United States v. Phaneuf

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 95-1389

UNITED STATES,

Appellee,

v.

JEFFREY PHANEUF,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

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

Before

Selya, Circuit Judge,

Campbell, Senior Circuit Judge,

and Stahl, Circuit Judge.

Donald R. Furman, Jr., for appellant.

Sheila W. Sawyer, Assistant United States Attorney, with whom

Donald K. Stern, United States Attorney, was on brief for appellee.

August 2, 1996

CAMPBELL, Senior Circuit Judge. Pursuant to a plea agreement

with the government, defendant-appellant Jeffrey Phaneuf pled

guilty to three counts of making a false statement on credit

card applications in violation of 18 U.S.C. 1014, and two

counts of mail fraud in violation of 18 U.S.C. 1341. The

United States District Court for the District of

Massachusetts sentenced Phaneuf to 24 months in prison on the

first three counts to run concurrently with a 30-month

sentence on the last two counts, followed by 36 months of

supervised release. In addition, the court ordered Phaneuf

to pay $20,400 to the Bank of New England ("BNE") as

restitution for losses. Phaneuf appeals from his sentence.

I.
I.

In April 1989, police officers in Massachusetts

discovered numerous stolen credit cards in Phaneuf's car

during a routine traffic stop. Police obtained a warrant to

search his residence in Hampton, New Hampshire. They

discovered numerous credit cards in his name, along with

receipts and credit card charge slips. A follow-up

investigation revealed that 31 of the cards recovered were

ones that Phaneuf had reported as stolen the previous year.

In June 1989, evidence from the state investigation

-- including credit card applications, receipts, stop payment

order receipts, and correspondence between Phaneuf and

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various banks -- was turned over to the United States Secret

Service in Boston. In July, Phaneuf complied with that

office's request for handwriting exemplars to compare with

the documents obtained from his home.

In August 1990, Phaneuf called Agent Hoelen of the

Secret Service to ask about the status of the investigation.

Phaneuf offered to cooperate with the Secret Service. In

September 1990, Phaneuf and Agent Hoelen met, without counsel

or a representative from the United States Attorney's Office

present. After Agent Hoelen advised Phaneuf of his Fifth

Amendment right against self-incrimination, Phaneuf explained

his scheme: from January 1988 through March 1989, he

obtained numerous credit cards from banks and credit card

companies by submitting false applications, used the cards

(or authorized others to use them), and then reported the

cards as stolen or failed to pay back the issuing

institutions. He also wrote checks against his personal

checking account at BNE to pay off credit card balances and

then issued stop payment orders on the checks after the

credit card balances had been reduced by the amount of the

checks. In this way, he was able to resume use of the credit

cards and incur more debt.

At the end of his meeting with Agent Hoelen,

Phaneuf signed a two-page typed statement outlining the above

scheme and initialled an additional ten or eleven pages of

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"certified inventory of evidence" forms. Phaneuf told Agent

Hoelen that he believed the total amount of fraud

attributable to his scheme was about $176,000. Phaneuf

apparently made this comment in response to a higher loss

estimate offered by Agent Hoelen.

In November 1994, the government filed a five-count

indictment in the United States District Court for the

District of Massachusetts charging Phaneuf with mail fraud

and making false statements on credit card applications. A

plea hearing was held on December 12, at which time the

government stated that the total loss attributable to Phaneuf

for sentencing purposes was approximately $175,000. Phaneuf

refused to agree to the $175,000 loss amount contained in the

plea agreement. Defense counsel questioned how the

government would prove this total amount, given the lower

amounts alleged in the various counts ($64,000 in counts I-

III and $57,182 in counts IV-V, for a sum of $121,182). As a

result of this dispute, the district court did not accept

Phaneuf's guilty plea and ended the plea proceedings. A

second plea hearing was held on December 20, at which the

court accepted Phaneuf's guilty plea but declared the amount

of the loss to be "in dispute."

On January 9, 1995, Assistant United States

Attorney Sheila Sawyer filed a notice of appearance replacing

Duane Deskins who had been handling Phaneuf's prosecution.

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Shortly thereafter, the probation department filed a

Presentence Investigation Report ("PSR") that relied

primarily upon Phaneuf's two-page signed statement of

September 1990 to characterize the offense conduct.

Phaneuf's base offense level was calculated to be six, and

was increased by six levels because he was found to be

responsible for a loss amount between $100,001 and $200,000.1

Two more levels were added because the offense involved more

than minimal planning. The probation officer then took into

account Phaneuf's acceptance of responsibility, and found

that his total adjusted offense level was twelve. Given that

offense level and a criminal history category of V, Phaneuf's

guideline sentencing range was put at 27 to 33 months.

The government did not object to the PSR. Phaneuf

made several objections. He asserted that neither he nor his

attorney had seen "any information in the possession of the

government" other than his two-page statement given to Agent

Hoelen. Phaneuf petitioned the probation department to

confine the loss calculation to the figures listed in the

mail fraud counts of the indictment. The probation officer

considered Phaneuf's objections but refused to alter the loss

calculations.

1. The applicable offense level for fraud claims increases
in proportion to the value of the fraud.

-5-

Sentencing was scheduled for March 27, 1995. On

March 7, the government filed with the court a sentencing

memorandum in support of the probation department's loss

calculations. The government attached to its sentencing

memorandum an affidavit from Agent Hoelen describing the

investigation, the confession signed by Phaneuf in 1990, and

a certified inventory of evidence prepared by Agent Hoelen.

On Thursday, March 23, Assistant United States Attorney

Sawyer called defense counsel to see whether he still

intended to contest the loss amount and whether he "had any

interest in looking at the materials referenced in the

government's sentencing memorandum prior to the sentencing

hearing." Defense counsel rejected the government's offer to

look at the evidence, stating his intention to challenge the

government for alleged discovery violations.

At sentencing, the district court concluded that

the loss amount was "somewhere in the range of" $100,001 to

$200,000, and not less than $166,229.38. The district court

also found that the government had not failed to make

available to the defense the documentation supporting its

loss calculation. Phaneuf was sentenced to 30 months in

prison, to be followed by a 36-month term of supervised

release. The court imposed several special conditions of

supervised release: it required Phaneuf to obtain prior

approval of the probation department before "incurring any

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extension of credit, including charge cards, credit cards or

loans" and before making "any purchase . . . exceeding the

cost of $100." The court further ordered Phaneuf to make

restitution to the BNE in the amount of $20,400 for losses it

sustained in connection with the mail fraud scheme.

II.
II.

Phaneuf assigns four errors on appeal: (1) that the

government's violation of a local discovery rule deprived him

of a fair sentencing; (2) that the district court erred in

calculating the loss amount for sentencing purposes; (3) that

the supervised release condition requiring him to obtain

prior approval for purchases over $100 was not reasonably

related to his offenses as required by 18 U.S.C.

3583(d)(1); and (4) that the court's restitution order was

improper.

1. Discovery Violation
1. Discovery Violation

Phaneuf contends that the government's purported

failure to provide the defense with documentation supporting

its loss estimate deprived him of a fair sentencing

procedure. He relies on Local Rule, D.Mass. 116.1(a), which

requires that, in criminal cases, the government

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automatically disclose certain written evidence in its

possession to the defense.2

Phaneuf argues that the government violated Local

Rule 116.1 by not spontaneously handing over to the defense

various pieces of evidence including the handwriting analyses

produced by the Forensic Services Division of the Secret

Service and evidence of "numerous legitimate payments" on

2. The Rule provides in relevant part:

In all criminal cases, the following
material and information . . . shall be
disclosed to the opposing party. Such
disclosure . . . shall occur . . . in all
events within fourteen (14) days after
arraignment.

(a) The government shall disclose, and
allow the defendant to inspect, copy and
photograph, all written material as
follows:

. . .

(3) All relevant reports of results of
physical or mental examinations, and of
all scientific tests, experiments and
comparisons, or copies thereof, made in
connection with a particular case.

(4) All . . . documents . . . which the
Government intends to use at the trial of
the case. . . .

(5) All exculpatory evidence within the
meaning of Giles v. Maryland, 386 U.S.

66, 87 S.Ct. 793, 17 L.Ed.2d 737 (1967),
Brady v. Maryland, 373 U.S. 83, 83 S.Ct.

1194, 10 L.Ed.2d 215 (1963) and Giglio v.

United States, 405 U.S. 150, 92 S.Ct.

763, 31 L.Ed.2d 104 (1972).

Local Rule, D.Mass. 116.1(a).

-8-

Phaneuf's credit card accounts. As a result, Phaneuf argues,

he could not effectively challenge the government's loss

estimate and the corresponding six-level increase in base

offense level. The government replies that Local Rule 116.1,

on its face, applies only to pre-trial discovery. At

sentencing, the government says, a defendant is entitled to

no more than fair notice of the evidence upon which the

government intends to rely.3 In any event, the government

insists that Phaneuf was fully advised in advance of the

sentencing hearing of the government's evidence and that his

counsel had made no request at all for evidence.

We need not linger over what role, if any, Local

Rule 116.1 should play at sentencing. Under any analysis,

Phaneuf is not entitled to relief here. He has only himself

to blame for any gaps in his knowledge of the basis of the

government's sentencing proposals. Counsel for the defense

conceded at the sentencing hearing that, during the two and

one-half month period leading up to sentencing, he did not

request any data from the prosecution, nor did he request the

court to compel the disclosure of any evidence.4 The absence

3. Neither party contends that Phaneuf did not have fair
notice of the evidence upon which the government intended to
rely at sentencing.

4. Although defense counsel requested certain information
from the government in the period before the institution of
formal judicial proceedings, he conceded at sentencing that
he did not request the documents at any point after the
hearing at which Phaneuf's plea was taken.

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of any such requests is especially telling given that three

weeks before sentencing the government had filed a sentencing

memorandum setting forth the government's position on the

loss amount. Moreover, some four days before sentencing,

Assistant United States Attorney Sawyer called defense

counsel and offered him an opportunity to inspect and copy

the materials referenced in the government's sentencing

memorandum -- an offer which defense counsel refused, citing

a strategic choice to pursue a prosecutorial misfeasance

argument. Even after this argument failed at sentencing,

defense counsel did not request a continuance of sentencing

to permit him an opportunity to investigate further the

government's evidence.

The district court, after hearing argument, found

that the government did not fail to make available to the

defense the documentation supporting its loss calculations.

This finding was amply supported by the facts and arguments

presented. See Fennell v. First Step Designs, Ltd., 83 F.3d

526, 532 (1st Cir. 1996) (holding that district court has

broad discretion over matters concerning discovery); United

States v. Tajeddini, 996 F.2d 1278, 1287 (1st Cir. 1993)

(noting that rulings on discovery matters are reviewed for an

abuse of discretion). Moreover, by not, even then,

requesting a continuance during which the evidence allegedly

withheld could be disclosed and reviewed, Phaneuf further

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weakened any claim he might conceivably have had of an

alleged discovery violation. See United States v. Tardiff,

969 F.2d 1283, 1286 (1st Cir. 1992) ("[E]ven if a defendant

is faced at sentencing with information that he has not had a

chance to rebut . . . we think it incumbent upon the

defendant to ask for a continuance then and there."); United

States v. Diaz-Villafane, 874 F.2d 43, 47 (1st Cir.) ("We

find it of decretory significance that defense counsel,

although seeking unsuccessfully to block the testimony

entirely, never moved for a continuance[;] [i]t is, we

think, incumbent upon a party faced with such a situation to

ask explicitly that the court grant the time needed to

regroup, or waive the point."), cert. denied, 493 U.S. 862

(1989).

Phaneuf's argument that he was denied discovery

documents is also weakened by the fact that much, although

not all, of the government's information that was directly

related to the loss estimate was information that Phaneuf

himself knew about or could have obtained. Phaneuf was aware

of the financial institutions which he had defrauded, and

could have contacted them himself to obtain information.

This is not a situation in which most of the information

relevant to sentencing was known only to the government.

We find no merit in Phaneuf's argument that the

government's purported failure to disclose evidence denied

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him his "constitutional right not to be sentenced on the

basis of invalid information." Diaz-Villafane, 874 F.2d at

47 (quoting United States v. Fogel, 829 F.2d 77, 90 (D.C.Cir.

1987)).

2. Amount of Loss
2. Amount of Loss

Phaneuf claims that the district court made an

unreasonable determination of the amount of loss attributable

to him for sentencing purposes. A district court's loss

estimate is a factual determination, and "a party

dissatisfied with the sentencing court's quantification of

the amount of loss in a particular case must go a long way to

demonstrate that the finding is clearly erroneous." United

States v. Rostoff, 53 F.3d 398, 407 (1st Cir. 1995); see also

United States v. Pavao, 948 F.2d 74, 77 (1st Cir. 1991).

When determining the amount of loss for sentencing

purposes, the district court "need only make a reasonable

estimate of the loss, given the available information."

U.S.S.G. 2F1.1, comment. (n.8); see also Rostoff, 53 F.3d

at 407 (stating that "[c]ourts can, and frequently do, deal

with rough estimates" when calculating the amount of loss).

The district court found that the loss attributable to

Phaneuf was "not less than $166,299.38" which placed him in

the $100,001 to $200,000 category necessitating a six-level

increase in base offense level. In reaching its loss

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determination, the court considered: (1) Agent Hoelen's

affidavit describing his investigation and the evidence

recovered from Phaneuf's home; (2) Phaneuf's signed statement

made to Agent Hoelen in September of 1990 stating that the

amount of loss was approximately $176,000; and (3) the

bankruptcy petition filed by Phaneuf in 1994 which discharged

many of his debts.5

Phaneuf challenges the court's loss determination

as not being based on "available information" within the

meaning of U.S.S.G. 2F1.1 comment (n.8), because it was

derived in part from Agent Hoelen's affidavit and Phaneuf's

statement rather than from the underlying evidence -- the

credit cards, receipts, sales slips, and other documents

collected during the investigation.6 This argument is

without merit. A district court may rely upon any relevant

evidence, including hearsay, to prove facts at sentencing

provided the evidence is sufficiently reliable. U.S.S.G.

6A1.3(a) (A sentencing court "may consider relevant

information without regard to its admissibility under the

5. According to the PSR, Phaneuf filed for Chapter 7
bankruptcy protection on February 8, 1994, and was discharged
from debts totalling $210,702 on May 31, 1994.

6. In his challenge to the loss determination, Phaneuf
reiterates his argument that the government, by failing to
disclose relevant documents, prevented him from presenting
any evidence regarding the specific loss amount. As we
determined in Part II.1 supra, this argument fails because

Phaneuf was offered an opportunity to inspect the documents
in the government's possession.

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rules of evidence applicable at trial, provided that the

information has sufficient indicia of reliability to support

its probable accuracy."); see also Rostoff, 53 F.3d at 407;

Tardiff, 969 F.2d at 1287; United States v. Figaro, 935 F.2d

4, 8 (1st Cir. 1991). Here, the district court relied on the

sworn affidavit of an officer who, having conducted the

investigation, had personal knowledge of the events in

question. This is the type and kind of evidence on which

sentencing courts often rely. See e.g., United States v.

Aymelek, 926 F.2d 64, 68 (1st Cir. 1991).

Phaneuf next argues that he made "numerous

legitimate payments" on his credit card accounts which may

have been included in the court's total loss amount.7 This

argument is equally unavailing. Phaneuf has not provided any

evidence that the legitimate payments were improperly taken

7. In making this claim, Phaneuf relies on an excerpt from
his 1990 statement to Agent Hoelen which discusses his
fraudulent practices:

During the course of my credit card
activity, I made numerous legitimate

payments on my accounts, however,

subsequent payments made on the following
accounts with checks from my personal
checking account . . . were made solely
for the purpose of making full payments
on the accounts to create either a zero
balance or a credit balance and to
increase credit available to me. After
submitting these checks for payment, I
would place a stop payment on them.

(emphasis added).

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into account in determining the loss amount. Absent such

evidence, we logically conclude that the loss calculations

upon which the court relied were based on the amount owing to

various institutions, rather than the amount paid. In

addition, we note that both Agent Hoelen and Phaneuf himself

(in his 1990 statement) attributed approximately $176,000 of

loss to Phaneuf's fraudulent activities.

We see no error, let alone clear error, in the

district court's loss determination. The government

introduced ample evidence upon which the court could conclude

that Phaneuf was responsible for not less than $166,299.38.8

Moreover, Phaneuf himself admitted to the court at sentencing

that the loss attributable to him was within the sentencing

guideline category of $100,001 to $200,000 requiring a six-

level increase in his base offense level.9

8. We also dismiss Phaneuf's perfunctory argument that the
district court erred in not holding a hearing on the issue of
loss amount. The denial of an evidentiary hearing at
sentencing is reviewable only for an abuse of discretion. We
cannot find that the district court abused its discretion in
not granting an evidentiary hearing when neither the
prosecution nor the defense requested such a hearing.
Tardiff, 969 F.2d at 1286 ("[T]he failure to ask the district

court to convene an evidentiary hearing ordinarily spells
defeat for a contention that one should have been held.");
see also United States v. Mala, 7 F.3d 1058, 1062 (1st Cir.

1993), cert. denied, 114 S.Ct. 1839 (1994).

9. Phaneuf stated at sentencing:

The amounts of money, at this point, I am
very confused as to what it is. I'm not
even going to argue it. I guess it has
to be somewhere in the range of my --

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3. Special Condition of Release
3. Special Condition of Release

Phaneuf argues that the district court erred in

imposing a special condition of supervised release requiring

prior approval from the probation department for purchases

over $100. We ordinarily review a district court's

imposition of a special release condition for an abuse of

discretion. See United States v. Thurlow, 44 F.3d 46, 47 (1st

Cir.), cert. denied, 115 S.Ct. 1987 (1995). However, as

Phaneuf did not object to the special condition at

sentencing, our review is for plain error. See United States

v. Peppe, 80 F.3d 19, 22 (1st Cir. 1996).

The court, adopting the recommendation in the PSR,

imposed the following special conditions on Phaneuf to be

observed during his three-year period of supervised release:

The defendant shall participate in a
mental health counselling program at the
direction of the probation department.
The defendant shall not open any new
lines of credit without prior approval of
the probation department.
The defendant shall not make any
purchases over $100 without prior
approval of the probation department.
The defendant shall provide the probation
department with any requested financial
information and records.

A sentencing judge has broad discretion to impose special

conditions of release that are "reasonably related" to (1)

the defendant's offense, history and characteristics; (2) the

within the hundred thousand and 200,000.
So I am not really going to argue it.

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need for adequate deterrence; and (3) the need to protect the

public from further crimes of the defendant.10 See U.S.S.G.

5D1.3(b) and the corresponding statutory provisions, 18

U.S.C. 3553(a)(2), 3583(d).

Phaneuf challenges the special condition limiting

his purchasing power, arguing that "[t]he record is silent on

a relationship between spending $100.01, accepting pre-

10. See, e.g., Peppe, 80 F.3d at 23 (condition that

defendant could not incur new credit charges or open
additional lines of credit without prior approval of
probation department permissible as an effort to monitor
defendant's use of funds where defendant had been convicted
of extortionate extension of credit); Thurlow, 44 F.3d at 47

(condition that defendant convicted of theft-related offenses
abstain from consuming alcohol permissible because of
defendant's history of substance abuse and use of crime
proceeds to purchase alcohol on several occasions); United

States v. Johnson, 998 F.2d 696, 699 (9th Cir. 1993) (no

abuse of discretion to impose, along with other restrictions,
condition requiring that defendant abstain from alcohol use
where defendant had history of substance abuse and had been
involved in alcohol-related incidents); United States v.

Chinske, 978 F.2d 557, 560 (9th Cir. 1992) (conditions that

defendant own no firearms, attend a substance abuse treatment
program, and submit to searches of his person, vehicle, and
residence related to offense of maintaining a residence for
the cultivation of marijuana); United States v. Sharp, 931

F.2d 1310, 1311 (8th Cir. 1991) (condition subjecting
defendant to warrantless searches to determine if he
possessed alcohol or drugs permitted when defendant convicted
of narcotics violation); cf. United States v. Abrar, 58 F.3d

43, 46-47 (2d Cir. 1995) (condition requiring defendant to
pay back personal loans unrelated to crime constitutes plain
error); United States v. Prendergast, 979 F.2d 1289, 1293

(8th Cir. 1992) (conditions requiring defendant convicted of
wire fraud to abstain from consuming alcohol and drugs, to
undergo drug tests, and to be subject to warrantless searches
of his premises, vehicle, or person, impermissible in absence
of "evidence indicating that [defendant] suffers from
alcoholism or that the use of alcohol in any way contributed
to the commission of the offense for which he was
sentenced").

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approved credit cards, and perpetrating a fraud on a bank."

While it would have been helpful had the court stated its

rationale, we can perceive a sufficient connection between

the restriction and Phaneuf's criminal conduct for the former

to pass muster under the plain error standard.

As Phaneuf concedes, he has a long history of

mental health problems11 and, at times, has been unable to

control his spending. The nature of the imposed conditions

strongly suggests that the district court viewed Phaneuf's

credit card crimes as stemming from a total lack of financial

discipline and a compulsion to make excessive expenditures.

The court could rationally have concluded that oversight of

expenditures over $100 would help deter the kind of

overspending and debt that might once more lead Phaneuf to

undertake fraudulent schemes.12

To overturn the condition under the plain error

standard, Phaneuf must show an obvious and clear error under

11. Phaneuf was hospitalized as an adolescent for "conduct
disorder" and "unsocialized aggressive" behavior and has been
treated for behavioral problems on and off throughout his
life.

12. Another justification of the limit on Phaneuf's
purchasing power stems from his outstanding restitution
obligation to pay $20,400 to BNE. The court's special
condition will help to ensure that Phaneuf satisfies to the
best of his ability his restitution obligation rather than
spending his money on other things. Because this
justification is not attributable to a factor set forth in
U.S.S.G. 5D1.3(b) or the corresponding statutes, 18 U.S.C.
3553, 3583, it does not deserve conclusive weight, but
still is a part of the total picture.

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current law that affected his substantial rights.

Fed.R.Crim.P. 52(b); United States v. Olano, 507 U.S. 725,

732-35 (1993); United States v. Laboy-Delgado, 84 F.3d 22, 31

(1st Cir. 1996). Even if plain error exists, Olano suggests

that courts should not exercise their discretion to correct

the error unless it "seriously affect[s] the fairness,

integrity or public reputation of judicial proceedings."

Olano, 507 U.S. at 736 (quoting United States v. Atkinson,

297 U.S. 157, 160 (1936)). In this case, even if we were to

assume, arguendo, that the district court went too far, the

error was not "obvious and clear" nor does it implicate the

fairness or integrity of judicial proceedings. The condition

limiting Phaneuf's purchasing power is effective only during

his period of supervised release, does not prohibit

expenditures of over $100 but merely requires pre-approval of

the probation department, and bears at least an arguable

relationship to checking the irresponsible behavior that

underlay Phaneuf's crimes.

4. Restitution
4. Restitution

Phaneuf argues that the sentencing court erred in

ordering restitution in the amount of $20,400 to be paid to

BNE, pursuant to the Victim and Witness Protection Act

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(VWPA), 18 U.S.C. 3663-3664 (1995).13 Our review is for

plain error as Phaneuf did not object to the restitution

order at sentencing. See United States v. Springer, 28 F.3d

236, 237, 239 (1st Cir. 1994).

A sentencing court is permitted to order

restitution "to any victim." 18 U.S.C. 3663(a) (1995).14

In ordering restitution the court is required to consider:

the amount of loss sustained by any
victim as a result of the offense, the
financial resources of the defendant, the
financial needs and earning ability of
the defendant and the defendant's
dependents, and such other factors as the
court deems appropriate.

18 U.S.C. 3664(a) (1995).15

Phaneuf claims that the restitution order is

contrary to law for two reasons. First, he asserts that he

is incapable of making restitution, citing his history of

mental disorders, his lack of professional training, his

virtually non-existent employment record, and his lack of

assets. Phaneuf predicts that he will likely be incarcerated

13. The VWPA, 18 U.S.C. 3663-3664, was amended by the
Antiterrorism and Effective Death Penalty Act of 1996, Pub.
L. No. 104-132, 205, 206, 110 Stat. 1230, 1232 (Apr. 24,
1996). However, the 1996 amendments are effective for
sentencing proceedings in cases in which defendant is
convicted on or after April 24, 1996. See Pub. L. No. 104-

132, 211, 110 Stat. 1232. Therefore, the pre-1996 version,
cited throughout this section of the opinion, is controlling
in Phaneuf's case.

14. See supra, note 13.

15. See supra, note 13.

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again as a result of being unable to satisfy the restitution

order. We find Phaneuf's argument unpersuasive. The

district court was not required to make explicit findings

regarding Phaneuf's ability to pay before ordering

restitution, so long as it considered the factors set forth

in 3664(a). See United States v. Newman, 49 F.3d 1, 10

(1st Cir. 1995); Springer, 28 F.3d at 239. Moreover, Phaneuf

need not be able to pay the restitution award immediately.

See United States v. Lombardi, 5 F.3d 568, 573 (1st Cir.

1993). Restitution awards may be imposed in order to make

victims whole should the defendant become able to pay in the

future. See Newman, 49 F.3d at 10-11. Here, given that

Phaneuf is a 26-year-old high school graduate, it is not

unforeseeable that he may earn some income when released from

prison. Moreover, Phaneuf can later seek a modification of

the restitution order in the sentencing court if he can show

that it is too onerous. See Springer, 28 F.3d at 239 n.2.

Second, Phaneuf argues that the district court

erred in ordering restitution to be paid to BNE because, at

the time of sentencing, BNE had failed and the Federal

Deposit Insurance Corporation ("FDIC") had been appointed its

receiver. Phaneuf further argues that the FDIC, which

succeeded to the assets and liabilities of the failed bank by

operation of law, see 12 U.S.C. 1821(d)(2)(A), is not a

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proper "victim" entitled to restitution under the VWPA.16

Phaneuf argues that the letter he received from the probation

department instructing him to make his restitution payments

to the FDIC was improper. He contends that an order

instructing him to pay an entity other than BNE had to come

from the court rather than the probation department.

According to Phaneuf, restitution can only be paid to someone

other than the victim, in this case BNE, pursuant to the

following provision of the VWPA:

the court may, in the interest of
justice, order restitution to any person
who has compensated the victim for such
loss to the extent that such person paid
the compensation.

18 U.S.C. 3663(e)(1) (1995).17 Since the court did not

award restitution to the FDIC pursuant to this provision,

Phaneuf argues that the restitution order was improper.

We find no plain error either in the court's

restitution order or in the probation department's

instructions to make restitution payments to the FDIC. BNE

was in fact a victim of Phaneuf's fraud when committed. The

failure of BNE and the appointment of the FDIC as its

receiver had not been brought to the court's attention when

16. Defendant also contends that his Mastercard debts of
$20,400 have subsequently been sold to Citibank by the FDIC.
However, there is no evidence of this in the record before
us.

17. See supra, note 13.

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it entered its order, hence the court order understandably

named BNE. Given that the FDIC "steps into the shoes" of a

failed bank, O'Melveny & Myers v. FDIC, 114 S.Ct. 2048, 2054

(1994), we see no reason why the probation department should

not substitute the FDIC for the failed bank as the "victim"

of Phaneuf's fraud. See United States v. Haddock, 50 F.3d

835, 841 (10th Cir. 1995) (holding that restitution was due a

bank that purchased one of the banks involved in the loan

transactions for which defendant was convicted); United

States v. Smith, 944 F.2d 618, 621-22 (9th Cir. 1991)

(holding that the VWPA "is intended to encompass both direct

and indirect victims of criminal acts" and therefore allowing

the FSLIC to receive restitution), cert. denied, 503 U.S. 951

(1992); United States v. Rochester, 898 F.2d 971, 980 n.7

(5th Cir. 1990) (holding that the district court may award

the FSLIC restitution under the VWPA when the FSLIC has

acquired the claims of an insolvent savings and loan that was

the victim of defendant's crime). Needless to say, such

matters remain subject to the district court's continuing

oversight and control, but we see no error subject to

appellate correction at this juncture.

III.
III.

For the foregoing reasons, the judgment and

sentence of the district court is affirmed.
affirmed.

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