
USCA1 Opinion

	




                            United States Court of Appeals                                For the First Circuit                                 ____________________        No. 97-1164                                    UNITED STATES,                                      Appellee,                                          v.                                BERNARD F. BRADSTREET,                                Defendant, Appellant.                                 ____________________        No. 97-1204                                    UNITED STATES,                                      Appellant,                                          v.                                BERNARD F. BRADSTREET                                 Defendant, Appellee.                                _____________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                    [Hon. Richard G. Stearns, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                               Torruella, Chief Judge,                                          ___________                                Stahl, Circuit Judge,                                       _____________                              and Lynch, Circuit Judge.                                         _____________                                 ____________________            William J.  Kopeny, with whom John  W. Powell and Kopeny & Powell,            __________________            _______________     ________________        P.C. were on brief for appellant/cross-appellee.        ____            John J.  Falvey, Jr.  and  Jonathan L.  Kotlier, Assistant  United            ____________________       ____________________        States Attorneys, with whom  Mark W. Pearlstein, Acting United  States                                     __________________        Attorney, was on brief for appellee/cross-appellant.                                 ____________________                                   January 29, 1998                                 ____________________                      STAHL, Circuit Judge.  Bernard F. Bradstreet is the                      STAHL, Circuit Judge.                             _____________            former  President  and Chief  Financial  Officer  of Kurzweil            Applied  Intelligence,  Inc.,  a  Massachusetts company  that            develops and sells  voice recognition software.   Following a            twenty-day trial, a  jury convicted Bradstreet  of conspiring            to  commit securities fraud, see  18 U.S.C.   371; securities                                         ___            fraud,  see 15  U.S.C.     78j(b), 78ff(a),  and 17  C.F.R.                      ___            240.10b-5 ("Rule 10b-5"); and knowingly falsifying Kurzweil's            books and records in an attempt to conceal his fraud,  see 15                                                                   ___            U.S.C.     78m(b)(5), 78ff(a),  and 17  C.F.R.    240.13b2-2.            Thereafter,  the district  court  departed downward  from the            applicable  guidelines sentencing  range of 51-63  months and            sentenced Bradstreet to  33 months in prison,  followed by 24            months of  supervised release.   It also  ordered him  to pay            $2.3 million in restitution.                      Bradstreet appeals from his convictions on a number            of  grounds, only  two  of which  are  preserved for  plenary            appellate  review.   The  government cross-appeals  from  the            district court's sentence, arguing that, on the facts of this            case,  the  downward  departure was  not  within  the court's            discretion.    We  affirm  the  convictions  but  vacate  the            judgment and remand for resentencing.                                         -3-                                          3                                          I.                                          I.                                          __                      We  limit ourselves here  to a general  overview of            the case, deferring more detailed recitations of the facts to            later discussions of relevant issues.                      To   sell  stock  to  the  general  public  on  the            publicly-traded securities  markets, a company must apply for            and  receive  the  approval of  the  Securities  and Exchange            Commission  (SEC),  and  thereafter make  an  initial  public            offering (IPO).  In connection with the IPO, the company must            file   with  the  SEC  a  prospectus  detailing  its  overall            financial   condition  and   recent  financial   performance.            Subsequently,  it also  must make  quarterly  filings of  SEC            Forms  10-Q, which  contain information  about  the company's            financial performance during the preceding quarter.                        Sometime  in   the  early   1990's,  the   Kurzweil            management   hierarchy,  led   by  Bradstreet,   initiated  a            substantial  effort to  "take the  company public."   To this            end,   Bradstreet  established   quarterly  projections   for            revenues and profits.   Bradstreet then  pressured Kurzweil's            sales  force  to  meet these  projections  because investment            bankers  were unlikely  to  underwrite  the contemplated  IPO            unless Kurzweil  could demonstrate profitability  for several            quarters in a row.                      Companies determine quarterly profits  or losses on            either a cash or an accrual basis.  In cash basis accounting,                                         -4-                                          4            profit  or  loss  constitutes actual  dollars  received  less            actual dollars spent.  In accrual basis accounting, profit or            loss constitutes revenue  due, whether received or  not, less            expense  incurred, whether  paid or  not.   Because  informed            judgment often determines  whether and when  revenue actually            is  "due," public companies that use accrual basis accounting            must develop revenue recognition policies that both guide the            exercise of such  judgment and conform to  generally accepted            accounting principles (GAAP).                      Prior  to the decision  to go public,  Kurzweil, an            accrual  basis  accounter,  adopted  a  revenue   recognition            policy.   In  June 1992, management  circulated to  the sales            staff  a  memorandum  reminding   the  staff  of   Kurzweil's            "policies  regarding   shipment  and   revenue  recognition."            Attached to the memorandum was a document dated "7/28/87" and            labeled   "Kurzweil   Applied  Intelligence,   Inc.   Revenue            Recognition  Policy."   In  relevant  part,  it  stated  that            anticipated  revenue  should  not  be  recognized  if  "major            uncertainties .  . .  surround culmination  of the  [revenue-            generating]  transaction" or  if  "final  acceptance  by  the            customer requires an event out  of [Kurzweil's] control . . .            ."                      After an  earlier false  start, the  IPO closed  on            August 17, 1993.  Thereafter, as required, Kurzweil submitted            Forms 10-Q for the quarters  ending July 31, 1993 and October                                         -5-                                          5            31, 1993.  The essence of the government's case was that each            of these submissions  contained fraudulently-inflated revenue            figures indicating  that  Kurzweil was  profitable  when,  in            fact, it  was operating  near or at  a loss.   In  making its            case,  the government sought to prove that Bradstreet; Thomas            E.  Campbell, Kurzweil's vice  president in charge  of sales;            and  Debra J. Murray,  Kurzweil's treasurer  and also  a vice            president,  conspired to and  actually did "book"  as revenue            the  anticipated proceeds  of a  number  of contingent  sales            which  occurred in time periods covered by the prospectus and            the Forms 10-Q.  The  government also endeavored to show that            these  same individuals, along with David R. Earl, Kurzweil's            vice president in  charge of operations, engaged  in a scheme            to   conceal  the  fraud  from  the  company's  auditors  and            underwriters.  The  underlying indictment charged  Bradstreet            and   Campbell  with   conspiracy   (Count  I);   substantive            securities  fraud  in  connection  with  each  of  the  three            fraudulent  submissions (Counts  II  - IV  respectively); and            knowing  falsification of company records (Count V).  It also            charged Earl with  knowing falsification in Count  V.  Murray            had  previously entered into a cooperation and plea agreement            with the government and had waived indictment.                      The  indictment  set   forth  14  improperly-booked            "sales" (and  alluded to  a fifteenth) as  overt acts  in the            conspiracy count.   The transactions in question,  which took                                         -6-                                          6            place between June  1992 and January 1994, were  of two basic            types:  (1)  those in  which, near the  end of a  fiscal-year            quarter, a  Kurzweil  salesperson had  forged  a  prospective            customer's signature to a sales quote; and (2) those in which            the prospective  customer had signed  a sales quote,  but had            conditioned its agreement to  purchase Kurzweil equipment  on            the occurrence of  some event not within  Kurzweil's control,            such as a future commitment from a third-party purchaser.  At            trial,  the  government introduced  evidence  regarding these            transactions and several others, the defendants' knowledge of            the nature of these transactions, and the defendants' efforts            to conceal the  nature of these transactions  from Kurzweil's            auditors  and  underwriters.    These  efforts  included  the            creation of side agreements, not shown to the auditors, which            memorialized the conditions of unfinalized sales Kurzweil had            recorded as  revenue; the  forging by  Kurzweil personnel  of            responses to audit "confirmation letters" which  the auditors            had  sent  to Kurzweil  customers to  confirm the  details of            certain recorded sales;  the pretextual shipment  of Kurzweil            products to  a storage  facility in order  to create,  on the            books, the illusion of shipment to customers; and the  giving            of false explanations of the high and ever-growing percentage            of Kurzweil  revenues made up  of accounts  receivable.   The            jury acquitted Earl, but convicted Bradstreet and Campbell on            all charges.                                         -7-                                          7                                         II.                                         II.                                         ___                      Bradstreet's appellate brief presents six developed            arguments  for reversal  of his convictions,  but hints  at a            good number more.  As usual, we confine our discussion to the            issues  accompanied by  developed argumentation.   See United                                                               ___ ______            States v. Bongiorno, 106 F.3d 1027, 1034 (1st Cir. 1997).            ______    _________                      Because four  of Bradstreet's  arguments, including            the primary  one, surface  for the first  time on  appeal, we            address them together under the plain-error rubric.  See Fed.                                                                 ___            R.  Crim.  P.  52(b)  ("Plain  errors  or  defects  affecting            substantial  rights may  be noticed  although  they were  not            brought to  the attention of  the court.").  We  then address            the two arguments Bradstreet has preserved.            A.  Arguments Governed by Rule 52(b)            ____________________________________                      Bradstreet  asserts  that the  trial  court plainly            erred in failing  to give the jury two  instructions he never            requested. The first is that "the government bears the burden            of  negating  a  reasonable  interpretation  of  the  revenue            recognition  policy upon  which [its] false  statement theory            depends" [sic]; the second is that the jury must "unanimously            agree  on either  the factual  basis for  each count,  or the            precise legal theory on which  [Bradstreet] was guilty" as to            the  conspiracy  and  securities  fraud counts.    Bradstreet            further contends that  the court plainly erred  in permitting            the  indictment to have been constructively amended and/or in                                         -8-                                          8            permitting  the facts at  trial to have  varied prejudicially            from those alleged in the indictment.                        In   two  recent  cases,   the  Supreme  Court  has            emphasized  and then  reaffirmed the  circumscribed authority            Rule 52(b) confers upon appellate courts.  To  be correctable            under Rule  52(b), an  error or defect  raised for  the first            time on appeal must be "plain," meaning "clear" or "obvious,"            United States v. Olano, 507 U.S. 725, 734 (1993), at the time            _____________    _____            of  appellate consideration, Johnson v. United States, 117 S.                                         _______    _____________            Ct.  1544, 1549-50  (1997);  and  it  must  have  "affect[ed]            substantial  rights," meaning, in most cases, "[i]t must have            affected  the  outcome of  the  district court  proceedings,"            Olano, 507 U.S. at 734.  Even then, an appellate court should            _____            exercise its discretion to notice an error or defect, see id.                                                                  ___ ___            at 735-36 (noting  the permissive language of the Rule), only            if  it "seriously affects  the fairness, integrity  or public            reputation of judicial proceedings," id. at 736 (citation and                                                 ___            internal  quotation marks omitted).   Although the  Court has            not described the contours of this discretionary inquiry with            much precision, it has declined to exercise its discretion in            the  face of "overwhelming"  evidence that the  outcome would            have been the same in an error-free proceeding.  See Johnson,                                                             ___ _______            117  S. Ct.  at 1550  (involving  failure to  instruct on  an            element of the offense).  We evaluate Bradstreet's first four            appellate arguments against this unfriendly legal backdrop.                                         -9-                                          9                      1.  The Reasonable Interpretation Instruction                      _____________________________________________                      The  trial court instructed the jury that there are            three  alternative ways one can commit securities fraud under            Rule  10b-5 --  employing  a device,  scheme  or artifice  to            defraud; making  an untrue statement  of a  material fact  or            omitting to state  a material fact  necessary to prevent  the            statement made from being misleading; or engaging  in an act,            practice  or course  of  business  which  operates  or  would            operate as a  fraud or deceit  upon any person  -- and  that,            although the government need only prove one of these three to            secure conviction, the  jury's "finding must be  unanimous as            to which type  or types of conduct, if  any, have been proven            beyond  a reasonable doubt."  It also  told the jury that, to            convict  Bradstreet of securities fraud, it  had to find that            he engaged in  the fraud knowingly,  willfully, and with  the            intent to defraud.  The court  then defined for the jury each            of these concepts,  and concluded its intent  instructions as            follows:                           Because  the crimes  charged in  the                      indictment   involve   a    specific   or                      deliberate  intent  to  defraud,  a  good                      faith  belief on the  part of a defendant                      in the truth of his actions or statements                      will  necessarily  negate   that  intent.                      Even false  statements or omissions  of a                      material   fact  do   not  constitute   a                      violation of  the criminal  provisions of                      the securities fraud law unless made with                      an  intent to defraud.  This intent, as I                      told you, is one that the government must                      prove beyond a reasonable doubt.                                         -10-                                          10                           If  you were  to  have a  reasonable                      doubt as to  whether a defendant  made an                      inaccurate   statement   while   honestly                      believing that  statement to be  true, he                      cannot be held criminally liable for that                      statement, even if the statement has been                      shown demonstrably false.   Good faith is                      a  defense  to  a   crime  containing  an                      element of  specific  intent  even  if  a                      defendant's belief in  the proof [sic] of                      his statements was one  that a reasonable                      person would not have embraced.            Bradstreet  did  not  object to  these  instructions  or seek            additional mens rea instructions.                       ____ ___                      Nevertheless,  Bradstreet  now  contends  that  the            court  plainly erred  in failing  to instruct  the  jury that            Bradstreet would not  have committed securities fraud  if, in            fact, the  revenue he  knowingly booked  was properly  booked            under  any  reasonable interpretation  of  Kurzweil's revenue            recognition  policy.  Analogizing  to a false  statement case            from the Tenth  Circuit, see United States  v. Migliaccio, 34                                     ___ _____________     __________            F.3d 1517 (10th Cir. 1994),  and cases cited therein, see id.                                                                  ___ ___            at   1525,  Bradstreet  asserts   that  there  is   here  the            possibility  that the  jury  convicted him  for  one or  more            recognitions  of revenue that were, in fact, reasonable under            a  fair  construction  of  Kurzweil s  policy.    Central  to            Bradstreet's primary argument are subsidiary contentions that            the jury was presented with substantively divergent summaries            of Kurzweil s policy  in the documentary evidence and  in the            testimony  of several  witnesses, and  that  the trial  judge            never   told  the   jury  which   version  was   controlling.                                         -11-                                          11            Bradstreet also  emphasizes our inability to  ascertain which            transactions the jury  relied upon in reaching  its verdicts,            and our  putative willingness to look "more  tolerantly" on a            "failure to articulate  precisely the shape of  [a] necessary            protective  instruction" in  the context of  an unprecedented            prosecution.  See  United States v. Sawyer, 85  F.3d 713, 742                          ___  _____________    ______            (1st  Cir. 1996) (involving  a bribery prosecution  under the            federal Travel Act, 18 U.S.C.   1952).                       The government responds by denying  the premises of            Bradstreet s argument.  It contends that Bradstreet presented            as his  defense theory  lack of knowledge  of the  fraud, not            truth-in-conduct; that all witnesses  summaries of Kurzweil's            revenue recognition  policy were essentially  consonant; that            this prosecution was not nearly  so novel as the one reviewed            in Sawyer; and that Bradstreet s utter failure to argue for a               ______            reasonable interpretation instruction below is not comparable            to  the  more  forgivable  "imprecise  articulation"  of  the            argument at issue in Sawyer.                                 ______                      While  we  agree with  the  government's final  two            rejoinders,  we think the first two are seriously misleading.            On   our  reading  of  the  record,  Bradstreet  presented  a            bifurcated  defense.    As  to   the  vast  majority  of  the            transactions  at  issue,  he  denied   knowing  the  critical            incriminating facts.   But  certainly with  respect to  three            transactions  -- contemplated  sales  to Transquick,  Chicago                                         -12-                                          12            Mercy, and Willard  Hall -- and probably with  respect to two            others -- contemplated sales to HCA Nashville and HCA Plano -            -  he did defend  on the  basis that  the revenue  that these            transactions  would have  generated  was properly  recognized            under Kurzweil's policy.                        Moreover, the  jury did hear verbal descriptions of            Kurzweil's revenue  recognition policy  which, when  taken in            isolation,  appear  to  have  differed  materially  from  the            written  versions  of  the  policy  set forth  in  the  trial            exhibits.   As  we have  noted,  the written  version of  the            policy that was circulated internally at Kurzweil stated that            revenue should not be recognized if "major uncertainties .  .            .   surround   culmination    of   the   [revenue-generating]            transaction" or if "final acceptance by the customer requires            an event out of  [Kurzweil's] control . . . ."   See supra at                                                             ___ _____            5.    The  jury  also   had  before  it  notes  to  financial            statements, which had  been attached to the  prospectus, that            contained a summary of Kurzweil's policy.  In pertinent part,            these  notes stated:  "Revenue from product sales is recorded            at the time of shipment if no significant obligation relating            to  the  sale  remains and  collection  is  deemed probable."            Arguably, these documentary summaries are consistent with one            another, and  with the  synopsis of  the revenue  recognition            inquiry Bradstreet himself presented to the jury:  "Are there            any major uncertainties and is collection probable?"                                           -13-                                          13                      They are not, however, entirely consistent with the            explanations of the applicable revenue recognition principles            provided by two of the government's more important witnesses:            Debra Murray, Kurzweil's treasurer, and Harvey Creem, who led            Kurzweil's auditing  team up  to and through  the IPO.   Both            Murray  and Creem used language  which might suggest that the            applicable principles were stricter than the written versions            of the policy seemed to indicate.                      After  being  shown a  copy of  Kurzweil's internal            policy,  Murray  described  it  as  requiring  that  a  "firm            contract [exist] before any goods could be shipped"; that the            goods "be shipped  to the customer and stored  at a warehouse            only at the request of a customer and that they were going to            be paying for the storage [sic]"; and that "there . . . be no            obligations  beyond the company's  control."  She  also noted            that  Kurzweil's policy was  in compliance with  GAAP.  Creem            framed  his testimony  in terms  of GAAP, and  not Kurzweil's            written  policy, stating  that income  must  be "earned"  and            "realizable"  to  be   recognizable:    "Putting   that  into            Kurzweil's terms, Kurzweil would have delivered to a customer            a product that the customer  wanted, and the customer has the            ability to pay and is obligated to pay, both."                          If  Bradstreet  had   argued  that  there  was   an            interpretation of Kurzweil's revenue  recognition policy that            differed  materially from  the  government's and  under which                                         -14-                                          14            certain of the recognitions of  revenue at issue in this case            would have been proper, the  trial court, upon request, might            well  have  been obliged  to  give some  sort  of "reasonable            interpretation" instruction.  After all, where the government            must prove, as an element of the offense, falsity or, as here            (at  least with respect to the  second and third of the three            securities fraud scenarios described by Rule 10b-5, see supra                                                                ___ _____            at 9-10),  something akin  to falsity;  where the  government            also must prove intent to defraud; where a defendant advances            an understanding of the principles by which truth and falsity            are  judged that  differs from  that of  the government;  and            where  the defendant's actions might have been truthful under            such an understanding, the government cannot carry its burden            without  first  demonstrating  the  unreasonableness  of  the            contrary  understanding.  See Migliaccio, 34 F.3d at 1522-25.                                      ___ __________                      In   this    case,   however,    Bradstreet   never            affirmatively claimed,  either in testimony  or in  argument,            that  his  underlying   understanding  of  Kurzweil's  policy            differed  from that  of Harvey  Creem, Debra  Murray, or  the            government.    Nor did  he  suggest that  ambiguities  in the            policy  made  such  a contrary  understanding  possible.   He            merely testified that, in his judgment and on his view of the            hotly-contested facts,  certain  of the  transactions put  in            issue by the  government properly triggered a  recognition of                                         -15-                                          15            revenue under Kurzweil's  policy.  In light of  this, we take            Bradstreet's characterization of Kurzweil's written policy, a            document to  which his lawyer drew his  attention just before            he gave  his characterization, to  be only a synopsis  of the            document.  We do not take it to be a de  facto assertion that                                                 __  _____            Bradstreet's baseline  understanding of  the policy  differed            from that of the government, or that a contrary understanding            was possible.   And  absent such an  assertion, there  was no            need  for  the   instruction  Bradstreet  now  contends   was            necessary.                        The transcript demonstrates that the parties  tried            this case on disputed historical facts and the inferences  to            be drawn  from those  facts.   The principles  underlying the            policy by which Bradstreet's conduct was to be judged, though            summarized  variously  and,  perhaps,  carelessly,  were  not            controverted;  they  seem to  have been  commonly understood.            This is enough to differentiate this case from Migliaccio and                                                           __________            the cases on which  it relies.  And it is  enough to convince            us  that the  trial  court's  failure to  give  a sua  sponte                                                              ___  ______            reasonable interpretation  instruction was  not plain  error.            On this  record, there  is no basis  for concluding  that the            jury's verdict would have been  different had the trial judge            given the now-suggested instruction.  Cf. Johnson, 117 S. Ct.                                                  ___ _______            at 1550.                      2.  The Remaining Plain Error Claims                        ____________________________________                                         -16-                                          16                      Bradstreet's remaining claims  of plain error merit            less  discussion.   As  we  have  observed, the  trial  judge            informed the  jury that it must unanimously  agree upon which            of  the three types of securities fraud Bradstreet committed.            See supra  at 9-10.   In view  of this, we  are at a  loss to            ___ _____            comprehend Bradstreet's  suggestion that  the jury never  was            told to agree  on a precise legal  theory of guilt as  to the            securities fraud and conspiracy counts.                         With respect to  the argument that the  jury should            have been  told that it must "unanimously agree  on . . . the            factual  basis for  each count,"  we simply  note that  it is            unaccompanied by  citation to  any case  which even  remotely            supports it, and that, although this area of the law is still            developing, the weight  of the relevant authority  appears to            be against  requiring juries  to reach  factual unanimity  in            circumstances  such as these.   See McKoy  v. North Carolina,                                            ___ _____     ______________            494  U.S.  433,  449 (1990)  ("Plainly  there  is  no general            requirement  that the jury reach agreement on the preliminary            factual issues which  underlie the verdict.")  (Blackmun, J.,            concurring) (footnote omitted); United  States v. Tipton,  90                                            ______________    ______            F.3d  861, 885 (4th  Cir. 1996) (unanimity  instructions need            guard only against  a lack of  unanimity as  to the means  by            which a statute  was in fact violated), cert.  denied, 117 S.                                                    _____  ______            Ct. 2414 (1997);  United States v. Bellrichard, 62 F.3d 1046,                              _____________    ___________            1049 (8th Cir. 1995) (similar), cert. denied, 116 S. Ct. 1425                                            _____ ______                                         -17-                                          17            (1996);  United States v.  Tarvers, 833 F.2d  1068, 1074 (1st                     _____________     _______            Cir.  1987) (unanimity generally not required with respect to            a specific  act underlying an element of  a charged offense);            cf.  United States v. Shaoul,  41 F.3d 811,  818 n.4 (2d Cir.            ___  _____________    ______            1994) (quoting pattern unanimity instructions).  We therefore            discern  no "clear" or "obvious"  defect in the trial court's            unanimity instructions.  See Olano, 507 U.S. at 734.                                     ___ _____                      We  are left,  then,  with  Bradstreet's claims  of            constructive  amendment  and/or  prejudicial  variance.   See                                                                      ___            United States v.  Fisher, 3 F.3d 456, 462-63  (1st Cir. 1993)            _____________     ______            ("A  constructive amendment occurs when the charging terms of            the indictment are altered, either literally or in effect, by            the prosecution or court after the grand jury has last passed            upon them.  A variance  occurs when the charging terms remain            unchanged but when  the facts proved  at trial are  different            from  those  alleged  in  the  indictment.")  (citations  and            internal  quotation   marks  omitted).     Bradstreet   first            complains about the  government's introduction into  evidence            of transactions other  than those set forth as  overt acts in            Count  I of  the indictment.   He  also contests  the court's            instruction to  the jury that it could  convict Bradstreet on            Count V  under an  aiding and abetting  theory.   Finally, he            points  to  the  discrepancy  between the  relatively  strict            summary of Kurzweil's revenue recognition policy set forth in            paragraph  1(f) of the  indictment -- "[Kurzweil]  could only                                         -18-                                          18            recognize a  sale as  revenue for purposes  of its  financial            statements  and  balance  sheet  when  (1)  it  had  a  firm,            unconditional contract with  the buyer evidenced by  a signed            purchase order or sales quote  signed by the customer and (2)            it had shipped  the product to the customer" --  and the more            open-ended  language found  in the  written  versions of  the            policy the jury saw.  None of these alleged defects is within            the purview of Rule 52(b).                      First,  it is settled that the government "need not            recite  all of  its evidence  in  the indictment,  nor is  it            limited at trial to the overt acts listed in the indictment."            Fisher, 3  F.3d at 462 n.16 (citation  and internal quotation            ______            marks  omitted).    Bradstreet  has  not  pointed  us  toward            anything  that  takes  this case  outside  the  general rule.            Second,  Count V did  effectively charge him  with falsifying                             ___            books   and  records   and  aiding   and   abetting  such   a            falsification  by  alleging  a violation  of  the  aiding and            abetting statute, 18  U.S.C.   2.   And even had it  not done            so,  "aiding and abetting  is an alternative  charge in every            count,  whether  explicit  or implicit."    United  States v.                                                        ______________            Oreto,  37  F.3d  739,  751  (1st  Cir.  1994)  (citation and            _____            internal  quotation marks  omitted), cert.  denied, 513  U.S.                                                 _____  ______            1177 (1995).  Third, while the summary of  Kurzweil's revenue            recognition  policy set forth in  the indictment -- a summary            the jury did not hear  or read -- did differ materially  from                                         -19-                                          19            the language used in the  written versions of the policy that            were   in  evidence,   the  lack   of   congruence  did   not            constructively  amend the indictment  and cause Bradstreet to            be  convicted of a crime  other than the  ones charged.  Cf.,                                                                     ___            e.g., United  States v. Fletcher,  121 F.3d 187,  191-93 (5th            ____  ______________    ________            Cir.) (analyzing  the effects  of a constructive  amendment),            cert. denied, 66 U.S.L.W. 3417  (U.S. Dec. 15, 1997) (No. 97-            _____ ______            6753).   Nor did it prejudice him.  See Fisher, 3 F.3d at 463                                                ___ ______            (an objected-to variance constitutes reversible error only if            it results  in prejudice).   Indeed, the  variance we  detect            worked only to Bradstreet's advantage, as the versions of the            policy  the jury saw were, if anything, more defense-friendly            than the  summary of applicable  principles set forth  in the            indictment.  Cf. id. at 463 n.19.                         ___ ___            B.  Preserved Arguments            _______________________                      Bradstreet contends that  the trial court committed            reversible  error  when,  in  admitting  into   evidence  the            cooperation  agreement  between  the   government  and  Debra            Murray, it failed to redact from the document the $10 million            loss to investors Murray admitted  to having caused.  He also            argues that  the court  committed reversible  error when,  in            giving  the  jury  an   accomplice  witness  instruction,  it            inadvertently failed, despite  its having told Bradstreet  it            would  do so at the charging conference,  to tell the jury to            consider  what benefits Murray "hopes to receive" in addition                                         -20-                                          20            to the benefits  she had been promised or  had received.  The            first argument is unconvincing and the second is frivolous.                      Near the end  of the trial's sixth  day, Bradstreet            and Campbell argued to the  district court that the amount of            loss  Murray admitted  to having  caused  should be  redacted            because it was irrelevant, see Fed. R. Evid. 401 and 402, or,                                       ___            even  if  relevant,  was highly  inflammatory  and  therefore            excludable  under  Fed.  R. Evid.  403  ("Although  relevant,            evidence   may  be  excluded   if  its  probative   value  is            substantially  outweighed by the  danger of unfair prejudice,            confusion of the  issues, or misleading the  jury . . .  .").            The district court rejected this argument, reasoning that the            amount  of  loss  was  relevant to  the  materiality  of  the            falsely-recorded  revenue   figures.     At  Bradstreet   and            Campbell's request, the  court then instructed the  jury that            the  loss stipulation was  between the government  and Murray            only,  and that  it  should  not be  viewed  as binding  upon            Bradstreet, Campbell, or Earl.                       Although  Bradstreet's  appellate argument  is  not            entirely clear on  this point, we infer that  he continues to            view the amount of loss as either irrelevant or, if relevant,            excludable under  Rule 403.   The government points  out that            Bradstreet  has not  presented a  coherent  challenge to  the            district court's  reasoning  in admitting  the evidence,  and            contends further that  the evidence was relevant  to Murray's                                         -21-                                          21            knowledge of the scope of the conspiracy.  Alternatively, the            government  asserts  that  any error  in  admitting  the loss            figure was  harmless because "it is highly  probable that the            error did not  contribute to the verdict."   United States v.                                                         _____________            Rose, 104  F.3d 1408, 1414  (1st Cir.), cert. denied,  117 S.            ____                                    _____ ______            Ct. 2424 (1997).                      On  the one  hand, Bradstreet  says  little in  his            brief about whether the amount of  loss was relevant.  On the            other, we have some trouble seeing how the amount of loss was            relevant to the  materiality of the alleged  false statements            or Murray's  knowledge of  the scope of  the conspiracy.   We            therefore  turn our focus  to the harmless-error  analysis by            assuming  error arguendo  and asking  whether  the error  was                            ________            likely  to  have  affected  the  verdict.   We  see  no  such            likelihood.   The  jury was  well aware  that the  IPO netted            Kurzweil approximately $24  million.  Moreover, the  jury was            told that  a private placement  of Kurzweil stock  would have            netted  anywhere  from  $10-15  million  less  than  an  IPO.            Finally,  a  single investor,  Scudder,  Stevens, and  Clark,            testified  without  objection  that, by  April  1994,  it had            invested approximately $5.6 million in the company.  The jury            therefore could hardly have been shocked by evidence that the            total  loss was  $10 million.    We are  confident that  this            evidence had no effect on the verdict.                                         -22-                                          22                      As  to  Bradstreet's  objection to  the  accomplice            witness instruction, we think that, although the court failed            to  use the "hopes to receive" language Bradstreet requested,            the court's lengthy instruction was adequate to convey to the            jury the  need to  scrutinize Debra  Murray's testimony  with            special care.   This, in combination with the extensive cross            examination of Murray as to the benefits she hoped to receive            for  her plea  and  cooperation,  leaves  us  with  no  doubt            whatsoever that the  jury fully understood  it was to  regard            what  Murray had  to say  with some  skepticism.   Cf. United                                                               ___ ______            States  v.  Newton,  891  F.2d   944,  950  (1st  Cir.  1989)            ______      ______            (rejecting  a challenge  to  a  court's  failure to  give  an            accomplice witness instruction because the court's immunized-            witness instruction advised the jury to receive the testimony            of such a witness with caution and to weigh it with care).                                         III.                                         III.                                         ____                      Having  rejected  Bradstreet's  challenges  to  his            convictions, we  turn now to  the government's  cross-appeal.            Appropriately  applying  the   1995  Guidelines  Manual,  the            probation  officer  who   prepared  Bradstreet's  presentence            report  (PSR)  recommended a  base  offense level  of  six; a            two-level  increase   for  more  than  minimal   planning;  a            fifteen-level  increase  because  the  loss  ($11,471,250.00)            exceeded   $10   million;  a   four-level   increase  because            Bradstreet was an organizer or leader of  a criminal activity                                         -23-                                          23            that  involved five  or more  participants  or was  otherwise            extensive; and a  two-level increase for abuse  of a position            of public or private trust.   This yielded adjusted and total            offense levels of 29 and,  because Bradstreet had no criminal            history,  a recommended guidelines sentencing range of 87-108            months.                      Prior  to sentencing,  however, Bradstreet  and the            government entered into a sentencing agreement which mirrored            the PSR except in two respects.  First, the government agreed            not  to seek  a two-level  upward adjustment  for abuse  of a            position of trust.  Second, the parties agreed to request the            court  to  find   that  the  $11-plus  million   loss  figure            overstated the  seriousness of  the offense, see  Application                                                         ___            Note  7(b) of  U.S.S.G.    2F1.1,  and  that the  appropriate            amount  of   loss  to   be  attributed   to  Bradstreet   was            approximately  $2.3  million.   Adoption of  this calculation            would result in a twelve, rather than fifteen, level increase            for  amount  of  loss.   These  provisions  of the  agreement            combined  to reduce the recommended total offense level to 24            and  the  recommended  guidelines sentencing  range  to 51-63            months.  The sentencing agreement also provided that the only            ground   on  which  Bradstreet  could  move  for  a  downward            departure was under  a theory that his conduct  was "a single            act  of aberrant behavior," see United States v. Grandmaison,                                        ___ _____________    ___________            77 F.3d 555, 560-64 (1st Cir. 1996) (explicating the contours                                         -24-                                          24            of this ground  of departure), and that the  government would            oppose the motion.  Prior to sentencing, Bradstreet so moved.                      The government opposed Bradstreet's motion on three            grounds.   First,  it argued  that  it is  illogical to  find            aberrant conduct where, as here, there has been  no admission            of guilt. Alternatively, it asserted that both the record and            the  jury's  verdicts  establish  that  Bradstreet  testified            dishonestly when  he testified  that he did  not act  with an            intent to defraud, see supra at  10-11 (outlining the court's                               ___ _____            mens  rea instructions, which  emphasized that the  jury must            ____  ___            find an  intent to  defraud in order  to convict);  see also,                                                                ___ ____            e.g., United  States v. Rostoff,  53 F.3d 398, 413  (1st Cir.            ____  ______________    _______            1995)  (a  court  is  bound  to  accept  a  fact  necessarily            established by a  jury verdict when that fact  is material to            sentencing),  and that  it  is  illogical  to  find  criminal            dishonesty   aberrant   where  the   defendant   subsequently            testified dishonestly.    Finally, the  government  took  the            position that the duration, complexity, and sophistication of            Bradstreet's fraud defy characterization as "a single act."                      The   district   court    accepted   the   parties'            recommendations    as   to    the   appropriate    guidelines            calculations,  finding that  Bradstreet had  a total  offense            level of 24 and an applicable guidelines sentencing  range of            51-63 months.  The court then granted Bradstreet's motion for            a  downward  departure,  reduced Bradstreet's  total  offense                                         -25-                                          25            level  to 20 (yielding a guidelines sentencing range of 33-41            months), and sentenced Bradstreet to 33 months in prison.  In            doing so,  the  court implicitly  rejected  the  government's            argument  that  a defendant  must  admit  guilt in  order  to            receive  an aberrant  conduct  departure.    The  court  also            rejected without explanation the argument that the record and            verdicts establish that Bradstreet testified dishonestly, and            that this fact makes  him legally ineligible for an  aberrant            conduct departure.                      Rather,  the  court  looked  to  our  statement  in            Grandmaison that "aberrant behavior departures are  available            ___________            to  first offenders whose course of criminal conduct involves            more  than  one  criminal  act,"  77 F.3d  at  563,  and  our            directive  that  courts  judge  aberrance  vel  non  under  a                                                       ___  ___            totality-of-circumstances test, see id.  at 563-64 (approving                                            ___ ___            consideration of  factors such  as the  absence of  pecuniary            gain  to the  defendant,  prior good  deeds,  and efforts  to            mitigate the effects of  the crime), to find  that Bradstreet            had  engaged  in  "behavior  .  .  .  animated  by  a  single            objective, . .  . the success of  the Kurzweil IPO."   In the            court's  view, Bradstreet's conduct  was, under the  facts of            this case, tantamount to  a single act.  And the  totality of            the circumstances -- a perceived lack of motivation by greed,            an            otherwise exemplary life, a record of significant charitable                                         -26-                                          26            giving,  and an impressive outpouring of support from friends            and  family  -- warranted  the  conclusion  that Bradstreet's            conduct was aberrant.                      Even  if we  were to  follow  the district  court's            approach  and to define  Bradstreet's criminal conduct  at an            exceedingly  high  level   of  generality,  that  is,   as  a            multi-faceted  act  of  dishonesty  designed  to  obtain  for            Kurzweil  badly-need cash during  the 1992-94 time  frame, we            are  faced with the government's arguments that what occurred            was  not  a   single  aberrant  act  of   dishonesty  because            Bradstreet  did not  plead  guilty and/or  because Bradstreet            engaged  in the wholly-separate act of testifying dishonestly            about his conduct.  Because  we see no convincing response to            the latter of these two arguments on the  facts of this case,            we accept  it  and  leave to  another  day  consideration  of            whether  an  admission  of  guilt  is  a prerequisite  to  an            aberrant behavior departure.                      Although  Grandmaison  takes an  expansive  view of                                ___________            that which constitutes  a single act of aberrant  conduct, it            confirms that  the Guidelines Manual  means what it says:   a            departure  for  an  act  that  is composed  of  a  number  of            component  acts, id.  at  563  ("[S]ingle  acts  of  aberrant                             ___            behavior  . .  .  include  multiple acts  leading  up to  the            commission of a  crime."), is permissible only if  the act is            singular, see id. at 564  (first time offenders who have been                      ___ ___                                         -27-                                          27            "convicted of several unrelated offenses" are not entitled to            aberrant  conduct departures).   Moreover, in the  context of            guidelines  sentencing, we  think it  obvious  that the  term            "aberrant" must look  forward as well as backward.   In other            words, an aberrant behavior departure is not warranted unless            the conduct at issue is both a marked departure from the past            and is unlikely to recur.  Cf. United States v. Lam,  20 F.3d            ___                        ___ _____________    ___            999, 1004  (9th Cir.  1994) ("[I]n  this  context, calling  a            consistent criminal's behavior aberrant would  be an oxymoron            and, perhaps,  make us look  like oxen or morons  or both.").            In so  holding, we  note that the  Ninth Circuit,  which also            takes an expansive  view of that  which constitutes a  single            act of  aberrant behavior,  see United  States v.  Takai, 941                                        ___ ______________     _____            F.2d 738, 741 (9th Cir. 1991), apparently includes likelihood            of recurrence as  part of its aberrance calculation, see Lam,                                                                 ___ ___            20 F.3d at 1005.                      Under  these  criteria  and  on  this  record,  the            district  court  exceeded  its  discretion  in  rejecting the            government's  dishonest  testimony   argument  and  departing            downward.  The argument rests  on two premises, one legal and            one factual:   (1) one convicted  of criminal dishonesty  who            testifies dishonestly about his conduct is not entitled to an            aberrant  conduct departure  as a  matter of  law; and  (2) a            finding  that Bradstreet did not testify dishonestly would be            an abuse of discretion.   Because the court failed to specify                                         -28-                                          28            which of these premises it did not accept, we examine each in            turn.                      We think  it  obvious that  the government's  legal            premise  is sound.  As we have observed, a departure based on            a finding that the relevant criminal conduct was a single act            of  aberrant behavior is  appropriate only where  the conduct            was isolated and is unlikely to recur.  Yet one who testifies            dishonestly  after engaging  in  felonious dishonesty  cannot            credibly  make either  claim.    One  convicted  of  criminal            dishonesty is therefore  not entitled to an  aberrant conduct            departure  if he has testified dishonestly about his criminal            conduct.                      We  also   agree  with  the   government's  factual            premise.  As the  government  pointed out  both below  and on            appeal,  Bradstreet testified that he  did not intend to file            false  information in connection with the public offering, to            file  false  financial  statements  in  connection  with  the            relevant Forms  10-Q, or  to conceal  records or  information            from  the auditors.   The  verdicts  against him  necessarily            establish, however, that the jury rejected this testimony and            found that he did act with  an intent to defraud.   See supra                                                                ___ _____            at 10-11 (noting that the court instructed the jury to acquit            unless  it found  that  Bradstreet acted  with  an intent  to            defraud and setting forth the court's mens rea instructions).                                                  ____ ___            In  our  view,  this  finding  conclusively  establishes that                                         -29-                                          29            Bradstreet  testified dishonestly  at trial.  After all,  the            jury's verdict must  be credited  over Bradstreet's  contrary            testimony, see,  e.g., Rostoff, 53 F.3d at  413; the contrary                       ___   ____  _______            testimony   strikes  us   as   inherently  not   subject   to            characterization  as  unintentional,  cf.  United  States  v.                                                  ___  ______________            Dunnigan, 507  U.S. 87,  94 (1993)  (making clear that  false            ________            testimony  is  not  perjurious  where  it  is  "a  result  of            confusion,  mistake, or faulty  memory"); and, in  any event,            Bradstreet  has not responded to the government's argument by            suggesting that his false intent testimony was unintentional.            To the contrary, he has  steadfastly maintained that he acted            without an intent  to defraud during  the entire pendency  of            these proceedings.                      Bradstreet attempts to rebut  this line of analysis            in three  ways.  First,  he appears in  some places to  argue            that the district court departed  downward on some ground  or            grounds  other  than  the  guidelines-based  single   act  of            aberrant  behavior  ground,  and  that  the  Supreme  Court's            decision in  Koon v.  United States, 116  S. Ct.  2035 (1996)                         ____     _____________            (establishing   an  across-the-board   abuse  of   discretion            reviewing standard for sentencing  departures), validates the            court's authority to engage in such a departure.  We think it            apparent, however, that the court based its departure  on the            ground  on which  departure  was  sought:  that  the  conduct            underlying  the conviction  was  a  single  act  of  aberrant                                         -30-                                          30            behavior.  To  the extent that the court  ranged far and wide            in explaining its departure, we perceive it only to have been            employing the totality-of-circumstances test we prescribed in            Grandmaison.        Second, Bradstreet seems  to contend that            ___________            Koon  precludes   appellate  courts  from   establishing  the            ____            contours  of mixed  fact/law  concepts  such  as  that  which            constitutes  a single act  of aberrant behavior.   Koon makes                                                               ____            clear, however,  that the appellate courts are to continue to            establish  the  legal  boundaries  and to  correct  law-based            misapplications of such concepts.  See 116 S. Ct. at 2047-48.                                               ___            Here, for  the reasons just  stated, we think  the sentencing            court went beyond its legal boundaries when it concluded that            the dishonest conduct underlying Bradstreet's convictions was            both a one-time occurrence and an aberration.  We simply have            corrected the court's error.                      Finally, Bradstreet contends that the  jury did not            necessarily reject any aspect of his testimony.  In doing so,            he  reanimates  his  argument that,  because  the  jury heard            substantively  divergent   versions  of   Kurzweil's  revenue            recognition policy  and was  not told to  acquit if  it found            that  the revenue  Bradstreet knowingly  booked was  properly            booked under a  reasonable interpretation of the  policy, his            conviction is fatally flawed.  In Bradstreet's view, the jury            might  have  believed that  he  knew nothing  about  the true            nature  of   those  transactions  involving   forgeries,  but                                         -31-                                          31            nonetheless  convicted him on the basis of those transactions            he defended as having generated properly-recognized revenue.                      Even  if we assume  this unlikely scenario  for the            sake  of  argument,  it remains  fact  that  Bradstreet never            argued  that there was an interpretation of Kurzweil's policy            that differed in some respect  from the government's.  And on            this record, there is no basis for an inference that the jury            understood the testifying witnesses' summaries of  Kurzweil's            revenue  recognition  policy   to  be  anything  other   than            divergent synopses of commonly-understood concepts.   We thus            have  every   confidence  that  the   jury  determined   that            Bradstreet acted with an intent  to defraud by reference to a            common and proper  set of  principles.  As  a result, we  are            bound to credit the jury's intent finding, which conclusively            demonstrates its rejection of Bradstreet's testimony.                      We wish  to be clear  on the precise nature  of our            ruling.  We do  not employ a per se rule that  an accused who                                         ___ __            gives testimony that is necessarily rejected  by the jury has            intentionally  testified  dishonestly --  i.e.,  that he  has            perjured himself.  As we  have stated, such testimony, though            it must be taken  as false, see Rostoff, 53 F.3d  at 413, may                                        ___ _______            not  have been  intentionally  false; it  may  have been  the            product  of  confusion,   mistake,  or  faulty  memory,   see                                                                      ___            Dunnigan, 507 U.S. at  95.  Here, though, for reasons we have            ________                                         -32-                                          32            explained,  see supra  at  29,  Bradstreet's false  testimony                        ___ _____            simply is not capable of being regarded as unintentional.                        Because the record is fully developed on this point            and Bradstreet has had an ample opportunity to respond to the            government's argument, we rule, as  a matter of law, that the            dishonest activity  for which Bradstreet stands convicted was            not a single act of aberrant conduct.  Accordingly, we vacate            Bradstreet's  sentence and  remand  for  resentencing.   See,                                                                     ___            e.g., Rostoff, 53 F.3d at 413-14.              ____  _______                                         IV.                                         IV.                                         ___                      Our  decision  to  nullify  the  district   court's            downward  departure might  strike  some  as  harsh.   We  are            acutely aware  that incarceration is  but one of a  number of            ruinous consequences that the  52-year-old Bradstreet and his            family are suffering as a result of his conduct.  And we have            a  great deal  of respect  for the  informed judgment  of the            experienced judge  who determined that,  in light of  all the            circumstances, nearly three years  in prison is enough.   But            it  hardly bears repeating that, under guidelines sentencing,            a judge has  limited discretion to depart  from an applicable            guidelines  sentencing range.    This  case  is  yet  another            striking reminder of this fact.                      For the  reasons  stated,  we  affirm  Bradstreet's                                                     affirm                                                     ______            convictions  but   vacate   the  judgment   and  remand   for                               vacate                               ______            resentencing.                                         -33-                                          33
