
USCA1 Opinion

	




                                For the First Circuit                                ____________________       No. 96-2002                                   UNITED STATES,                                      Appellee,                                         v.                                  ANTHONY J. RIZZO,                                Defendant, Appellant.                                ____________________                    APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Nathaniel M. Gorton, U.S. District Judge]                                ____________________                                       Before                               Torruella, Chief Judge,                             Cyr, Senior Circuit Judge,                              and Stahl, Circuit Judge.                                ____________________            James H. Budreau for appellant.            John M. Griffin                          , Assistant United States Attorney, with whom                                                                        Donald       K. Stern, United States Attorney, was on brief for appellee.                                ____________________                                   August 11, 1997                                ____________________                      STAHL,                             Circuit Judge                                         . Defendant-appellant Anthony J.            Rizzo appeals the thirty-seven month sentence that the district            court imposed upon him after he pleaded guilty to several            counts involving possessing, negotiating, and uttering            counterfeit securities in violation of 18 U.S.C. SS 371, 513.            Finding no merit to Rizzo's arguments, we affirm.                                         Facts                      We consider the facts as set forth in "the            presentence report, the sentencing transcript[,] and various            other materials before the district court."  United States v.            Gill, 99 F.3d 484, 485 (1st Cir. 1996).                      The counterfeit scheme in which Rizzo was involved            was designed to operate as follows: Rizzo supplied counterfeit            checks to Ronald A. Moore, who forwarded them to Joseph            Savarese. The checks were made payable to Savarese's business,            Thermal Shield of New England ("Thermal Shield"). Savarese was            to deposit the counterfeit checks in his business' bank            accounts and then withdraw the funds after the checks had            cleared. Rizzo, Moore, and Savarese were to share in the            illegal proceeds from the counterfeit checks.                       During the course of the scheme in 1992, Rizzo            provided Savarese with five checks that were fraudulent            reproductions of actual corporate checks. Moore operated as            the middleman between Rizzo and Savarese for the first three            checks; Rizzo dealt directly with Savarese for the final two                                         -2-                                          2            checks. The companies whose checks had been counterfeited            neither issued these checks nor authorized the disbursement of            any funds to Thermal Shield.                      In April 1992, Rizzo, Moore, and Savarese conducted            their first illegal transaction. Moore gave Savarese a            $160,00.00 counterfeit check that Rizzo had provided him            listing Thermal Shield as payee and Hasbro, Inc. as payor.            Savarese then deposited the counterfeit check into the Thermal            Shield account at the Winthrop, Massachusetts branch of New            World Bank and delivered the deposit slip to Moore. After the            check cleared, Savarese withdrew the $160,000.00 proceeds from            the check. There being little honor among the dishonest, it            was not until Moore made threatening statements to Savarese on            several occasions that he provided Moore with approximately            $40,000.00 of the illicit proceeds to be shared with Rizzo as            their portion of the illegal booty.                      Prior to the Hasbro check transaction, for reasons            not entirely clear in the record, Savarese had contacted agents            of the Federal Bureau of Investigations ("FBI") concerning the            counterfeit check scheme. The FBI agents instructed Savarese            that under no circumstances was he to become involved with the            Hasbro check. Savarese did not follow these instructions, and            the FBI agents subsequently discovered Savarese's participation            in negotiating the first counterfeit check. Following the            Hasbro check transaction, Savarese began cooperating with the                                         -3-            FBI in connection with the Bureau's investigation of the            counterfeit check scheme. During this time, the FBI, with the            knowledge of Savarese and the assistance of security officials            at the Bank of Boston, established a "shell" account in the            name of Thermal Shield at the Bank of Boston.                      Emboldened by their success with the Hasbro check,            Rizzo, Moore, and Savarese agreed to negotiate additional            counterfeit checks drawn on unsuspecting corporations. On June            2, 1992, Moore gave Savarese two counterfeit checks from Rizzo;            one in the amount of $47,750.00 naming New Wave Transport            (U.S.A.) as payor and one in the amount of $47,785.00 naming            The American Experience West Corp. as payor. Savarese            deposited the checks in the Thermal Shield account at the Bank            of Boston and delivered the deposit slip to Moore. On June 9,            1992, upon Moore's urging, Savarese visited the Bank of Boston            in an effort to withdraw the funds from the two counterfeit            checks. By previous arrangement between the FBI and the Bank            of Boston, the teller furnished Savarese with a letter stating            that his account was closed.                      On July 1, 1992, Savarese met directly with Rizzo.            During one conversation, Rizzo told Savarese that they would            "do two more." Several days later, Rizzo gave Savarese two new            counterfeit checks, one in the amount of $9300.00 naming the            Great Atlantic and Pacific Tea Company, Inc. as payor and one                                         -4-                                          4            in the amount of $9,275.00 naming Waldbaum, Inc. as payor. The            conspirators never negotiated either of these two checks.                                Procedural Background                      On December 14, 1995, a federal grand jury returned            a three-count superseding indictment alleging that Rizzo            engaged in a counterfeit check scheme. The indictment stated            that Rizzo illegally conspired with co-defendant Ronald A.            Moore and others to obtain cash through the negotiation of            counterfeit corporate securities, in violation of 18 U.S.C. S            371. The indictment further alleged two counts of uttering and            possessing counterfeited securities of a corporation, in            contravention of 18 U.S.C. S 513.                      On May 10, 1996, Rizzo entered a plea of guilty to            all three counts. Following Rizzo's plea, the United States            Probation Officer prepared a Presentence Report, which            recommended an adjusted offense level of sixteen for Rizzo's            participation in the counterfeit check scheme. The base            offense level under U.S.S.G. S 2F1.1 was six and the Report            suggested several enhancements. First, the Report recommended            an eight-level increase because the intended loss from the            scheme exceeded $200,000.00.  See U.S.S.G. S 2F1.1(b)(1)(I).            The Presentence Report calculated the amount of loss under                                            1.  On December 14, 1993, Savarese was convicted and sentenced            to sixty-three months imprisonment. Savarese's conviction and            sentence reflected his involvement in the negotiation of the            Hasbro check.                                          -5-                                          5            U.S.S.G. S 2F1.1 by using the actual loss of $160,000.00 from            the Hasbro check and adding the intended loss of $113,950.00,            representing the total of the four other checks involved in the            scheme. The next suggested enhancement entailed a two-level            increase, which reflected the fact that the offense involved            more than minimal planning.   See U.S.S.G. S 2F1.1(b)(2)(A).            Finally, the Presentence Report recommended a three-level            increase because Rizzo committed the offense while awaiting            sentencing on a 1992 federal conviction.                                                     See U.S.S.G. S 2J1.7.            The Presentence Report recommended reducing the resulting            offense level of nineteen to sixteen because Rizzo demonstrated            acceptance of responsibility. See U.S.S.G. S 3E1.1(a),(b)(2).                      The Presentence Report computed Rizzo's criminal            history category as a IV. This computation included Rizzo's            1992 federal conviction for negotiating counterfeit checks and            using stolen credit cards and false identification, for which            he had been sentenced to thirty-three months' imprisonment on            September 17, 1992. Rizzo completed the sentence on February            3, 1995, at which time he began a period of supervised release.            Rizzo's criminal history computation also reflected a 1989            conviction in Charlestown District Court for possession of a            firearm without proper identification.                                         -6-                                          6                      Rizzo filed numerous objections to the Presentence            Report. Of importance for purposes of this appeal,     Rizzo            argued for a downward departure, asserting that his case fell            outside the heartland of the Guidelines because he was unable            to request concurrent federal sentences due to the fact that            the thirty-three month sentence imposed in September 1992 had            been discharged by the time he was indicted in this case. In            support of this assertion, Rizzo advanced two arguments:            first, he contended that the government purposefully delayed            the indictment in the instant case until after he completed his            thirty-three month sentence for his 1992 conviction in order to            circumvent U.S.S.G. S 5G1.3(c); second, he claimed that the            government was aware of the instant counterfeit check offenses            when he was sentenced in September 1992 for his prior crimes,            but improperly failed to inform the district court of the new            offenses at the 1992 sentencing so that the sentencing judge            could consider them as relevant conduct. According to Rizzo,            if the government properly had informed the court of the            relevant conduct involving this case, the court then "would            have combined the two cases." If the court had combined the            two cases, this process would have "result[ed] in a level 20                                            2.  Rizzo lodged a total of nine objections to the Presentence            Report. We discuss only those arguments which bear upon the            subject matter of this appeal.                                         -7-                                          7            for the combined cases." A level twenty carries a sentencing            range of thirty-seven to forty-six months, which is at least            twenty-four and potentially thirty-three months shorter than            the total of seventy months Rizzo received on the two separate            indictments.                      Also of importance for purposes of this appeal, Rizzo            insisted that he should not have been subject to an eight-level            increase reflecting the intended loss. According to Rizzo, the            $273,950.00 of counterfeit checks involved in the scheme were            "generated through a government sting operation," and, thus,            "no loss was capable of occurring as a matter of law."                      On July 19, 1996, following an hour-long sentencing            hearing at which Rizzo voiced his objections to the Presentence            Report, the district court (Gorton, J.) accepted the            recommendations contained in the Report and declined to depart            downward from the suggested adjusted offense level of sixteen.            The district court sentenced Rizzo to thirty-seven months'            imprisonment and three years of supervised release. Thirty-            three months of the imprisonment term were to run concurrently                                            3.  Given our disposition of this appeal, we need not recite            the process Rizzo set forth to arrive at a total offense level            of twenty.            4.  An offense level of sixteen permits the sentencing judge to            sentence the defendant to a period of incarceration ranging            from thirty-three months to forty-one months. The sentence            that Judge Gorton imposed in this case (thirty-seven months)            thus falls precisely in the middle of the possible            incarceration terms Rizzo faced at sentencing.                                         -8-                                          8            on counts one, two, and three, and four months of the term were            to run consecutively, pursuant to 18 U.S.C. S 3147.     The            district court also ordered Rizzo to pay $12,500 in            restitution.                                 Standard of Review                      "[O]ur review of the legal conclusions and factual            determinations underlying the district court's departure            decision [is] . . . conducted under a unitary abuse-of-            discretion standard." United States                                                v.                                                    Cali, 87 F.3d 571, 580            (1st Cir. 1996). "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. (quoting                                         Koon v.                                                 United States                                                             , 116 S. Ct.            2035, 2045 (1996)). When the issue is whether or not the            district court believed it had authority to depart, we have            held that "[w]hat the district court thought was the scope of            its authority [to depart from the guidelines] is perhaps a            question of fact, but it is one that we must answer ourselves,            by reviewing the sentencing transcript. Whether the district            court's belief was mistaken is plainly a legal question that we                                            5.  18 U.S.C. S 3147 concerns "person[s] convicted of an            offense committed while released pursuant to this chapter," and            provides that "[a] term of imprisonment imposed pursuant to            this section shall be consecutive to any other sentence of            imprisonment." As noted above, at the time Rizzo committed the            crimes underlying this appeal, he was on release awaiting            sentencing for his 1992 conviction.                                          -9-                                          9            review de novo."  United States v. Saldana, 109 F.3d 100, 103            (1st Cir. 1997).                      "Appellate review of a district court's application            of the Guidelines is a two-part process. We first determine            the applicability of the guideline to a particular case    de            novo. 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.'"                                                          Cali, 87 F.3d at            575 (internal citations omitted) (quoting   United                                                                States v.            Joyce, 70 F.3d 679, 681 (1st Cir. 1995), cert. denied, 116 S.            Ct. 1556 (1996)).                                     Discussion                      On appeal, Rizzo advances two arguments that he            raised both in his objections to the Presentence Report and            during his sentencing hearing. First, he contends that the            district court erred when it denied his request for a downward            departure pursuant to U.S.S.G. S 5K2.0                                                  and U.S.S.G. S 5G1.3(c)                                            6.  U.S.S.G. S 5K2.0 provides in pertinent part: "Under 18            U.S.C. S 3553(b) the sentencing court may impose a sentence            outside the range established by the applicable guideline, if            the court finds 'that there exists an aggravating or mitigating            circumstance of a kind, or to a degree, not adequately taken            into consideration by the Sentencing Commission in formulating            the guidelines that should result in a sentence different from            that described.'"            7.  U.S.S.G. S 5G1.3(c) states: "(Policy Statement) In any            other case, the sentence for the instant offense may be imposed            to run concurrently, partially concurrently, or consecutively            to the prior undischarged term of imprisonment to achieve a                                        -10-                                         10            because "the record in the instant case fails to reveal whether            the court understood that the present case fell outside of the            guideline's heartland and that it had the discretion to depart            downward." Second, Rizzo insists that the district court            arrived at an incorrect adjusted offense level because it            misapplied U.S.S.G. S 2F1.1     in calculating the loss            attributable to him. We address Rizzo's arguments in turn.            A.  Downward Departure                      As we previously have stated, "a criminal defendant            cannot ground an appeal on the sentencing court's discretionary            decision not to depart below the GSR. . . . [A]ppellate            jurisdiction[, however,] may attach if it appears that the            failure to depart stemmed from the sentencing court's mistaken            impression that it lacked the legal authority to deviate from                                            reasonable punishment of the instant offense." Rizzo bases            much of his argument on a snippet of commentary to this section            stating "[d]eparture would be warranted when independent            prosecutions produce anomalous results that circumvent or            defeat the intent of the guidelines." This commentary,            however, was deleted from the Guidelines in 1989. Because            Rizzo was sentenced in 1996, the November 1995 Guidelines apply            to this case. See                               United States                                            v.                                               DiSanto, 86 F.3d 1238, 1254            n.26 (1st Cir. 1996), cert.  denied, 117 S. Ct. 1109 (1997);            United                    States v. Springer, 28 F.3d 236, 237 (1st Cir. 1994).            Moreover, there is no                                  ex                                     post                                          facto problem because S 5G1.3(c)            did not change after Rizzo committed the offenses underlying            this appeal. See                              United States                                           v.                                              Aymelek, 926 F.2d 64, 66 n.1            (1st Cir. 1991).            8.  U.S.S.G. S 2F1.1(b)(1) concerns increases to the base            offense level of six applicable to offenses involving fraud or            deceit and necessitates increases to this base offense level            depending on the amount of loss resulting from the fraud or            deceit.                                         -11-                                         11            the guideline range."  United States v. Gifford, 17 F.3d 462,            473 (1st Cir. 1994). Rizzo asserts both that the district            court believed that it lacked the legal authority to depart and            that the court's belief was mistaken. The record reveals            little to buttress his assertion that the district court            believed it lacked authority to depart downward. To support            his assertion that the district court was mistaken, Rizzo            contends that a court may depart downward pursuant to U.S.S.G.            S 5G1.3(c) and U.S.S.G. S 5K2.0 when the government delays an            indictment until after a defendant completes a previous federal            sentence or when the government "had full knowledge of the            facts and circumstances related to the instant case prior to            the sentencing in that previous case" but failed to apprise the            court of such facts and circumstances.                                            9.  Specifically, Rizzo points to the following question that            the district court asked during the sentencing hearing as            evidence that the court believed it lacked authority to depart:            "Do you have any law, statutory or otherwise in this regard,            that requires the government to call such relevant conduct to            the attention of the sentencing court?" Rizzo's counsel then            directed the court to a section of the commentary to U.S.S.G.            S 5G1.3 that was deleted in 1989: "[A] departure would be            warranted when independent prosecutions produce anomalous            results that circumvent or defeat the intent of the            guidelines."  See supra note 7. The court then responded by            questioning Rizzo's counsel about this commentary: "It ought            to be in the guideline manual, shouldn't it?" The court            ultimately denied Rizzo's request for a downward departure,            stating: "To the extent that this is in support of a motion            for a downward departure, that motion is denied." From this            interchange, Rizzo concludes that the district court did not            think that it possessed the authority to depart downward.                                         -12-                                         12                      "We are obliged to review a trial court's actions as            they are made manifest in the record."      United                                                                 States v.            Tavano, 12 F.3d 301, 304 (1st Cir. 1993);                                                      see                                                          United States                                                                       v.            Morrison, 46 F.3d 127, 130 (1st Cir. 1995) ("When determining            whether the sentencing court merely refused to exercise its            discretionary power to depart, we consider the totality of the            record and the sentencing court's actions as reflected            therein."). The record in this case does not support Rizzo's            claim that the district court believed it lacked authority to            depart downward.                      Rizzo, both in his objections to the Presentence            Report and during his sentencing hearing, clearly enunciated            his position that his case fell outside the heartland of the            guidelines and thus warranted a downward departure pursuant to            U.S.S.G. S 5K2.0 and U.S.S.G. S 5G1.3. During the sentencing            hearing, for instance, Rizzo's counsel explained that "[a]ll of            this is, even the reference to . . . 5G.3 is in reference to a            downward departure. . . . And, again, I think, because of the            facts, it does take it out of the heartland of the guidelines."             During the course of the sentencing hearing, the district            court questioned Rizzo's counsel concerning this argument. The            court repeatedly manifested its understanding of Rizzo's            argument, initially stating: "you argue that under Sections            5G1.3 and 5G1.2, pertaining to the sentencing on multiple            counts of conviction, that the present offense should run                                        -13-                                         13            concurrently with Mr. Rizzo's prior offense. Is that basically            it?" Later in the discussion, the court asked Rizzo's counsel,            "Do you have any law, statutory or otherwise, that will guide            the Court in this regard, that requires the government to call            such relevant conduct to the attention of the sentencing            court?" After Rizzo's counsel presented his argument and the            district court subjected him to questioning, the government            responded to Rizzo's argument at length during the sentencing            hearing. After listening to both parties on the subject of a            downward departure pursuant to U.S.S.G. S 5K2.0 and U.S.S.G. S            5G1.3, the district court ruled: "To the extent that that is            in support of a motion for a downward departure, that motion is            denied."                      "[I]f a district court desired to depart but thought            this course forbidden by explicit guideline language, one would            expect the court to cast its refusal in these terms."  United            States v. DeCosta, 37 F.3d 5, 8 (1st Cir. 1994);  see  United            States v.  Grandmaison, 77 F.3d 555, 565 (1st Cir. 1996)            (indicating that if the record is ambiguous concerning the            district court's awareness of its discretion to depart            downward, "that ambiguity, without more, would not be enough to            make the district court's refusal to depart appealable"). In            this case, unlike in     DeCosta, the district court made            absolutely no remark that could be construed to indicate that                                        -14-                                         14            it thought it lacked the authority under the guidelines to            depart downward.                      [W]e have suggested that a sentencing                      court state, where appropriate, "that it                      has considered the mitigating factors                      urged but does not find them sufficiently                      unusual to warrant a departure in the case                      at hand." If a sentencing court neglects                      to use such language, however, the                      sentencing decision is not necessarily                      ripe for remand or review.     Sentencing                      courts                              have                                   had                                        abundant                                                 opportunity                                                              to                      become                             experienced with the Guidelines and                      familiar                                 with                                       their                                              authority                                                         to                                                             make                      discretionary decisions regarding whether                      to depart.            Morrison, 46 F.3d at 132 (internal citations and footnote            omitted) (emphasis added) (quoting (                                               DeCosta, 37 F.3d at 8). As            in               Morrison, "viewed in harmony with its context, the [district            court's decision not to] depart[] reflects no misapprehension            on the part of the district court as to its departure power,            but simply its decision not to exercise that power in the            present case."  Id. at 132-33; see United                                                       States v.  DiIorio,            948 F.2d 1, 9 (1st Cir. 1991) ("[W]e think it apparent from            this record that the court understood its authority to depart            downward[], and yet concluded . . . that the specific            provisions of the Guideline that DiIorio wished to invoke            simply did not permit departure under the circumstances of her            case.").                                            10.  While we do not believe the record supports Rizzo's            contention that the district court did not understand that it            had authority to depart downward in this case, we note that the            district court could have avoided much trouble in this case if                                        -15-                                         15                      Because we find that the record contains no evidence            that the district court believed it lacked authority to depart            downward in this case, we pause only briefly to address Rizzo's            arguments supporting his plea for such a departure. Initially,            we note that with respect to his contention that U.S.S.G. S            5G1.3 provided authority for the district court to depart            downward, S 5G1.3 applies only to "undischarged terms of            imprisonment." See                                United States                                             v.                                                McHan, 101 F.3d 1027, 1040            (4th Cir. 1996),  cert. denied, No. 96-8994, 1997 WL 275967            (June 16, 1997);                             Prewitt v.                                        United States                                                    , 83 F.3d 812, 817-18            (7th Cir. 1996). In this case, Rizzo had discharged the            thirty-three month term of imprisonment resulting from his 1992            convictions prior to being sentenced for his 1995 federal            indictment.                      Similarly, Rizzo's argument that the government            improperly delayed indicting Rizzo until he served his thirty-            three month term of imprisonment for the 1992 convictions is            unavailing in light of                                   United States                                                v.                                                    Saldana, 109 F.3d 100,            104 (1st Cir. 1997). In                                    Saldana, a federal grand jury indicted            the appellant following his release after serving twenty months            of a thirty-month state sentence. The federal grand jury                                            it had heeded the suggestions of  DeCosta and Morrison.   See            DeCosta, 37 F.3d at 8 (suggesting that the "district court            say--where this is the case--that it has considered the            mitigating factors urged but does not find them sufficiently            unusual to warrant a departure in the case at hand");                                                                 Morrison,            46 F.3d at 132 (same).                                         -16-                                         16            indicted the appellant based on conduct that occurred            approximately two years previously, prior to his conviction and            sentencing in the state case. The district court sentenced the            appellant to seventy months' imprisonment.  See id. at 102.                      The appellant claimed, inter alia, that "if he had            been charged with the federal offense while still serving his            state sentence, the federal sentence would, under U.S.S.G. S            5G1.3(c), have been set to run concurrently with the state            sentence."  Id. In    Saldana, we reasoned that "deliberate            tampering to increase a sentence would be a concern, but the            ordinary accidents of acceleration or delay are part of the            fabric of criminal proceedings."    Id. at 104. Affirming            appellant's sentence, we held that "in the present case, the            delay was neither extreme nor implicitly sinister."  Id.                       As in Saldana, nothing in the record indicates that            the delay in this case was sinister. Rizzo indicated that he            possessed no evidence concerning the government's motive in            waiting to indict him until 1995. During the sentencing            hearing, in fact, Rizzo's counsel conceded "I'm not pointing            the finger at the government in terms of its conduct."            Furthermore, in light of the precedent in this circuit, we do            not believe that the delay in this case was "extreme."    See            Saldana, 109 F.3d at 102-04 (involving two-year delay);                                                                    United            States v.                      McCoy, 977 F.2d 706, 711 (1st Cir. 1992) (finding no                                        -17-                                         17            due process violation in case of three and one-half year delay            between conduct at issue and return of federal indictment).                      Rizzo's contention that the government knew of the            facts of the offenses underlying this appeal at the time of his            1992 sentencing and improperly withheld this information from            the sentencing court also is unpersuasive. We previously have            explained:                      Undercover operations comprise a valuable,                      and generally lawful, weapon in the                      government's ar[senal]. Thus, courts                      should proceed with caution in staking out                      rules that will hinder government agents                      who seek lawfully to set such ruses in                      motion. "Despite the fact that undercover                      operations by their nature involve                      elements of furtiveness, duplicity, and                      manipulation, we have never held that such                      initiatives are per  se unfair. To the                      contrary, we think that the Executive                      Branch is free,  within                                               broad                                                     limits, to                      set such snares for unwary criminals."            United                     States v.  Gibbens, 25 F.3d 28, 31 (1st Cir. 1994)            (internal citations omitted) (emphasis added) (quoting United            States v.                      Gifford, 17 F.3d 462, 470-71 (1st Cir. 1994)). Given            the wide latitude we afford the government in conducting sting            operations, "the burden of showing sentencing factor            manipulation [necessarily] rests with the defendant. As with            other fact-sensitive sentencing issues, the burden of proof            must be carried by a preponderance of the evidence."                                                                 Gibbens,                                            11.  Particularly in light of Rizzo's failure to provide an            adequate explanation, we agree with the government that Rizzo's            non-disclosure argument essentially constitutes an accusation            of sentencing factor manipulation on the part of the                                        -18-                                         18            25 F.3d at 31-32 (internal citations omitted);    see  United            States v. Montoya, 62 F.3d 1, 4 (1st Cir. 1995) (indicating            that the "standard is very high" and cautioning that "garden            variety manipulation claims are largely a waste of time").                      In this case, Rizzo offered no evidence whatsoever of            any bad faith on the government's behalf. During Rizzo's            sentencing hearing, his counsel explicitly stated that he did            not have evidence concerning the government's motive in            protecting the information pertaining to Rizzo's "relevant            conduct" during the 1992 sentencing. At one point, Rizzo's            counsel admitted: "I can't probe into the minds of the            government at the time." Later in the hearing, Rizzo's counsel            explained: "[W]e can't speculate about whatever the reasons            were for the government not raising it at that time."                       Rizzo also failed to direct the district court (and            now fails to point this court) to any authority requiring the            government to "call such relevant conduct to the attention of            the sentencing court." For its part, the government explained            that it did not reveal Rizzo's "relevant conduct" to the 1992                                            government.  See United                                     States v. Montoya, 62 F.3d 1, 4 (1st            Cir. 1995) (indicating that sentencing factor manipulation            encompasses "vast range of circumstances"); United                                                                States v.            Connell, 960 F.2d 191, 196 n.8 (1st Cir. 1992) ("Governmental            misconduct that shapes the contours of the crime and thus            delimits the available sentencing options . . . can, in a            suitable case, furnish the basis for downward departure.");                                                                       see            also United                         States v. Okey, 47 F.3d 238, 240 (7th Cir. 1995)            ("Sentencing manipulation occurs when the government engages in            improper conduct that has the effect of increasing a            defendant's sentence.").                                        -19-                                         19            sentencing court because it "had a specific investigative plan            . . . to move from Mr. Rizzo to . . . find out who the            participants were in this counterfeit check ring who were            spreading [fraudulent] paper all throughout the city." This            explanation is plausible given the record in this case and            particularly Rizzo's numerous references to others in the            scheme to whom he was responsible. See                                                    Gibbens, 25 F.3d at 31            (crediting government's explanation that it "was hoping, based            on appellant's allusions to a supposed business partner, to            land a bigger fish"). We thus find that the district court did            not commit an abuse of discretion in refusing to depart            downward on the grounds that the government somehow manipulated            Rizzo's 1992 sentence; Rizzo simply failed to carry his burden            of proof with respect to his allegation of sentencing factor            manipulation.  See id. at 32; Montoya, 62 F.3d at 4.            B.  Loss Calculation                      The district court sentenced Rizzo based on the total            $273,950.00 value of the five counterfeit checks given to            Savarese in 1992. Pursuant to U.S.S.G. S 2F1.1(B)(1)(I), the            district court increased Rizzo's base offense level of six by            eight levels because the loss involved in the scheme fell            between $200,000.00 and $350,000.00.                      Rizzo objected to the eight-level increase both in            his objections to the Presentence Report and during his            sentencing hearing. Rizzo argued that the $273,950.00 was                                        -20-                                         20            generated through a government sting operation. Distorting the            record, Rizzo asserted that "all the checks were deposited into            the government's shell corporation . . . . Therefore, Mr.            Rizzo's guidelines should not be increased by 2F1.1(b)(1) as no            loss was capable of occurring as a matter of law." Perhaps            recognizing the flaw in his earlier assertion, on appeal Rizzo            alters his argument slightly, insisting that he "should only            have been responsible for at most $160,000 under S 2F1.1 since            the other amounts were incapable of being lost and/or had not            been completed as a substantive offense." Because a loss            calculation of $160,000.00 necessitates a seven-level increase            pursuant to U.S.S.G. S 2F1.1(b)(1)(H), rather than an eight-            level increase pursuant to U.S.S.G. S 2F1.1(b)(1)(I), Rizzo            maintained that his "total offense level should have been 15            instead of 16."                      Rizzo rests his argument that actual rather than            intended loss represents the appropriate calculation for            purposes of U.S.S.G. S 2F1.1(b)(1) on two cases,                                                             United States            v.               Galbraith, 20 F.3d 1054 (10th Cir.),                                                    cert.                                                          denied, 513 U.S.            889 (1994), and United                                    States v. Watkins, 994 F.2d 1192 (6th            Cir. 1992). In     Galbraith, the appellant contended that            "because his offense was committed in response to an undercover            sting operation structured so there was no possibility of loss            to a victim, the intended or probable loss was zero."            Galbraith, 20 F.3d at 1059. Reasoning that "[b]ecause this was                                        -21-                                         21            an undercover sting operation which was structured to sell            stock to a pension fund that did not exist, defendant could not            have occasioned any loss even if the scheme had been            completed," the Tenth Circuit ruled that the applicable loss            calculation for purposes of U.S.S.G. S 2F1.1(b)(1) was zero.            Id.                       The Galbraith court's rationale is inapplicable to            this case. Unlike the fictitious victim in    Galbraith, the            intended victims of Rizzo's counterfeit check scheme were            actual corporations. Moreover, the fact that the conspirators            managed to deposit the first check and then to withdraw the            entire $160,000.00 demonstrates that Rizzo could have            "occasioned" a loss "if the scheme had been completed" with            respect to the remaining four checks. If, for instance,            Savarese again had determined to flout the FBI's instructions,            it appears that the conspirators could have successfully            negotiated the other checks totaling $113,950.00.                      As with                              Galbraith, we find                                                 Watkins' treatment of the            appropriate loss calculation under U.S.S.G. S 2F1.1(b)(1)            unpersuasive in the context of Rizzo's appeal. In                                                              Watkins, the            Sixth Circuit enunciated three factors that must be present for            an amount of loss to be relevant under U.S.S.G. S 2F1.1:            "First, as application note 7 instructs, the defendant must            have intended the loss. Second, it must have been possible for            the defendant to cause the loss. Third, the defendant must                                        -22-                                         22            have completed or been about to complete but for interruption,            all of the acts necessary to bring about the loss."  Watkins,            994 F.2d at 1196. Contrary to Rizzo, we believe that these            three factors were satisfied in this case. First, as Rizzo            admits, he intended the $273,950.00 loss. Second, the            conspirators' success with the $160,000.00 check demonstrates            that it was possible for the defendant to cause the loss.            Third, Rizzo provided Savarese with five checks totalling            $273,950.00 and urged him to deposit these checks and then to            remove the funds from the Thermal Shield account, thus            "complet[ing] . . . but for interruption, all of the acts            necessary to bring about the loss." We therefore find that            even if the Watkins factors were dispositive of this appeal,            the circumstances of this case were such that $273,950.00, not            $160,000.00, would represent the proper figure for purposes of            calculating loss pursuant to U.S.S.G. S 2F1.1(b)(1).                      Because Watkins does not guide our analysis of this            issue, we add a few words about our interpretation of U.S.S.G.            S 2F1.1(b)(1). Application Note 7 to U.S.S.G. S 2F1.1 states            in pertinent part: "Consistent with the provisions of S 2X1.1            (Attempt, Solicitation or Conspiracy), if an intended loss that            the defendant was attempting to inflict can be determined, this            figure will be used if it is greater than the actual loss." In            this case, Rizzo admits that he intended to inflict $273,950.00            of loss. According to Application Note 7, therefore,                                        -23-                                         23            $273,950.00 represents the appropriate amount for purposes of            calculating loss under U.S.S.G. S 2F1.1 in this case.                      In United                                 States v.  Egemonye, 62 F.3d 425, 428-29            (1st Cir. 1995), furthermore, we addressed the issue of            intended loss in the context of U.S.S.G. S 2F1.1. The                                                                  Egemonye            appellant was charged with conspiracy and other offenses            relating to the possession and use of stolen credit cards.                                                                       See            id. at 426. Pursuant to U.S.S.G. S 2F1.1(b)(1)(H), the            district court computed the loss at $242,950.00, "representing            the aggregate credit limit of the 51 credit cards purchased .            . . in the four transactions," despite the fact that the            appellant never inflicted any actual loss with many of the            stolen credit cards that he purchased.  Id. at 426-27. As in            the instant case, the appellant was sentenced within the            guidelines range to thirty-seven months' imprisonment.                                                                   See                                                                       id.            at 427. Rejecting the appellant's argument that the district            court's loss calculation based on the limits of all of the            credit cards was "unrealistic," we concluded that on the            "record the use of the aggregate card limits as a measure of            intended and potential loss was [not] clearly erroneous." Id.            at 429. We explained that "[w]here there is good evidence of            actual intent and some prospect of success, we do not think            that a court needs to engage in more refined forecasts of just            how successful the scheme was likely to be."  Id.                                        -24-                                         24                      Given the evidence of Rizzo's intent and the prospect            of future success manifested by his initial success with the            $160,000.00 check, we do not find that the district court's use            of the $273,950.00 figure for purposes of calculating loss            under U.S.S.G. S 2F1.1(b)(1) was clearly erroneous.                                                                See                                                                    United            States v. Carrington, 96 F.3d 1, 7 (1st Cir. 1996),     cert.            denied, 117 S. Ct. 1328 (1997); Egemonye, 62 F.3d at 429.                                     Conclusion                      For the reasons stated above, we affirm the sentence            that the district court imposed.                                        -25-                                         25
