USCA1 Opinion

UNITED STATES COURT OF APPEALS

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

No. 95-2271

UNITED STATES,

Appellee,

v.

PHILIP M. CALI,

Defendant, Appellant.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Robert E. Keeton, U.S. District Judge]

___________________

____________________

Before

Lynch, Circuit Judge,

_____________
Aldrich and Bownes, Senior Circuit Judges.
_____________________

____________________

John P. Ward with whom David Duncan and Zalkind, Rodriguez, L

____________
_____________
______________________
& Duncan were on brief for appellant.
________
Brian T. Kelly, Assistant
________________

United

States

Attorney,

with

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

_______________

____________________
June 25, 1996
____________________

BOWNES,

Senior Circuit

Judge.

On June

1, 1995,

BOWNES,

Senior Circuit Judge.

_____________________

defendant-appellant Philip Cali ("Cali") pled guilty to count

sixty-nine

of a

with operating

seventy-one

count indictment

an illegal gambling business

18 U.S.C.

1955, 2.

Cali now

sentence

of imprisonment

district

court

enhanced the

in violation of

appeals the

he received,

prison

charging him

fifteen-month

contending that

term

mandated by

the

the

Sentencing Guidelines ("Guidelines") because of the erroneous

view

that U.S.S.G.

adjustment

3B1.1 permits

base offense

level

for mere management of assets or property.

Cali

also

maintains that the district court's alternative holding

that

upward departure

was appropriate

because

his conduct

fell outside section 3B1.1's heartland was clearly erroneous.

We agree that mere management of assets is insufficient for a

base offense

level adjustment under section

3B1.1, but find

that the district court's alternative determination cures any

defect in its holding.

stems from 18 U.S.C.

Accordingly, we affirm.

Jurisdiction

3742.

I.
I.

THE FACTS
THE FACTS
_________

We

unobjected-to

consider

portions

Report ("PSI") and the

the

of

facts

the

as

set

Presentence

forth

in

the

Investigation

transcript of the sentencing hearing.

See, e.g., United States v. Peppe, 80 F.3d 19, 20

___ ____ _______________________

1996); United States v. Grandmaison, 77

_____________________________

(1st Cir.

F.3d 555, 557

(1st

-22

Cir.

1996).

pursuant

to

On October

count

15, 1993, Philip

sixty-nine

of

Cali was arrested

seventy-one

count

indictment charging him with conducting, financing, managing,

supervising, directing, and owning all or part of an

illegal

gambling business which involved five or more persons between

October 1986 and December 1992.

The

result of an eight year

Massachusetts

into

named

State

large-scale

nine

Police

("State Police")

racketeering conspiracies,

individuals,

four

of whom

--

investigation

the indictment

Joseph

Yerardi

("Yerardi"), William Maguire ("Maguire"), Anthony Grabiec Jr.

("Grabiec"), and Salvatore M. DeAngelis ("DeAngelis") -- were

charged in count sixty-nine

five and

has a

with Cali.

Cali, who

criminal history which

for gambling-related

activities, was

is sixty-

includes convictions

not charged in

any of

the indictment's other counts.

During

investigation, the

intercept

utilized

phone

by

the

course

State

from

their

Police obtained

conversations

Yerardi

of

June

over

to

racketeering

authorization

cellular

August

1991.

to

telephone

Their

surveillance of the telephone

over

extensive loansharking

gambling

business,

Boston's Winter

which

revealed that Yerardi presided

and gambling

operated

under the

Hill Gang and generated

loansharking business, included

agents, two principal

businesses.

auspices

The

of

funds for Yerardi's

over twenty-five

bookmaking

offices, and had a gross daily revenue

-33

of $2,000.00.

Maguire

was

Though Yerardi headed the gambling enterprise,

its

principal

supervisor

and the

individual

responsible for collecting money owed to the organization and

paying out money owed to agents and bettors.

Transcripts

Cali

of numerous calls

intercepted by the State Police

DeAngelis played

though

they

the same

operated out

was often one of

principal

various

bookmaking

agents.

revealed that Cali and

role in the

of

stationed Cali, who frequently

and

between Yerardi and

different

The agents,

locations. Yerardi

placed bets with the business

its debtors, at

offices

gambling enterprise,

to

one of the business's

receive

calls

who identified

from

the

themselves by

code only and received a percentage of the business's profits

as

compensation,

event

bets

to

information,

communicated

Cali.

After

information

about

taking

recording

Cali transmitted it

and

directly to

whom he was in daily telephone contact.

sporting

that

Yerardi, with

The majority of the

calls intercepted by the State Police were made by Yerardi to

Cali at the bookmaking office.

Cali

often

reviewed

betting

reported agents' makeup figures --

results

telephone conversations.

charting bets

tracking

daily

made

by

agents

-- to Yerardi

He also

for the gambling business.

bets

and

those monies that have to

be worked off before any money can be paid out

during these

with

assisted in

Charting involves

and

monitoring

the

-44

business's

events.

projected

Though Cali

responsible

evidence

risk of

individual sporting

answered directly to

for completing

that he

loss on

received

charting

Yerardi and

analyses, there

a percentage

of the

was

is no

business's

profit or played any role in setting policy regarding odds or

bet placement.

On June 1, 1995,

in

the

operation

district

court

of

an illegal

scheduled

thereto received a

Cali pled guilty to participating

gambling

sentencing

PSI from the

business.

hearing and

the Probation Department, to which

government

Cali

total

adjusted

recommendation

offense for

registered objections,

guideline

reflects a

acceptance of

2E3.1(a); 3E1.1.

offense

two

prior

Probation Department.

PSI prepared by

and

The

level

both the

recommended

of

level decrease

responsibility.

The

See
___

ten.

This

in the

base

U.S.S.G.

The PSI concluded, based on the information

provided by the government and the defendant's description of

his duties that an

not be warranted.

adjustment for role in the

offense would

The

Probation

criminal history

Department

assigned

points for prior gambling

Cali

three

convictions and,

as a result, placed him in Criminal History Category II.

district

court,

however,

later

found

assigned

that the

Department

had erroneously

points for

offenses committed while working

-55

Cali criminal

The

Probation

history

for Yerardi and

identified the appropriate

criminal history

category as

I.

Placement in Criminal History Category I, at a total adjusted

offense level of ten, results in a sentencing range of six to

twelve months.

II.
II.

THE SENTENCING HEARING

THE SENTENCING HEARING
______________________

At

the

sentencing

downward departure on the

suffered,

largely

inter
_____

alia,
____

supported

benefits that would

that

Cali was

hearing,

Cali

requested

grounds that both he and

from

themselves

serious heart

on

be unavailable

incarcerated.

The

his wife

conditions

and

Social

Security

income

to them

for any

period

government disputed

the

contention that Cali was entitled

and objected

responsibility

to the

to departure on this basis

two-point adjustment for

recommended

by

the

acceptance of

Probation

Department.

Additionally, the government objected to the PSI's failure to

add four levels under

arguing

that

an

managed

people and

section 3B1.1(a) for supervisory role,

enhancement

was

warranted

assets within that

because

Cali

guideline's meaning.

The government also argued that the Criminal History Category

assignment Cali

received did

not adequately

reflect the

seriousness of his past criminal history.

The

requests

Cali's

district

court

made by both Cali

request for

denied

the

objections

and the government.

health-related departure,

and

It refused

concluding

that the factors cited by the defense did not, "separately or

-66

together,

justify

government's

acceptance

departure."

objection

of

to

the

responsibility

It

also

two-point

recommended

rejected

the

adjustment

for

by

the

PSI.

Finally, the court found that the severity of Cali's criminal

history

was

not

underrepresented by

the

amended criminal

history calculation and denied the government's request for a

four-level adjustment under section 3B1.1(a).

Nevertheless, the court

Yerardi's gambling

his

sentence and

three level

enterprise warranted some

concluded, over

increase in

offense provisions

adjustment

to Cali's

should

this

Court determine

permit

such

an

adjustment,

that a

was appropriate.

and Application Note 2's role

permitted

base

in

enhancement in

Cali's objection,

the offense level

It found that section 3B1.1(b)

in the

found that Cali's role

him to

offense level,

that

it

section

would

make a

direct

but added

that,

3B1.1 does

employ

an

departure, under United States v. Rivera, 994 F.2d 942

________________________

not

upward

(1st

Cir. 1993), to impose a sentence outside the range prescribed

by the Guidelines to

calculus

results

thirteen, which

in

reach the same final sentence.

total

adjusted

offense

corresponds to a sentencing

Either

level

of

range of twelve

to eighteen months.

Accordingly, the court sentenced Cali to a fifteen-

month

term

release.

It

of

imprisonment

and two

assessed Cali $50.00,

-77

years

of

as required by

supervised

statute,

and

imposed a fine of $3,000.00, without interest.

of

Cali's

medical

problems,

the

court

also

In light

made

recommendation that Cali be placed in a facility, as close to

Massachusetts as possible,

where adequate medical

treatment

would be available to him.

III.
III.

STANDARD OF REVIEW
STANDARD OF REVIEW
__________________

Appellate review of a district

of

the Guidelines is a

two-part process.

court's application

United States v.
________________

Joyce, 70 F.3d 679, 681 (1st Cir. 1995), cert. denied, 116 S.
_____
_____ ______

Ct. 1556 (1996).

guideline to a

McCarthy,
________

St.
Cyr,
_________

We first determine the applicability of the

particular case

United States v.
_________________

77 F.3d 522, 535 (1st Cir. 1996); United States v.

________________

977

F.2d

698,

701

determining the guideline's scope

district

de novo.
__ ____

court's factual

"giv[ing] due

(1st

Cir.

After

and meaning, we review the

determinations

deference to the

1992).

for

clear

error,

district court's application

of the guidelines to the facts."

Joyce, 70 F.3d at 681; see

_____
___

also Koon v. United States, Nos.

____ ______________________

94-1644, 94-8842, 1996

WL

315800 at * 8 (U.S. June 13, 1996); McCarthy, 77 F.3d at 535;

________

St. Cyr, 977 F.2d at 701.

________

Because "[t]he determination of a

defendant's role

F.3d

at

findings

in an offense is

682, we

will

regarding

enterprise if

they

only

Cali's

are

fact-specific," Joyce, 70
_____

disturb the

role

in

district

Yerardi's

clearly erroneous

or

court's

gambling

based

on

-88

mistake

of law.

See
___

United States v. Frankhauser, 80 F.3d

_____________________________

641, 653 (1st Cir.

1996); United States v. Rostoff,

________________________

53 F.3d

398, 413 (1st Cir. 1995); United States v. Tejada-Beltran, 50

_______________________________

F.3d 105, 110-11 (1st Cir. 1995).

IV.
IV.

DISCUSSION
DISCUSSION
__________

The

small,

but

nevertheless

between a twelve and fifteen month prison

what is

at stake in this

appeal.

real,

difference

term is ultimately

Cali contends

that he is

entitled to a reduction in his fifteen-month sentence because

twelve months

received

under

is

the maximum

the Guidelines.

maintains that the district

prison

In

term he

should

support of

this,

have

he

court erroneously concluded that

section 3B1.1(b) permits a

the absence

of a finding

base offense level enhancement in

that a defendant

organized, lead,

managed, or supervised one or more participants in an illegal

enterprise

involving

Additionally,

Cali

holding -- that

event

section

argues

or

that

more

the

an upward departure

3B1.1

erroneous

because

heartland

of 18

U.S.C.

individuals,

alternative

was appropriate in

conduct falls

--

squarely

1955 offenses.

that, absent a finding

U.S.S.G.

participants.

court's

precluded adjustment

his

reviewing the claim

managed

five

3B1.1(b)

was

the

clearly

within

the

We begin

by

that a defendant

precludes

an

-99

enhancement

in

the

requirements for a

base

offense

level

and

discuss

the

3B1.1 upward departure thereafter.

U.S.S.G.
3B1.1(b) Role in the Offense Adjustments
U.S.S.G.
3B1.1(b) Role in the Offense Adjustments
___________________________________________________

U.S.S.G.

criminal

3B1.1 punishes defendants in large-scale

enterprises

responsibility,

meting

according

out

the most

to

their

severe

relative

sentences

to

individuals

who hold

Tejada-Beltran,
______________

leadership

50 F.3d at

or

management

positions.

111; United States v. Fones, 51

_______________________

F.3d

663, 665 (7th Cir. 1995); United States v. Parmelee, 42

_________________________

F.3d

387, 395 (7th Cir. 1994), cert. denied sub nom. Brozek_____ ______ ___ ____ _______

Lukaszuk, 116 S. Ct. 63 (1995).

________

guideline

to

elevate Cali's

The district court used this

sentence

on

the theory

that

section 3B1.1(b) permits an enhancement in a defendant's base

offense level for both

Cali assigns

offense

level

management of individuals and assets.

error, contending

can

only be

that an enhancement

based

defendant managed other individuals.

this

point,

but

maintains

on

in base

finding that

the

The government concedes

that Cali's

argument

is

moot

because the district court found that Cali's responsibilities

in Yerardi's gambling business included managing individuals,

as well as assets.

To make sense of these positions, we briefly review

section 3B1.1 and its history.

Based

on

offense,

the

Section 3B1.1 provides:

defendant's role

increase

the offense

follows:

-1010

in

the

level as

(a)

If the defendant was an organizer or

leader

of

criminal

activity

that

involved five or more participants or was

otherwise

extensive,

increase

by

levels.
(b)

If

the defendant

supervisor
leader)

(but
and

not
the

was a
an

manager or

organizer

criminal

or

activity

involved five or more participants or was

otherwise

extensive,

increase

by

levels.
(c)

If the defendant

leader,

manager,

or

was an

organizer,

supervisor in

any

criminal activity other than described in

(a) or (b), increase by 2 levels.

Prior to 1993, courts were split as to whether a finding that

criminal-enterprise

prerequisite

to

defendant managed

section

3B1.1

individuals

base

offense

was a

level

adjustment.

See United States v. McFarlane, 64

___ ___________________________

1237 (8th Cir. 1995).

defendant

must have

others involved in

must

have been

This Circuit took the view

exercised some

the commission of

responsible

degree of

control over

. .

others for

the

United States v. Fuller,

_______________________

(1st Cir. 1990); see also

___ ____

v. Fuentes, 954 F.2d 151,

___________

that "the

the offense or

for organizing

purpose of carrying out the crime."

897 F.2d 1217, 1220

F.3d 1235,

153 (3d Cir.),

United States
_____________

cert. denied, 504

_____ ______

U.S. 977 (1992); United States v. Mares-Molina, 913 F.2d 770,

_____________________________

773

(9th

Cir.

1990).

defendant who did not

a manager

Other

concluded

that

"a

supervise people [could] be considered

or supervisor within

United States

courts

v. Chambers, 985

the meaning of

3B1.1(b)."

F.2d 1263, 1267

(4th Cir.),

__________________________

-1111

cert. denied, 114 S.

_____ ______

Ct. 107 (1993); see also

___ ____

United States
_____________

v. Grady, 972 F.2d 889 (8th Cir. 1992).

________

On

November

1,

1993, the

Sentencing

Commission

("Commission")

weighed into this debate by issuing Amendment

500, which amended section

2.

3B1.1 to include Application Note

That application note provides:

To qualify for
section,

an adjustment under

defendant

must

have been

this
the

organizer, leader, manager, or supervisor

of one

or more

upward

departure

however, in
did

not

supervise

other participants.
may

be

the case of a

organize,
another

nevertheless

An

warranted,
defendant who

lead,

manage,

or

participant, but

who

exercised

management

responsibility over the property, assets,

or activities of a criminal organization.

Thus, Amendment 500 offered something to courts on both sides

of the

with

section 3B1.1 debate.

the position we embraced

that section

3B1.1

It

made it clear,

in Fuller, 897
______

adjustments are

in accord

F.2d at 1220,

unavailable unless

the

record

shows

that

individuals, but

the

managed

one

or

more

also states that a finding that a defendant

managed assets instead

upward departure.

defendant

of individuals could

be a basis

for

Ironically, this attempt to define section

3B1.1's contours and operation created the dispute which lies

at the heart of this appeal.

Application

adjustments

findings,

and

Note

explains

departures

require

that

section 3B1.1

different

factual

but does not clarify how, if at all, these devices

-1212

differ in

At

terms of the sentencing

the sentencing

hearing, Cali

adjustments involve

whereas

calculation they mandate.

argued that

enhancements in the

section 3B1.1

base offense level,

section 3B1.1 departures involve enhancements in the

total adjusted offense level and must adhere to the framework

for

Guidelines departures

Rivera,
______

994 F.2d

section

3B1.1

defendant's base

at 942.

adjustments

established

The

this Circuit

district court

effectuate

offense level.

by

in

agreed that

increases

in

See, e.g., United States v.

___ ____ ________________

Capers, 61 F.3d 1100, 1109 (4th Cir. 1995), cert. denied, No.
______
_____ ______

95-7022, 1995 WL 752222

(U.S. May 20, 1996); Fones,

_____

at

64 F.3d

669-70;

persuaded,

section

McFarlane,
_________

however, that

at

1239-40.

the Commission

3B1.1 departures

to changes

It was

intended to

in the

My primary view of the matter

. . . is that the appropriate way to read

these

guidelines

is

that

that

word

"departure" in Application Note 2 was not

being
kind

used in

the technical sense

of departure that

of a

is controlled by

Rivera, by
______

the decision-making structure

controlled

by

Rivera.
______

Instead

talking about a calculation of

offense level.

not

limit

total adjusted

offense level:

THE COURT:

51 F.3d

it's

the total

The court reasoned that had the Commission

"departure"

to

have the

offense context as

would

have

Chapter 5,

it does elsewhere

discussed

Part K,

same meaning

role

of the

in the

intended the term

in

the role

in the

in the Guidelines,

offense

Guidelines, which

departures

it

in

is explicitly

-1313

devoted

to departures, and not

in Chapter 3,

Part B, which

primarily

deals with

base offense

level adjustments.

See
___

U.S.S.G. Chap. 3, Part B, Introductory Commentary ("This part

provides adjustments to the offense level based upon the role

the

defendant

district

played in

court,

committing

therefore,

the

held that

offense.").

both

The

section

3B1.1

adjustments and departures affect base offense level.

This

circumstances

Application

between

was

error.

surrounding

We

cannot

agree,

the Commission's

given

the

promulgation of

Note 2, that the sentence-calculation difference

section 3B1.1 adjustments

inconsequential."

and departures "is

See McFarlane, 64
___ _________

F.3d at 1239.

because

role-in-the-offense

departures

are

Chapter

3, Part

of Chapter

5, Part

B, instead

. . .

Simply

discussed

K, is

in

not

persuasive

evidence

of an

intent

to

adjustments and departures the same for

purposes.

See Rivera, 994 F.2d at

___ ______

treat section

sentence calculation

948 ("Specific individual

guidelines may also encourage departures.").

Application

whereas

The language of

Note 2 persuades us that the two devices are, in

fact, different: section 3B1.1

subject to

the tripartite

departures

discretionary.

As

made

adjustments are mandatory and

test set

pursuant

the Eighth

out by

to

that

that guideline,

guideline

Circuit explained

the sentencing court concludes that a

defendant has managed

or supervised

one

are

in United
______

States v. McFarlane, 64 F.3d 1235, 1239 (8th Cir. 1995):

___________________

If

3B1.1

-1414

or

more

participants

in

enterprise involving five

criminal

or more

total

participants, an adjustment is mandated -

the court must enhance the defendant's

sentence
other

by three
hand,

levels.

If,

on the

sentencing

court

defendant has

merely

the

concludes that the

exercised

managerial

property,

assets,

criminal

enterprise

or

role

over

activities
involving

the
of

five

a
or

more participants, the court is possessed

of

certain

degree

of

discretion

regarding

the

defendant's

enhancement

sentence

--

of

"[a]n

the
upward

departure may be warranted."

We hold that section 3B1.1(b) and

or

Application Note

preclude "management responsibility over property, assets,

activities

defendant's

as

base

the

basis"

offense

Greenfield, 44 F.3d 1141,

__________

level.

adjustment

immediately decide

departures

Instead, we

must

exists

the

be

an

See
___

enhancement

focus on whether

Because the

factual predicate for a section

in

this

question of

analyzed

to

United States v.
__________________

1146 (2d Cir. 1995).

government contends that the

3B1.1(b)

for

under

case,

whether

the

we

do

section

not

3B1.1

Rivera framework.
______

the district court

found that

Cali managed one or more individuals in a criminal enterprise

involving

five or more participants and, if so, whether that

finding was

clearly erroneous.

See
___

Tejada-Beltran, 50 F.3d
______________

at 110.

Section

shows

3B1.1(b)

only

that a defendant operated as

and the criminal activity

applies

where

the record

a "manager or supervisor

involved five or more participants

-1515

or was otherwise

the

extensive."

U.S.S.G.

Guidelines provide a list

neither exhaustive nor

3B1.1(b).

of seven factors

-- which is

imbued with "talismanic significance"

-- to assist courts in determining whether a defendant

as

leader or

Though

organizer

within

the meaning

of

acted

section

3B1.1(a), United States v. Talladino, 38 F.3d 1255, 1260 (1st

__________________________

Cir.

1994); see also Joyce,

___ ____ _____

50 F.3d at 111; U.S.S.G.

not define "[t]he terms

70

F.3d at 682.

of

control

or

In the

70 F.3d at 683; Tejada-Beltran,

______________

3B1.1, Application Note 4, they do

'manager' and 'supervisor'."

Joyce,
_____

past, we have required some "degree

organizational

authority

over

others"

to

support a section

1220.

3B1.1(b) adjustment.

Immediate or

direct

control

Fuller,
______

897 F.2d at

over subordinates

or

partners, while certainly an important factor to consider, is

not, however, a prerequisite to finding a defendant deserving

of added culpability or punishment.

at 654;

Tejada-Beltran,
______________

Payne, 63 F.3d 1200,

_____

S.

Ct.

1056

"Managerial

at 112;

United States v.
_________________

1212 (2d Cir. 1995), cert.

_____

(1996);

status

50 F.3d

See Frankhauser, 80 F.3d

___ ___________

Greenfield,
__________

[generally]

44

F.3d

attach[es]

denied, 116
______

at

if

1146-47.

there

is

evidence that a defendant, in committing the crime, exercised

control over, or was otherwise responsible for overseeing the

activities

of, at least one other person."

United States v.
________________

Savoie,
______

985 F.2d 612, 616

States v. Munoz, 36 F.3d

________________

(1st Cir. 1993);

1229, 1240 (1st

see also United

___ ____ ______

Cir. 1994), cert.

_____

-1616

denied
______

sub nom. Martinez v. United States, 115

___ ____ __________________________

(1995); see
___

S. Ct. 1164

also United States v. Webster, 54 F.3d 1, 8 (1st

____ ________________________

Cir. 1995); United States v. Castellone, 985 F.2d 21, 26 (1st

___________________________

Cir. 1993).

The

found

government

that Cali

gambling

Yerardi

served as

enterprise and

supported

by

of

that

intercepted

responsibility

provided by State Trooper

682

(government

must

preponderance of the

reveals that

this

the

court clearly

or supervisor

finding was

in the

adequately

of the

conversations between

by the

State Police,

statement,

Tutungian.

prove

role

evidence and

circumstantial evidence).

that

a manager

the transcripts

and Cali

acceptance

contends

and

affidavits

See Joyce, 70
___ _____

in

the

may do so

Cali's

F.3d at

offense

by

by relying

on

Our review of the record, however,

the court's findings

on this

issue were

less

than

clear: there is a

district

hearing

court

and

discrepancy between the findings the

made from

those

it

the

bench

offered in

at Cali's

its

sentencing

subsequent

written

judgment.

Transcripts of the sentencing hearing

the court

did conclude that

suggest that

Cali managed people

for Yerardi's gambling business:

THE

COURT:

find that the defendant's

role was more than

keeper.
part

simply that of record

He was that, as described in one

of

the

referred to as
case, but

testimony
the trial of

that was not the

-1717

that's

been

the Grabiec
limit of his

and assets

participation.

And it is my finding that

he was

also coordinating the

efforts of

others

and

others and

putting

the

that

reports

of

together

and

advising

Yerardi about managerial decisions in the

operation of this ongoing enterprise over
a substantial length of time.
Those findings, in my view, under an
appropriate

interpretation

guidelines

support a

adjustment

in

total offense
total
the

the

of

the

three-point upward
calculation

level so as

of

the

to raise that

offense level by three points from

way

it

was

calculated

by

the

presentence investigation report and thus

move it up to 13.

But the written judgment summarizing the court's findings and

decisions regarding the

adjustments and departures requested

by the

Cali does

government

supervision

omits the

alleged

and

of individuals as

not

part of

cite

management

Cali's offense.

or

It

reference to individuals and refers only to Cali's

-1818

management of assets:

Government objection to failure of PSI to

add

four levels

under

3B1.1(a)

for

alleged supervisory role is rejected, but

I find (over defendant's
an

upward

adjustment

appropriate

objection) that
of

under

levels

3B1.1(b)

is
and

Application Note 2, because the defendant

exercised

degree

responsibility over
under

the

of

management

property and assets,

direction

of

the

principal

organizer and leader.

The

government

invites

us

to

ignore

this

discrepancy and to focus instead on the district court's oral

explanation of its sentencing decisionmaking.

Ordinarily, we

would accept such

. [a] district

court's oral

materially

an invitation.

expression of

from its

rationale, appellate

at the expense

"Where . .

its sentencing rationale

subsequent written

expression of

courts have tended to

of the latter."

varies

that

honor the former

United States v. Muniz, 49

_______________________

F.3d 36, 42

n.5 (1st Cir. 1995);

Tramp, 30 F.3d 1035,

_____

Hicks,
_____

see also United States v.

___ ____ _________________

1037 (8th Cir. 1994); United States v.

_________________

997 F.2d 594, 597

(9th Cir. 1993);

United States v.
________________

Roberts, 933 F.2d 517, 519 n.1 (7th Cir. 1991)(citing cases);
_______

United States v. Khoury, 901 F.2d 975, 977 (11th Cir. 1990).
________________________

We decline, however, to do so in this instance.

Because

the

court's alternative

assets

warranted

prescribed under

written

holding

an

upward

judgment

-- that

Cali's

departure

the Guidelines -- both

-1919

and

from

the

district

management

the

of

sentence

focus on management

of assets and

all,

do not

we think

mention management

it would be

pronouncement made

by

remanding

record

could

individuals

imprudent to adhere

in this case.

resolve the conflict in

-- an

support

issue

at

to the oral

Furthermore, the

need to

the district court's 3B1.1 decisions

for clarification

even

of individuals

or

to

finding

about which

decide whether

that

we have

Cali

the

managed

considerable

doubt

--

is

holding.

obviated

existence

of

the secondary

It provides an alternative basis for upholding the

fifteen-month

whether a

sentence

Cali received.

We

do not

sufficient factual predicate existed

the defendant was

meaning

by the

of

a manager of other

section

3B1.1.

We

decide

to find that

individuals within the

proceed,

instead,

to

discussion of the district court's upward departure holding.

U.S.S.G.
3B1.1(b) Role in the Offense Departures
U.S.S.G.
3B1.1(b) Role in the Offense Departures
__________________________________________________

As an alternative to its upward adjustment holding,

the

district

conducted

court

during

his

business

justified a

section

3B1.1(b), to

held

that the

involvement

three-level

impose a

asset

in

upward

management

Yerardi's

Cali

gambling

departure,

sentence corresponding

under

to a

total adjusted offense level of thirteen.

The district court

found that Cali operated as more than a bookie or mere record

keeper

and

Yerardi's

that

the

threats

gambling and

conduct outside

the

of

violence

loansharking businesses

heartland

-2020

of

other

which

marked

took Cali's

section

3B1.1(b)

offenses.

Cali assigns error.

He argues,

first, that the

facts of his case do not support a conclusion that he managed

assets

and,

second,

reflects asset

conduct

offenses.

that

the record,

to

management at all, does not

falls outside

See Rivera,
___ ______

the

heartland

994 F.2d

contends that Rivera's heartland

______

at

of

947.

the

extent

it

suggest that his

section

3B1.1(b)

The government

analysis does not apply and

urges us to accept the district court's findings of fact.

Before addressing

rules pertaining

the Guidelines.

these arguments, we

to departures from

discuss the

sentences prescribed by

Prior to the Court's recent decision in Koon

____

v. United States, Nos. 94-1664, 94-8842, 1996 WL 315800 (U.S.

________________

June 13, 1996), appellate courts were expected to engage in a

three-part

departure

analysis.

See
___

United
States v.
___________________

Campbell, 61 F.3d 976, 984 (1st Cir. 1995), cert. denied, 116
________
_____ ______

S. Ct. 1556 (1996); Rostoff, 53 F.3d at 404; United States v.

_______
________________

Jackson,
_______

30 F.3d

199,

202

conducted plenary review of

case

were,

permitted

in

the

(1st

1994).

We

first

whether the circumstances of the

principle, of

district

Cir.

court

kind

to

that the

consider,

Guidelines

"with

'full

awareness of, and respect for the trier's superior "feel" for

the

case' .

. .

."

Rivera, 994
______

United States v. Diaz-Villafane, 874

________________________________

F.2d at

951-52 (quoting

F.2d 43, 50

1989)); see also United States v. Bennett, 60 F.3d

___ ____ _________________________

(1st Cir.

902, 904

(1st Cir. 1995); United States v. Pelkey, 29 F.3d 11, 14 (1st

_______________________

-2121

Cir. 1994). We then

reviewed the district court's departure-

related findings of fact for clear error.

14.

Pelkey, 29 F.3d at
______

Finally, we assessed the reasonableness of the departure

taken.

Id.
___

Koon effectively merges the first and second stages

____

of our

departure analysis into

review of

the legal

underlying

the

one, and instructs

conclusions and

district

court's

that our

factual determinations

departure

decision

conducted under a unitary abuse-of-discretion standard.

Koon, 1996 WL 315800

____

an occasional case,

at *9.

"That a

may call for a legal

discretion."

while other

Id. at
___

conduct in evaluating

*9-10.

determination does

parts are labeled

Thus,

See
___

departure decision, in

not mean, as a consequence, that parts of the

labeled de novo

be

review must be

an abuse

the analysis

of

we must

departure decisions entails reviewing,

under an

abuse of discretion standard,

determination that

the case

sufficiently

unusual

guideline's

heartland.

review

to

[district court's

it

out

See id. at *12.

___ ___

review to

of

our pre-Koon
____

Id. at 10.
___

the

applicable

determine that

the

not guided by

Additionally,

review process, requires

assess the reasonableness of the departure taken.

-2222

make it

Abuse of discretion

exercise of] discretion was

erroneous legal conclusions."

analysis, like

presents features that

take

necessarily "includes

the district court's

our

us to

Decisions

to depart

from sentences

prescribed by

the Guidelines are generally only permitted in cases in which

unusual or

atypical circumstances justify

sentence more than the

Guidelines permit.

(1st Cir. 1991);

U.S.C.

3553(b).

individualizing a

relatively narrow strictures that the

United States v. Calderon, 935 F.2d 9, 11

_________________________

see also
___ ____

Koon, 1996
____

WL 315800

at *7;

18

In general, departure decisions fall into

one

of

three

encouraged.

departures

national

categories:

Grandmaison,
___________

are

F.3d

departure

on these

discouraged,

at

inter
_____

560.

alia,
____

origin, creed, religion, or

Sentencing

atypical

77

those based,

Id.; Rivera, 994 F.2d at

___ ______

"The

forbidden,

grounds,

or extraordinary."

"Forbidden

on race,

sex,

socioeconomic status."

948-49; U.S.S.G.

Commission . .

and

. has

5H1.10, 5H1.12.

expressly precluded

even where

they

Grandmaison,
___________

make a

77 F.3d

case

at 560.

"Discouraged departures involve factors which were considered

by

the

Commission--such

as

age,

family

ties

and

responsibilities, employment

record, good works, or physical

condition--but which present

themselves to an

degree in a

particular case."

Id.

extraordinary

"Encouraged departures,

___

in

contrast, involve

considerations not

into account by the Commission."

The departure

category

in

which

departure falls."

the

analysis

feature

previously

Id.
___

"varies depending

[or

activity]

on

the

justifying

United States v. DeMasi, 40 F.3d

_________________________

-2323

taken

1306,

1323 (1st Cir. 1994), cert. denied sub nom. Bonasia v. United
_____ ______ ___ ____ _________________

States,
______

starting

departure

conduct

115

S. Ct.

point

for

decision

was

947 (1995).

our

must

more

offenders.

contends

that such

The

"upward departure

the

into

than

of

that

that the

district

an inquiry

government

context

departures are encouraged.

the Commission.

be

of

an investigation

role-in-the-offense

Section

review

egregious

3B1.1(b)

Cali maintains

court's

whether

other

disputes

section

this

is unnecessary

because

section

his

and

in the

3B1.1(b)

We agree with the government.

3B1.1 departures are clearly encouraged by

The

language of Application Note 2

may be warranted

. . .

-- that

in the case

of a

defendant who . .

the

property,

organization"

. exercised management responsibility over

assets,

--

or

endorses

activities

management

permissible basis for upward departure.

our

determination that

asset

management

conclusion that

as

section

of

of

conduct

has explicitly

not incorporate

lead

us

to the

authorized to depart

without first engaging in the analysis Cali urges.

Commission

as

This endorsement and

factor

the district court was

criminal

assets

3B1.1 does

a sentencing

identified certain

Where the

activities or

as a factor not adequately taken into account in its

formulation of a particular guideline and that guideline does

not

incorporate that factor at all, we can be confident that

the

departure undertaken

was not

unreasonable.

See Koon,
___ ____

-2424

1996

WL 315800

at

*8; Rivera,
______

994 F.2d

at 948;

see also
___ ____

United States v. Diaz-Martinez, 71 F.3d 946, 952-53 (1st Cir.

______________________________

1995)(reviewing

encouraged

departure); Rostoff,
_______

53 F.3d

U.S.S.G.

at

2K2.1

406 (reviewing

upward

encouraged

U.S.S.G.

2F1.1

Quinones,
________

26

downward

F.3d

encouraged U.S.S.G.

"heartland"

departures

315800

analysis

213,

departure);

218

generally

DeMasi, 40
______

for

cases

departure).

190-91

F.3d at 1323

involving

Management

of

3B1.1 and hence

discouraged

1996 WL

United States v.
________________

1994)(Breyer,

(describing process

discouraged

Resort to the

See Koon,
___ ____

(1st Cir.

enterprise's assets is conduct which,

2 to section

1994)(reviewing

for

F.3d at 1240;

F.3d 188,

C.J.); compare
_______

reserved

unnecessary.

at *8; McFarlane, 64
_________

comparing

Cir.

5K2.8 upward departure).

is, therefore,

Mendez-Colon, 15
____________

(1st

United States v.
__________________

reasons

large-scale

for

criminal

under Application Note

as a matter

of law, places

defendant outside

who participate in

the heartland of

offenses by

individuals

large-scale criminal enterprises

do not manage assets.

but who

See Rivera, 994 F.2d at 948.

___ ______

Having concluded that the relevant circumstances of

Cali's

case constitute

under the Guidelines,

analysis.

encouraged

we proceed

Cali asserts that the

found that he managed

persuasive

an

picture

to the next

his

role

-2525

departure

stage in

our

district court erroneously

gambling assets.

of

basis for

in

While Cali

paints a

Yerardi's

gambling

business, we cannot

discretion.

record,

say that the

"[W]hen there

the sentencing

also Munoz, 36
____ _____

F.3d at

are two plausible

court's

cannot be clearly erroneous."

district court abused

adoption of

its

views of

one such

St. Cyr, 977 F.2d at

_______

the

view

706; see
___

1240; United States v. Brewster,

__________________________

F.3d 51, 55 (1st Cir. 1993); Savoie, 985 F.2d at 616.

______

The government presented evidence which was a solid

basis

for the district

court to conclude

that Cali managed

assets

and

was

more than

operator" in Yerardi's

the

business.

information Cali recorded

possession of

mere

great value to

"bookie"

or "telephone

The record reveals

and analyzed was

that

an asset or

the gambling enterprise.

See
___

Webster's II New Riverside University Dictionary 131 (1994).

_________________________________________________

It

also shows that Cali

for various agents, as

reviewed betting

presided

over

participated

gambling

"charting"

organization's risk of

395

a bookie might do, but

and makeup figures with

the

in

fielded calls from

loss.

Compare
_______

i.e.,

also directly

the individual who

enterprise,

--

and placed bets

Yerardi,

and

assessing

the

Parmelee, 42 F.3d
________

at

(control of plane inherent in role of pilot for criminal

enterprise).

Though Yerardi seems to have made the decisions

about

when and whom to

responsibility

for

chart, the record

keeping

the

suggests that the

organization's

records,

calculating the business's risk of loss on particular events,

and assisting Yerardi in assessing the organization's overall

-2626

financial

health

primarily

rested

with

Cali

and

his

counterpart, DeAngelis.

The transcripts of calls intercepted

by

in

the

State

exercised

Police,

discretion

information

and

or

that

particular,

control

Yerardi

over

suggest

the

heavily

that

Cali

organization's

relied

on

Cali's

expertise and special knowledge of the business's operations.

We, therefore,

that Cali

do not think the

district court's conclusion

managed assets or enjoyed

executive status within

the gambling enterprise implausible.

Nor do we think

by the

district court

219.

The

three-level

sentence tabulated

month

increase

in

the extent of the

unreasonable.

upward

departure taken

Quinones,
________

departure

26 F.3d

at

from

the

taken

under the Guidelines represents

the

maximum sentence

Cali

a three-

could

have

received and an even smaller increase in the actual time Cali

will serve in prison.

Because of this, the reasons given for

the upward departure, and the deference due

the district

the

that

court developed for this case in presiding over

legal proceedings

the upward

reasonable.

decision

the special feel

for Cali's

departure

See Rostoff,
___ _______

regarding

co-conspirators,

the district

court imposed

53 F.3d at 409 (judgment

extent of

departure

district court's).

V.
V.

CONCLUSION
CONCLUSION
__________

we find

is

was

call for

ultimately the

-2727

For

the

foregoing

reasons, Cali's

sentence of imprisonment is affirmed.

affirmed
________

fifteen-month

-2828