United States v. Canova

05-6439-cr
U.S. v. Canova

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term 2006

Heard: February 5, 2007 Decided: May 8, 2007)

Docket No. 05-6439-cr

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UNITED STATES OF AMERICA,
Appellant,

v.

JOHN CANOVA,
Defendant-Appellee.
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Before: MESKILL, NEWMAN, and SACK, Circuit Judges.

Appeal by the Government from the November 17, 2005, judgment of

the United States District Court for the District of Connecticut

(Alfred V. Covello, District Judge), resentencing the Defendant to

probation and a $1,000 fine after a remand. See United States v.

Canova, 412 F.3d 331 (2d Cir. 2005).

Remanded for resentencing.

Eric J. Glover, Asst. U.S. Atty., New Haven,
Conn. (John H. Durham, Acting U.S. Atty.,
William J. Nardini, Asst. U.S. Atty., New
Haven, Conn., on the brief), for Appellant.

Paul Shechtman, New York, N.Y. (Michael J.
Grudberg, Stillman, Friedman & Schectman,
P.C., New York, N.Y., on the brief), for
Defendant-Appellee.
JON O. NEWMAN, Circuit Judge.

This sentencing appeal primarily concerns the reasonableness of

a downward departure from a Sentencing Guidelines calculation and the

reasonableness of the resulting sentence. The Government appeals from

the November 17, 2005, judgment by the District Court for the District

of Connecticut (Alfred V. Covello, District Judge) resentencing the

Defendant, John Canova, after a remand from this Court, to one year’s

probation and a $1,000 fine. The Government contends that the

District Court’s 15-level downward departure was unreasonable and that

we should remand with instructions to impose a sentence of not less

than 12 months. We agree that a remand for resentencing is required,

but decline to specify a minimum sentence.

Background

The facts are set out in detail in the opinion on the prior

appeal. See United States v. Canova, 412 F.3d 331 (2d Cir. 2005). We

repeat only those pertinent to the issues on this appeal, as recounted

at 412 F.3d at 336-40.

Canova’s conduct. At all relevant times, Canova was Vice-

President for Operations at Raytel Cardiac Services, Inc. (“Raytel”).

Raytel performed transtelephonic pacemaker monitoring for Medicare

patients. Transtelephonic monitoring involves a remote technician’s

testing the operation of a pacemaker by having the patient use a

device to transmit telephonic signals that can be converted into an

electrocardiogram (“ECG”) report for review by a cardiologist.

The Medicare Coverage Issues Manual required monitoring of

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pacemakers over the course of three thirty-second phases and recording

the results of each phase on magnetic tape.1 Raytel was required to

produce magnetic tape records of all three phases to receive Medicare

compensation. However, after computerized testing was introduced in

1995, some Raytel technicians began to record an abbreviated strip of

magnetic tape for the last phase or to omit it altogether. Canova

knew of this practice, and the performance quotas he imposed

contributed to it. Sometime in 1999, Canova suggested to a

subordinate that the Medicare Manual could be construed not to require

production of a strip for the last phase if the telephonic signals

were recorded in audio format. His subordinate called Medicare, and

the persons with whom he spoke could not answer his questions about

the Manual.

At some point, Medicare’s Connecticut carrier received an

anonymous complaint that Raytel was not complying with Medicare’s

requirements. In 1999, the carrier informed Raytel that it refused to

pay, or was seeking reimbursement for having paid, Medicare claims for

1
The Manual states in relevant part:

In order for transtelephonic monitoring services to be
covered, the services must consist of the following
elements:
1. A minimum 30-second readable strip of the pacemaker in
the free-running mode;
2. Unless contraindicated, a minimum 30-second readable
strip of the pacemaker in the magnetic mode; and
3. A minimum 30 seconds of readable ECG strip.

Medicare Program; National Coverage Decisions, 54 Fed. Reg. 34,555-03,

34,580 (Aug. 21, 1989).

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noncompliant monitoring. In response, Canova falsely wrote that

Raytel had complied with all relevant regulations and was producing

thirty-second strips for all three phases.

After receiving Canova’s letter, Medicare decided to conduct an

audit of Raytel’s Connecticut facility. The day before the visit,

Canova instructed his managers to tell the auditors that Raytel had

complied with the Medicare Manual even though he knew this was false.

Following the audit, Canova falsely asserted in a letter that Raytel’s

“standard operating procedure [was] to obtain the full 90 seconds of

ECG.” Id. at 339 (alteration in original). He also represented that

Raytel would send the auditors certain records they had requested.

In March 2000, when Raytel had failed to produce the requested

records, Medicare gave Raytel thirty days in which to correct

deficiencies in its archive system and to certify that all data in its

records complied with the Medicare requirements. Canova instructed

his managers to “clean up” the requested records to make it look as if

they had been printed directly from the computer archives, although

the “cleaned up” records were never transmitted to Medicare. See id.

at 339 & n.6. Even after learning that the requested records were

noncompliant, Canova reported to Medicare that “the company had

established a ‘new archive system . . . populated with tests starting

with December 6th, 1999,’ and that he was certifying Raytel’s

compliance with Medicare’s regulations for tests conducted after that

date.” Id. at 340 (omission in original).

The conviction. After indictment and a jury trial, Canova was

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convicted of one count of conspiracy to defraud the United States by

making false statements to Medicare agents in violation of 18 U.S.C.

§ 1001 and to obstruct a Medicare audit in violation of 18 U.S.C.

§ 1516, see 18 U.S.C. § 371; two counts of making false statements in

violation of 18 U.S.C. § 1001; and one count of obstructing a federal

audit by directing his employees to make false representations to

auditors, see id. § 1516.

The first sentencing. Applying the 1998 Sentencing Guidelines,2

the Probation Department recommended in its Presentence Report (“PSR”)

a total offense level of 25. Starting with a base offense level of 6

under section 2F1.1(a), which governed fraud offenses, the PSR added

a 13-level enhancement for a $5 million loss, see U.S.S.G.

§ 2F1.1(b)(1)(N); a 2-level enhancement for more than minimal

planning, see id. § 2F1.1(b)(2)(A); a 2-level enhancement for Canova’s

leadership role, see id. § 3B1.1(c); and a 2-level enhancement for

obstruction of justice based on Canova’s trial testimony, see id.

§ 3C1.1. The total offense level of 25 and a criminal history

category (“CHC”) of I yielded a Guidelines sentencing range of 57 to

71 months.

At the sentencing hearing, which occurred after the Supreme Court

rendered the Guidelines advisory, see United States v. Booker, 543

U.S. 220 (2005), the District Judge made it clear that he intended to

impose a Guidelines sentence. Making the required Guidelines

2
All references to the Sentencing Guidelines are to the 1998

version unless otherwise noted.

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calculation, generally required even after Booker, see United States

v. Crosby, 397 F.3d 103, 111-12 (2d Cir. 2005), he concluded that the

evidence did not support a loss calculation of $5 million. The Judge

found that Raytel’s noncompliance did not cause Medicare any harm at

all. Finding no monetary loss, the Judge calculated the Guidelines

range using an “alternative method.” Relying on section 2J1.2,

governing obstruction of justice offenses, he started with a base

offense level of 12. He then applied a 2-level enhancement for

Canova’s leadership role. However, he rejected the Government’s

request for a 2-level enhancement for obstruction of justice,

observing that he could not conclude that Canova perjured himself with

the specific intent to obstruct justice.

From the adjusted offense level of 14 the District Judge granted

Canova a 6-level downward departure based on “his extraordinary record

of civil and public service,” which included service in the U.S.

Marine Corps, courageous service as a volunteer firefighter, and

several “Good Samaritan” acts. The final offense level of 8, combined

with a CHC of I, yielded a Guidelines sentencing range of 0 to 6

months’ incarceration. The District Judge sentenced Canova to one

year’s probation and a fine of $1,000.

The first appeal. Canova unsuccessfully appealed from the denial

of his motion for a new trial, but the Government’s cross-appeal,

challenging the sentence, was partially successful. The Government

challenged the District Court’s loss calculation, its denial of an

obstruction-of-justice enhancement, and its charitable service

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downward departure.

We first noted that, after Booker, a district court’s sentencing

decision is reviewed for reasonableness and that “a Guidelines error

that appreciably influences this decision could render the final

sentence unreasonable.” Canova, 412 F.3d at 350, 351 (internal

quotation marks and alterations omitted). Applying this standard, we

concluded that it was necessary to remand for resentencing because the

District Court had erred in declining to make a Guidelines loss

calculation.

We first distinguished between actual loss and intended loss and

focused most of our attention on the District Court’s error in

disregarding “intended” loss.3 See U.S.S.G. § 2F1.1, cmt. n.8.4 We

3
Discussing actual loss, we noted the District Court’s conclusion

that Medicare had suffered no clinical loss. See Canova, 412 F.3d at

352. However, we emphasized, Canova’s fraudulent representations

concerned the tests’ compliance with Medicare regulations, not their

clinical value. See id. We then remarked that “it is not the task of

a sentencing court to second-guess the victim’s judgment as to the

necessity of [its] specifications.” Id. Accordingly, a party who

contracts to have goods produced in accordance with certain

specifications and who pays for those goods in reliance on fraudulent

representations of compliance suffers “a measure of pecuniary loss for

purposes of calculating the fraud guideline.” Id. at 354.

Nevertheless, we conceded, “[t]his does not mean that a victim’s loss

in a substitute goods or services case necessarily equals the full

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noted that Canova had been convicted not only of offenses involving a

completed fraud--furnishing test results known to be noncompliant--

but also of an offense involving intended fraud--making false

statements to prevent Medicare from recouping payments made to Raytel

for the noncompliant tests. See Canova, 412 F.3d at 354. The

Government was entitled to recoup full payment for all noncompliant

tests, see 42 U.S.C. § 1395gg; 42 C.F.R. §§ 405.371(a), 405.373, and

the evidence showed that Canova knew of the Government’s right to

recoup, thereby providing a basis for inferring that his false

statements interfered with the recoupment, see Canova, 412 F.3d at

354-55 & n.24. Because Medicare payments to Raytel during the period

covered by the audit were approximately $10 million and evidence

supported the Government’s “conservative” conclusion that 50 percent

of Raytel’s tests were noncompliant, we calculated the intended loss

from Canova’s actions to be $5 million. See id. at 355. We also

advised the District Judge that he could rely on the intended loss in

determining the appropriate loss enhancement for this case, rather

than make the more difficult determination of actual loss. See id. at

355 n.25; see also U.S.S.G. § 2F1.1, cmt. n.8 (“[I]f an intended loss

that the defendant was attempting to inflict can be determined, this

figure will be used if it is greater than the actual loss.”).

contract price paid.” Id. at 353.
4
The distinction between actual and intended loss is set forth in

the current version of the Guidelines at U.S.S.G. § 2B1.1 cmt. n.3(A)

(2006).

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 We declined to express an opinion on whether it would be

appropriate to depart from the Guidelines range on the ground that the

monetary loss overstated the seriousness of the offense, see U.S.S.G.

§ 2F1.1, cmt. n.11. Canova, 412 F.3d at 351 n.21. We also concluded

that the District Court’s error could very well have affected Canova’s

sentence, despite the charitable service downward departure, because

of the “significant difference” between a Guidelines sentencing range

that included the $5 million loss, 46 to 57 months, and the range,

before the departure, that the District Court calculated, 15 to 21

months, based on no loss. See id. at 355-56.

On the remaining issues on the Government’s cross-appeal, we

affirmed the District Court’s denial of an obstruction-of-justice

enhancement, see id. at 356-58, and the 6-level downward departure for

Canova’s charitable service, see id. at 358-59.5 We also stated that,

on remand, the District Court could reconsider the extent of the

departure “in light of the higher Guidelines range dictated by proper

application of a loss enhancement.” Id. at 359 n.29.

The resentencing. At the resentencing the District Judge began

his Guidelines recalculation with a base offense level of 6, see

U.S.S.G. § 2F1.1(a), and then added a 13-level enhancement for a loss

5
We recognized that the Guidelines generally discourage downward

departures on the basis of charitable or public service but stated

that a departure may be appropriate when the discouraged factor “‘is

present to an exceptional degree.’” Canova, 412 F.3d at 358 (quoting

Koon v. United States, 518 U.S. 81, 96 (1996)).

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of $5 million, see id. § 2F1.1(b)(1)(N); a 2-level enhancement for

more than minimal planning, see id. § 2F1.1(b)(2)(A); and a 2-level

enhancement for leadership role, see id. § 3B1.1(c), for an adjusted

offense level of 23. Neither party disputes this calculation.

The District Judge then granted a 15-level downward departure on

the ground that the monetary loss overstated the seriousness of the

offense and because “the previous departure for public service [did]

not fully reflect the Court’s sentencing objectives in light of the

newly imposed loss enhancement.”6 As he explained, “[T]he higher

guideline range calls for a more extended downward departure for the

defendant’s service to the country and community.” As for the loss

calculation, the judge commented, “[I]t’s not that these tests weren’t

performed. It’s the question whether a portion of the last test was

not properly concluded.” He pointed to evidence suggesting that some

Medicare officials could not tell whether its policy required all

three parts of the test, noting that the court could consider the

“victim’s own conduct.” He also concluded that it was appropriate to

consider Raytel’s restitution in the amount of $5 million.

After applying the 15-level downward departure, the court arrived

at an offense level of 8, which, when combined with a CHC of I,

yielded a Guidelines range of 0 to 6 months. The District Judge

resentenced Canova to one year’s probation and a $1,000 fine,

precisely the same sentence originally imposed.

6
The District Court did not allocate the 15 levels among the

stated grounds for departure.

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 Discussion

Although Booker rendered the Sentencing Guidelines advisory,

sentencing courts must still consider the factors contained in 18

U.S.C. § 3553(a), including the applicable Guidelines range and

departure authority. See United States v. Selioutsky, 409 F.3d 114,

117-18 (2d Cir. 2005) (citing Crosby, 397 F.3d at 111-12). After

considering all relevant factors, a court must decide whether to

impose a Guidelines or a non-Guidelines sentence. See id. at 118

(citing Crosby, 397 F.3d at 113).

Before Booker, we reviewed downward departures under the de novo

standard set forth in 18 U.S.C. § 3742(e). See United States v. Brady,

417 F.3d 326, 332 (2d Cir. 2005). However, Booker excised that

provision, and substituted review of sentences for “reasonableness.”

See id. Reasonableness review involves consideration of both the

length of the sentence (substantive reasonableness) and the procedures

used to arrive at the sentence (procedural reasonableness). See United

States v. Rattoballi, 452 F.3d 127, 131-32 (2d Cir. 2006).

With respect to procedural reasonableness, “[a]n error in

determining the applicable Guideline range or the availability of

departure authority would be the type of procedural error that could

render a sentence unreasonable under Booker.” Selioutsky, 409 F.3d at

118. Accordingly, we review downward departures to determine whether

the sentencing court “abused (or exceeded) its discretion.” Id. at

119. A sentencing court abuses or exceeds its discretion when its

decision rests on an error of law or a clearly erroneous factual

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finding or, even if not resulting from such an error, “‘cannot be

located within the range of permissible decisions.’” Brady, 417 F.3d

at 332-33 (quoting Zervos v. Verizon N.Y., Inc., 252 F.3d 163, 169 (2d

Cir. 2001)).

The Government argues that Canova’s sentence is unreasonable both

procedurally--i.e., the 15-level downward departure is based on the

District Court’s erroneous view that the $5 million loss overstated

the seriousness of the offense and that the victim’s conduct and

Raytel’s restitution were mitigating factors--and substantively--i.e.,

the extent of the departure is unreasonable and the resulting sentence

is unreasonably low. We first consider the three alleged procedural

errors.

I. Procedural Errors

(1) Whether the loss overstated the harm. The District Judge

exceeded his discretion in deciding that the $5 million loss

overstated the seriousness of Canova’s offense. The commentary to

section 2F1.1 states in relevant part:

In a few instances, the loss determined under subsection
(b)(1) may overstate the seriousness of the offense. This
may occur, for example, where a defendant attempted to
negotiate an instrument that was so obviously fraudulent
that no one would seriously consider honoring it. In such
cases, a downward departure may be warranted.

U.S.S.G. § 2F1.1 cmt. n.11. “The example suggests that this departure

typically applies in cases where there is no meaningful chance that

the attempted crime would have succeeded to the extent indicated by

the stated loss.” United States v. Crawford, 407 F.3d 1174, 1183 (11th

Cir. 2005).

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 At the resentencing hearing, the District Judge recognized that

the $5 million loss was based on the fact that Canova (or, more

precisely, Raytel) was liable to Medicare for the full cost of tests

performed in violation of the Medicare specifications. In reasoning

that the $5 million loss overstated the seriousness of the offense, he

explained, “[I]t’s not that these tests weren’t performed. It’s the

question whether a portion of the last test was not properly

concluded.”

The District Judge’s explanation of why the $5 million loss

overstates the seriousness of the offense again relates only to the

actual harm: the effect of Raytel’s noncompliance. The District Judge

did not take into account this Court’s instruction to consider the

intended loss that would have resulted from Canova’s attempts to

obstruct Medicare’s audit. Regardless of the medical value of

Raytel’s tests, the Government had the right to recoup $5 million in

payments made for noncompliant products, and Canova’s conduct was

designed to prevent this recoupment. The District Judge did not make

any findings to support a conclusion that the intended loss overstated

the harm.

Moreover, it is questionable whether the departure authority

contained in note 11 to section 2F1.1 even applies to a case such as

this. The note states that instances where the loss overstates the

seriousness of the offense will be “few,” and offers, as an example,

a case in which a defendant attempts to negotiate an instrument so

obviously fraudulent that no one would consider honoring it, i.e.,

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where the intended loss is almost certain not to occur. The pending

case differs substantially from that example: it cannot be said that

Canova’s attempts to prevent Medicare from learning of Raytel’s

noncompliance and obtaining recoupment were certain to fail.

(2) The victim’s conduct. The District Judge stated at the

resentencing hearing that the victim’s conduct was a ground for

departure, noting that “even Medicare could not tell in the language

of its own policy that all three parts of the test were required.”

The Judge apparently was referring to the testimony of a Raytel

employee, Steven Boecklin, who stated at trial that he called Medicare

to ask about the Manual’s requirements for the third phase of

monitoring and that the persons to whom he spoke did not know what the

Manual meant.7 See Canova, 412 F.3d at 338.

In the circumstances of this case, this factor was not a

permissible ground for departure. Section 5K2.10 of the Sentencing

Guidelines, entitled “Victim’s Conduct,” permits a downward departure

“[i]f the victim’s wrongful conduct contributed significantly to

7
The testimony at trial showed that Boecklin called Medicare

twice. He testified that he called directory assistance and said that

he needed to speak to someone in Medicare. He did not know the

identity of the persons to whom he spoke but assumed they were

qualified to answer his question because they did not indicate

otherwise. In each case, after putting him on hold for three to five

minutes, they returned to the phone and said, “We don’t know what it

means.”

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provoking the offense behavior.” The response of Medicare employees

cannot be considered to have provoked Canova’s conduct.

(3) Raytel’s restitution. The District Judge also supported the

downward departure by the fact that Raytel had paid $5 million in

restitution. He acknowledged that restitution was not ordinarily an

appropriate ground for departure but concluded that it was appropriate

in this case, citing United States v. Broderson, 67 F.3d 452 (2d Cir.

1995). In Broderson, the defendant, acting on behalf of his employer,

Grumman Data Systems Corp., had negotiated a contract with the

National Aeronautics and Space Administration (“NASA”). See id. at

454. The Truth in Negotiations Act (“TINA”), 10 U.S.C. § 2306a, which

governed the negotiations, required Broderson to disclose and update

to NASA all cost or pricing data. See id. Broderson initially

disclosed a certain interest rate to NASA but failed to update the

rate after it had been reduced. See id. at 455. He subsequently

certified in writing Grumman’s compliance with the Act. See id.

Broderson was convicted of numerous counts of executing a major fraud

scheme, engaging in wire fraud, and making false statements. See id.

The District Judge granted Broderson a 7-level downward departure

based on his conclusions that the loss calculation overstated the

seriousness of the offense and that there were mitigating

circumstances not adequately taken into account by the Guidelines. See

id. In particular, he observed that Broderson did not profit

personally, the contract was favorable to the Government, and Grumman

had paid restitution to the Government. See id.

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 On appeal, the Government challenged the District Court’s

downward departure. See id. at 457-58. With respect to restitution,

we stated, “Ordinarily, payment of restitution is not an appropriate

basis for downward departure . . . because it is adequately taken into

account by Guidelines Section 3E1.1, dealing with acceptance of

responsibility.” Id. at 458. Nor were the other factors mentioned by

the District Court typical grounds for departure. See id. at 459.

However, we concluded that the departure was permissible in light of

the District Court’s “special competence in determining whether a case

is outside the heartland,” id. (internal quotation marks omitted),

which the Commission has defined as “a set of typical cases embodying

the conduct that each guideline describes,” U.S.S.G. ch. 1 pt.

A(4)(b). We took into account the facts that (1) Broderson did not

set out to mislead the government and therefore was unlike the typical

fraud defendant, (2) he did not personally profit from the fraud, (3)

the fraud was not “mainstream fraud” because negotiators do not

usually reveal their costs to each other, and (4) the Government had

recovered contractual and civil damages from Grumman. See Broderson,

67 F.3d at 459.

By citing Broderson, the District Judge here presumably believed

that it was appropriate to consider Raytel’s restitution because he

did not believe Canova to be a typical fraud defendant. As Canova

contends, this case does resemble Broderson in some aspects. Canova

did not personally profit from his fraud, he did not falsify test

results or engage in other typical fraud, Medicare’s recoupment rights

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allowed it to recover more than its actual pecuniary loss, and,

accordingly, Medicare profited from Raytel’s $5 million restitution.

However, Canova and the District Court overlooked important

differences. Most notably, by making false representations and

instructing employees to make false representations, Canova actively

attempted to obstruct the Government’s audit in order to prevent the

Government from recouping significant sums of money to which it was

entitled. See Canova, 412 F.3d at 355 (recounting Canova’s testimony

that he knew that recoupment would be “a large bullet to take as a

financial hit”). By contrast, Broderson’s conviction stemmed only

from his certification that his employer had complied with the TINA,

and he did not initially intend to deceive the Government. Moreover,

in the pending case, Raytel paid restitution only as part of a plea

agreement in its criminal case. See id. The fact that the Government

had to bring a criminal indictment to obtain money to which it was

entitled illustrates the seriousness of Canova’s conduct.

Raytel’s restitution could not properly contribute much if

anything to a departure in view of the significant differences between

Canova’s conduct and the conduct in Broderson.

II. Substantive Unreasonableness

In many cases involving a departure, it would be appropriate to

consider separately the reasonableness of the extent of the departure

and the reasonableness of the resulting sentence. In this case,

however, where the departure resulted in a sentence of no imprisonment

at all, the considerations that bear on the reasonableness of the

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extent of the departure apply equally to the reasonableness of the

sentence, and at this point we need consider only the reasonableness

of the extent of the departure.

The Government contends that the l5-level departure was

unreasonable. The Defendant responds that the original 6-level

departure for exceptional charitable service could permissibly have

been increased to 8 levels in view of the increased base offense level

from which the departure was made, and that the remaining 7 levels of

the departure could permissibly be attributed to the claimed

overstatement of the loss. On the first appeal we recognized that a

somewhat increased downward departure based on Canova’s charitable

service (or perhaps a non-Guidelines sentence) might be appropriate in

view of the significant increase in the adjusted offense level. See

Canova, 412 F.3d at 359 n.29 (citing United States v. Elefant, 999

F.2d 674, 678 (2d Cir. 1993) (recognizing that the extent of a

departure may be increased if the offense level from which the

departure is made is increased)).

We have some doubt whether a departure can be justified by

dividing its aggregate extent into component parts, each attributable

to different grounds. However, since the District Judge did not

explain the departure on the basis now advanced by the Defendant, and

since our review is normally based on the rationale put forth by the

sentencing judge, see Rattoballi, 452 F.3d at 134 (the Court’s

“ability to uphold a sentence as reasonable will be informed by the

district court’s statement of reasons (or lack thereof) for the

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sentence that it elects to impose”), we will assess the departure by

considering its aggregate extent.

We have not set forth any particular method for assessing the

extent of a departure in order to determine its reasonableness.

Several methods can plausibly be advanced, grouped within either of

two categories--an absolute assessment or a relative assessment. An

absolute assessment would gauge the extent of the departure, measured

in levels, without regard to the starting point from which the

departure was made. Such an assessment could consider only the number

of levels the departure spans--in the pending case, 15. A relative

assessment would gauge the extent of the departure either by the

increase or decrease in the resulting prison time (from the prison

time for the adjusted offense level) or by the percentage of increase

or decrease of either prison time or levels. Using a relative

assessment based on prison time would require noting either the tops

of the original and new ranges or the bottoms of such ranges,8 as

8
We note that some courts, when calculating a percentage by which

a non-Guidelines sentence varies from a Guidelines sentence, have used

the top of the range when assessing an increased sentence, see, e.g.,

United States v. Sindima, 478 F.3d 467, 472 (2d Cir. 2007); United

States v. Valtierra-Rojas, 468 F.3d 1235, 1240 (10th Cir. 2006);

United States v. Larrabee, 436 F.3d 890, 892 (8th Cir. 2006), and the

bottom of the range when assessing a reduced sentence, see, e.g.,

United States v. Trupin, 475 F.3d 71, 72 (2d Cir. 2007); United States

v. Plaza, 471 F.3d 876, 879 (8th Cir. 2006); United States v. Maloney,

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illustrated in the margin.9

466 F.3d 663, 669 (8th Cir. 2006).
9
For example, in the pending case, the adjusted base offense level

was 23, which, in CHC I, would have yielded a sentencing range of 46

to 57 months. The 15-level departure reduced the offense level to 8,

yielding a sentencing range of 0 to 6 months. Expressed in months,

the reduction is 51 months if the tops of the ranges are used (57

minus 6) and 46 months if the bottoms are used (46 minus 0).

Expressed in percentages of months, the reduction is 89 percent if the

tops of the ranges are used (and the resulting top is 11 percent of

the original top); because in this instance the bottom of the new

range is 0, a percentage calculation using the bottoms is meaningless.

Expressed in percentage of levels, the 15-level reduction is 65

percent of the original level of 23 (and the resulting level of 8 is

35 percent of the original level).

Relative assessments of the same absolute reduction of levels

will yield different results in months of reduction and sometimes in

percentages of reduction depending on the adjusted offense level from

which the reduction (or increase) was made. For example, a 6-level

reduction from level 14 (in CHC I) to level 8 would reduce the tops of

the sentencing ranges by 15 months (from 21 to 6 months), which is a

71 percent reduction (and the resulting top is 29 percent of the

original top); the same 6-level reduction from level 36 to level 30

would reduce the tops of the sentencing ranges by 114 months (from 235

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 We decline to specify any one measurement technique as a

preferred method for assessing the extent of a departure, although one

of the various techniques of relative assessment, or a combination of

these techniques, will usually be more informative than an absolute

assessment.10 Whenever the extent of a decrease (or increase) is

to 121 months), which is a 48.5 percent reduction (and the resulting

top is 51.5 percent of the original top). Apart from a reduction in

levels, a reduction of a fixed number of months will always yield a

higher percentage reduction if the original sentence was low than if

it was high. See United States v. Wallace, 458 F.3d 606, 613 (7th Cir.

2006) (noting that a 24-month reduction of a 25-month sentence would

be a 96 percent reduction, and the same reduction of a 240-month

sentence would be a 10 percent reduction).

We set forth these calculations only to illustrate the

consequences of various available approaches, not to require

sentencing judges to determine any percentage reductions or increases.
10
Besides comparing sentencing ranges before and after departures

or imposition of non-Guidelines sentences, some courts have used other

techniques to make a relative assessment of the extent of a departure

or the difference between a Guidelines and a non-Guidelines sentence.

In United States v. Sindima, 478 F.3d 467 (2d Cir. 2007), we noted

that had the defendant been in CHC VI, appropriate for a career

criminal, instead of CHC I, the high end of the range would have been

lower than the non-Guidelines sentence imposed. See id. at 472. In

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assessed for reasonableness, it seems evident that the starting point

should be considered. In the pending case, for example, the fact that

the reduction is 15 levels is not nearly as informative as the fact

that the reduction reduced the tops of the ranges by 51 months or 89

percent and resulted in a top that was only 11 percent of the original

top.

Transcending the numbers in this case, however, is the blunt fact

that the effect of the departure and the resulting sentence was to

treat Canova as though he had intended to cause no loss at all.

Canova’s sentence was probation when the District Judge understood

that no actual or intended loss had occurred, and it remained

probation even after this Court’s remand made clear that Canova had

caused some actual loss and had intended a loss of $5 million.

Although unusual circumstances might arise in which it would be

reasonable to impose the same sentence after a significant aggravating

(or mitigating) factor had been taken into consideration, such an

outcome would require a persuasive justification. Since the District

Judge sentenced here without any consideration of the $5 million loss

that Canova intended, a departure that results in the reimposition of

the same sentence appears to be unreasonable. However, in the absence

of the District Court’s consideration of the impact of the intended

United States v. Rajwani, 476 F.3d 243 (5th Cir. 2007), the Court

compared the extent of an upward departure to the extent of two

departures for which the Sentencing Guidelines specified a precise

number of levels. See id. at 253 n.27.

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loss on the sentencing decision, see 18 U.S.C. § 3553(a)(2) (requiring

sentencing court to consider, among other things, need for sentence to

reflect seriousness of offense), we make no ultimate ruling on the

reasonableness of the departure. Although we are not inclined to

specify a minimum sentence, as urged by the Government, we will remand

to the District Court for careful reconsideration in light of this

opinion.

Conclusion

The case is remanded for resentencing.

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