USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 93-1577
UNITED STATES OF AMERICA,
Appellee,
v.
WILLIAM W. LILLY,
Defendant, Appellant.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Walter Jay Skinner, Senior U.S. District Judge]
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Before
Selya, Circuit Judge,
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Coffin, Senior Circuit Judge,
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and Cyr, Circuit Judge.
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Mark M. Freeman and Rappaport, Freeman & Pinta on brief for
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appellant.
A. John Pappalardo, United States Attorney, and Brien T.
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O'Connor, Assistant United States Attorney, on brief for the
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United States.
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January 4, 1994
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SELYA, Circuit Judge. In this criminal appeal,
SELYA, Circuit Judge.
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defendant-appellant William W. Lilly claims that the district
court engaged in impermissible "double counting" when calculating
the guideline sentencing range (GSR) applicable to his case.
Concluding that Lilly's assignment of error lacks force, we
affirm the judgment below.
I
I
The facts relevant to this appeal are not now disputed.
Lilly, a successful developer, fell on hard times after the
collapse of a boom market in real estate. He began to play fast
and loose, courting trouble on several fronts. See, e.g., United
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States v. Lilly, 983 F.2d 300 (1st Cir. 1992) (describing
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appellant's prosecution for bank fraud). On May 21, 1991,
Lilly's woes mounted: a federal grand jury returned an
indictment against him and two cohorts, Sheldon Stone and Gerald
Sarro. The indictment focused on a condominium conversion
project in Claremont, New Hampshire. It charged all three men
with conspiracy, 18 U.S.C. 371 (1988), and also charged Lilly
with fifty-four substantive counts of making false statements to
a federally insured financial institution, in violation of 18
U.S.C. 1014 (1988).
On December 4, 1991, the grand jury returned another
indictment accusing Lilly and five codefendants, Robert O'Connor,
Gina Lonardo, Mark Lonardo, Barry Tevrow, and Diane Tevrow, of
having perpetrated eight counts of wire fraud, in violation of 18
U.S.C. 1343 (1988). These charges involved a so-called "land
2
flip" scheme,1 separate from the Claremont boondoggle. After
considerable skirmishing, not material here, the two indictments
were consolidated and Lilly pled guilty to all counts on February
25, 1993.
II
II
In respect to many crimes, particularly "white collar"
crimes, the sentencing guidelines use the amount of the actual or
intended loss as an important indicium in fixing a defendant's
offense level and, hence, his GSR. See, e.g., United States v.
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Tardiff, 969 F.2d 1283, 1285 (1st Cir. 1992) ("In respect to
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fraud crimes, the applicable offense level increases in
proportion to the monetary magnitude of the loss."); see also
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U.S.S.G. 2F1.1(b)(1).2 Here, the district court, faced with
several proposed scenarios, determined that the aggregate amount
of the monetary loss stemming from appellant's involvement in the
two schemes equalled $1,750,000 a total reached by evaluating
the land-flip losses at $1,000,000 and the Claremont losses at
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1We have described a land flip as "an intricate and
sophisticated scheme . . . under which real property is purchased
for a low price, immediately resold at a much higher price to a
straw or fictitious buyer, and the higher resale price is used as
the basis for obtaining a mortgage loan that finances the entire
transaction." United States v. Cassiere, 4 F.3d 1006, 1010 (1st
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Cir. 1993).
2A sentencing court customarily applies the guidelines in
effect on the date of sentencing. See United States v. Bell, 953
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F.2d 6, 7 (1st Cir. 1992); United States v. Harotunian, 920 F.2d
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1040, 1041-42 (1st Cir. 1990). Accordingly, this case is
controlled by the November 1992 edition of the guidelines.
3
$750,000.3 This computation increased appellant's base offense
level from six to eighteen. See U.S.S.G. 2F1.1(b)(1)(M)
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(providing a twelve-level upward adjustment for fraud crimes
involving more than $1,500,000, up to and including $2,500,000).
After holding appellant responsible for the overall
amount of the combined losses, the court increased his offense
level by two levels because his offenses involved more than
minimal planning, see U.S.S.G. 2F1.1(b)(2)(A), and by four
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additional levels because he played a leading role in the
Claremont scheme, see U.S.S.G. 3B1.1(a) (providing for a four-
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level increase if a defendant acts as an "organizer" or "leader"
in an extensive criminal enterprise). The loss valuation, the
planning adjustment, and the role-in-the-offense adjustment all
adversely affected appellant's GSR and, hence, his 60-month
sentence (a sentence within, but near the low end of, the GSR).
III
III
On appeal, Lilly makes only a single argument. He says
that the district court impermissibly "double counted" because it
used his position as the kingpin in the Claremont scheme to
increase his offense level in two different ways, first, as the
basis for attributing the full amount of the loss to him, and,
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3Appellant disputed both figures in the district court, but,
on appeal, he does not challenge the district court's findings as
to the amounts involved. Consequently, we deem all such
arguments, together with any other arguments asserted below but
not resurrected in this court, to be waived. See United States
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v. Slade, 980 F.2d 27, 30 n.3 (1st Cir. 1992); United States v.
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St. Cyr, 977 F.2d 698, 701 (1st Cir. 1992).
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4
second, as the basis for an upward role-in-the-offense
adjustment.4 We reject appellant's construct for two
independently sufficient reasons.
A
A
At the outset, we note that appellant's claim suffers
from a fatal strain of procedural default. While appellant
voiced a double counting concern below he contended that the
planning adjustment, U.S.S.G. 2F1.1(b)(2)(A), overlapped with,
and represented double counting of, his leadership role, id. at
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3B1.1(a) he did not raise the contention he advances here.
For all intents and purposes, that ends the matter.5 Legal
arguments cannot be interchanged at will. See United States v.
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Dietz, 950 F.2d 50, 55 (1st Cir. 1991) ("A criminal defendant,
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dissatisfied with the district court's rulings at sentencing yet
persuaded that his original arguments lacked merit, cannot switch
horses mid-stream in hopes of locating a swifter steed.").
Mindful of this principle, "[w]e have repeatedly ruled, in
connection with sentencing as in other contexts, that arguments
not seasonably addressed to the trial court may not be raised for
the first time in an appellate venue." Id.; accord United States
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4In support of this argument, appellant points out that the
district court, when sentencing the two other "Claremont
defendants," assigned lesser amounts of loss to them, with the
result that the loss attributed to appellant exceeded the
aggregate loss attributed to others.
5Lilly's original complaint has not been renewed on appeal.
It is, in any event, jejune. See United States v. Balogun, 989
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F.2d 20, 23-24 (1st Cir. 1993) (rejecting complaint that
supervisory role adjustment constituted double counting in view
of upward adjustment for more than minimal planning).
5
v. Ortiz, 966 F.2d 707, 717 (1st Cir. 1992), cert. denied, 113 S.
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Ct. 1005 (1993); United States v. Uricoechea-Casallas, 946 F.2d
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162, 166 (1st Cir. 1991); United States v. Pilgrim Market Corp.,
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944 F.2d 14, 21 (1st Cir. 1991); United States v. Fox, 889 F.2d
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357, 359 (1st Cir. 1989).
In order to preserve sentence-related points for
appeal, litigants must raise them squarely in the lower court.
Appellant cannot pass this test; indeed, he concedes that he
never explained his current version of a double counting
objection to the district court. The mere fact that appellant
made a different double counting argument below, addressed to a
different offense level adjustment, does not exempt him from the
operation of the raise-or-waive rule. Thus, the appeal is by the
boards.6
B
B
The second fly in appellant's ointment is that no
double counting occurred in this case. We explain briefly.
The amount of loss attributable to a particular
participant in a jointly undertaken criminal activity is the sum
of the amount of loss he personally caused (or intended to
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6Of course, even though a defendant fails to raise a
particular argument at the disposition hearing in the lower
court, his sentence can still be reversed on the basis of that
argument if the error is "plain." The criteria for a finding of
plain error in the sentencing context are, however, rigorous.
See United States v. Olano, 113 S. Ct. 1770, 1777-79 (1993);
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United States v. Olivier-Diaz, ___ F.3d ___, ___ (1st Cir. 1993)
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[No. 93-1306, slip op. at 10]; see also United States v. La
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Guardia, 902 F.2d 1010, 1012-13 (1st Cir. 1990). For the reasons
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stated infra, appellant cannot satisfy these exacting standards.
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6
cause), and, under the relevant conduct rubric, U.S.S.G. 1B1.3,
the loss (actual or intended) stemming from acts by others that
were reasonably foreseeable by him and were committed in
furtherance of the conspiracy.7 See U.S.S.G. 1B1.3(a)(1)(B);
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id., comment. (n.2); see also United States v. Moore, 923 F.2d
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910, 917 (1st Cir. 1991). It follows that the measure of a
defendant's accountability for transactions in which he was not
personally involved "is usually congruent with the scope of his
agreement with the other participants in the criminal
enterprise." United States v. Garcia, 954 F.2d 12, 16 (1st Cir.
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1992). In other words, the scope of a participant's agreement
rather than his place in the conspiracy's hierarchy determines
the amount of loss properly laid at his doorstep for sentencing
purposes.
To be sure, there is an overlap between "scope" and
"role." It stands to reason that the majordomo of a scheme,
having set the stage, probably will be saddled with more
"relevant conduct" than a bit player. That overlap, however,
does not mean that adjusting for a leadership role necessarily
portends double counting in a case where the amount of loss
influences the offense level. The two enhancements do not march
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7Generally speaking, a sentencing court looks to intended
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loss as well as actual loss. See U.S.S.G. 1B1.3(a)(3) (stating
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that relevant conduct includes, inter alia, "all harm that was
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the object of [the] acts and omissions" comprising relevant
conduct); See also U.S.S.G. 2F1.1, comment. (n.9) (cross-
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referencing U.S.S.G. 2X1.1); U.S.S.G. 2X1.1, comment. (n.4).
Here, the court
chose to focus on actual loss, and neither party assigns error to
that choice.
7
in lockstep8 and, moreover, serve different purposes in the
sentencing calculus. This case illustrates the point.
Section 2F1.1(b)(1) is aimed at measuring the gravity of the
offense. It does so by formulating a sliding scale that
increases a defendant's probable punishment in rough proportion
to the victims' financial loss (actual or intended). Thus,
amount of loss becomes a proxy for the seriousness of an offense.
See, e.g., U.S.S.G. 2F1.1(b), comment. (n.10) (suggesting
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consideration of a departure if the amount of loss overstates or
understates a crime's seriousness).
Conversely, the role-in-the-offense adjustment is not
concerned with specific offense characteristics like amount of
loss; it is aimed instead at measuring the culpability of a
defendant's conduct in the commission of the offense and
increasing (or reducing) the punishment in rough proportion to
the defendant's involvement. The adjustment proposes, in effect,
to treat less harshly those persons within a criminal
organization who are on the fringes, i.e., "minor" or "minimal"
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participants, see U.S.S.G. 3B1.2, and to treat more harshly
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those who, although guilty of participating only in the self-same
offense, bear greater "relative responsibility" and who,
therefore, "present a greater danger to the public" and "are more
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8Take, for example, two participants in a criminal
enterprise, one the mastermind and one a bottom-rung underling.
The former is an organizer and leader; the latter is not. Yet,
both may be chargeable with the entire amount of loss in a
particular case, say, if the underling is a forger who, knowing
the plan, follows the mastermind's lead and doctors the critical
paperwork, thus consummating the fraud.
8
likely to recidivate." U.S.S.G. 3B1.1, comment. (backg'd.).
Thus, role becomes a proxy for the degree of an offender's
culpability.
We think this regime lies well within the Sentencing
Commission's power. Sentencing factors do not come in
hermetically sealed packages, neatly wrapped and segregated one
from another. Rather, several factors may draw upon the same
nucleus of operative facts while nonetheless responding to
discrete concerns. Consequently, a degree of relatedness,
without more, does not comprise double counting. So it is here:
although calculating the amount of loss for which appellant is
responsible requires some examination into what role he played in
the overall scheme, the upward adjustment for leadership does
not, by dint of the loss-evaluation inquiry alone, equate to
double counting. Compare, e.g., United States v. Balogun, 989
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F.2d 20, 23-24 (1st Cir. 1993) (differentiating between conduct
undergirding supervisory role adjustment and conduct undergirding
sentence enhancement for more than minimal planning). The proof
of this pudding is that, if Lilly had organized exactly the same
scheme and provided leadership to exactly the same accomplices,
but bilked investors or lenders out of appreciably more (or
appreciably less) money, the amount of loss would change, thus
altering his offense level but the role-in-the-offense
enhancement would remain constant.
C
C
We add an eschatocol of sorts. Even if the district
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court's actions usefully could be described in some sense as
double counting and we doubt the accuracy of such a
characterization, see supra Part III(B) appellant would face a
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further hurdle. Double counting in the sentencing
context "is a phenomenon that is less sinister than the name
implies." United States v. Zapata, 1 F.3d 46, 47 (1st Cir.
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1993). Since double counting is often perfectly proper, see id.,
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the guidelines themselves are the most helpful aid in the task of
separating permissible double counting from its impermissible
counterpart. The Sentencing Commission has not been bashful
about explicitly banning double counting in a number of
instances. See, e.g., U.S.S.G. 3A1.1, comment. (n.2)
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(discussing "vulnerable victim" enhancement); U.S.S.G. 3A1.3,
comment. (n.2) (discussing enhancement relating to restraint of
victim); U.S.S.G. 3C1.2, comment. (n.1) (discussing "reckless
endangerment" enhancement). We believe the Commission's ready
resort to explicitly stated prohibitions against double counting
signals that courts should go quite slowly in implying further
such prohibitions where none are written.9 Accord United States
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9Some circuits have held that double counting is always
permissible except when it is expressly forbidden by the
guidelines. See, e.g., United States v. Reese, 2 F.3d 870, 894-
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95 (9th Cir. 1993), petition for cert. filed (Oct. 28, 1993) (No.
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93-6552); United States v. Ellen, 961 F.2d 462, 468 (4th Cir.),
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cert. denied, 113 S. Ct. 217 (1992); United States v. Williams,
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954 F.2d 204, 208 (4th Cir. 1992). That view is, however, not
without its detractors. See, e.g., United States v. Hudson, 972
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F.2d 504, 507 (2d Cir. 1992) (declining to follow Williams);
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United States v. Romano, 970 F.2d 164, 167 (6th Cir. 1992)
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(similar); cf. United States v. Fuller, 897 F.2d 1217, 1222 (1st
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Cir. 1990) (voicing concern about whether a single factor can be
double counted in setting a defendant's offense level). We leave
10
v. Wong, 3 F.3d 667, 670-71 (3d Cir. 1993); United States v.
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Sanders, 982 F.2d 4, 8 (1st Cir. 1992) (per curiam), cert.
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denied, 113 S. Ct. 2937 (1993); United States v. Rocha, 916 F.2d
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219, 243 (5th Cir. 1990), cert. denied, 111 S. Ct. 2057 (1991);
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United States v. Goolsby, 908 F.2d 861, 863 (11th Cir. 1990).
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In the situation at hand, the guidelines not only fail
expressly to outlaw double counting, but also imply the exact
opposite. They specifically instruct that persons who commit
fraud offenses ought to receive sentences commensurate with the
amount of loss for which they are responsible, and that those who
marshal criminal enterprises ought to receive extra punishment
for their leadership roles. We think that when, as now, neither
an explicit prohibition against double counting nor a compelling
basis for implying such a prohibition exists, clearly indicated
adjustments for seriousness of the offense and for offender
conduct can both be imposed, notwithstanding that the adjustments
derive in some measure from a common nucleus of operative facts.
See, e.g., Balogun, 989 F.2d at 23-24; United States v. Newman,
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982 F.2d 665, 673 (1st Cir. 1992), cert. denied, 114 S. Ct. 59
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(1993); Sanders, 982 F.2d at 8; see also Zapata, 1 F.3d at 50
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(holding that where the guidelines provide for the consideration
of a single factor in the calculation of both offense level and
criminal history category, either expressly or by fair
implication, double counting is permissible).
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this question open, as the case at hand can be resolved by the
application of less controversial principles.
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IV
IV
We need go no further. Concluding, as we do, that
appellant's assignment of error is without merit, we affirm the
judgment below.
Affirmed.
Affirmed.
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