USCA1 Opinion

UNITED STATES COURT OF APPEALS

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT

____________________

No. 95-1586

UNITED STATES OF AMERICA,

Plaintiff, Appellee,

v.

GARY S. GILBERG,

Defendant, Appellant.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Douglas P. Woodlock, U.S. District Judge]

___________________

____________________

Selya, Cyr and Stahl,

Circuit Judges.
______________

____________________

Gary C. Crossen, with whom Toni G. Wolfman, Mark D. Rosen, Ci

_______________
_______________ ______________ __
M. Lott and Foley, Hoag & Eliot were on brief for appellant.
_______
___________________

Wan J. Kim, Attorney, Department of Justice, with whom Donald

__________
_______

Stern, United States Attorney,

_____
England Bank Fraud Task

Mark D. Seltzer, Acting

_______________

Director,

Force, and James P. Gillis, Trial

________________

Attorn

New England Bank Fraud Task Force, were on brief for appellee.

____________________

January 31, 1996

____________________

CYR,
CYR,

lenges

Circuit Judge.
Circuit Judge.
_____________

several district court rulings relating

sentencing for conspiring

to

Defendant Gary S.

financial

financing,

to make, and making,

institutions

see 18 U.S.C.
___

in order

to

371 & 1014.

Gilberg chal-

to his trial and

false statements

procure

mortgage loan

We affirm all but the

restitutionary sentence.

I
I

BACKGROUND
BACKGROUND
__________

During

which he agreed to

the 1980s,

after

borrowing almost

repay from future condominium

$5 million

sale proceeds,

Gilberg launched Chancery Court, a forty-unit condominium project

in Lynn, Massachusetts.

however,

and Gilberg

promising to obtain

the need for

Condominium sales did not proceed apace,

decided

to

lure

prospective

100% mortgage financing for

down payments.

To this end,

buyers

by

them, obviating

Gilberg would inflate

the purchase price stated on the sales agreement which he submit-

ted to

the bank in support of the buyer's mortgage loan applica-

tion.

A so-called "amended" sales agreement, containing the true

purchase price, would be retained in Gilberg's private files, and

the buyer was

On

other

told not to mention

occasions, Gilberg

second mortgage

mortgage lenders

the "amendment" to

provided

financing, which

he concealed

by instructing his

second mortgages, or to record

prospective

buyers with

from the

attorney not to

them late.

the bank.

first-

record the

Gilberg attended each

loan

closing,

personally

which he knew to contain

signing

HUD-1 settlement

false information.

statements

These means enabled

Gilberg

to

sell

thirty-seven

condominium

units,

which

were

financed through various banks.

In

August 1993, Gilberg was

conspiring to make

indicted in one count for

false statements on twenty-one

loan applica-

tions to three FDIC-insured financial institutions, see 18 U.S.C.

___

371, and

in thirteen

counts for

FDIC-insured institutions, see

___

buyers, as

well as

id.
___

making false

1014.

Gilberg's attorney,

originated and orchestrated

the scheme.

statements to

Several condominium

testified that

Gilberg

The jury convicted

on

all counts and the district court sentenced Gilberg to thirty-six

months' imprisonment and ordered $3,635,000 in restitution.

II
II

DISCUSSION
DISCUSSION
__________

A.
A.

The Trial Related Rulings

The Trial Related Rulings
_________________________

1.
1.

"Good faith" Jury Instruction

"Good faith" Jury Instruction
____________________________

Gilberg first contends that the final jury

instruction

misdefined

criminalizes

the mens
____

rea
___

element

in 18

U.S.C.

1014,

which

"knowingly mak[ing] any false statement or report .

_________

. . for the purpose of influencing in any way the action of . . .

___ ___ _______ __ ___________

any [FDIC-insured bank]

. commitment, or

section 1014

knew

. . . upon any application, advance, . .

loan."

(Emphasis added.)

Gilberg argues that

affords a "good faith" defense

the statement

or report

contained

where the defendant

false information

acted without the "bad" purpose to influence the

He proffered evidence that

the

various

loan

bank's actions.

he knew and believed, at

applications,

that

the

but

the time of

prevailing

banking

practice was to

on the

approve or disapprove applications

appraised value of

based solely
______

the real property securing

the loan,

rather than on whether the real estate sale itself involved price

"discounts"

or

secondary

mortgage

financing.

Thus,

Gilberg

argues, the district court hobbled his defense by instructing the

jury that "a

defendant does

not act

in good faith

even if

he

honestly holds a particular opinion or belief and, yet, knowingly

makes false and fraudulent statements or misrepresentations."

Gilberg

concededly raised

no

objection

to the

jury

instruction.

See
___

Fed. R. Crim. P. 51.

Consequently, we review

for plain error, see Fed. R. Crim. P. 52(b), and may reverse only
___

if (i) the

final jury instruction

constituted error (ii)

which

was or should have been "obvious" in the sense that the governing

law was

clearly settled

to the

contrary,

and (iii)

appellant

proves that the error resulted in "prejudice," or in other words,

that it

affected his substantial

Hurley,
______

63 F.3d 1,

Olano,
_____

113

S. Ct.

9 (1st Cir.

1770, 1777

rights.

1995) (citing United States v.

______________

(1993)).

criteria are met, however, we do not "notice

caused

See United States v.

___ ______________

Even

if

these three

the error unless it

`a miscarriage of justice' or [seriously] undermined `the

integrity

or public reputation

of judicial proceedings.'"

Id.
___

(citations omitted).

Though the statutory interpretation posited by

is dubious at best, cf., e.g.,

___ ___

Gilberg

United States v. Wilcox, 919 F.2d

_____________
______

109, 112 (9th Cir. 1990) ("The requisite intent [under

1014] is

the intent to influence an action, and nothing more."), we do not

reach the merits.

Gilberg cites to no authority

controlling United

States

decision

clearly holding

given below

contained

a minimum,
_ _______

pursuant to

1014.

the Court

added).1

or

statement of

See Olano,
___ _____

First

Circuit

Hence, any

instruction

the mens
____

113 S. Ct. at

cannot correct

the error is clear

instruction was neither "obvious,"

alone to

"good faith"

of Appeals

Rule 52(b) unless

law.") (emphasis

Court

that the

an erroneous

requirement under section

("At
__

Supreme

let

error in

rea
___

1777

an error

under current

the challenged

nor cognizable under Criminal

Rule 52(b).

2.
2.

Motion in Limine
Motion in Limine
________________

Gilberg

precluding

next assigns error in the district court order

evidence that the

defrauded banks had

relied exclu-

sively on property

appraisals in determining whether

to approve

loan applications, and not on the apparent absence of "discounts"

and

second

mortgage financing.

He

claims

that this

ruling

prejudiced him because the excluded evidence would have bolstered

his "good faith" defense.

See supra Section II.A.1.2

___ _____

____________________

1Morissette v. United States, 342 U.S. 246 (1952), and Cheek

__________
_____________
_____
v. United States, 498
_____________

U.S. 192 (1991), are inapposite.

Gilberg's interpretation of

the "purpose" clause in

correct, he cannot seriously contend

element in

1014

conduct a

1014 were

that the one clear mens rea

____ ___

"knowingly" communicating

does not criminalize

Even if

false statements
_____

normal person

readily would

recognize as culpable.

2We do

not understand

Gilberg to

evidence was

relevant to

the discredited

namely, that

any bank

scheme would exonerate

argue that

officials' knowing
Gilberg under

the excluded

"complicity" defense,
participation in

1014.

the

See United States

___ _____________

v. Johnson, 585 F.2d 119, 124 (5th Cir. 1978) (rejecting complic_______
ity

defense,

and noting

that

awareness of the fraud is not

the

"[t]he savings

and

loan's

relevant, for its existence is not

Once again

we review

for plain

first raised this claim on appeal.

there was

no plain error

instruction, a
_

error, since

See Hurley, 63 F.3d at 9.

___ ______

in rejecting the "good

fortiori there
________

Gilberg

can have been

As

faith" defense

no plain

error in

excluding

evidence

offered

in

support.

Furthermore,

given

Gilberg's concession that a representative sampling of this "good

faith" evidence

strate

was admitted at

"prejudice."

Olano, 113
_____

trial, he has failed

S. Ct.

at 1778

to demon-

(noting that,

unlike Rule 52(a), Rule 52(b) provides that "the defendant rather
_________

than the

Government . .

. bears

the burden of

persuasion with

respect to prejudice") (emphasis added).

B.
B.

The Sentencing Rulings

The Sentencing Rulings
______________________

1.
1.

Amount of Loss (U.S.S.G.

2F1.1)
Amount of Loss (U.S.S.G.
2F1.1)
________________________________

Gilberg contends

three errors

that

in calculating the

applicable version

of U.S.S.G.

the

district

court

committed

amount of loss under

the then-

2F1.1, and

that the

combined

effect of its miscalculations ballooned

the total loss from $1-2

million to the $2-5 million range, which in turn led the court to

make a ten-level (rather than

a nine-level) upward adjustment in

____________________

inconsistent with the

intent to influence which a

1014

Nor do we

the

must possess").

similarly discredited

that his

did not, in
approving
612 F.2d

understand Gilberg to argue for

"lack of

purpose to influence
the end, actually

reliance" defense,

was immaterial because

__________
rely on his

the loan applications.

1, 4

violator of

(1st Cir. 1979)

namely,

the banks

false statements

See United States v. Norberg,

___ _____________
_______
(expressly rejecting such

fense).

in

a de-

his base offense level of six.3

First, Gilberg argues that

not have

See
___

included $726,637

U.S.S.G.

calculation

States v.
______

settled

2F1.1,

the loss calculation should

in accrued

comment. (n.7)

mortgage loan

interest.

(excluding from

the loss

the "interest the victim could have earned"); United

______

Hoyle, 33
_____

law in

F.3d 415,

this circuit

419 (4th

is to

Cir. 1994).

the contrary.

But

the

See United
___ ______

States v. Goodchild,
______
_________

25 F.3d 55, 66-67 (1st

Cir. 1994) (holding

that accrued finance charges on credit cards are not lost "oppor-

tunity costs,"

and may

United States v.
______________

be included in

Lowder, 5
______

F.3d

amount of

467, 471

loss) (citing

(10th Cir.

Gilberg's attempt to distinguish Goodchild is unavailing.

_________

Goodchild
_________

clear,

panel's citation to

we have found

earned on a

Lowder and other

______

no principled difference

credit card (a/k/a

_____

earned on other types of loans.

1993)).

As the

authority makes

between interest

"finance charges") and

interest

See Hurley, 63 F.3d at 9 (noting

___ ______

that newly-constituted panels are bound by a prior panel decision

on

point).

Since

interest as part

it was

proper

to include

of the loss, the other

the

$726,637 in

loss calculation errors

raised on appeal need not be addressed because

loss

totalled

no less

than

the unimpeachable

$2,669,065, well

within

the $2-5

million range necessary to trigger a ten-level upward adjustment.

____________________

3Although

normally a

loss

determination under

U.S.S.G.

2F1.1 is fact-based and subject to clear error review, see United

___ ______
States
______

v. Goodchild,
_________

25 F.3d

55, 64

(1st Cir.

challenges the district

court's interpretation

guideline.

review is

Therefore,

United States v.
______________

Ovalle-Marquez,
______________

de novo.
__ ____
36 F.3d

1994), cert. denied, 115 S. Ct. 1322 (1995).

_____ ______

1994), Gilberg
of a

See id.;
___ ___
212,

sentencing

see also
___ ____

221 (1st

Cir.

2.
2.

The "Role in Offense" Enhancement

The "Role in Offense" Enhancement
_________________________________

Gilberg

based on his

challenges

role in the offense, see U.S.S.G.

___

ing that the government

tion by

cutting deals

Court scheme

the four-level

his

upward

adjustment

3B1.1, contend-

improperly singled him out for

with the real

"leaders" of

attorney and a business partner.

prosecu-

the Chancery

Second, he

complains that the district court failed to make express findings

of fact regarding the comparative responsibilities of the partic___________ ________________

ipants in

the scheme.

We

review for "clear error,"

see United
___ ______

States v.
______

Akitoye, 923
_______

F.2d 221, 227

(1st Cir.

1991), mindful

that "battles over a defendant's [role in the offense] . . . will

almost always

be won

States v. Graciani,
______
________

or lost

in the

61 F.3d 70,

district court,"

75 (1st Cir. 1995).

United
______

Gilberg's

case is no exception.

Gilberg

rational

concedes that

inference that

alleged in the indictment.

he

the

evidence

orchestrated

could support

the criminal

conduct

The evidence disclosed that he was a

sophisticated

real estate developer

who supplied false purchase

prices to his

attorney, instructed his attorney

and prospective

buyers to conceal his false statements, and secreted the documen-

tation containing the actual terms.

nor

is there

any

Gilberg cites no

for the proposition

that a

authority

sentencing

court

must

compare
_______

before imposing a

dant.

the responsibilities

U.S.S.G.

Moreover, in crediting

of

all

participants

3B1.1 enhancement against

the evidence that

a defen-

Gilberg played

the pivotal

scheme,

role in

the initial success

of the

the district court implicitly found

"organizer,"

regardless

of

the precise

Chancery Court

that Gilberg was an

roles

played

by each

cohort.

offense

See U.S.S.G.
___

may involve

3B1.1, comment.

"more than

leader or organizer");

105, 111-13 (1st

over

other

inquiry

one person

participants,

status

although

of

50 F.3d

relevant

organizer,

to

an

is not

an

essential attribute of organizer status."); cf. U.S.S.G.

__

comment. (n.2)

(authorizing

responsibility

over the

criminal

upward

departure

property, assets,

organization," even

though

supervised any other participant).

or

for

3B1.1,

"management

activities of

defendant neither

3.
3.

as a

retention of control

sometimes

a putative

that an

who qualifies

United States v. Tejeda-Beltran,

_____________
______________

Cir. 1995) ("We hold that

into the

(n.4) (noting

led nor

The Victim and WitThe Victim and Wit____________________

ness Protection Act

ness Protection Act

___________________

Finally,

tence overstates

too

broad.

restitution

Gilberg claims

that the

victim loss because

He points

out

that the

restitutionary sen-

the class of

"victims" is

sentencing court

ordered

in connection with all thirty-one loans, whereas the

indictment charged him in relation to only twenty-one loans.

The

government concedes that the last criminal conduct

involving Gilberg took place no later than June 1990.

and

Witness

Protection

Act ("VWPA"),

18

U.S.C.

(1990), governs restitution in criminal cases.

States
______

v. DeSalvo, 41
_______

F.3d 505, 511

1990, the VWPA provided that

3663-3664

See, e.g., United

___ ____ ______

(9th Cir. 1994).

the district court

The Victim

In June

in sentencing

"a defendant convicted

_________

to

any victim
______

of
__

of an offense"
__ __ _______

such offense."
____ _______

(emphasis

added); see 18 U.S.C.

___

18 U.S.C.

3663-3664 (1990).

U.S. 411

(1990), the

may order "restitution

18 U.S.C.

3579(a)(1)(1982)

3579-3780 (1987), amended by

_______ __

In Hughey v. United States,

______
_____________

defendant had

been

charged, in

495

multiple

counts, with theft and unauthorized use of credit cards, offenses

which caused

pled

victim losses

guilty to but

totaling $90,431.

one count

Although

of unauthorized

use of

Hughey

a single
______

credit card, which caused $10,412 in victim loss, id. at 414, the
__

district

court ordered $90,431

in restitution.

Reversing, the

Supreme Court held that "the language and structure of the [VWPA]

make plain Congress'

only for
____

the loss

intent to authorize an award of restitution

caused by

the specific
________

basis of the offense of conviction."

_____ __ ___ _______ __ __________

Effective

November

conduct that
_______

Id. at 413, 422 n.5.

___

29, 1990,

Congress

broadened the

VWPA definition of "victim," see Pub. L. No. 101-647,

___

Stat.

4789, 4863,

1990) (codified at

4931 (Nov.

29, 1990)

18 U.S.C.

3663(a)(2)),

overruling Hughey in part.

is the

2509, 104

(Crime Control

Act of

thereby effectively

Section 3663(a)(2) now provides that

______

"a victim of an offense that

conspiracy, or a
__________

involves as an element a scheme,

pattern of criminal

activity means any

___

person
______

directly harmed by the defendant's criminal conduct in the course

of the scheme,

conspiracy, or pattern."

(emphasis added). See

___

18

U.S.C.

generally United States

_________ _____________

3663(a)(2)

v. Neal, 36
____

F.3d

1190, 1200 (1st Cir. 1994).

The district court ordered Gilberg to

10

make restitution

to banks other than the

_____ ____

twenty-one insured

three FDIC-insured banks involved in the

____________

loans which formed

substantive counts

the entire basis

conspiracy

and the

convicted.

The parties agree that, under the 1987 version of the

____

VWPA as interpreted in

Gilberg

upon

for the

which Gilberg

Hughey, the restitution order imposed

______

would be improper,

and that "approximately

was

on

$2 million"

would be the maximum permissible "victim loss" calculation.

The government

nonetheless contends that

court order complies with the 1990 VWPA.

____

413

n.1 (normally,

the

VWPA version

the district

See Hughey, 495 U.S. at

___ ______

in

effect at

sentencing
__________

controls).

Gilberg responds that such a retroactive application

of section 3663(a)(2)

to his pre-November 1990

criminal conduct

would violate the Ex Post Facto Clause, U.S. Const. art. I,

__ ____ _____

cl. 3.

See Miller v.
___ ______

9,

Florida, 482 U.S. 423, 430-31 (1987);

_______

also United States v. Newman, 49

____ _____________
______

F.3d 1, 10-11 (1st Cir.

see
___

1995);

United States v. Cronin, 990 F.2d 663, 666 (1st Cir. 1993).
_____________
______

Normally, we review restitution

of discretion."

See
___

orders only for "abuse

United States v. Benjamin, 30 F.3d 196, 198

_____________
________

(1st Cir. 1994); United States v. Savoie, 985

_____________
______

Cir. 1993).

cation of

law

Although a

the 1990 VWPA

____

subject

to

plenary

F.2d 612, 617 (1st

timely challenge to a retroactive appli-

amendments would present a

review, see,
___

e.g.,
____

question of

United States v.
______________

Guthrie, 64 F.3d 1510, 1514 (10th Cir. 1995); DeSalvo, 41 F.3d at

_______
_______

511; United States v. Meacham, 27

_____________
_______

Gilberg concedes that

ingly,

we review

F.3d 214, 218 (6th Cir. 1994),

he did not object at

only for

plain error.

sentencing.

Accord-

See United States v.

___ ______________

11

Tutiven, 40 F.3d 1, 7-8 (1st Cir. 1994), cert. denied, 115 S. Ct.
_______
_____ ______

1391 (1995); United States v. Rodriguez, 938 F.2d

______________
_________

Cir. 1991).

As the Rule

Olano, 113 S.
_____

Benjamin,
________

Olano
_____

Ct. at 1776-79, applies to

30 F.3d

"plain

52(b) "plain error" test

at 197;

error"

the

announced in

sentencing errors, see

___

supra Section
_____

criteria to

319, 321 (1st

II.A.1, we

forfeited

apply the

"victim loss"

calculation claim asserted by Gilberg on appeal.4

a) "Error"
a) "Error"
_____

The first

Olano, 113 S.
_____

Olano criterion
_____

Ct. at 1777

application of VWPA

that

there be

is readily met here.

3663(a)(2)

"error,"

Retroactive

would violate the Ex Post Facto

__ ____ _____

Clause, since it would "make[] more burdensome the punishment for

__________ ___

[Gilberg's] crime[s], after [their] commission

_________ ________ _____ _____ __________

v. Florida, 432
_______

U.S. 282, 292 (1977) (emphasis

United States v.
______________

cert. denied,
_____ ______

is part of

. . . ."

Johnson, 952
_______

F.2d 565,

113 S. Ct. 58 (1992).

Dobbert
_______

added); see also

___ ____

585 (1st

Cir. 1991),

As an order of restitution

the criminal sentence, we reject

the suggestion that

the November 1990 VWPA amendments may be applied against Gilberg.

See, e.g.,
___ ____

United States
_____________

v. Jewett, 978
______

F.2d 248,

Cir. 1992)

(rejecting retroactivity argument);

252-53 (6th

see also
___ ____

United
______

States v. Elliott, 62 F.3d 1304, 1313-14 (11th Cir. 1995) (same);

______
_______

DeSalvo, 41 F.3d at 515 (same).

_______
____________________

4Given

the concession by the government that application of

Hughey would result

______

in a $1.6 million reduction

in the restitu-

tion order, we conclude that Gilberg has shouldered his burden on

the third Olano factor
_____
We

therefore confine

remaining

"prejudice."
our "plain

Olano factors (i.e.,

_____

See supra Section II.A.1.

___ _____

error" analysis

to

the three

error, "obviousness," and "mani-

fest miscarriage of justice").

12

b) Obviousness of Error
b) Obviousness of Error
____________________

The government

argues that retroactive

application of

the

1990 VWPA amendments

see Olano,
___ _____

weigh in

113 S.

would not constitute

Ct. at 1777,

on the retroactivity

sentenced, and other

_________

courts of

because this

"obvious" error,

court had

question by the time

__ ___ ____

appeals were

yet to

Gilberg was
_______ ___

divided.

Compare
_______

Jewett, 978 F.2d at

______

252-53, with United States v. Rice, 954 F.2d

____ _____________
____

40

United States v. Arnold,

_____________
______

(2d Cir. 1992);

Cir. 1991) (per curiam).

The Rice
____

inapposite to

We disagree.

and Arnold
______

cases are

the present context.

Rice ultimately turned on a

____

implicated in

our case

947 F.2d 1236 (5th

factually and

The retroactivity

legally

issue in

different 1990 VWPA amendment

_________

which provided that "[t]he

not
___

court may

also order restitution in any

to by the

parties in a plea
____

(emphasis

added).

for

agreement." 18 U.S.C.
_________

to

victims of

the

dismissed counts

uncharged criminal conduct, Rice, 954

____

and the plea

predated both the 1990 VWPA

____
____

Thus, settled

Second Circuit precedent

victim loss

3663(a)(3)

The plea agreement in Rice expressly provided

____ _________

restitution both

victims of

criminal case to the extent agreed

calculation agreed

to by

and

F.2d at 41-42,

amendments and Hughey.

___ ______

supported the

Rice.

Id. at
___

expansive

44.

The

Second Circuit rejected Rice's ex post facto argument because (1)

__ ____ _____

Rice must
____

have relied

on the more

law, rather than on Hughey, when

______

tion

commitment adopted in

onerous Second

Circuit case

he agreed to the broad restitu-

the plea agreement;

and (2) section

3663(a)(3) did not

___

retroactively "enhance the punishment

for an

13

offense"

but "merely

provided

that a

specified

agreement could be enforced from that point on."

type of

plea

Id.
___

The Fifth Circuit employed the same analysis in Arnold,

______

947

F.2d at

1238 n.2,

noting that

section 3663(a)(3)

was not

retroactive

[earlier]

but

"applied

prospectively

plea agreement."

circuit court authority

The

to

validate

Arnold's

government

cites no

apposite

holding that section

3663(a)(2) applies
__________

retroactively to pre-November 1990 criminal conduct.

As

the

government

address this precise

government

did not

question.

retroactively

instead

that

to

is

we

have

In Cronin, 990 F.2d

______

contend that

applied

Hughey
______

correctly notes,

section

pre-November
____________

distinguishable
_______________

yet to

at 663, the

3663(a)(2) should

1990
____

from

conduct,

be

urging

cases involving

convictions for "offense[s]"

like mail fraud

____ _____

as an essential element, proof

of a broader "scheme to defraud."

See
___

id. at
___

666; see also,

___ ____

e.g., 18
____

U.S.C.

which require,

1341.

Given the

inherent breadth

of the "offense"

of conviction in

Cronin, the
______

government argued that VWPA restitution was not limited to losses

caused

by the particular
__________

mailings designated in
________

counts

upon which the defendant was

victim losses occasioned by the

convicted, but included all

larger fraud "scheme."

circuit split on the issue, we sided with the

concluded

that

Hughey
______

the individual

barred the

broader

Noting a

majority rule, and

restitution

order.

Cronin, 990 F.2d at 666; see also Newman, 49 F.3d at 11 (applying

______
___ ____ ______

Cronin pronouncement to wire fraud conviction).

______

The implicit concessions of nonretroactivity in

14

Cronin
______

and

Newman
______

apparently

stemmed from

the

government's acknowl-

edgement that retroactive application of section 3663(a)(2) would

have had no colorable basis

Ex Post Facto Clause.

__ ____ _____

offenses occurred

See id. at 11 n.14 (noting that, "[a]s the

___ ___

in 1989 and

the restitution statute as it

ber

1990

of 1990").

in the decisional law construing the

early 1990, Newman is

subject to

stood prior to amendment in Novem-

Further, had this

court been satisfied that the

VWPA amendments were readily amenable to retroactive appli-

cation in Cronin and Newman, we could have affirmed those restit______

______

utionary sentences on that alternative ground.

See United States

___ _____________

v. Alzanki, 54 F.3d 994, 1008 (1st Cir. 1995), petition for cert.
_______
________ ___ _____

filed, 64 U.S.L.W. 3298 (U.S. Oct. 16, 1995) (No. 95-619) (appel_____

late court may

record); cf.
___

affirm district court on any

also Jewett, 978

____ ______

precluded broad

activity

addressed by parties).

though the

latter

Based on the clear

the error

that Hughey
______

issue had

in

the govern-

see supra Section II.B.3.a,

___ _____

this case

satisfied the

not been

language of the 1987

unanimous circuit precedents rejecting

ment's retroactivity claim,

that

F.2d at 252 (finding

restitution order, before addressing VWPA retro-

question, even

VWPA and the

ground supported by

we hold

"obviousness" test

announced in Olano.5
_____

See United States

___ _____________

v. Weiner, 3 F.3d 17, 24

______

____________________

5It is noteworthy

that the Olano Court

_____

decision on whether an error

prior

to review

"obvious."

by

the

that becomes clear after trial, but

court of

appeals,

Olano, 113 S. Ct. at 1777.

_____

of Appeals cannot correct an

this

unanimous case law,

question

may be

considered

("At a minimum, the Court

error pursuant to Rule 52(b) unless

the error is obvious under current law.").

not resolve

explicitly reserved

because we

As in Olano,
_____

have

found,

we need

given

the

that it was already "obvious" at the time of

sentencing that Gilberg should not be held

__________

15

responsible under the

n.5 (1st

Cir. 1993) (noting that a circuit

split may rule out a

finding that forfeited error was "obvious," even if First Circuit

has not weighed in on issue).

c) "Miscarriage of Justice"
c) "Miscarriage of Justice"
______________________

Although

the

sound

Olano entrusts remediation

_____

discretion

of the

reviewing

of plain error to

court,

the courts

of

appeals "should not" exercise their discretion unless a forfeited

error

results in

"`a miscarriage

affect[s] the fairness,

cial proceedings.'"

ted).

of

justice,' or

"`seriously

integrity or public reputation

Olano, 113 S. Ct. at

_____

of judi-

1776 (citations omit-

In all events, the VWPA expressly limits restitutionary

relief to "victims of [the] offense [of conviction]." 18 U.S.C.

_______

3662(a)(1)

(emphasis added).

federal court has

authority to order restitution in a

criminal case; it may do

only as expressly provided by statute.

We have noted that when

mutandis to
________

caused the

appeal."

(citing

one in

conviction of an

under which

a plain and

so

DeSalvo, 41 F.3d at 511.

_______

the district court fundamentally departs

from "obvious" sentencing principles,

mutatis
_______

no inherent

which

"the situation corresponds

a forfeited

innocent person,
________ ______

error may

the other

prejudicial error should be

have

rubric

noticed on

United States v. Whiting, 28 F.3d 1296, 1312 (1st Cir.)

_____________
_______

Olano,
_____

113

S. Ct.

at

1779)

(emphasis

added), cert.
_____

denied,
______

115 S.

Ct. 378

(1994).

Given the

particular circum-

____________________

1987 VWPA for losses occasioned victims of offenses with which he

was not

charged, nor

held retroactively

responsible under

the

1990 VWPA amendments. See supra Section II.B.3(a), (b).

___ _____
_

16

stances of this case, and

in restitution portended

the substantial $1.6 million reduction

by Hughey's application, we
______

find plain

error warranting vacatur

case.6

The

comprising

of the restitutionary sentence

restitution

award

the total estimated

is

reduced

loss on the

to

in this

$2,107,406.00,

twenty-one mortgage

loans designated in the indictment.7

The
___

sentence is modified to require restitution in the

________ __ ________ __ _______ ___________ __ ___

amount of $2,107,406.
______ __ __________

The district court

___ ________ _____

judgment is affirmed,
________ __ _________

as modified.
__ ________
____________________

6Gilberg's
not

remaining challenges to the restitution order do

meet the "plain error" standard.

district

court erroneously

lenders by using the price

ing foreclosure,
lender.

This

Circuit.

The

inapposite,

assessed

circuit

the

loss

occasioned

the

the lender received on resale follow________

rather than
issue has

First, he argues that the

the foreclosure

not yet
court

simply holding that

price bid
___

been addressed

decisions

cited by

by the

in the
Gilberg

the sentencing court

First

are

should be

wary of basing

restitution on the resale price

acquired

estate at

years.

real

foreclosure

where the lender

but does

not

resell for

See, e.g., United States v. Holley, 23 F.3d 902, 914 (5th

___ ____ _____________
______

Cir. 1994) (six years).

Gilberg's victims

Here, however, there is no evidence that

held the

following foreclosure.

property for

Consequently,

such extended

any error

periods

in the

victim

loss calculation, or the standard employed, has not been shown to

be "obvious."
Second, Gilberg contends
make explicit findings on his
U.S.C.

3664(a).

need not be

that Gilberg's
considerable

failed to

ability to pay restitution. See 18

___

Nevertheless,

explicit.

985 F.2d at 618).

that the district court

we have held that such findings

See Newman, 49 F.3d at 10 (citing Savoie,

___ ______
______

Moreover, the district court supportably found

earning potential

would enable

restitutionary obligations in

him to meet

the future.

his

Id. at
___

10-11.

7Since loss calculations under U.S.S.G.

2F1.1 are based on

criteria different from the VWPA victim loss criteria, see, e.g.,
___ ____
id.
___

2B1.3 (providing

that "relevant

conduct," for

guideline

sentencing purposes, may encompass conduct not charged in indictment,

and conduct underlying the counts upon which defendant was

acquitted), the

reduction in

Gilberg's restitutionary

requires no readjustment in the offense level.

sentence

See supra Section

___ _____
II.B.1.

17