
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                FOR THE FIRST CIRCUIT                                 ____________________        No. 95-2271                                    UNITED STATES,                                      Appellee,                                          v.                                   PHILIP M. CALI,                                Defendant, Appellant.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. Robert E. Keeton, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                                 Lynch, Circuit Judge,                                        _____________                      Aldrich and Bownes, Senior Circuit Judges.                                          _____________________                                 ____________________            John P. Ward with whom David  Duncan and Zalkind, Rodriguez,  Lunt            ____________           _____________     _________________________        & Duncan were on brief for appellant.        ________            Brian  T.  Kelly, Assistant  United  States  Attorney,  with  whom            ________________        Donald K. Stern, United States Attorney, were on brief for appellee.        _______________                                 ____________________                                    June 25, 1996                                 ____________________                      BOWNES,  Senior Circuit  Judge.   On June  1, 1995,                      BOWNES,  Senior Circuit  Judge.                               _____________________            defendant-appellant Philip Cali ("Cali") pled guilty to count            sixty-nine  of a  seventy-one  count indictment  charging him            with operating  an illegal gambling business  in violation of            18 U.S.C.     1955, 2.   Cali now  appeals the  fifteen-month            sentence  of imprisonment  he received,  contending that  the            district  court  enhanced the  prison  term  mandated by  the            Sentencing Guidelines ("Guidelines") because of the erroneous            view  that U.S.S.G.     3B1.1 permits  a  base offense  level            adjustment  for mere management of assets or property.   Cali            also  maintains that the district court's alternative holding            that  upward departure  was appropriate  because  his conduct            fell outside section 3B1.1's heartland was clearly erroneous.            We agree that mere management of assets is insufficient for a            base offense  level adjustment under section  3B1.1, but find            that the district court's alternative determination cures any            defect in its holding.  Accordingly, we affirm.  Jurisdiction            stems from 18 U.S.C.   3742.                                          I.                                          I.                                      THE FACTS                                      THE FACTS                                      _________                      We  consider   the  facts  as  set   forth  in  the            unobjected-to  portions  of  the   Presentence  Investigation            Report ("PSI") and the  transcript of the sentencing hearing.            See, e.g., United States v.  Peppe, 80 F.3d 19, 20  (1st Cir.            ___  ____  _______________________            1996); United States  v. Grandmaison, 77  F.3d 555, 557  (1st                   _____________________________                                         -2-                                          2            Cir.  1996).  On October  15, 1993, Philip  Cali was arrested            pursuant   to  count  sixty-nine   of  a   seventy-one  count            indictment charging him with conducting, financing, managing,            supervising, directing, and owning all or part of an  illegal            gambling business which involved five or more persons between            October 1986 and December 1992.  The  result of an eight year            Massachusetts  State  Police  ("State Police")  investigation            into  large-scale  racketeering conspiracies,  the indictment            named  nine  individuals,  four  of whom  --  Joseph  Yerardi            ("Yerardi"), William Maguire ("Maguire"), Anthony Grabiec Jr.            ("Grabiec"), and Salvatore M. DeAngelis ("DeAngelis") -- were            charged in count sixty-nine  with Cali.  Cali, who  is sixty-            five and  has a  criminal history which  includes convictions            for gambling-related  activities, was  not charged in  any of            the indictment's other counts.                      During   the   course    of   their    racketeering            investigation, the  State  Police obtained  authorization  to            intercept  phone  conversations  over  a  cellular  telephone            utilized  by  Yerardi  from  June  to  August  1991.    Their            surveillance of the telephone  revealed that Yerardi presided            over  extensive loansharking  and gambling  businesses.   The            gambling  business,  which  operated  under the  auspices  of            Boston's Winter  Hill Gang and generated  funds for Yerardi's            loansharking business, included  over twenty-five  bookmaking            agents, two principal  offices, and had a gross daily revenue                                         -3-                                          3            of $2,000.00.  Though Yerardi headed the gambling enterprise,            Maguire  was  its  principal  supervisor  and the  individual            responsible for collecting money owed to the organization and            paying out money owed to agents and bettors.                      Transcripts  of numerous calls  between Yerardi and            Cali  intercepted by the State Police  revealed that Cali and            DeAngelis played  the same  role in the  gambling enterprise,            though  they  operated out  of  different  locations. Yerardi            stationed Cali, who frequently  placed bets with the business            and  was often one of  its debtors, at  one of the business's            principal  bookmaking  offices  to  receive  calls  from  the            various  agents.   The agents,  who identified  themselves by            code only and received a percentage of the business's profits            as  compensation,  communicated  information  about  sporting            event  bets  to  Cali.    After  taking  and  recording  that            information,  Cali transmitted it  directly to  Yerardi, with            whom he was in daily telephone contact.   The majority of the            calls intercepted by the State Police were made by Yerardi to            Cali at the bookmaking office.                      Cali  often  reviewed  betting  results   with  and            reported agents' makeup figures --  those monies that have to            be worked off before any money can be paid out  -- to Yerardi            during these  telephone conversations.   He also  assisted in            charting bets  for the gambling business.   Charting involves            tracking  daily  bets  made  by  agents  and  monitoring  the                                         -4-                                          4            business's   projected  risk of  loss on  individual sporting            events.   Though Cali  answered directly to  Yerardi and  was            responsible  for completing  charting  analyses, there  is no            evidence  that he  received  a percentage  of the  business's            profit or played any role in setting policy regarding odds or            bet placement.                      On June 1, 1995,  Cali pled guilty to participating            in  the  operation  of  an illegal  gambling  business.   The            district  court  scheduled  a  sentencing  hearing and  prior            thereto received a  PSI from the  Probation Department.   The            PSI prepared by  the Probation Department, to which  both the            government  and  Cali  registered objections,  recommended  a            total  adjusted  guideline  offense   level  of  ten.    This            recommendation  reflects a  two  level decrease  in the  base            offense for  acceptance of  responsibility.  See  U.S.S.G.                                                            ___            2E3.1(a); 3E1.1.  The PSI concluded, based on the information            provided by the government and the defendant's description of            his duties that an  adjustment for role in the  offense would            not be warranted.                        The  Probation  Department   assigned  Cali   three            criminal history  points for prior gambling  convictions and,            as a result, placed him in Criminal History Category II.  The            district  court,  however,  later  found  that the  Probation            Department  had erroneously  assigned  Cali criminal  history            points for  offenses committed while working  for Yerardi and                                         -5-                                          5            identified the appropriate  criminal history  category as  I.            Placement in Criminal History Category I, at a total adjusted            offense level of ten, results in a sentencing range of six to            twelve months.               II.                                         II.                                THE SENTENCING HEARING                                THE SENTENCING HEARING                                ______________________                      At  the  sentencing  hearing,    Cali  requested  a            downward departure on the  grounds that both he and  his wife            suffered,  inter  alia,  from  serious heart  conditions  and                       _____  ____            largely  supported  themselves   on  Social  Security  income            benefits that would  be unavailable  to them  for any  period            that  Cali was  incarcerated.   The  government disputed  the            contention that Cali was entitled  to departure on this basis            and objected  to the  two-point adjustment for  acceptance of            responsibility  recommended  by  the   Probation  Department.            Additionally, the government objected to the PSI's failure to            add four levels under  section 3B1.1(a) for supervisory role,            arguing  that  an  enhancement  was  warranted  because  Cali            managed  people and  assets within that  guideline's meaning.            The government also argued that the Criminal History Category            I  assignment Cali  received did  not adequately  reflect the            seriousness of his past criminal history.                        The   district  court  denied  the  objections  and            requests  made by both Cali  and the government.   It refused            Cali's  request for  a  health-related departure,  concluding            that the factors cited by the defense did not, "separately or                                         -6-                                          6            together,  justify  departure."     It   also  rejected   the            government's  objection  to  the  two-point   adjustment  for            acceptance   of  responsibility   recommended  by   the  PSI.            Finally, the court found that the severity of Cali's criminal            history  was  not  underrepresented by  the  amended criminal            history calculation and denied the government's request for a            four-level adjustment under section 3B1.1(a).                        Nevertheless, the court  found that Cali's role  in            Yerardi's gambling  enterprise warranted some  enhancement in            his  sentence and  concluded, over  Cali's objection,  that a            three level  increase in  the offense level  was appropriate.            It found that section 3B1.1(b)  and Application Note 2's role            in the  offense provisions  permitted  him to  make a  direct            adjustment  to Cali's  base  offense level,  but added  that,            should  this  Court determine  that  section  3B1.1 does  not            permit  such  an  adjustment,   it  would  employ  an  upward            departure, under United States v.  Rivera, 994 F.2d 942  (1st                             ________________________            Cir. 1993), to impose a sentence outside the range prescribed            by the Guidelines to  reach the same final sentence.   Either            calculus  results  in  a  total  adjusted  offense  level  of            thirteen, which  corresponds to a sentencing  range of twelve            to eighteen months.                      Accordingly, the court sentenced Cali to a fifteen-            month  term  of  imprisonment  and two  years  of  supervised            release.  It  assessed Cali $50.00,  as required by  statute,                                         -7-                                          7            and  imposed a fine of $3,000.00, without interest.  In light            of   Cali's  medical   problems,  the   court  also   made  a            recommendation that Cali be placed in a facility, as close to            Massachusetts as possible,  where adequate medical  treatment            would be available to him.                                                     III.                                         III.                                  STANDARD OF REVIEW                                  STANDARD OF REVIEW                                  __________________                      Appellate review of a district  court's application            of  the Guidelines is a  two-part process.   United States v.                                                         ________________            Joyce, 70 F.3d 679, 681 (1st Cir. 1995), cert. denied, 116 S.            _____                                    _____ ______            Ct. 1556 (1996).  We first determine the applicability of the            guideline to a  particular case  de novo.   United States  v.                                             __ ____    _________________            McCarthy,  77 F.3d 522, 535 (1st Cir. 1996); United States v.            ________                                     ________________            St.   Cyr,  977  F.2d  698,  701  (1st  Cir.  1992).    After            _________            determining the guideline's scope  and meaning, we review the            district  court's factual  determinations  for  clear  error,            "giv[ing] due  deference to the  district court's application            of the guidelines to the facts."   Joyce, 70 F.3d at 681; see                                               _____                  ___            also Koon v.  United States, Nos.  94-1644, 94-8842, 1996  WL            ____ ______________________            315800 at * 8 (U.S. June 13, 1996); McCarthy, 77 F.3d at 535;                                                ________            St.  Cyr, 977 F.2d at 701.  Because "[t]he determination of a            ________            defendant's role  in an offense is  fact-specific," Joyce, 70                                                                _____            F.3d  at  682, we  will  only  disturb the  district  court's            findings   regarding  Cali's   role  in   Yerardi's  gambling            enterprise if  they  are  clearly erroneous  or  based  on  a                                         -8-                                          8            mistake  of law.  See  United States v.  Frankhauser, 80 F.3d                              ___  _____________________________            641, 653 (1st Cir.  1996); United States v. Rostoff,  53 F.3d                                       ________________________            398, 413 (1st Cir. 1995); United States v. Tejada-Beltran, 50                                      _______________________________            F.3d 105, 110-11 (1st Cir. 1995).                                         IV.                                         IV.                                      DISCUSSION                                      DISCUSSION                                      __________                      The  small,  but   nevertheless  real,   difference            between a twelve and fifteen month prison  term is ultimately            what is  at stake in this  appeal.  Cali contends  that he is            entitled to a reduction in his fifteen-month sentence because            twelve months  is  the maximum  prison  term he  should  have            received  under  the Guidelines.    In  support of  this,  he            maintains that the district  court erroneously concluded that            section 3B1.1(b) permits a  base offense level enhancement in            the absence  of a finding  that a defendant  organized, lead,            managed, or supervised one or more participants in an illegal            enterprise    involving    five    or   more    participants.            Additionally,  Cali  argues   that  the  court's  alternative            holding -- that  an upward departure  was appropriate in  the            event  section  3B1.1  precluded adjustment  --  was  clearly            erroneous  because  his  conduct falls  squarely  within  the            heartland  of 18  U.S.C.     1955 offenses.      We begin  by            reviewing the claim  that, absent a finding  that a defendant            managed  individuals,   U.S.S.G.     3B1.1(b)   precludes  an                                         -9-                                          9            enhancement  in  the  base  offense  level  and  discuss  the            requirements for a   3B1.1 upward departure thereafter.                 U.S.S.G.   3B1.1(b) Role in the Offense Adjustments                 U.S.S.G.   3B1.1(b) Role in the Offense Adjustments                 ___________________________________________________                      U.S.S.G.   3B1.1 punishes defendants in large-scale            criminal    enterprises    according   to    their   relative            responsibility,  meting  out  the most  severe  sentences  to            individuals  who hold  leadership  or  management  positions.            Tejada-Beltran,  50 F.3d at  111; United States  v. Fones, 51            ______________                    _______________________            F.3d  663, 665 (7th Cir. 1995); United States v. Parmelee, 42                                            _________________________            F.3d  387, 395 (7th Cir. 1994), cert. denied sub nom. Brozek-                                            _____ ______ ___ ____ _______            Lukaszuk, 116 S. Ct. 63 (1995).  The district court used this            ________            guideline  to  elevate Cali's  sentence  on  the theory  that            section 3B1.1(b) permits an enhancement in a defendant's base            offense level for both  management of individuals and assets.            Cali assigns  error, contending  that an enhancement  in base            offense  level  can  only be  based  on  a  finding that  the            defendant managed other individuals.  The government concedes            this  point,  but  maintains  that Cali's  argument  is  moot            because the district court found that Cali's responsibilities            in Yerardi's gambling business included managing individuals,            as well as assets.                      To make sense of these positions, we briefly review            section 3B1.1 and its history.  Section 3B1.1 provides:                      Based  on  the  defendant's role  in  the                      offense,  increase  the offense  level as                      follows:                                         -10-                                          10                      (a)  If the defendant was an organizer or                      leader  of  a   criminal  activity   that                      involved five or more participants or was                      otherwise   extensive,   increase  by   4                      levels.                      (b)  If  the defendant  was a  manager or                      supervisor  (but  not  an   organizer  or                      leader)   and   the   criminal   activity                      involved five or more participants or was                      otherwise   extensive,   increase  by   3                      levels.                      (c)  If the defendant  was an  organizer,                      leader,  manager,  or  supervisor in  any                      criminal activity other than described in                      (a) or (b), increase by 2 levels.            Prior to 1993, courts were split as to whether a finding that            a  criminal-enterprise  defendant managed  individuals  was a            prerequisite  to   a  section   3B1.1   base  offense   level            adjustment.   See United States  v. McFarlane, 64  F.3d 1235,                          ___ ___________________________            1237 (8th Cir. 1995).   This Circuit took the view  that "the            defendant  must have  exercised some  degree of  control over            others involved in  the commission of  the offense or  . .  .            must  have been  responsible  for organizing  others for  the            purpose of carrying out the crime."  United States v. Fuller,                                                 _______________________            897 F.2d 1217, 1220  (1st Cir. 1990); see also  United States                                                  ___ ____  _____________            v.  Fuentes, 954 F.2d 151,  153 (3d Cir.),  cert. denied, 504            ___________                                 _____ ______            U.S. 977 (1992); United States v. Mares-Molina, 913 F.2d 770,                             _____________________________            773  (9th  Cir.  1990).    Other  courts  concluded  that  "a            defendant who did not  supervise people [could] be considered            a manager  or supervisor within  the meaning of    3B1.1(b)."            United States  v. Chambers, 985  F.2d 1263, 1267  (4th Cir.),            __________________________                                         -11-                                          11            cert. denied, 114 S.  Ct. 107 (1993); see also  United States            _____ ______                          ___ ____  _____________            v. Grady, 972 F.2d 889 (8th Cir. 1992).            ________                      On  November  1,  1993, the  Sentencing  Commission            ("Commission")  weighed into this debate by issuing Amendment            500, which amended section  3B1.1 to include Application Note            2.  That application note provides:                        To qualify for  an adjustment under  this                      section,  defendant  must  have been  the                      organizer, leader, manager, or supervisor                      of one  or more  other participants.   An                      upward   departure   may  be   warranted,                      however, in  the case of a  defendant who                      did  not  organize,   lead,  manage,   or                      supervise  another  participant, but  who                      nevertheless     exercised     management                      responsibility over the property, assets,                      or activities of a criminal organization.            Thus, Amendment 500 offered something to courts on both sides            of the  section 3B1.1 debate.   It  made it clear,  in accord            with  the position we embraced  in Fuller, 897  F.2d at 1220,                                               ______            that section  3B1.1  adjustments are  unavailable unless  the            record  shows   that  the  defendant  managed   one  or  more            individuals, but  also states that a finding that a defendant            managed assets instead  of individuals could  be a basis  for            upward departure.  Ironically, this attempt to define section            3B1.1's contours and operation created the dispute which lies            at the heart of this appeal.                        Application  Note  2  explains  that  section 3B1.1            adjustments   and   departures   require  different   factual            findings,  but does not clarify how, if at all, these devices                                         -12-                                          12            differ in  terms of the sentencing  calculation they mandate.            At  the sentencing  hearing, Cali  argued that  section 3B1.1            adjustments involve  enhancements in the  base offense level,            whereas  section 3B1.1 departures involve enhancements in the            total adjusted offense level and must adhere to the framework            for  Guidelines departures  established  by  this Circuit  in            Rivera,  994 F.2d  at 942.   The  district court  agreed that            ______            section  3B1.1   adjustments   effectuate  increases   in   a            defendant's base  offense level.  See, e.g., United States v.                                              ___  ____  ________________            Capers, 61 F.3d 1100, 1109 (4th Cir. 1995), cert. denied, No.            ______                                      _____ ______            95-7022, 1995 WL 752222  (U.S. May 20, 1996); Fones,  51 F.3d                                                          _____            at  669-70;  McFarlane,  64 F.3d  at  1239-40.    It was  not                         _________            persuaded,  however, that  the Commission  intended to  limit            section  3B1.1 departures  to changes  in the  total adjusted            offense level:                      THE COURT:  My primary view of the matter                      . . . is that the appropriate way to read                      these  guidelines  is   that  that   word                      "departure" in Application Note 2 was not                      being  used in  the technical sense  of a                      kind  of departure that  is controlled by                      Rivera, by  the decision-making structure                      ______                      controlled  by  Rivera.     Instead  it's                                      ______                      talking about a calculation of  the total                      offense level.             The court reasoned that had the Commission  intended the term            "departure"  to  have the  same meaning  in  the role  in the            offense context as  it does elsewhere  in the Guidelines,  it            would  have  discussed  role  in the  offense  departures  in            Chapter 5,  Part K,  of the  Guidelines, which  is explicitly                                         -13-                                          13            devoted  to departures, and not  in Chapter 3,  Part B, which            primarily  deals with  base offense  level adjustments.   See                                                                      ___            U.S.S.G. Chap. 3, Part B, Introductory Commentary ("This part            provides adjustments to the offense level based upon the role            the  defendant  played in  committing  the  offense.").   The            district  court,  therefore,  held that  both  section  3B1.1            adjustments and departures affect base offense level.                       This  was  error.    We  cannot  agree,  given  the            circumstances  surrounding  the Commission's  promulgation of            Application  Note 2, that the sentence-calculation difference            between  section 3B1.1 adjustments  and departures "is  . . .            inconsequential."   See McFarlane, 64  F.3d at 1239.   Simply                                ___ _________            because  role-in-the-offense  departures  are   discussed  in            Chapter  3, Part  B, instead  of Chapter  5, Part  K, is  not            persuasive  evidence  of an  intent  to  treat section  3B1.1            adjustments and departures the same for  sentence calculation            purposes.  See Rivera, 994 F.2d at  948 ("Specific individual                       ___ ______            guidelines may also encourage departures.").  The language of            Application  Note 2 persuades us that the two devices are, in            fact, different: section 3B1.1  adjustments are mandatory and            subject to  the tripartite  test set  out by  that guideline,            whereas  departures  made  pursuant  to  that  guideline  are            discretionary.   As  the Eighth  Circuit explained  in United                                                                   ______            States v. McFarlane, 64 F.3d 1235, 1239 (8th Cir. 1995):            ___________________                      If  the sentencing court concludes that a                      defendant has managed  or supervised  one                                         -14-                                          14                      or  more  participants   in  a   criminal                      enterprise involving five  or more  total                      participants, an adjustment is mandated -                      -  the court must enhance the defendant's                      sentence  by three  levels.   If,  on the                      other   hand,    the   sentencing   court                      concludes that the  defendant has  merely                      exercised  a  managerial  role  over  the                      property,  assets,  or  activities  of  a                      criminal  enterprise  involving  five  or                      more participants, the court is possessed                      of   a   certain  degree   of  discretion                      regarding   the    enhancement   of   the                      defendant's  sentence   --  "[a]n  upward                      departure may be warranted."                        We hold that section 3B1.1(b) and  Application Note            2  preclude "management responsibility over property, assets,            or   activities  as  the  basis"  for  an  enhancement  to  a            defendant's  base  offense  level.    See  United  States  v.                                                  ___  __________________            Greenfield, 44 F.3d 1141,  1146 (2d Cir. 1995).   Because the            __________            government contends that the  factual predicate for a section            3B1.1(b)  adjustment   exists  in   this  case,  we   do  not            immediately decide  the  question of  whether  section  3B1.1            departures  must  be  analyzed  under  the  Rivera framework.                                                        ______            Instead, we  focus on whether  the district court  found that            Cali managed one or more individuals in a criminal enterprise            involving  five or more participants and, if so, whether that            finding was  clearly erroneous.  See  Tejada-Beltran, 50 F.3d                                             ___  ______________            at 110.                        Section  3B1.1(b)  only  applies  where  the record            shows  that a defendant operated as  a "manager or supervisor            and the criminal activity  involved five or more participants                                         -15-                                          15            or was otherwise  extensive."  U.S.S.G.    3B1.1(b).   Though            the  Guidelines provide a list  of seven factors  -- which is            neither exhaustive nor  imbued with "talismanic significance"            -- to assist courts in determining whether a defendant  acted            as  a  leader or  organizer  within  the meaning  of  section            3B1.1(a), United States v. Talladino, 38 F.3d 1255, 1260 (1st                      __________________________            Cir.  1994); see also Joyce,  70 F.3d at 683; Tejada-Beltran,                         ___ ____ _____                   ______________            50 F.3d at 111; U.S.S.G.   3B1.1, Application Note 4, they do            not define "[t]he terms  'manager' and 'supervisor'."  Joyce,                                                                   _____            70  F.3d at 682.  In the  past, we have required some "degree            of  control  or  organizational  authority  over  others"  to            support a section  3B1.1(b) adjustment.  Fuller,  897 F.2d at                                                     ______            1220.    Immediate or  direct  control  over subordinates  or            partners, while certainly an important factor to consider, is            not, however, a prerequisite to finding a defendant deserving            of added culpability or punishment.  See Frankhauser, 80 F.3d                                                 ___ ___________            at 654;  Tejada-Beltran,  50 F.3d  at 112;  United States  v.                     ______________                     _________________            Payne, 63 F.3d 1200,  1212 (2d Cir. 1995), cert.  denied, 116            _____                                      _____  ______            S.  Ct.   1056  (1996);  Greenfield,  44   F.3d  at  1146-47.                                     __________            "Managerial   status  [generally]  attach[es]   if  there  is            evidence that a defendant, in committing the crime, exercised            control over, or was otherwise responsible for overseeing the            activities  of, at least one other person."  United States v.                                                         ________________            Savoie,  985 F.2d 612, 616  (1st Cir. 1993);  see also United            ______                                        ___ ____ ______            States  v. Munoz, 36 F.3d  1229, 1240 (1st  Cir. 1994), cert.            ________________                                        _____                                         -16-                                          16            denied  sub nom. Martinez v.  United States, 115  S. Ct. 1164            ______  ___ ____ __________________________            (1995); see  also United States v. Webster, 54 F.3d 1, 8 (1st                    ___  ____ ________________________            Cir. 1995); United States v. Castellone, 985 F.2d 21, 26 (1st                        ___________________________            Cir. 1993).                       The  government  contends  that  the  court clearly            found  that Cali  served as  a manager  or supervisor  in the            gambling  enterprise and  that  this  finding was  adequately            supported  by  the transcripts  of the  conversations between            Yerardi  and Cali  intercepted  by the  State Police,  Cali's            acceptance  of  responsibility   statement,  and   affidavits            provided by State Trooper  Tutungian.  See Joyce, 70  F.3d at                                                   ___ _____            682  (government  must  prove  role   in  the  offense  by  a            preponderance of the  evidence and  may do so  by relying  on            circumstantial evidence).  Our review of the record, however,            reveals that  the court's findings  on this  issue were  less            than  clear: there is a  discrepancy between the findings the            district  court  made from  the  bench  at Cali's  sentencing            hearing  and  those  it  offered in  its  subsequent  written            judgment.                        Transcripts of the sentencing hearing  suggest that            the court  did conclude that  Cali managed people  and assets            for Yerardi's gambling business:                      THE  COURT:  I  find that the defendant's                      role was more than  simply that of record                      keeper.  He was that, as described in one                      part   of   the  testimony   that's  been                      referred to as  the trial of  the Grabiec                      case, but  that was not the  limit of his                                         -17-                                          17                      participation.  And it is my finding that                      he was  also coordinating the  efforts of                      others  and  the  reports  of  others and                      putting   that   together  and   advising                      Yerardi about managerial decisions in the                      operation of this ongoing enterprise over                      a substantial length of time.                           Those findings, in my view, under an                      appropriate    interpretation   of    the                      guidelines  support a  three-point upward                      adjustment  in  the  calculation  of  the                      total offense  level so as  to raise that                      total  offense level by three points from                      the   way  it   was  calculated   by  the                      presentence investigation report and thus                      move it up to 13.             But the written judgment summarizing the court's findings and            decisions regarding the  adjustments and departures requested            by the  government  and  Cali does  not  cite  management  or            supervision  of individuals as  part of  Cali's offense.   It            omits the  reference to individuals and refers only to Cali's            alleged                                           -18-                                          18            management of assets:                       Government objection to failure of PSI to                      add  four levels  under     3B1.1(a)  for                      alleged supervisory role is rejected, but                      I find (over defendant's  objection) that                      an  upward  adjustment  of  3  levels  is                      appropriate   under        3B1.1(b)   and                      Application Note 2, because the defendant                      exercised   a    degree   of   management                      responsibility over  property and assets,                      under  the  direction  of  the  principal                      organizer and leader.                        The   government   invites   us   to   ignore  this            discrepancy and to focus instead on the district court's oral            explanation of its sentencing decisionmaking.  Ordinarily, we            would accept such  an invitation.  "Where . .  . [a] district            court's oral  expression of  its sentencing rationale  varies            materially  from its  subsequent written  expression of  that            rationale, appellate  courts have tended to  honor the former            at the expense  of the latter."   United States v.  Muniz, 49                                              _______________________            F.3d 36, 42  n.5 (1st Cir. 1995);  see also United  States v.                                               ___ ____ _________________            Tramp, 30 F.3d 1035,  1037 (8th Cir. 1994); United  States v.            _____                                       _________________            Hicks,  997 F.2d 594, 597  (9th Cir. 1993);  United States v.            _____                                        ________________            Roberts, 933 F.2d 517, 519 n.1 (7th Cir. 1991)(citing cases);            _______            United  States v. Khoury, 901 F.2d 975, 977 (11th Cir. 1990).            ________________________            We decline, however, to do so in this instance.                         Because  the  written  judgment  and  the  district            court's alternative  holding  -- that  Cali's  management  of            assets  warranted  an  upward  departure  from  the  sentence            prescribed under  the Guidelines -- both  focus on management                                         -19-                                          19            of assets and  do not  mention management  of individuals  at            all,  we think  it would be  imprudent to adhere  to the oral            pronouncement made  in this case.   Furthermore, the  need to            resolve the conflict in  the district court's 3B1.1 decisions            by  remanding  for clarification  or  to  decide whether  the            record  could  even  support  a  finding  that  Cali  managed            individuals  -- an  issue  about which  we have  considerable            doubt  --  is  obviated  by the  existence  of  the secondary            holding.   It provides an alternative basis for upholding the            fifteen-month  sentence  Cali received.    We  do not  decide            whether a  sufficient factual predicate existed  to find that            the defendant was  a manager of other  individuals within the            meaning  of  section  3B1.1.    We  proceed,  instead,  to  a            discussion of the district court's upward departure holding.                  U.S.S.G.   3B1.1(b) Role in the Offense Departures                  U.S.S.G.   3B1.1(b) Role in the Offense Departures                  __________________________________________________                      As an alternative to its upward adjustment holding,            the  district  court  held  that the  asset  management  Cali            conducted  during  his   involvement  in  Yerardi's  gambling            business  justified a  three-level  upward  departure,  under            section  3B1.1(b), to  impose a  sentence corresponding  to a            total adjusted offense level of thirteen.  The district court            found that Cali operated as more than a bookie or mere record            keeper  and  that  the   threats  of  violence  which  marked            Yerardi's  gambling and  loansharking businesses  took Cali's            conduct outside  the  heartland  of  other  section  3B1.1(b)                                         -20-                                          20            offenses.   Cali assigns error.   He argues,  first, that the            facts of his case do not support a conclusion that he managed            assets  and,  second,  that  the record,  to  the  extent  it            reflects asset  management at all, does not  suggest that his            conduct  falls outside  the  heartland  of  section  3B1.1(b)            offenses.    See Rivera,  994 F.2d  at  947.   The government                         ___ ______            contends that Rivera's heartland  analysis does not apply and                          ______            urges us to accept the district court's findings of fact.                      Before addressing  these arguments, we  discuss the            rules pertaining  to departures from  sentences prescribed by            the Guidelines.  Prior to the Court's recent decision in Koon                                                                     ____            v. United States, Nos. 94-1664, 94-8842, 1996 WL 315800 (U.S.            ________________            June 13, 1996), appellate courts were expected to engage in a            three-part  departure   analysis.    See  United   States  v.                                                 ___  ___________________            Campbell, 61 F.3d 976, 984 (1st Cir. 1995), cert. denied, 116            ________                                    _____ ______            S. Ct. 1556 (1996); Rostoff, 53 F.3d at 404; United States v.                                _______                  ________________            Jackson,  30 F.3d  199,  202  (1st  Cir.  1994).    We  first            _______            conducted plenary review of  whether the circumstances of the            case  were,  in  principle, of  a  kind  that the  Guidelines            permitted  the  district  court   to  consider,  "with  'full            awareness of, and respect for the trier's superior "feel" for            the  case' .  . .  ."   Rivera, 994  F.2d at  951-52 (quoting                                    ______            United States  v. Diaz-Villafane, 874  F.2d 43, 50  (1st Cir.            ________________________________            1989)); see also United  States v. Bennett, 60 F.3d  902, 904                    ___ ____ _________________________            (1st Cir. 1995); United States v. Pelkey, 29 F.3d 11, 14 (1st                             _______________________                                         -21-                                          21            Cir. 1994). We then  reviewed the district court's departure-            related findings of fact for clear error.  Pelkey, 29 F.3d at                                                       ______            14.  Finally, we assessed the reasonableness of the departure            taken.  Id.                    ___                      Koon effectively merges the first and second stages                      ____            of our  departure analysis into  one, and instructs  that our            review of  the legal  conclusions and  factual determinations            underlying   the  district  court's   departure  decision  be            conducted under a unitary abuse-of-discretion standard.   See                                                                      ___            Koon, 1996 WL 315800  at *9.  "That a  departure decision, in            ____            an occasional case,  may call for a legal  determination does            not mean, as a consequence, that parts of the  review must be            labeled de novo  while other  parts are labeled  an abuse  of            discretion."    Id. at  *9-10.   Thus,  the analysis  we must                            ___            conduct in evaluating  departure decisions entails reviewing,            under an  abuse of discretion standard,  the district court's            determination that  the case  presents features that  make it            sufficiently  unusual  to  take  it  out  of  the  applicable            guideline's  heartland.  See id. at *12.  Abuse of discretion                                     ___ ___            review  necessarily "includes  review to  determine that  the            [district court's  exercise of] discretion was  not guided by            erroneous legal conclusions."  Id. at 10.  Additionally,  our                                           ___            analysis, like  our pre-Koon  review process, requires  us to                                    ____            assess the reasonableness of the departure taken.                                           -22-                                          22                      Decisions  to depart  from sentences  prescribed by            the Guidelines are generally only permitted in cases in which            unusual or  atypical circumstances justify  individualizing a            sentence more than the  relatively narrow strictures that the            Guidelines permit.  United States v. Calderon, 935 F.2d 9, 11                                _________________________            (1st Cir. 1991);  see also  Koon, 1996  WL 315800  at *7;  18                              ___ ____  ____            U.S.C.   3553(b).   In general, departure decisions fall into            one  of  three  categories:     forbidden,  discouraged,  and            encouraged.    Grandmaison,  77  F.3d  at  560.    "Forbidden                           ___________            departures  are    those based,  inter  alia,  on race,  sex,                                             _____  ____            national  origin, creed, religion, or  socioeconomic status."            Id.; Rivera, 994 F.2d at  948-49; U.S.S.G.    5H1.10, 5H1.12.            ___  ______            "The   Sentencing  Commission . .  . has  expressly precluded            departure  on these  grounds,  even where  they  make a  case            atypical  or extraordinary."   Grandmaison,  77 F.3d  at 560.                                           ___________            "Discouraged departures involve factors which were considered            by   the   Commission--such   as   age,   family   ties   and            responsibilities, employment  record, good works, or physical            condition--but which present  themselves to an  extraordinary            degree in a  particular case."  Id.   "Encouraged departures,                                            ___            in  contrast, involve  considerations not   previously  taken            into account by the Commission."  Id.                                                ___                      The departure  analysis  "varies depending  on  the            category  in  which  the  feature  [or  activity]  justifying            departure falls."   United  States v.  DeMasi, 40 F.3d  1306,                                _________________________                                         -23-                                          23            1323 (1st Cir. 1994), cert. denied sub nom. Bonasia v. United                                  _____ ______ ___ ____ _________________            States,  115  S. Ct.  947 (1995).    Cali maintains  that the            ______            starting  point  for  our  review  of  the  district  court's            departure  decision  must  be  an inquiry  into  whether  his            conduct  was  more  egregious  than  that  of  other  section            3B1.1(b)  offenders.    The   government  disputes  this  and            contends  that such  an investigation  is unnecessary  in the            role-in-the-offense   context    because   section   3B1.1(b)            departures are encouraged.  We agree with the government.                        Section  3B1.1 departures are clearly encouraged by            the Commission.  The  language of Application Note 2  -- that            "upward departure  may be warranted  . . .  in the case  of a            defendant who . .  . exercised management responsibility over            the   property,  assets,   or   activities   of  a   criminal            organization"  --  endorses   management  of   assets  as   a            permissible basis for upward departure.  This endorsement and            our  determination that  section  3B1.1 does  not incorporate            asset  management  as  a sentencing  factor  lead  us  to the            conclusion that  the district court was  authorized to depart            without first engaging in the analysis Cali urges.  Where the            Commission  has explicitly  identified certain  activities or            conduct  as a factor not adequately taken into account in its            formulation of a particular guideline and that guideline does            not  incorporate that factor at all, we can be confident that            the  departure undertaken  was not  unreasonable.   See Koon,                                                                ___ ____                                         -24-                                          24            1996  WL 315800  at  *8; Rivera,  994 F.2d  at 948;  see also                                     ______                      ___ ____            United States v. Diaz-Martinez, 71 F.3d 946, 952-53 (1st Cir.            ______________________________            1995)(reviewing   encouraged   U.S.S.G.        2K2.1   upward            departure); Rostoff,  53 F.3d  at  406 (reviewing  encouraged                        _______            U.S.S.G.     2F1.1  downward  departure);  United  States  v.                                                       __________________            Quinones,  26   F.3d  213,  218  (1st   Cir.  1994)(reviewing            ________            encouraged U.S.S.G.   5K2.8 upward departure).  Resort to the            "heartland"  analysis  generally  reserved   for  discouraged            departures  is, therefore,  unnecessary.   See Koon,  1996 WL                                                       ___ ____            315800  at *8; McFarlane, 64  F.3d at 1240;  United States v.                           _________                     ________________            Mendez-Colon, 15  F.3d 188,  190-91  (1st Cir.  1994)(Breyer,            ____________            C.J.); compare  DeMasi, 40  F.3d at 1323  (describing process                   _______  ______            for  comparing  cases   involving  discouraged  reasons   for            departure).      Management   of   a   large-scale   criminal            enterprise's assets is conduct which,  under Application Note            2 to section  3B1.1 and hence  as a matter  of law, places  a            defendant outside  the heartland of  offenses by  individuals            who participate in  large-scale criminal enterprises  but who            do not manage assets.  See Rivera, 994 F.2d at 948.                                   ___ ______                      Having concluded that the relevant circumstances of            Cali's  case constitute  an  encouraged  basis for  departure            under the Guidelines,  we proceed  to the next  stage in  our            analysis.   Cali asserts that the  district court erroneously            found that he managed  gambling assets.  While Cali  paints a            persuasive  picture  of   his  role  in   Yerardi's  gambling                                         -25-                                          25            business, we cannot  say that the  district court abused  its            discretion.   "[W]hen there  are two plausible  views of  the            record,  the sentencing  court's  adoption of  one such  view            cannot be clearly erroneous."  St. Cyr, 977 F.2d at  706; see                                           _______                    ___            also Munoz, 36  F.3d at  1240; United States  v. Brewster,  1            ____ _____                     __________________________            F.3d 51, 55 (1st Cir. 1993); Savoie, 985 F.2d at 616.                                         ______                      The government presented evidence which was a solid            basis  for the district  court to conclude  that Cali managed            assets  and  was  more than  a  mere  "bookie"  or "telephone            operator" in Yerardi's   business.   The record reveals  that            the  information Cali recorded  and analyzed was  an asset or            possession of  great value to  the gambling enterprise.   See                                                                      ___            Webster's II New Riverside  University Dictionary 131 (1994).            _________________________________________________            It  also shows that Cali  fielded calls from  and placed bets            for various agents, as  a bookie might do, but  also directly            reviewed betting  and makeup figures with  the individual who            presided  over   the   gambling  enterprise,   Yerardi,   and            participated   in   "charting"   --   i.e.,   assessing   the            organization's risk of  loss.  Compare  Parmelee, 42 F.3d  at                                           _______  ________            395  (control of plane inherent in role of pilot for criminal            enterprise).  Though Yerardi seems to have made the decisions            about  when and whom to  chart, the record  suggests that the            responsibility  for  keeping   the  organization's   records,            calculating the business's risk of loss on particular events,            and assisting Yerardi in assessing the organization's overall                                         -26-                                          26            financial  health  primarily   rested  with   Cali  and   his            counterpart, DeAngelis.  The transcripts of calls intercepted            by  the  State  Police,  in  particular,  suggest  that  Cali            exercised  discretion  or  control  over  the  organization's            information  and   that  Yerardi  heavily  relied  on  Cali's            expertise and special knowledge of the business's operations.            We, therefore,  do not think the  district court's conclusion            that Cali  managed assets or enjoyed  executive status within            the gambling enterprise implausible.                        Nor do we think  the extent of the  departure taken            by the  district court  unreasonable.  Quinones,  26 F.3d  at                                                   ________            219.    The  three-level  upward  departure  taken  from  the            sentence tabulated  under the Guidelines represents  a three-            month  increase  in  the  maximum sentence  Cali  could  have            received and an even smaller increase in the actual time Cali            will serve in prison.  Because of this, the reasons given for            the upward departure, and the deference due  the special feel            the district  court developed for this case in presiding over            the  legal proceedings  for Cali's  co-conspirators,  we find            that  the upward  departure  the district  court imposed  was            reasonable.  See Rostoff,  53 F.3d at 409 (judgment  call for                         ___ _______            decision  regarding  extent of  departure  is  ultimately the            district court's).                                            V.                                          V.                                     CONCLUSION                                       CONCLUSION                                     __________                                         -27-                                          27                      For  the  foregoing  reasons, Cali's  fifteen-month            sentence of imprisonment is affirmed.                                           affirmed                                        ________                                         -28-                                          28
