USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 95-2191
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. William G. Young, U.S. District Judge]
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Before
Cyr, Boudin and Stahl,
Circuit Judges.
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Morris M. Goldings with whom Richard S. Jacobs and Mahoney,
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Hawkes & Goldings were on briefs for appellant.
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John J. Falvey, Jr., Assistant United States Attorney, with whom
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Donald K. Stern, United States Attorney, was on brief for the United
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States.
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April 3, 1996
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BOUDIN, Circuit Judge. William Lilly appeals the denial
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of his motion in the district court, brought under 28 U.S.C.
2255 and the prior version of Fed. R. Crim P. 35(a),
seeking relief as to sentence.1 In substance, Lilly asks
both for resentencing and for a determination that no term of
probation may be imposed upon him. He also challenges a
restitution order that is part of his present sentence. The
facts are set forth in detail in Judge Young's thorough
opinion in United States v. Lilly, 901 F. Supp. 25 (D. Mass.
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1995), and we limit ourselves to a brief summary.
Lilly was indicted in 1990 on 30 counts of bank fraud.
Four charges were later dropped, but he was convicted by a
jury on the remaining 26 counts. This was a pre-guidelines
case, and in November 1991, Lilly was sentenced to five years
in prison on count 1, to be followed by concurrent five-year
suspended sentences on counts 2-7 and 12-29 accompanied by
five years' probation, and by a five-year suspended sentence
on count 30 consecutive to the other suspended sentences. He
was ordered to pay $5,071,751.59 in restitution.
Nearly two months later, and after Lilly had noticed an
appeal, the trial judge realized that a probation term
required by law had not been imposed on count 30. On
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1Former Rule 35(a) permitted the court to correct an
"illegal sentence" at any time and continues to apply to
Lilly's sentence because his offenses were committed prior to
November 1, 1987.
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December 30, 1991, he issued a second judgment sua sponte,
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which differed from the first judgment in two respects: it
made all of the suspended sentences run concurrently, and it
explicitly imposed five years' probation on count 30. Under
this second judgment, Lilly's effective sentence was five
years' imprisonment to be followed by a suspended sentence
and five years' probation.
Lilly's initial appeal from his convictions, argued
before this court in 1992, did not challenge his sentence.
Instead, he claimed that the indictment was multiplicitous in
treating as individual offenses the various frauds charged
under counts 1-29 against First Mutual Bank of Boston. That
argument proved successful and, in December 1992, this court
vacated his convictions on counts 2-7 and 12-29. United
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States v. Lilly, 983 F.2d 300 (1st Cir. 1992).
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However, this court also found that the multiplicity did
not impair the convictions on counts 1 and 30 and it affirmed
both convictions. Lilly, 983 F.2d at 306. Count 1 covered
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the execution of the scheme to defraud directed at First
Mutual as to which counts 2-7 and 12-29 were multiplicitous;
count 30 involved execution of a separate scheme directed
against another bank and was unaffected by the multiplicity
ruling. This court remanded for entry of a revised judgment,
noting that a new sentencing proceeding was not required.
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In February 1993, the district judge entered a new
judgment on remand, representing the third judgment in this
case. In this third judgment, the court gave Lilly five
years in prison on count 1; on count 30, the court gave Lilly
a five year suspended sentence to run after the term of
imprisonment imposed on count 1 and again ordered restitution
of $5,071,751.59. The judgment referred to certain
conditions of probation, but in another apparent oversight
did not specify any probation term for count 30. Lilly did
not appeal this third judgment.
In February 1995, Lilly filed a motion to vacate his
sentence, pursuant to 28 U.S.C. 2255 and former Rule 35(a).
The district court treated the motion as one properly brought
under former Rule 35(a) to correct an illegal sentence but
denied it on the merits. On appeal, the government is
content to assume arguendo that the merits are properly
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presented under former Rule 35(a), although it notes its
reservations as to Lilly's attack on the restitution order.
The essence of Lilly's argument as to probation is this:
the first and third judgments did not sentence him to
probation on count 30, and the second judgment, which
purported to do so was without effect because it was entered
in his absence and after he filed his notice of appeal.
Lilly says that, at minimum, the third judgment is unclear as
to probation and entitles him to resentencing. He further
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asserts that because probation was not imposed on count 30 in
the first judgment, the district court cannot now add it upon
resentencing without impermissibly increasing his sentence.
The problem here is more complicated than difficult, and
responds quickly to the application of common sense. The
first question is one of interpreting the prevailing third
judgment entered in February 1993; we must parse it to decide
whether it should be read to incorporate a five-year term of
probation, which the government claims is implicit. The
second question concerns the validity of the judgment, if so
read, as against Lilly's claim that such a reading would
unlawfully increase his sentence.
The parties agree that the applicable probation statute,
18 U.S.C. 3651 (since repealed), requires that a probation
period accompany any suspended sentence; this is a reading
not obvious from the statutory language but supported by the
cases and various policy considerations. Miller v. Aderhold,
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288 U.S. 206, 210-11 (1933) (decided under predecessor to
section 3651); United States v. Elkin, 731 F.2d 1005, 1010
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(2d Cir.), cert. denied, 469 U.S. 822 (1984). The first
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judgment failed to specify a probation term on count 30, but
the second judgment swiftly corrected the error.
Therefore, when the case came up on appeal from the
convictions in 1992, the then-existing (second) judgment
reflected a five-year term of probation on count 30, which
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went unchallenged on the appeal. In affirming the
convictions on counts 1 and 30, this court specifically said
that no resentencing proceeding was required. Lilly, 983
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F.2d at 306. In the new third judgment entered on remand,
the sentences on counts 1 and 30 mirrored those imposed on
counts 1 and 30 in the second judgment, save that (as in the
first judgment) the district court again overlooked the need
to refer specifically to probation in count 30.
We say "overlooked" because in our minds it is evident
that the district court intended count 30 to include a term
of probation, as the law requires, and intended it to be five
years. Both the first and second judgments provided for five
years' imprisonment followed by five years of probation.
Since the multiplicity determination did not alter the
substance of Lilly's misconduct, there was no reason why the
reduction in counts should have been expected to alter the
total sentence.2 Indeed, that is why we did not require a
new sentencing proceeding.
In addition, the third judgment expressly included
conditions of probation, conditions that would have been
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2Lilly had secured a single large bank loan to buy an
apartment complex (submitting in support mortgage documents
for individual apartments units) containing false
representations. Although the original indictment treated
each apartment mortgage as a separate fraud count, this court
viewed the loan application to the bank as comprising the
execution of a single scheme to defraud. Lilly, 983 F.2d at
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303.
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pointless without probation and signaled an intent that
probation be served. In these circumstances, and given that
probation was legally required for a suspended sentence and
had in fact been imposed on count 30 in the second judgment,
it is patent to us that the district court intended to
reimpose the same probation requirement in the third
judgment.
Finally, if we were in the slightest doubt about the
district court's intention, the doubt is clearly dispelled by
the district court's recent decision in the Rule 35(a)
proceeding where it explained its intent as to probation.
Lilly, 901 F. Supp. at 29. The district court's opinion makes
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it perfectly clear that, whatever wording was overlooked, the
court intended in its third judgment--and its first as well--
to impose probation on count 30. A remand to clarify a
supposed "ambiguity" would be an errant waste of time.
Lilly knows full well that this is so, and the real
thrust of his objection is that the district court lawfully
could not when imposing the third judgment, or in any new
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remand we might now order, add a term of probation to count
30. Lilly's reason is that probation was not included in
count 30 of the first judgment and would therefore enlarge
the original sentence long after its imposition. Lilly
thinks, quite mistakenly, that courts are automatically
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forbidden from increasing sentences after they have been
imposed.
The law on enlargement of sentences after their first
imposition is in fact complex. There are constitutional
limitations and issues of authority independent of the
Constitution, but there is no automatic bar to an increase in
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all circumstances. See generally Bozza v. United States, 330
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U.S. 160, 165-67 (1947); DeWitt v. Ventetoulo, 6 F.3d 32, 34
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n.3 (1st Cir. 1993) (collecting cases), cert. denied, 114 S.
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Ct. 1542 (1994). But the complexities need not be plumbed in
this case because there is no enlargement even if we assume
that count 30 did not incorporate a term of probation.
In practical terms, the present judgment does not
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enlarge the overall sentence originally imposed for Lilly's
misconduct. As already noted, in the first judgment the
explicit sentence for the package of counts included five
years' imprisonment followed by a suspended sentence and five
years' probation. That is also the sentence under the third
judgment if read to incorporate five years' probation. The
number of counts fell but the underlying misconduct remained
the same. See United States v. Pimienta-Redondo, 874 F.2d 9,
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16-17 (1st Cir.) (en banc), cert. denied, 493 U.S. 890
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(1989).
Lilly's remaining claims relate to the restitution
order. Lilly asserts that the district court miscalculated
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the loss figures used to determine the amount of restitution
and failed to make express findings to confirm Lilly's
ability to pay restitution. Independently, Lilly argues that
the restitution order is illegal because the district court
delegated to the probation officer the authority to determine
when Lilly was obliged to make installment payments.
Former Rule 35(a) permits a challenge to an "illegal
sentence" and it is questionable whether all of Lilly's
attacks on the restitution order, even if sound, would render
the restitution order "illegal." One might think that the
first two are fairly routine claims of mistake that are not
fundamental infirmities and do not make the sentence
"illegal." As for the third, Lilly has a somewhat more
plausible claim that improper delegation would render the
order "illegal" on its face. Cf. United States v. Ahmad, 2
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F.3d 245, 248-49 (7th Cir. 1993).
The case law under former Rule 35(a) reflects varying
definitions of "illegality" and some disagreement as to what
makes a sentence "illegal." Compare, e.g., United States v.
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Padgett, 892 F.2d 445 (6th Cir. 1989), with United States v.
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Celani, 898 F.2d 543 (7th Cir. 1990). There is little First
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Circuit law on the subject. However, without deciding the
jurisdictional issue, we are entitled to affirm on the merits
where this will save time, United States v. Connell, 6 F.3d
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27, 29 n.3 (1st Cir. 1993), and that course is doubly
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appropriate here since former Rule 35(a) is a subject of
diminishing importance.
Lilly first says the restitution order was not based on
a proper theory of loss. His argument appears to be that the
district court attributed to him much or all of the losses
suffered by the First Mutual Bank when it subsequently
collapsed, despite the court's finding that Lilly's frauds
were only a contributing factor in the bank's demise. But it
is evident from the sentencing colloquy and the restitution
amount that the court did not rely on this more speculative
bank-collapse theory. Instead, the district judge figured
losses by looking at Lilly's specific transactions with the
bank.
As detailed in the government's sentencing memorandum
and discussed by Lilly's counsel at the sentencing hearing,
the restitution total reflected the difference between the
amounts in default on the mortgages that Lilly sold to the
bank and the lesser appraised value of the properties held as
collateral. Lilly is correct that the calculations relied to
some extent on estimates of property values, but this does
not preclude restitution where, as here, a reasonable
approximation can be made. United States v. Savoie, 985 F.2d
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612, 617 (1st Cir. 1993).
Lilly also asserts the trial judge did not make adequate
findings regarding his ability to pay the ordered
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restitution. His theory is that because the statute requires
the court to consider ability to pay, 18 U.S.C. 3664(a),
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the restitution order is invalid if no findings of ability
are made on the record. Although this view prevails in some
circuits, we have held that the statutory obligation--not
very demanding by its own terms--does not require express
record findings and generally is satisfied where, as here,
the court relies on a presentence report detailing the
defendant's financial condition. Savoie, 985 F.2d at 618-19.
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Nor does the statute require a record basis for finding
that a defendant can presently pay restitution. The prospect
of future income is sufficient. United States v. Newman, 49
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F.3d 1, 10-11 (1st Cir. 1995). Lilly does not attempt to
argue that no such likelihood exists, so we reserve for
another occasion the question of what circumstance, if any,
would preclude a district court from ordering restitution
based on prospective income.
Lilly's third claim is that the district court
improperly delegated authority to the probation officer to
set a payment schedule. Several circuit courts have held
that the responsibility for deciding when payments must be
made inheres in the district court, and that it would be
improper for the court to delegate this authority to a
probation officer. E.g., United States v. Porter, 41 F.3d
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68, 71 (2d Cir. 1994); Ahmad, 2 F.3d at 248-49. Lilly's
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claim turns on the cryptic statement in the third judgment
that Lilly make restitution "as directed" by the probation
officer.
Whatever ambiguity may have existed has been removed by
Judge Young's recent opinion which makes clear that the third
judgment does not give the probation officer authority to set
a binding payment schedule. Lilly, 901 F. Supp. at 32.
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Rather, it is Judge Young's intention that Lilly be
supervised by the probation officer to ensure good faith
compliance; and if any question arises as to whether Lilly is
complying, it will be resolved by the district court. This
limited role has been approved by other circuits, e.g.,
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Ahmad, 2 F.3d at 249, and is a reasonable enlistment of the
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probation officer's services.
Affirmed.
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