United States v. Gilman

United States Court of Appeals
For the First Circuit

No. 06-1376

UNITED STATES OF AMERICA,

Appellee,

v.

THURSTON GENE GILMAN,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Reginald C. Lindsay, U.S. District Judge]

Before

Howard, Circuit Judge,
Selya, Senior Circuit Judge,
and Shadur,* Senior District Judge.

John J. Commisso, with whom Thomas M. Hoopes and Kelly, Libby
& Hopes, P.C. were on brief, for appellant.
Victor A. Wild, Assistant United States Attorney, with whom
Michael J. Sullivan, United States Attorney, and Cynthia A. Young,
Assistant United States Attorney, were on brief, for the United
States.

March 8, 2007

__________
* Of the Northern District of Illinois, sitting by designation.
 SHADUR, Senior District Judge. Thurston Gene Gilman

(“Gilman”) challenges his criminal sentence, urging that the

district court below committed multiple procedural errors by

(1) placing too much weight on the advisory sentencing guidelines,

(2) failing to explain adequately the reasons for the sentence

imposed and (3) taking into account impermissible considerations as

part of his sentencing decision. Gilman also argues that his

sentence is unreasonably high in light of various mitigating

circumstances.

We find all of Gilman’s arguments unpersuasive save one

two-part contention: that the district court (1) failed to provide

an adequate explanation of its sentencing decision “in open court,”

as required by 18 U.S.C. §3553(c), and (2) failed to particularize

his reason for the specific sentence imposed, as required by 18

U.S.C. §3553(c)(1).1 Nonetheless, because Gilman forfeited those

arguments in the court below, we are limited to plain-error review.

And because Gilman cannot show that the error affected his

substantial rights, we affirm the sentence imposed by the district

court.

Background

On July 18, 2005 Gilman pleaded guilty to one count of

willful violation of the Investment Advisers Act of 1940 in

1
For convenience, further citation to that section will take
the form “Section 3553--,” omitting the prefatory reference to
Title 18 U.S.C.

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contravention of 15 U.S.C. §§80b-6 and 80b-17 and to 18 counts each

of mail fraud and wire fraud in violation of 18 U.S.C. §§1341 and

1343 respectively. As recounted in the Presentence Investigation

Report (“PSI”) prepared by the Probation Office, the tale leading

up to that guilty plea is a disheartening story of betrayal of

personal relationships and trust that came to an end only after

Gilman saw his house of cards collapsing beneath him and came clean

via his plea.

Before he embarked on his criminal activities, Gilman had

been an independent securities broker and investment advisor for

more than 20 years, serving long-term clients with whom he

developed close personal as well as professional relationships.

Beginning in November 1998 and continuing until November 2003,

Gilman abused his position and the trust that his clients placed in

him by illegally and fraudulently diverting investors’ funds from

the domestic securities accounts that they believed they owned into

two start-up ventures operated by Gilman. Gilman hid those actions

from his clients by periodically issuing false account statements

assuring them that their money was invested and appreciating as

promised.

While it is unnecessary to detail the ins and outs of

Gilman’s scheme, it does bear mention that he went so far as to

dragoon one of his sons into the plot, apparently contributing to

that son’s nervous breakdown and hospitalization in the summer of

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2003. Gilman’s start-ups--a software outfit and an Italian

sunglasses distributor--did not work out as he had planned, and his

unwitting investors’ money was lost. Those losses, totaling more

than $11 million, impacted retirement funds, college savings and

estate plan assets of some 55 victims.

In November 2003, with the Securities and Exchange

Commission (“SEC”) investigating an unrelated but too-close-to-home

issue with one of his other dealings, Gilman decided that the jig

was up. Though it was still possible that the SEC would not

discover his fraud, Gilman had his lawyer communicate with the

United States Attorney’s Office in Boston to self-report the crime

and cooperate with the government in uncovering the extent of his

misdealing. Hoping that the government would spare any prosecution

of his son (which it did), Gilman cooperated with the investigation

and provided extensive information that assisted the government in

fully exposing his complex scheme and identifying all of the

deceived victims. Without the benefit of a plea bargain, Gilman

then entered a straight plea of guilty to all of his crimes.

We arrive now at the critical scene for this appeal:

Gilman’s sentencing hearing in January 2006. Using the 2005

Sentencing Guidelines Manual (“Manual”) and information reported in

the PSI, the district court calculated Gilman’s base offense level

as 7 (Guideline §2B1.1(a)(1)) and added 20 levels for the over $11

million in resulting losses (Guideline §2B1.1(b)(1)(K)), 4 levels

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for the 55 victims involved (Guideline §2B1.1(b)(2)(B)), 2 levels

for the sophisticated means used in the offense (Guideline

§2B1.1(b)(9)(C)), 4 levels for the violation of securities law by

a registered investment advisor (Guideline §2B1.1(b)(15)(A)(iii))

and 2 levels for being an organizer, leader, manager or supervisor

of criminal activity with fewer than five culpable participants

(Guideline §3B1.1(c)). After a 3-level reduction for Gilman’s

acceptance of responsibility and his early guilty plea (Guideline

§3E1.1(a)-(b)), the district court reached a net offense level of

36. That, together with Gilman’s criminal history category I,

produced a guideline range of 188 to 235 months. Gilman did not

object to any of those calculations.2

After hearing from several victims of Gilman’s scheme and

listening to Gilman’s arguments for departure and mitigation, the

district court pronounced sentence. Addressing Gilman, the court

said that after hearing the victims’ statements it was moved to

think about the harm caused by Gilman’s fraud--the loss of planned

retirements, college savings and savings for health needs as well

as the frustration of inheritance plans--as compared to the harm

caused by some of the drug crimes, committed by individuals from

difficult backgrounds, for which it regularly handed down long

prison sentences. Next the court addressed Congress’ growing

2
Gilman did object to the use of the 2005 Manual rather than
the 2002 Manual, but he has not advanced that objection here on
appeal.

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concern with economic crimes since 2000 and spoke of the abuse of

personal and professional trust at the root of Gilman’s deceit.

At that point the court likened Gilman’s requested

sentence to the “worst day” that the court had ever had on the

bench, a case in which the court had felt compelled by the then-

mandatory sentencing guidelines to hand down a harsh 204 month

sentence for a man convicted of burning down his own convenience

store to collect the insurance money. In closing, the district

court said that it was primarily moved by the stories of lives

“shattered” by Gilman’s crime, and it imposed the selfsame 204

month sentence--one that was in the middle of the established

guideline range.

Challenges to the Sentencing Procedure

Gilman first brings a multifaceted challenge to the

sentencing procedure followed by the district court. We review de

novo such legal challenges to sentencing procedure (United States

v. Rivera, 448 F.3d 82, 84 (1st Cir. 2006)). But when a defendant

has failed to raise such an objection below, we treat the issue as

forfeited and hence as reviewable only for plain error (United

States v. Turbides-Leonardo, 468 F.3d 34, 38 (1st Cir. 2006)). To

establish plain error an appellant bears the burden of showing

(United States v. Duarte, 246 F.3d 56, 60 (1st Cir. 2001)):

(1) that an error occurred (2) which was clear
or obvious and which not only (3) affected the
defendant’s substantial rights, but also (4)
seriously impaired the fairness, integrity, or

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 or public reputation of judicial proceedings.

Since the Supreme Court decided United States v. Booker,

543 U.S. 220 (2005), we have had several occasions to set forth a

proper sentencing procedure to be followed by district courts--most

definitively in our en banc decision in United States v. Jiménez-

Beltre, 440 F.3d 514, 518-19 (1st Cir. 2006). Even though Booker

decreed the sentencing guidelines to be only advisory, the

guidelines still play an important role in the sentencing

procedure, so that (as was done here) a court should ordinarily

begin by calculating the applicable guideline range (id. at 518).

Once that now-advisory range is established, the court must

evaluate the factors set out in Section 3553(a) to consider whether

to exercise its discretion to impose a non-guideline sentence

(United States v. Thurston, 456 F.3d 211, 215 (1st Cir. 2006)).

Finally, and no less important, the court must provide a detailed,

case-specific explanation for imposing the chosen sentence (id.).

Gilman’s first challenge to the procedure followed in

this case--his argument that the district court placed too much

weight on the guidelines, effectively treating them as mandatory--

may be set aside quickly. On that score Gilman seeks support in

such indicia as (1) the court’s use of the word “departure” and not

“mitigation,” (2) the court’s emphasis on the policies it saw

behind the stiffer guideline ranges for economic crimes that took

effect in November 2003 and (3) the court’s failure to state in so

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many words that it was treating the guidelines as advisory under

Booker.

That compound contention does not hold water in any

respect. While the district court did not state for the record

that it was treating the guidelines as advisory, it is clear from

the sentencing transcript that everyone recognized that to be true.

Thus Gilman’s attorney expressly asked for departure or for Section

3553(a) mitigation, and the court itself just as specifically

asked the government to respond to the question whether it should

not impose a guideline sentence at all. Moreover, given the

continuing importance of the guidelines as a means for bringing the

policy decisions of the Sentencing Commission into the sentencing

process, the court’s measured deference to the policies behind the

guideline recommendations for Gilman’s economic crimes was entirely

appropriate (see United States v. Pho, 433 F.3d 53, 62 (1st Cir.

2006)).

In short, although the guidelines had a significant

influence on the district court’s sentencing decision, it plainly

treated them as advisory while considering Gilman’s arguments--

though it did not find them ultimately persuasive--for applying a

non-guideline sentence. There is surely no error in that.

Gilman’s second front in his procedural challenge to the

sentencing gives us more pause. There he contends that the

district court failed to provide an adequate explanation for the

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sentence imposed by not speaking to the Section 3553(a) factors

that should have been addressed, instead taking into account other

factors that should not have been considered, and in the end by

leaving a record too limited for effective appellate review.

There is no question that a district court is required to

provide a reasoned and case-specific explanation for the sentence

it imposes. Whether a sentence is within or outside the guideline

range, we require such an explanation to enable us to review the

reasonableness of the sentence (Jiménez-Beltre, 440 F.3d at 519).

And beyond that, Section 3553(c) requires a sentencing judge to

“state in open court the reasons for its imposition of the

particular sentence”--and most particularly, where (as here) the

applicable guideline range exceeds 24 months the court must

articulate “the reason for imposing a sentence at a particular

point within the range.”

Turbides-Leonardo, 468 F.3d at 40-41 (citations and

internal quotation marks omitted) recently summarized the

principles we have applied in reviewing district courts’ sentencing

explanations. We allow a good deal of leeway:

This [Section 3553(c)] directive does not mean
that the sentencing court’s explanation need
be precise to the point of pedantry. While
the court ordinarily should identify the main
factors upon which it relies, its statement
need not be either lengthy or detailed. By
the same token, a sentencing court is not
required to address frontally every argument
advanced by the parties, nor need it dissect
every factor made relevant by 18 U.S.C. §3553

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 one by one, in some sort of rote incantation,
when explicating its sentencing decision.
Even silence is not necessarily fatal; a
court’s reasoning can often be inferred by
comparing what was argued by the parties or
contained in the presentence report with what
the judge did.

While we have on occasion gone to significant lengths in

inferring the reasoning behind, and thus in affirming, some less-

than-explicit explanations by district courts (see, e.g., United

States v. Scherrer, 444 F.3d 91, 94-95 (1st Cir. 2006)(en banc);

United States v. Navedo-Concepción, 450 F.3d 54, 57-58 (1st Cir.

2006); United States v. Feliz, 453 F.3d 33, 36 (1st Cir. 2006)),

there are limits. First, if we are in fact unable to discern from

the record the reasoning behind the district court’s sentence,

appellate review is frustrated and “it is incumbent upon us to

vacate, though not necessarily to reverse” (Feliz, 453 F.3d at 36)

the decision below to provide the district court an opportunity to

explain its reasoning at resentencing (see also United States v.

McDowell, 918 F.2d 1004, 1012 (1st Cir. 1990)). Second, because

Section 3553(c) calls for an explanation “in open court” at the

time of sentencing, we may remand for resentencing when a court has

provided no explanation at the sentencing hearing (see, e.g.,

Navedo-Concepción, 450 F.3d at 56 & 56 n.1).

Here the district court weighed the perceived relative

harms caused by the economic crimes committed by Gilman and by the

drug crimes for which the court routinely handed down lengthy

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prison terms, then considered the policy behind the increased

guideline sentences for economic crimes beginning in November 2003.

Next the court rather obliquely discussed the 204 month sentence it

had reluctantly handed down in the earlier arson case under what

were, at that pre-Booker time, considered mandatory sentencing

guidelines. Finally, the court explained that it was primarily

influenced by the victims’ statements about how Gilman’s conduct

“shattered” their lives, and then announced the 204 month guideline

sentence for Gilman.

Those in-court statements, which the court itself

referred to as a “sort of soliloquy,” suggest a consideration of

the harm caused to society by Gilman’s conduct, and we can infer

from them that the court considered and found unpersuasive Gilman’s

arguments for a below-guideline sentence (see Scherrer, 444 F.3d at

94-95). Here, however, that is not enough. While Turbides-

Leonardo, 468 F.3d at 41 allows “a lesser degree of explanation”

when a within-guideline-range sentence is imposed, the statement

here does not identify the reason that the district court imposed

a sentence in the middle of the guideline range rather than

elsewhere within that range (which spans more than 24 months), in

direct violation of Section 3553(c)(1). We find the district

court’s explanation insufficient as a matter of law under that

section.

But we see no suggestion in the record that Gilman

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objected to that deficiency in the court below. Having failed to

do so, he has forfeited his Section 3553(c)(1) argument, and he

must thus make a showing of plain error to win a remand on that

score (Duarte, 246 F.3d at 60). Even if the shortfall of the

court’s explanation in that respect is viewed as an obvious error,

that would leave Gilman standing only at second base. To make it

to home plate by establishing plain error, Gilman must round each

of the bases as to which he carries the burden of persuasion

(Turbides-Leonardo, 468 F.3d at 39).

To reach third base in those terms, Gilman must show that

the inadequate explanation affected his “substantial rights” (id.),

a term that has generally been taken to mean that he must show that

the error was prejudicial in the sense that “[i]t must have

affected the outcome of the district court proceedings” (United

States v. Olano, 507 U.S. 725, 734 (1993)). In the sentencing

context that translates to a requirement that a defendant must

paint a picture that illuminates “a reasonable probability that,

but for the error, the district court would have imposed a

different, more favorable sentence” (Turbides-Leonardo, 468 F.3d at

39).

To look for a moment outside our circuit, United States

v. Molina, 356 F.3d 269, 277-78 (2d Cir. 2004) also proves helpful

in our review of Gilman’s chances in that regard. Molina

concluded that even though the sentencing court had committed error

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under Section 3553(c)(1) by not sufficiently stating in open court

the grounds for its decision, the court nonetheless facilitated

appellate review by providing a sufficient reasonable explanation

in a written statement of reasons, and for that reason the

defendant could not show that he was prejudiced under plain error

review.

While in this instance the district court’s statement at

the sentencing hearing itself was inadequate as a matter of law,

the record provides no reason to believe that remanding this case

to the district court for resentencing would in any way alter

Gilman’s sentence (see Navedo-Concepción, 450 F.3d at 57). To that

end we have looked to the later written statement of reasons

accompanying the judgment and commitment order, a statement in

which the district court itemized multiple case-specific reasons

for the length of the sentence: (1) the substantial length of the

fraud that came to an end only after discovery by the SEC became

likely, (2) Gilman’s facilitation of his crime through the betrayal

of trust placed in him by friends, (3) his callousness to the

degree of harm involved in the destruction of retirement, health

and education savings and (4) his willingness to lure his own

unwilling son into the terrible mess that he had created. In

conclusion the district court “concede[d]” that the sentence he

imposed was driven by the “nature and circumstances of these

particular offenses and the need to provide just punishment in

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light of the nature and circumstances involved.”

Even though that explanation was statutorily called for

at the time of sentencing, its belated pronouncement shows the

district court’s reasoning that ties the defendant’s specific

conduct to Section 3553(a) considerations and to specific relevant

goals of sentencing. In affirming another district court’s

sentencing decision, Scherrer, 444 F.3d at 93-94 found very similar

factors, such as the harm caused by a fraudulent betrayal of trust

leading to the loss of retirement funds, to be entirely appropriate

considerations of the “nature and characteristics of the offense

and the history and characteristics of the defendant” per Section

3553(a)(1). With the district court in this case thus having made

its explanation clear--albeit belatedly--for appellate review, we

cannot believe that the court would be persuaded to alter its

course on a resentencing. Under that analysis Gilman cannot show

that he has been prejudiced by the district court’s Section

3553(c)(1) violation, so as to make a case for plain error.

Gilman also takes a slightly different tack to challenge

the adequacy of the district court’s explanation, asserting that it

suggests reliance on three impermissible factors: (1) congressional

intent, (2) a comparison of drug crime with economic crime and (3)

the sentence imposed by the court in the earlier arson case. We

find those arguments unpersuasive as well.

Two of those contentions merit short shrift indeed. As

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for the first, it was entirely appropriate for the court to

consider what it viewed as the congressional intent behind the

sentencing guidelines in evaluating the individual characteristics

of this case (see Pho, 453 F.3d at 62). Second, Gilman’s argument

that the comparison of drug crimes and economic crimes was error

under Section 3553(a)(6) because they do not equate to “similar

conduct” is likewise without merit. Plainly the district court was

not suggesting that a drug peddler and Gilman were “defendants with

similar records who have been found guilty of similar conduct”

under Section 3553(a)(6). Instead it was permissibly weighing the

comparative harms caused by those crimes in an effort to impose a

“just punishment for the offense” under Section 3553(a)(2)(A).

Gilman’s argument as to the earlier arson case is

similarly unavailing. Although the district court ultimately

imposed identical terms of imprisonment in the two cases, it is

again clear that was not for Section 3553(a)(6) purposes. Instead

the length of the earlier sentence obviously factored into the

court’s consideration of the harm caused by Gilman and the sentence

accordingly required to impose just punishment on him. We cannot

reasonably expect a district court to approach each sentence as a

tabula rasa, divorced from its experience and decisions as to other

criminal defendants whom it has had the trying duty to sentence.

Challenge to the Length of Sentence

In Gilman’s final salvo of challenges he asserts that his

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sentence is unreasonably high due to a failure of the district

court to weigh the Section 3553(a) factors and various mitigating

circumstances properly. In the absence of any error in the

calculation of the guideline range, and in the presence of a

discernable explanation for the sentencing decision, we review a

sentencing court’s considered judgment solely for reasonableness

(Jiménez-Beltre, 440 F.3d at 519). We approach that review with

measured deference, respecting the district court’s primary

responsibility for sentencing and recognizing that “there can be

more than one reasonable way of assessing a factor and more than

one reasonable result” (id.). Because Gilman seeks here to attack

an in-guideline-range sentence as excessive, he must “adduce fairly

powerful mitigating reasons and persuade us that the district judge

was unreasonable in balancing pros and cons despite the latitude

implicit in saying that a sentence must be ‘reasonable’” (Navedo-

Concepción, 450 F.3d at 59).

Perhaps Gilman’s most significant contention is that

because his entire crime save for one wire transfer was executed

before the effective date of the 2003 Manual,3 that one transaction

dramatically increased his sentence due to the higher guideline

range for his collective crimes that took effect at that time. In

that regard, the guideline rule that mandates the use of the

3
That Manual substantially upped the ante for significant
financial crimes, a treatment carried forward into the 2005 Manual
that the district court employed pursuant to Guideline §1B1.11(a).

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Manual in effect as of the date of sentencing, irrespective of the

date of the offense of conviction (see n. 5) does not apply if such

use would violate the Ex Post Facto Clause (Guideline

§1B1.11(b)(1)). Although we note that the Court of Appeals for the

Seventh Circuit has concluded that Booker’s ruling that the

guidelines are advisory rather than mandatory carries with it the

elimination of ex post facto concerns (United States v. Demaree,

459 F.3d 791, 795 (7th Cir. 2006)), the issue is doubtful in this

circuit: see the references to the Ex Post Facto Clause in United

States v. Cruzado-Laureano, 404 F.3d 470, 488 & n.10 (1st Cir.

2005), a post-Booker decision (by three months) relying on a pre-

Booker case.

But even if ex post facto considerations are thus in

play, Gilman does not prevail in any event. To be sure, the

sentencing hearing transcript reflects the district court’s

acknowledgment that the single wire transfer was “wagging this

very, very big dog.” But the court applied the later Manual in

conjunction with its view that the important policy that underlay

the increased guideline sentences as to economic crimes that took

effect in November 2003 should also be taken into account. More

significantly, Gilman’s November 2003 wire transfer marked the

completion of his last offense of conviction under his straight

guilty plea. And that being so, the startlingly parallel situation

in Cruzado-Laureano calls for application of the 2003 Manual here.

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 Here is what we said in that case (404 F.3d at 488

(emphasis in original)):

Even in a complex case like this one,
involving conduct that occurred on dates
implicating different versions of the manual,
it will not be necessary to compare more than
two manuals to determine the applicable
guideline range--the manual in effect at the
time the last offense of conviction was
completed and the manual in effect at the time
of sentencing.

And in that light we there concluded that it was a mistake of law

for a district court to use an earlier Manual when defendant’s last

unlawful act charged in one count had been committed just a month

after the new Manual took effect, even though all of the other 11

counts of conviction plus two of the three acts that made up the

twelfth count involved conduct that antedated the new Manual’s

effective date. That decision might well have been written for

this case, and it controls here.

Gilman also seeks special sentencing consideration for

what he considers an extraordinary acceptance of responsibility,

evidenced by the self-reporting of his illegal scheme to the

government plus his cooperation that may have helped identify

victims who might otherwise have been left ignorant of his deceit.

Again it is clear that the district court considered that argument

and found it overbalanced by the fact that Gilman came clean only

after the SEC was investigating his other dealings, creating a

likelihood that the victims would come out of the woodwork

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inquiring about their money.

Finally, Gilman’s brief focuses on the disparity between

the 204 month sentence imposed on him and the sentences in two

other cases involving, in Gilman’s view, similarly situated

defendants. As Scherrer, 444 F.3d at 95 has explained, however,

“[t]rying to compare an individual sentence with a few counsel-

selected cases involving other defendants sentenced by other judges

is almost always useless.” Gilman has not sufficiently

demonstrated that those cases are somehow representative or are

sufficiently comparable to his case to make a compelling argument

that any disparity is unjustified.

Conclusion

In sum, we have considered all of Gilman’s arguments as

to mitigation and as to the reasonableness of his sentence and find

them insufficient to meet his burden on appeal. We therefore

affirm the sentence imposed by the district court.

AFFIRMED.

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