USCA1 Opinion

United States Court of Appeals

United States Court of Appeals
For the First Circuit
For the First Circuit
____________________

No. 95-2121

UNITED STATES,

Appellee,

v.

HENRY J. PEPPE,

Defendant - Appellant.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

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

___________________

____________________

Before

Selya, Stahl and Lynch,

Circuit Judges.
______________

____________________

Richard H. Gens
________________

with

whom Martin K. Leppo was

_________________

on

brief

appellant.
Gary S. Katzmann,
_________________

Assistant United

States Attorney,

with

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

_______________

____________________

March 29, 1996

____________________

STAHL, Circuit Judge.

STAHL, Circuit Judge.
_____________

Pursuant to a plea agreement

with

the

government,

pleaded guilty

his

defendant-appellant

Henry

to a three-count indictment

codefendant,

Joseph

S.

extortionate extensions of credit

J.

Peppe

charging him and

Mongiello,

with

making

and using, and

conspiring

to use, extortionate means to collect and attempt

to collect

an

extension of credit.

The district court sentenced Peppe

to

twenty-seven

incarceration

years' supervised

$10,000 fine.

and

months'

release, a

Peppe

condition

probation-office

followed

by

three

special assessment fee,

and a

now appeals the imposition of

of

his

supervised

approval prior

to

any

release

incurring

credit charges or opening of new credit lines.1

I.
I.
__

the fine

requiring

of

new

Factual Background and Prior Proceedings

Factual Background and Prior Proceedings
________________________________________

A. Offense Conduct
___________________

We

the

accept the facts of the offense as set forth in

unchallenged portions of the Presentence Report ("PSR").

See United States v. Grandmaison, No. 95-1674, slip op. at 2___ _____________
___________

3 (1st Cir. Mar. 1, 1996).

In the

summer of 1993, Peppe

to John Wiltshire,

a self-employed

and Mongiello loaned

contractor, $3,000

upon

____________________

1.

At oral

challenge

argument before
to

condition of

the

imposition

of

supervised release: that Peppe

any and all financial

office.

court's

this court, Peppe

withdrew his
an

additional

grant access to

information requested by the probation

Accordingly, we do not address this argument.

-22

which Wiltshire was

When

and

required to

Wiltshire was late

Mongiello

repeated,

Wiltshire

pay 5%

in making his

would intimidate

threatening

temporarily

payments because he

him

telephone

stopped

could no

interest per

loan payments, Peppe

and

calls.

making

week.

the

his wife

In

through

June

1994,

weekly interest

longer afford them.

In

July

1994,

Wiltshire

agreed

to

do some

construction

work

at

Peppe's home in return for forgiveness of part of the debt.

On August 1, 1994, Wiltshire contacted

the Federal

Bureau of Investigation ("FBI") about his situation.

date,

he had

loan.

As

paid about

part

of

$6,000 in

the

FBI's

interest on

subsequent

Peppe

and

accompanying five

such

occasion,

Mongiello,

including

additional payments on

Peppe

referred

to

his

the $3,000

investigation,

Wiltshire tape-recorded telephone conversations

with

By that

and meetings

conversations

the loan.

"cuff

On one

list"

of

delinquent loan-shark debtors to see how far behind Wiltshire

was.

In October 1994, Wiltshire told Peppe that he would not

make further payments on

the loan and indicated that

he had

relocated himself

and his

became very angry and

hearing this,

Peppe

warned Wiltshire, "I will catch

up to

you" and "I will find you."

had

in his

possession

wife.

Upon

At the time of his arrest, Peppe

a "cuff

overdue in their payments.

-33

list"

listing ten

debtors

B. The Plea Agreement

______________________

The

parties

agreed

tendered pursuant to Fed. R.

"[w]ithin

law,

"the

the

the

be

possible

imposed

the sentencing judge."

plea agreement

years'

to

Peppe's

that he

plea would

faced a

is

under applicable

within

the

that,

under the

sole

Peppe acknowledged in

maximum penalty

incarceration and a $250,000 fine on each count.

agreement stated

be

Crim. P. 11(e)(1)(B), and that,

maximum sentence"

sentence

discretion of

that

United States

of 20

The

Sentencing

Guidelines, Peppe's Base Offense Level was 20 and the parties

would

recommend to

Peppe's acceptance

the

court a

three-level reduction

of responsibility,

resulting in a

for

Total

Offense Level of 17.

C. The Presentence Report

__________________________

In

the

PSR,

computed at 17, his

applicable

Peppe's

Guideline

supervised

$5,000 to

(2).

imprisonment

release.

the

Level

was

and the

to be

followed by two to three

years

range was

to U.S.S.G.

government

Wiltshire, was entitled to

range

was

found

The fine

$50,000, pursuant

While

Offense

Criminal History Category at I,

twenty-four to thirty months

of

Total

contended

determined at

5E1.2(c)(1) and

that

the

victim,

restitution of the interest paid,

$6,000, the PSR stated that the issue of granting restitution

in

loan-sharking

District

cases

had

of Massachusetts,

never been

and

addressed

relayed the

in

the

matter to

the

-44

court.

Peppe

complained that

figure came only

did

not offer

the government's

restitution

from Wiltshire and was exaggerated,

his

own calculation

and

did not

but he

otherwise

object to that portion of the PSR.

The

PSR

also

included

the

following additional

facts to which

year-old high

as

neither party

objected.

Peppe

school graduate with previous

bartender,

temporary

postal

owner

and racer,

and employee

is a

forty-

work experience

employee, greyhound-dog

at his father's

smoke shop.

Peppe and his wife, Jayne Zannino Peppe, have three children,

the

youngest of whom

may have a

serious medical condition.

Peppe's wife manages the care of the family and home, working

part-time

as

$24,056.50,

a real

estate

agent.

comprised

of,

inter
_____

Peppe's

alia,
____

securities, life insurance, real estate,

His

liabilities total

brothers

$50,000, made

assets total

bank

accounts,

and an automobile.2

up of

loans

for attorney fees incurred in his defense.

from his

The PSR

reports that Peppe has a negative net worth of $25,943.50 and

a monthly negative cash flow of $193.

D. The Sentencing Hearing

__________________________

The district court adopted the factual findings and

Sentencing Guideline

the sentencing

applications set forth in the

hearing,

the district

court

PSR.

confirmed

At

the

____________________

2.

As of the time of the balance sheet set forth in the PSR,

Peppe no longer owned greyhounds.

-55

PSR's calculation of Total Offense Level and Guideline ranges

for

the

fine

and

recommended thirty

and

imprisonment

term.

months' incarceration, a

an order of restitution of $6,000.

restitution

requested

should

The

not

be

an

government

fine of

Peppe responded that

issue

in

sentencing,

a hearing should it become a factor.

record,

enough

for

frankly,
me

to

is

do

not

speculate concerning the proper

restitution.

decline

further time before

in

this case

to

attempt

remedy,

light

fact

of

the

to

reaching a

restitutionary

clear

anything

but

level of
take

any

sentence

to fashion

particularly

that

there

is

and

With respect

to restitution, the court stated:

[T]he

$5,000

a
in
a

potential for a fine.

And I will impose

a fine in this case.

The district court

months'

imprisonment

concurrently, followed

The

court

waived,

on

be paid

each

count,

to

be

served

by three years of supervised release.

further imposed

to

sentenced Peppe to twenty-seven

$10,000

fine, with

in installments.

interest

In addition

to the

standard conditions of supervised release,

the court ordered

that Peppe

could

charges

additional

lines of

probation

officer"

consideration

schedule.

not

court opined:

credit

who,

Peppe's

At the

"incur

new credit

without prior

in

compliance

turn,

with

or

approval of

would

the

conclusion of the sentencing

take

fine

open

the

into

payment

hearing, the

-66

I think I needn't say very much about the

reasons for
Pep[p]e

the sentence.

understands that this

the costs of doing

and that

[of]

Mr.

is one of

this kind of business

there is imposed

with those costs a

component

I think

in connection

fine component, and a

being

taken

loved ones at critical times.

away

from

II.
II.
___

Discussion
Discussion
__________

Peppe now

the $10,000

argues that the court

fine and by

prohibiting him from

credit charges or opening

prior approval

was

of the

raised before

the

incurring new

additional lines of credit without

probation office.

sentencing judge,

Peppe concedes, our review

States v. Carrozza, 4
______
________

erred by imposing

Neither challenge

however, and,

is for plain error only.

F.3d 70, 86-87 (1st Cir.

denied, 114 S. Ct. 1644 (1994).

______

A. Imposition of $10,000 Fine

______________________________

as

United
______

1993), cert.
_____

Peppe contends that the

financial

resources

court did not consider his

and earning

ability

$10,000 fine.

He

in the record

is undisputed, and argues that

both

his

current

unlikelihood that

points out that his

in assessing

inability

combination of

pay

he will be able

Peppe also suggests that

component," noting

to

the

financial information

the

it establishes

fine

to pay it in

and

the

the future.

the fine contained a "restitutional

that its amount

the government's

-77

reflects an

recommendation

approximate

for a

fine

($5,000) and restitution ($6,000), and that the court did not

consider

remedy.

the

requisite

He maintains

interest on the fine,

fine

itself

and

factors

that,

to

in

support a

addition to

restitution

waiving

the court should also have

imposed

alternative

sanctions

the

waived the

such

as

community service.

When imposing a fine and its conditions, a district

court must

to

consider, inter alia, "any

_____ ____

the defendant's

ability to

evidence presented as

pay the fine

(including the

ability to pay over a period of time) in light of his earning

capacity and

financial resources"

fine places on

and "the burden

the defendant and his

that the

dependents relative to

alternative punishments."

U.S.S.G.

5E1.2(d); see
___

U.S.C.

defendant

bears

3572(a).

The

the

also 18
____

burden

of

demonstrating that his case warrants an exception to the rule

that a fine

612,

shall

be imposed.

620 (1st

Cir. 1993);

need

U.S.S.G.

5E1.2(a)

985 F.2d

("The court

impose a fine in all cases, except where the defendant

establishes that he

become

United States v. Savoie,

______________
______

is unable

able to pay any

not

make

express

financial condition

to pay and

fine").

findings

is not likely

Moreover,

a district court

regarding

so long as the record

to

defendant's

is sufficient for

adequate appellate review.

Savoie, 985 F.2d

______

at 620 (citing

United States v. Wilfred Am. Educ. Corp., 953 F.2d 717, 719______________
_______________________

20 (1st Cir. 1992)).

When a challenge to the imposition of a

-88

fine is fully preserved

for appellate review, we

review for

abuse

of discretion.

because

error.

Peppe did

Savoie, 985
______

not

F.2d at 620.

object below,

we

But here,

review for

plain

Carrozza, 4 F.3d at 86-87.

________

First, we

do not agree

failed to consider his

fine.

The PSR,

with Peppe that

the court

financial condition when imposing the

adopted

by the

Peppe's assets, liabilities, and

district

court, detailed

monthly cash flow.

Wilfred
_______

Am. Educ. Corp., 953 F.2d at 719-20 (reviewing court will not
_______________

presume that the court below ignored relevant evidence in the

record).

condition

The court's

is evident in its

and written order

defendant

consideration

does

waiver of interest

stating that it

not

have

of Peppe's

the

financial

on the fine

"has determined that

ability

to

pay

the

interest."

Indeed,

in choosing $10,000, the

court chose a

fine at the

lower end of the applicable $5,000 to $50,000 range.

Second, although it is undisputed that Peppe's

worth and monthly cash

do

not compel

imposed.

was

the

flow are negative, these facts

conclusion that

fine should

net

alone

not

be

Rather, it was Peppe's burden to establish that he

not able to pay

installment schedule.

the fine, with

or without a reasonable

At no time did Peppe offer evidence to

establish his inability to pay, and his inability to pay does

not

follow inexorably

from the

United States v. Olivier-Diaz,

_____________
____________

-9-

facts in

the record.

13 F.3d 1, 5 (1st

See
___

Cir. 1993)

(noting that plain

asserts a

be found where

defendant

fact that he failed to ask the sentencing court to

find, "unless

rationally

error will not

the desired

factual finding

supported by the record below.").

all of Peppe's

defense costs.

is the

only one

Interestingly,

debt is owed to family members who funded his

Further, Peppe

does not address

his future

ability to pay the fine, and given his age, good health,

past

employment

experience,

he

cannot

complain

in

and

this

regard.

Finally,

the

fine

to

component."

stated

include

speculative, and

Wiltshire;

an

that the

court fashioned

impermissible

"restitutionary

This argument lacks merit.

that

court did

Peppe contends

restitutionary

remedy

simply declined

to take

not express the

rather, it

expressed the

ample

notice

of

range.

both the

be

purely

that route.

goal to

The

the victim,

punish Peppe.

fine in an amount

by the government,

end of the Guideline

would

desire to compensate

Accordingly, the court imposed the

than recommended

The court explicitly

but still at

higher

the lower

The record shows that Peppe had

potential

for

fine and

the

applicable fine range, and never claimed the inability to pay

any amount.

We find no error -- certainly no plain, or obvious,

error

--

in

imposing

the

$10,000

-1010

fine.

We

decline,

therefore, to order any relief sought

by Peppe regarding the

fine.

B. Probation Office Approval Prior to Obtaining New Credit

___________________________________________________________

approval

Peppe

argues

prior

to

obtaining

related

his

additional

to

his

that

requiring

incurring

lines

of

offense and

new

probation

credit

credit

is

constitutes

charges

not

an

office

or

reasonably

impermissible

occupational restriction that inhibits his

pursuit of lawful

business

that,

activity.

He

also

contends

Guidelines, the only purpose for this

under

the

condition is to ensure

compliance with a fine payment schedule; accordingly, he asks

this

court

5E1.2(g).

to modify

the

condition

to resemble

U.S.S.G.

supervised

district

release

court

that

is

defendant's offense, history,

for

deterrence

from

protection;

and

defendant.

U.S.S.G.

may

(1995).

criminal

correctional

5D1.3(b);

extortionate

delinquent

suggest

extension

loan-shark

that

limited to

Peppe's

his

of

condition

to:

and characteristics; the

offense

credit.

debtors,

extortionate

conduct;

treatment

of

the

need

public

of

the

see also United States v.

___ ____ ______________

Thurlow, 44 F.3d 46, 47 (1st Cir.), cert.

_______
_____

1987

"reasonably related"

further

effective

impose

denied, 115 S. Ct.

______

conduct

His

"cuff

evidenced

lending

involved

in

lists"

the

activity

the identified victim, Wiltshire.

the

of

record,

was

not

The condition

-1111

of

prescreening

reasonable

office to

new

new credit

charges and

information-gathering

monitor Peppe's use

credit, the

probation

device

indicated at

for the

of money; when

office

purpose and planned disbursement.

court

credit lines

sentencing, the

may

is a

probation

Peppe desires

inquire as

to

its

Moreover, as the district

probation office

could

also use that opportunity

the fine

the

to monitor Peppe's compliance with

payment schedule.

requirements

related to

of

Therefore, the

5D1.3(b)

because

Peppe's offense, preventing

condition meets

it is

reasonably

his participation in

further extortionate lending, and ensuring his payment of the

fine.

Peppe suggests that

his ability to work or

in derogation of

We disagree.

fails

to

First,

profession."

in

of U.S.S.G.

5F1.5(a).3

5F1.5(a) is inapplicable because Peppe

how

inhibits

engage in lawful business activities,

the requirements

explain

participation

the credit condition

the court's

"specified
_________

Id. (emphasis
___

condition

occupation,

added).

affects

his

business,

or

Even assuming it

is an

"occupational restriction" within the

meaning of

5F1.5, it

____________________

3.

U.S.S.G.

5F1.5(a) provides

that

a court

may bar

or

limit a defendant's participation in a "specified occupation,

business,

or

profession"

if

it

determines

that

such

participation bears a "reasonably direct relationship" to the

relevant offense conduct, and the restriction
necessary to
believe

protect the public

that, absent

such

"is reasonably

because there is

restriction, the

defendant will

continue to engage in [similar unlawful conduct]."

-1212

reason to

is appropriate

for many of

the same

reasons that

proper condition of supervised release under

supra
_____

note 3

restriction

(noting

criteria considered

condition).

it is

5D1.3(b).

See
___

in occupational-

Second, the condition requires only

prior approval of the probation office; it is not an absolute

bar to incurring credit charges or obtaining new

it

applies only for the

Thus, we do not

condition

credit, and

duration of the supervised release.

see, and Peppe has

impermissibly

restricts

not explained, how

his

this

lawful

business

that

U.S.S.G.

activities.

Finally, we

find

Peppe's argument

5E1.2(g)

prohibits

disingenuous.

district

court

defendant

from

See
___

the

U.S.S.G.

"may

impose

incurring

additional lines of

condition

in

5E1.2(g)

new

credit unless he
______ __

the payment schedule") (emphasis

___ _______ ________

case

to

prohibiting
___________

charges

or

the

opening

is in compliance
__ __ __________

added).

be

(providing that

condition

credit

his

with
____

Here, the district

court did not "prohibit" Peppe from obtaining credit, it only

required

prior

approval.

Further,

simply

because

the

Guidelines permit the condition in the circumstance reflected

in

5E1.2(g) does not mean that a court cannot employ it in

other cases under

5D1.3(b), the provision generally guiding

conditions

of supervised

release.

modify the

credit conditions

Finally, we

imposed on Peppe

decline to

to "comport"

(as

Peppe puts it) with

section 5E1.2(g), which would allow

-1313

Peppe to forego

with

credit prescreening as

the payment schedule.

long as he

That condition is

complied

not what the

district court deemed appropriate in its carefully

fashioned

sentence,

and we discern no

reason or basis

to disturb the

court's decision.

The

district court

did

not err

in imposing

the

condition that Peppe obtain prior approval from the probation

office for new credit charges or lines of credit.

-1414

III.
III.
____

Conclusion
Conclusion
__________

Nothing

more

reasons,

all of

Peppe's

merit.

Affirmed.
Affirmed
________

need be

said.

challenges on

For the

appeal are

foregoing

without

-1515