprendi or Blakely error or that the Guidelines were

unconstitutional." United States v. Antonakopoulos, 399 F.3d 68,

76 (1st Cir. 2005). The similarity of the constitutional issues

present in Booker, Blakely, and Apprendi justifies the wide

latitude afforded defendants for preserving Booker errors, but this

latitude is limited. See United States v. Martins, 413 F.3d 139,

153 (1st Cir. 2005). For example, an "argument that the acceptance

of responsibility guideline was unconstitutional" does not preserve

a Booker error. Id. at 152. Further, while a Booker error may be

preserved "when the trial court, on its own initiative, seizes the

issue and makes an express ruling on the merits," id. at 153, it is

not preserved when the trial court "muse[s], sua sponte, that there

were no Apprendi issues involved in the hearing," id. at 152, and

the trial court's "rumination form[s] no part of the court's

rulings or holdings," id. at 153.

Epstein argues that his counsel sufficiently raised an

Apprendi error. At sentencing, Epstein's counsel stated that he

was "trouble[d]" by the "substantial difference" in loss found by

the judge and the jury. Counsel then stated that the court must

determine the amount of loss, to which the judge responded, "I

have." The judge then asked counsel whether the sentence raised an

Apprendi issue, to which counsel responded "no, he wouldn't be

receiving beyond the statutory maximum." This exchange is clearly

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insufficient to preserve a Booker error. The judge then, sua

sponte, mused about the ramifications of Apprendi. The judge

stated "[m]aybe I'm just wasting time because it would be dicta"

and created a hypothetical where he "wonder[ed]" if an Apprendi

issue would be present. Because the trial judge merely mused about

an Apprendi issue and did not make any kind of holding or ruling on

the issue, the Booker error is not preserved. See Martins, 413

F.3d at 152-53.

Handel does not claim to have preserved the Booker error

below.

If a defendant fails to preserve a Booker error, the

circuit court will review for plain error. Booker, 125 S. Ct. at

769; Antonakopoulos, 399 F.3d at 76. The test for plain error

contains four prongs, which the defendant bears the burden of

proving. United States v. Olano, 507 U.S. 725, 734 (1993). For a

circuit court to correct an unpreserved error, it must find "an

error that is plain and that affects substantial rights." Id. at

732 (internal quotation marks omitted). Then, only if the error

"seriously affects the fairness, integrity or public reputation of

judicial proceedings," may the circuit court, in its discretion,

correct the error. Id. at 736 (internal quotation marks and

alteration omitted). "The first two prongs of the Olano test as to

Booker error are satisfied whenever defendant's Guidelines sentence

was imposed under a mandatory Guidelines system." Antonakopoulos,

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399 F.3d at 77. For the third prong, we require a "defendant [to]

show a reasonable probability that he would have received a more

lenient sentence under an advisory guidelines regime." Martins,

413 F.3d at 154.

Epstein and Handel argue that their Booker errors are

plain errors that must be corrected by this court. To show a

reasonably probability that he would have received a more lenient

sentence absent the error, Epstein cites three facts from the

record. First, his sentence was the minimum allowed by the

Guidelines, and this certainly weighs in his favor. Second, the

judge reduced his sentence to reduce the disparity between Epstein

and Gonczy, the mastermind of the crime, and he claims that the

judge would have further reduced the sentence had he been able to.

This also weighs in Epstein's favor. Third, the sentencing judge

stated that although there were "proper[] grounds to file a motion

for a downward departure," they were not sufficient to warrant a

downward departure. From this statement, Epstein attempts to

impute to the judge a desire to grant the downward departure that

was obstructed by the "rigorous requirements" of the Guidelines.

No such intent can be inferred from the trial transcript. In

contrast, the trial transcript shows that the judge had no

inclination to give a lower sentence. The judge flatly stated that

it was "an appropriate sentence under the law." Further, the judge

stressed the gravity of the crime: "This is an enormous and

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sophisticated fraud. . . . You were absolutely essential to getting

this up and running. You were central to it." Although it is a

close call, we find that Epstein has not shown a reasonable

probability that he would have received a more lenient sentence and

therefore has not shown plain error.

Handel's only argument in support of the third and fourth

prong of Olano's plain error test is that without the sentencing

facts found by the judge, his sentence would have been thirty

months shorter. This is not relevant to showing what sentence the

judge would had given had the Guidelines not been mandatory.

Moreover, the sentencing transcript shows that the judge would

likely have given the same sentence under advisory guidelines.

Handel's sentence was not at the bottom of the Guidelines range.

Also, the judge emphasized Handel's culpability: "I think it makes

you more culpable that you are a licensed real estate broker. It

was a sham from the get-go and you knew it was." Handel thus has

also not shown plain error.

Finally, Epstein also urges this court to find a

structural error that would require reversal and a remand. This

court has already determined that "[b]ecause sentencing under a

mandatory system is not an error that undermines the fairness of a

criminal proceeding as a whole . . . a Booker type error is not a

structural error." Antonakopoulos, 399 F.3d at 80 n.11 (internal

quotation marks omitted).

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 III. Conclusion

For the reasons stated above, we affirm the convictions

and sentences of Epstein and Handel.

Affirmed.

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