
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 92-2300                              UNITED STATES OF AMERICA,                                      Appellee,                                          v.                                     AARON STERN,                                Defendant, Appellant.                                 ____________________        No. 93-1047                              UNITED STATES OF AMERICA,                                      Appellee,                                          v.                                   LAWRENCE GORDON,                                Defendant, Appellant.                                 ____________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. William G. Young, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                                Boudin, Circuit Judge,                                        _____________                     Coffin and Campbell, Senior Circuit Judges.                                          _____________________                                 ____________________            Martin D. Boudreau for appellant Aaron Stern.            __________________            Lawrence Gordon on brief pro se.            _______________            Paul  G.  Levenson, Assistant  United States  Attorney, with  whom            __________________        A. John  Pappalardo, United  States  Attorney, was  on  brief for  the        ___________________        United States.                                 ____________________                                   January 20, 1994                                 ____________________                 BOUDIN,  Circuit Judge.    The  Miller  Act,  40  U.S.C.                          _____________               270a-f  requires all  contractors  bidding for  government            construction   contracts  in  excess   of  $25,000   to  post            performance  and payment  bonds, and  the  Air Force  further            requires  that a  bid bond  accompany  the bid  itself.1   In            order to qualify for  consideration, contractors must  submit            bonds  issued  by  companies approved  by  the  United States            Treasury  and listed  in  Treasury  Department Circular  570,            commonly called the "T-list."  See  48 C.F.R.   28.202(a)(1).                                           ___            The  bonds  must  also be  submitted  on  standard government            forms:   SF 24 (bid  bond), SF 25  (payment bond) and  SF 25A            (performance bond).                 Defendant  Lawrence  Gordon  was   the  head  of   Tower            Associates, Inc.,  a Winchester,  Massachusetts, construction            company   seeking  to  secure   a  contract  to   renovate  a            photography  laboratory at Hanscom Air Force Base in Bedford,            Massachusetts.  In September 1988 Tower submitted the low bid            for  the project,  offering to  perform  the renovations  for            $1,000,200.  This bid was accompanied by a bid bond issued by            Continental Surety Company, a surety or purported surety that            did  not appear  on the  T-list and  which apparently  had no                                            ____________________                 1"Bid  bonds"  ensure  that a  contractor  will  in fact            undertake the contract if its bid is accepted;   "performance            bonds"  guarantee  that  the  contractor  will  complete  the            project  in accordance with the specifications;  and "payment            bonds" ensure that those who  furnish labor and materials for            the project will be paid.                                         -2-                                         -2-            assets.   The Air  Force employee responsible  for overseeing            the  bidding process, Lorraine  McLoughlin, did not  at first            notice  this problem  and Tower was  awarded the  contract on            September 30, 1988.                 When   shortly   thereafter  McLoughlin   learned   that            Continental was not an approved issuer, she called Gordon and            informed him that Tower's payment and performance bonds would            have to  be written by  a T-listed  company.  On  October 17,            1988,  Gordon  presented  a  payment   and  performance  bond            purportedly  issued by Amwest Surety Insurance Co., a company            that did appear on  the T-list.  The bond bore  Tower's seal,            as well as the signatures of Gordon and one "Alan Stime," who            was  listed as  Amwest's  attorney-in-fact.    The  bond  was            accompanied  by a power of attorney, purportedly from Amwest,            also signed by "Alan Stime."                 The  Amwest bond and power of attorney were counterfeits            fabricated by  James  Grier, the  principal  of  Continental.            Grier later testified  at trial  that he  produced the  bogus            documents  at Gordon's  request.   Sandra  Catalano, a  Tower            employee, testified  at trial that  she was present  when the            bond was  signed by  Gordon  and defendant  Aaron Stern,  who            signed  the  bond as  "Alan  Stime."    At trial,  an  Amwest            official testified  that the bond  was not  a genuine  Amwest            bond  and  that  no "Alan  Stime"  was  or ever  had  been an            authorized attorney in fact for Amwest.                                         -3-                                         -3-                 The Air Force  rejected the phony bond  after McLoughlin            noted that some of  the signatures on the bond appeared to be            facsimiles  and that  the purported  Amwest  seal was  poorly            impressed and  illegible.   On October  19, 1988,  McLoughlin            requested that Tower resubmit its bonds and enclosed standard            government bond forms.   The Air Force received  a second set            of bonds, on the government  forms, from Tower on October 24,            1988.   These bonds were  also purportedly issued  by Amwest,            but the typed  name of the  attorney-in-fact under the  "Alan            Stime" signature was "Aaron Stern."  By this time, McLoughlin            had been  told by an  Amwest employee that Amwest  "had never            heard of Tower Associates."                 Rather than  accept the bonds, McLoughlin forwarded them            to the  Air Force Office  of Investigations and sent  Tower a            notice to cure.   On November  18, 1988, McLoughlin  notified            Gordon of her  communications with Amwest.   After requesting            an  extension  of  time  to  submit  new  bonds,  Tower  sent            McLoughlin  a  third  set  of  bonds on  December  13,  1988,            explaining that Tower  "[had been] given a bond  which proved            invalid."   This third  set of bonds,  like the  original bid            bond, was issued by Continental  and signed by Aaron Stern as            attorney-in-fact.   As Continental  was still  not on  the T-            list, McLoughlin rejected the bonds.                 The Air Force terminated Tower's award on March 3, 1989,            and eventually  awarded the contract  (without rebidding)  to                                         -4-                                         -4-            Fellsway,  Inc., which had  submitted the second  lowest bid.            On  June 13, 1991, Gordon and Stern  were charged in a multi-            count indictment with the following offenses:                 Count 1   Gordon  and  Stern   were  both  charged  with                           conspiring to defraud the United States in the                           solicitation  and  award of  the  construction                           contract at Hanscom Air Force  Base. 18 U.S.C.                             371 (conspiracy to defraud).                 Count 2   Both    defendants    were     charged    with                           counterfeiting the  October 17,  1988, payment                           and  performance  bond purportedly  issued  by                           Amwest Surety  Insurance Company. 18  U.S.C.                             494    (making,    uttering    or   presenting                           counterfeit bond).                 Count 3   Gordon was  charged with  knowingly presenting                           the same counterfeit bond to the Air Force. 18                           U.S.C.   494.                 Count 4   Gordon  and  Stern  were  both  charged   with                           uttering to  the Air Force a counterfeit power                           of attorney. 18 U.S.C.   495 (making, uttering                           or presenting counterfeit power of attorney).                 Count 5   Both  defendants   were  charged   with  false                           statements   in   completing   and  submitting                           Standard  Form  25,  the government  form  for                           performance bonds.   18  U.S.C.   1001  (false                           statement statute).                 Count 6   Both  defendants   were  charged   with  false                           statements   in   completing   and  submitting                           Standard  Form 25A,  the  government form  for                           payment bonds.  18 U.S.C.   1001.                 After a jury trial, Stern  was convicted on counts 1 and            4, and acquitted on count 2. Gordon was convicted on count 3,            and acquitted  on counts 1,  2 and 4.   Both  defendants were            convicted on Counts 5 and 6.  Gordon moved for a new trial on            June  19, 1992,  arguing  that  the  verdict  was  internally            inconsistent and  that the  government had  withheld material                                         -5-                                         -5-            exculpatory  evidence.  The district court denied this motion            on December 18, 1992.                 On  October 13, 1992, the district court sentenced Stern            to  a 60-day  term of  imprisonment, along  with a  period of            supervised release.   Gordon  was sentenced  on November  24,            1992, to  a 30-day  term of imprisonment  and nine  months of            home confinement.  Both defendants were also held jointly and            severally  liable  for  restitution.2    These   consolidated            appeals followed.  Stern's counsel has briefed and argued the            case; Gordon, with  this court's permission, has  relied upon            his district court filings in support of a new trial.                 In  this court  both  defendants  claim  that  the  jury            verdicts are internally  inconsistent.  Gordon argued  in the            district court that since he was acquitted (under count 2) of            counterfeiting the October  17 bond, it was  inconsistent for            the jury then to convict him  (under count 3) of uttering the            same counterfeit bond.  Stern  points to his own acquittal of            the charge of counterfeiting  the bond (again under  count 2)            and  protests that this acquittal undermines the jury verdict            convicting Stern (under  count 4) of uttering  a forged power            of attorney in support of the same bond.                                            ____________________                 2Stern's  sentence  was  stayed  pending  appeal.    The            district  court denied Gordon's motion  for a similar stay on            January  19,  1993, but  this  court  stayed the  payment  of            Gordon's restitution pending appeal on August 24, 1993.                                         -6-                                         -6-                 Both objections lack  merit.  As the  defendants purport            to recognize, general  jury verdicts may not  normally be set            aside for inconsistency as between counts.  United States  v.                                                        _____________            Powell,  469  U.S.   57,  64-65  (1984);  United   States  v.            ______                                    _______________            Bucuvalas, 909  F.2d 593, 597  (1st Cir. 1990).   The reasons            _________            are explained by  Judge Friendly in United States v. Maybury,                                                _____________    _______            274  F.2d 899  (2d Cir.  1960),  and do  not need  repeating.            Maybury is relied on  by both defendants because the  appeals            _______            court there did set aside  verdicts as inconsistent.  But the            inconsistent verdicts  were there  rendered by a  judge in  a                                                              _____            jury-waived trial.   The whole point of Maybury  is that (for                                                    _______            both practical and historical reasons) the general verdict by            a jury  is a  special case but  a requirement  of consistency            does apply to written findings  made by a single judge.   Id.                                                                      ___            at 903.                 We  need not  discuss  other inconsistent-verdict  cases            cited  by defendants  because,  as it  happens,  there is  no            necessary inconsistency in the verdicts  in this case.  As to            Gordon,  there  was  evidence  from  Grier  that  he  (Grier)            fabricated the October 17, 1988, bond, but also evidence that            Gordon  knew it was counterfeit and nevertheless presented it            to the Air Force.  The jury may have supposed (quite wrongly)            that Grier's admission entirely lifted responsibility for the            counterfeiting from Gordon's  shoulders but also  permissibly                                         -7-                                         -7-            believed  that  Gordon uttered  the  bond  knowing  it to  be            forged.3                 Similarly,  the  acquittal  of Stern  on  the  charge of            counterfeiting the same bond, again quite possibly because of            Grier's admission,  is in  no way  inconsistent with  Stern's            conviction for uttering  to the Air Force the companion power            of attorney document knowing it to be forged.  In addition to            other  evidence to support the uttering conviction, there was            direct  testimony  from Sandra  Catalano  that  Stern himself            signed the bond using the phony signature "Alan Stime."                   Whether or  not Stern,  Gordon or  both could  have been            convicted of procuring or participating in the counterfeiting            of the bond itself is irrelevant.  It is sufficient to dispel            the taint of inconsistency that a rational jury  could easily            have acquitted on count 2  while convicting Gordon on count 3            and  Stern on  count 4.   And,  as explained  at the  outset,            inconsistency  would   not   in  any   event  undermine   the            convictions  so  long as  they themselves  were, as  they are            here, supported by sufficient evidence.  See Powell, 469 U.S.                                                     ___ ______            at 67.                                            ____________________                 3Gordon's  claim that  the  conspiracy acquittal  (under            count  1) is inconsistent with the uttering conviction (under            count 3)  is even more  far-fetched.  True, the  uttering was            charged as an  act in furtherance  of the conspiracy.   But a            literal  minded jury might  believe that the  uttering itself            was   proved  amply  but  that  the  "agreement"  element  of            conspiracy had not been established.                                         -8-                                         -8-                 Next,  Gordon claimed  in the  district  court that  the            government violated its obligation, under  Brady v. Maryland,                                                       _____    ________            373  U.S. 83  (1963),  to  produce  exculpatory  evidence  by            failing to turn over the  grand jury testimony of Grier, whom            Stern called as  a witness.  The background is  this:  Grier,            called by Stern as a defense witness, was then cross-examined            by Gordon's counsel--not by the  government.  On this  cross-            examination, Grier proceeded to testify that Gordon had asked            Grier to  forge the October  17, 1988 bond.   Although Gordon            was acquitted of  that forgery, he was convicted  of uttering            the  forged  bond,  and  the  Grier  testimony--elicited   by            Gordon's own  counsel--may have  helped  to confirm  Gordon's            knowledge of the forgery.                 After conviction  Gordon learned that  Grier, testifying            in  the grand  jury prior  to trial,  had himself  denied any            knowledge  of  the bond.    Gordon  moved  for a  new  trial,            contending that the government's failure to produce the grand            jury testimony at  trial as impeaching evidence  violated its            obligation under  Brady.   In pre-trial  requests Gordon  had                              _____            asked in general  terms for Brady material, but  he had never                                        _____            specifically  requested  production  of  prior statements  or            testimony by Grier.  The  district court denied the new trial            motion, citing United States v. Pandozzi, 878 F.2d  1526 (1st                           _____________    ________            Cir. 1989), and United States v. Carrasquillo-Plaza, 873 F.2d                            _____________    ____________ _____            10 (1st Cir. 1989).                                         -9-                                         -9-                 Under the Jencks  Act, 18 U.S.C.   3500,  the government            is required to produce prior statements by its own witnesses,            whether or  not the  statements are exculpatory.   And,  if a            statement is  itself exculpatory, the  government under Brady                                                                    _____            is normally required to produce it, regardless of  whether it            is made by a trial witness. See Brady, 373 U.S. at 86.  Here,                                        ___ _____            says the government, Grier's grand  jury testimony was not  a            prior  statement  by   a  government  witness,  nor   was  it            exculpatory in the sense that it disproved Gordon's guilt.                    Thus, in the government's view, the grand jury testimony            is  merely newly discovered  impeaching evidence.   Under the            Wright-Martin  standard  for  a  new  trial  based  on  newly            _____________            discovered  evidence, the ordinary requisites for a new trial            on this ground  are specific and demanding.4   Gordon may not            have met any of the requisites, and he certainly did not meet                     ___            the requirement  that the  newly discovered  evidence be  (at            least  in the  normal case)  "not merely  . .  . impeaching."            Martin, 815 F.2d at 824 (quoting Wright, 625 F.2d at 1019).            ______                           ______                                            ____________________                 4A  new trial will ordinarily be denied absent a showing            that                 (1)  the evidence was unknown or unavailable to the                 defendant at the time of the trial;  (2) failure to                 learn  of the  evidence  was  not  due to  lack  of                 diligence  by the defendant;   (3) the  evidence is                 material, and not  merely cumulative or impeaching;                 and (4)  it will  probably result  in an  acquittal                 upon retrial of the defendant.            United States v. Martin, 815  F.2d 818, 824 (1st Cir.), cert.            _____________    ______                                 _____            denied, 484 U.S. 825 (1987) (quoting United States v. Wright,            ______                               _____________    ______            625 F.2d 1017, 1019 (1st Cir. 1980)).                                         -10-                                         -10-                 Thus Gordon's only hope is  to argue that the grand jury            testimony did have to be produced under Brady in which event,                                                    _____            as  the government notes, the Wright-Martin standard does not                                          _____________            invariably apply. See United States v. Sanchez, 917 F.2d 607,                              ___ _____________    _______            617  (1st Cir.  1990),  cert. denied,  499  U.S. 977  (1991).                                    ____________            Rather,  there is a general obligation to produce exculpatory            testimony and failures to comply are reviewed  after the fact            under the standard  of United States v. Bagley,  473 U.S. 667                                   _____________    ______            (1985).  Bagley  is somewhat  opaque, there  being no  single                     ______            majority opinion, but  reversal may be warranted  where there            is a  "reasonable probability" that  the undisclosed evidence            would havealtered the outcome. Id. at 682(plurality opinion).                                           ___                 Here the grand jury testimony was not exculpatory in the            sense  that, reading  the  bare  language  before  trial,  an            assistant U.S.  attorney would  think it  helpful to  Gordon.            After  all, in the  testimony Grier  denied knowledge  of the            forgery, a  position that could  be neutral in its  impact on            Gordon or  even potentially  harmful to  Gordon (in  shifting            responsibility  to someone  other than  Grier).   Only  after            Grier, as  a defense witness  for Stern, named Gordon  as the            procurer of the forgery did  the grand jury testimony take on            a potential as impeaching evidence.                 The  government  protests   that  it   has  no   ongoing            obligation  to monitor the testimony of defense witnesses and            to  seek out prior  statements in its  files that  may in the                                         -11-                                         -11-            course of  trial  turn out  to  have impeachment  value  when            defense testimony injures  a defendant.  Even if  it did have            such an obligation in some instances, there would be  serious            questions--not  easily answered  on  this record--whether  in            this   case  Gordon's  own   access  to  Grier   negated  the            obligation, see United States v.  Hicks, 848 F.2d 1, 3-4 (1st                        ___ _____________     _____            Cir. 1988), and whether the  failure of Gordon to request the            grand jury testimony  is also fatal to the Brady  claim.  Cf.                                                       _____          __            18  U.S.C.    3500(b) (request  by  defendant required  under            Jencks Act); Carrasquillo-Plaza,  873 F.2d at 13  (failure to                         __________________            make a specific request for alibi witness statements).                 We think that these interesting questions had best await            another  occasion.   It  is  enough  in  this case  that  the            impeaching  evidence, even if made available to Gordon, could            not  conceivably have  altered the  outcome.   See  generally                                                           ______________            Pandozzi, 878 F.2d at 1528-30.   The jury acquitted Gordon on            ________                                  _________            the counterfeiting  count despite Grier's  direct inculpation            of Gordon; and the  knowledge element of the  uttering count,            on  which Gordon was  convicted, was confirmed  by the direct            testimony of another witness, Catalano,  as well as much else            in Gordon's conduct.   Under Bagley, the  impeaching evidence                                         ______            does  not remotely "undermine confidence" in the outcome. 473            U.S. at 682.                 The final issue in this  case is the most perplexing and            relates  solely   to  sentencing.     Under  the   Sentencing                                         -12-                                         -12-            Guidelines,5 the amount  of "the loss" is a  specific offense            characteristic of crimes  involving fraud or deceit,  and the            base  offense level  (6 levels) is  increased by  a specified            number of levels  (from 0 to 11  additional levels) depending            on the  amount of the  loss.  U.S.S.G.    2F1.1 (1988).   The            adjusted  offense  level,  together  with  criminal  history,            determines the sentencing range, and actual loss  may also be            the basis for a restitution order. 18 U.S.C.   3663(b)(1).                 In  this  case, following  the pre-sentence  report, the            district court found  that the loss to  the Air Force  of the            fraudulent  activities  in  this  case  was  "the  difference            between the bid price [by  Tower] and the award [to Fellsway,            the  second  lowest  bidder] for  $88,477,  increased  by the            restated administrative costs of $250" involved in reawarding            the contract  to Fellsway.   The  resulting figure,  $88,727,            increased the  base offense  level from 6  to 11,  U.S.S.G.              2F1.1(b)(1) (1988), and  this in turn was increased  to 13 by                                            ____________________                 5The   pre-sentence   report   referred   to  the   1988            guidelines,  which  were   in  effect  when  the   crime  was            committed.    Current  practice  would  normally  invoke  the            guidelines  in effect  at the  time  of sentencing--the  1991            version  for Stern and  the 1992 version  for Gordon--barring            any ex post facto problems.  See Isabel v. United States, 980                _____________            ___ _______________________            F.2d 60, 62  (1st Cir. 1992).   But since  the 1991 and  1992            guidelines employ a  new loss/increase- in-level  table which            would have resulted  in a higher base offense  level for both            Stern and Gordon than provided for under the 1988 guidelines,            we  cite  to  the  1988   version.    See  United  States  v.                                                  ___  ______________            Harotunian, 920 F.2d 1040, 1042 (1st Cir. 1990).            __________                                         -13-                                         -13-            the  addition  of two  more  levels  for  "more than  minimal            planning."  Id.   2F1.1(b)(2).                        ___                 The loss attributed to Stern may well have had no effect            on his sentence  of confinement; a downward  departure, based            on assistance to  the government, reduced his  confinement to            below the minimum range that  would have prevailed if no loss                                                                  __            had  been   attributed  to   him.     Gordon's  sentence   of            confinement, also  based on  a downward  departure, might  or            might  not  have  been  affected  by  a  lower  loss  figure,            depending on  how small  a loss was  imputed.6  But  based on            the imputed loss of $88,727,  both defendants were ordered to            pay  restitution--Stern to pay $88,727 and Gordon $80,000--so            the importance of the loss figure is obvious.                 At this  point, some procedural  history is needed.   In            the district  court, both  defendants challenged  the $88,727            loss figure on somewhat different grounds.  Then, while these            appeals were pending, someone apparently happened  upon Judge            Posner's decision in United States v. Schneider, 930 F.2d 555                                 _____________    _________            (7th Cir. 1991), which undoubtedly made the government uneasy            about the  loss calculation in this case.   In any event, the            government and  defendants entered into a  joint stipulation,                                            ____________________                 6Gordon's departure was based on the theory that the Air            Force could  have rebid the  entire contract  for $10,000  (a            figure supplied by the Air Force), instead of merely awarding            it  to the previous second lowest bidder.  Cf.  United States                                                       ___  _____________            v.  Gregorio, 956  F.2d 341,  344-48  (1st Cir.  1992).   The                ________            government did not appeal this departure.                                         -14-                                         -14-            proposing  that this court  remand the case,  before deciding            the merits, for  resentencing in light of  Schneider; and the                                                       _________            parties stipulated further that                 1.   The parties  jointly stipulate  that the  best                 readily  calculable measure  of the  loss from  the                 offenses of  conviction, for  purposes of  applying                 the  Sentencing  Guidelines,  is  $ 20,450.    This                 amount  includes both an attempted gain of $ 20,200                 (the purchase price for a  genuine bond of the kind                 that  was   forged  in   this  case),   and  actual                 consequential  losses  of  $  250 (the  immediately                 identifiable administrative  costs associated  with                 the  re-awarding  the   Photolab  contract).    For                 purposes of ordering  restitution, only the  actual                 loss figure, $ 250 is subject to restitution.                 2.  The United States further reserves the right to                 argue    that    the    stipulated    amount--while                 representing   the   best   readily   ascertainable                 estimate of  loss--understates the  full extent  of                 the  loss in question.   The United  states further                 reserves the right  to argue that, given  the small                 sum of restitution payable, fines should be imposed                 upon each  defendant, in an  amount to be  fixed in                 light of the defendants' resources.                 This court denied  the motion to remand,  believing that            the challenges to the convictions ought to be decided  before            any remand for fine-tuning the  sentences.  Stern, taking the            view  that the  stipulation  was binding  only if  this court            ordered an immediate remand, has  argued in his brief in this            court that no  loss, apart perhaps from the  $250 involved in                       __            shifting the  award to the  second bidder, has been  shown by            the government.  The government  adheres to its request for a            remand in accordance with the stipulation, arguing that Stern            has waived  the contention  he now makes.   Gordon  has urged            nothing beyond the stipulation.                                         -15-                                         -15-                 It would  be a  hazardous venture to  lay down  abstract            rules  as  to  how  "loss"  is to  be  calculated  under  the            governing guideline even if the focus were narrowed to  false            statements in bid  documents.  As Judge Posner  made clear in            Schneider, the  underlying  facts  of  individual  cases  may            _________            differ  widely, and even in comparable situations, what proof            is available as to specific items of loss will vary from case            to case. See 930 F.2d at  557-59.  Further, we note that  the                     ___            deceptively simple notion  of "loss" is elaborated  under the            guideline  to include situations  of foreseeable  or intended            losses, see U.S.S.G.   2F1.1,  application note 7 (1988), and                    ___            in later  versions to cover various specific  types of fraud,            e.g.,  id.,  application  note 7(e)  (1993)  (Davis-Bacon Act            ____   ___            fraud).                 If  we   agreed  with  the  district   court's  original            calculations of loss, we would not remand the case regardless            of the stipulation of  the parties, since the parties  cannot            by agreement create error where none exists.  On this record,            however, we  think that  there is no  basis for  mechanically            measuring the  loss as the  difference between the  two bids.            The problem is that the government never showed that it could            have secured a  bid from a properly bonded  contractor at the            price offered by Tower.  Without such evidence, it is hard to            see how  the government  can measure its  loss on  the theory                                         -16-                                         -16-            that, but for  the fraud, it would have  enjoyed that initial            low price.7                 On certain facts--say,  a general increase in  the level            of  second  round bids  after  a  rebidding due  to  fraud--a            calculation  of  loss  based on  the  differential  between a            tainted first-round best  bid and a higher  second-round best            bid  might be entirely  persuasive.  But  here the government            simply  took  the   second  best  first-round  bid   with  no            rebidding; and its administrative costs in shifting the award            from Tower to  Fellsway were admittedly minimal ($250).   The            probation  reports and the  government urged the  loss figure            adopted  by  the  district judge,  and  the  defendants while            protesting did  little to undermine  it.  Yet  the government            itself no longer supports the $88,275 figure, and we can find            no basis to sustain it on the present record.                 Conversely, we reject Stern's "no loss at all" argument,            at least so  far as concerns the guideline  calculation.  The            section  2F1.1 guideline  commentary,  from the  1988 version            (application note 7)  to the present 1993 version  (id.), has                                                                ___            included  the  "probable"  or "intended"  or  "expected" loss                                            ____________________                 7It is true that if the Amwest bond had been a real bond            instead of a forgery, then  the government would have enjoyed            the original  low price;  and in this  sense the  forgery may            seem like the cause of that  loss.  But there is no  evidence            ____            that Tower Associates could ever  have secured a real bond by            a T-list surety or, if it could, that its bid would have been            as low.  Indeed, Continental  seems to have been an off-shore            "front" for contractors who could not get T-list bonding.                                         -17-                                         -17-            threatened by a defendant's conduct as an alternative measure                                                      ___________            of  loss if that figure can be  determined and is larger than            actual loss.  The evident purpose of the alternative is to be            certain  that attempted fraud does not escape all adjustments            based  on magnitude merely because the  fraud miscarried.  We            think that  this is  just such a  case where  the foreseeable            loss exceeded the actual loss.                 It was plainly foreseeable at the time of the fraud that            the Air Force might be deceived by the phony Amwest  bond and            might finally award the contract to Tower.  At that point, it            is  hard  to know  the precise  risk of  loss imposed  on the            government,   for  it  would  depend  on  many  circumstances            including the likelihood that Tower would flawlessly complete            the contract.  Yet "the amount of loss  need not be precise,"            U.S.S.G.    2F1.1, application  note 7  (1988); and,  broadly            speaking, to inflict  a phony  construction-contract bond  on            the government  exposes the government to the average cost of                                                          _______            failure to perform the contract adjusted  by the average risk                                                             _______            of failure to  perform.  That adjusted figure  should also be            the approximate price of the average bond for such a project.            Of  course, the  pertinent  figure  could  be higher  if  the            government  sought  to  prove  that  Tower  was  a  high-risk            contractor and would have been charged more for a valid bond.                                         -18-                                         -18-                 To assume that the phony bond might well be accepted is,            in  a  case  like  this  one,  entirely  fair.    It  is  the            defendants' intended outcome and, given possible carelessness            by administrators or merely a  good forgery, it is normally a            realistic likelihood.  From the standpoint of the guideline's            "intended or probable  loss" criterion, we see  nothing wrong            with the use of the cost of  a valid bond as a fair proxy for            the potential loss  caused by the uttering of  the phony bond            and forged  power of attorney.   In this case,  the potential            was not  realized, but  it was still  intended or  reasonably            likely and thus a proper measure of loss under the guideline.                 Consequently, we think that the principle underlying the            first paragraph  of the  quoted stipulation  is a  legitimate            basis in this case for calculating loss under  the guideline;            whether the  $20,200 figure is  binding on Stern is  a matter            that can be resolved on remand if Stern seeks to disclaim the            stipulation.8  Of course,  the government did not offer  such            evidence  of bond cost in the original sentencing proceeding;            but   where  a   sentence  is   vacated   and  remanded   for            redetermination under  correct principles, the  government is            not automatically foreclosed from offering evidence pertinent                                            ____________________                 8The   district  court  is  not  required  to  accept  a            stipulation on an issue of fact  pertinent to sentencing, but            is free  to do  so given the  apparent reasonableness  of the            proposed  figure.  This assumes, of course, either that Stern            withdraws his disclaimer (as he  would plainly be wise to do)            or  that  the   district  court  decides  that   his  initial            acceptance of the stipulation is binding in any event.                                         -19-                                         -19-            to the newly announced rule.  See United States v. Sepulveda,                                          ___ _____________    _________            1993 U.S.  App. LEXIS  33020, *107 n.31  (1st Cir.,  Dec. 20,            1993).                 Restitution is  a different matter.   We agree  with the            government's  concession that  the intended or  probable loss            cannot be  the measure of  restitution:  it  is one  thing to            base a criminal sentence on the magnitude  of threatened harm            but quite another to  "restore" to the government money  that            it  never  lost.   Here,  the actual  loss  is only  the $250            administrative  cost of reawarding  the contract.   Given the            common interrelationship  between fines  and restitution,  we            see no  reason why  the government should  not be  allowed to            argue for a fine on remand.                 Accordingly,  the judgment of conviction in each case is            affirmed,  and the sentence and  the orders of restitution in            ________            each  case  are  vacated  and  the  cases  are  remanded  for                             _______                        ________            resentencing  in  accordance  with  this  opinion.    Further            proceedings on remand are for the district court to determine            in the first instance.                 It is so ordered.                 ________________                                         -20-                                         -20-
