
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                                                                      ____________________        No. 96-1110                              UNITED STATES OF AMERICA,                                      Appellee,                                          v.                                  SCOTT A. HENSLEY,                                Defendant, Appellant.                                                                                      ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Douglas P. Woodlock, U.S. District Judge]                                              ___________________                                                                                      ____________________                                        Before                               Torruella, Chief Judge,                                          ___________                            Cyr and Lynch, Circuit Judges.                                           ______________                                                                                      ____________________             Miriam Conrad, with whom Federal Defender Office was on brief for             _____________            _______________________        appellant.             Annette Forde, Assistant United States Attorney, with whom Donald             _____________                                              ______        K. Stern, United States Attorney, was on brief for appellee.        ________                                                                                      ____________________                                    August 5, 1996                                                                                      ____________________                    CYR,  Circuit  Judge.   Defendant  Scott  Allen Hensley                    CYR,  Circuit  Judge                          ______________          challenges  the restitutionary sentence  imposed upon him  by the          district  court, thus presenting this  court with its first occa-          sion to interpret and apply the 1990 amendments to the Victim and          Witness Protection  Act ("VWPA"),  18 U.S.C.     3663-64  (1994).          Finding no error, we affirm the district court judgment.                                           I                                          I                                      BACKGROUND                                      BACKGROUND                                      __________                    After  a federal  grand jury  indicted  him for,  among          other things, devising and executing a  scheme to obtain merchan-          dise under  false pretenses  from various computer-products  dis-          tributors across the country, Hensley  pled guilty to all counts,          thereby conceding  the following facts as alleged  in the indict-          ment.1                      On April  1, 1995,  under the  alias "Robert  Halford,"          Hensley rented  a box  at Mail Boxes,  Etc. ("MBE"),  510 Common-          wealth Avenue, Boston, Massachusetts.  On April 14, he telephoned          companies  in California,  New York,  Texas, and New  Jersey, and          using the name "Halford," placed orders for computer equipment in          behalf  of a fictitious company, American Telemark, purportedly a          division  of AT&T,  for delivery  to the  MBE address  in Boston.          Hensley  remitted  five  forged checks  via  Federal  Express, in                                        ____________________               1The  charges included mail fraud, 18  U.S.C.   1341 (1994);          wire  fraud, id.   1343; making or possessing counterfeit securi-                       ___          ties, id.   513; interstate transportation of counterfeit securi-                ___          ties,  id.    2314; and  receipt of  stolen goods  transported in                 ___          interstate commerce, id.   2315.                                ___                                          2          amounts  ranging from  $20,000 to  $31,000 and  bearing the  AT&T          logo.   Once  the  computer equipment  arrived, Hensley  used the          alias "William Noonan"  to rent storage space and  a U-Haul truck          to  transport the  equipment.   On  his next  visit  to the  MBE,          Hensley was arrested by the FBI.                        After Hensley  pled guilty and  before sentencing,  the          government  learned that  he had committed  additional fraudulent          acts during  the same time  period.  According to  the undisputed                                                                 __________          facts  set forth  in the presentence  report ("PSR"),  see United                                                                 ___ ______          States v. Benjamin, 30 F.3d 196,  197 (1st Cir. 1994) (failing to          ______    ________          object bars appellate challenge to facts stated in PSR), on March          30, 1995, Hensley had used  the "William Noonan" alias to  rent a          second box at another MBE  location, on Newbury Street in Boston.          On  April  3,  "Noonan" placed  an  $837.86  telephone  order for          computer software  with Creative Computers, a California company,          for delivery to the  Newbury Street MBE.  He tendered  a counter-          feit money order drawn on a Boston Check Cashiers ("BCC") company          account, which was  dishonored after he  absconded with the  Cre-          ative  Computers software.  Hensley issued three more counterfeit          BCC money  orders in payment  for another  computer order  placed          with  ATS Technologies  ("ATS"), a  credit card  bill, and  a car          rental.                    Although  the charged  conduct  resulted  in no  actual          losses because the  equipment was recovered, the  PSR recommended          that  Hensley reimburse  the car  rental  company ($500.00),  the          credit card company ($725.00), Creative Computers  ($837.86), and                                          3          ATS ($1,026.12),  each of  which had  accepted a  counterfeit BCC          money order.   Hensley objected that the four  companies were not          victims of  the offense of  conviction as the indictment  did not          charge him with passing the counterfeit money  orders.  Following          briefing and oral argument, the district court found that ATS had          sustained no loss, and that neither the credit card bill nor  the          car rental  came within the  scope of the offense  of conviction.          The  court nonetheless ruled that the Creative Computers acquisi-          tion was within the alleged scheme to defraud.  The court accord-          ingly directed Hensley to make restitution to Creative Computers,          and Hensley appealed.                                           II                                          II                                      DISCUSSION                                      DISCUSSION                                      __________                    Federal courts possess  no inherent authority  to order          restitution, and may do so  only as explicitly empowered by stat-          ute.   United States v. Gilberg, 75 F.3d  15, 22 (1st Cir. 1996).                 _____________    _______          The  VWPA authorizes  restitutionary  sentences  by the  district          courts  for the  benefit  of  victims of  federal  offenses.   As          Hensley's criminal conduct and conviction occurred after November          29,  1990, the effective date  of the Crime  Control Act of 1990,          the 1990 VWPA amendments govern our decision.2                         The VWPA provides that "[t]he court . . . may order . .          . restitution  to any  victim  of such  offense."   18  U.S.C.                               ___  ______  __ ____  _______                                        ____________________               2Gilberg, 75 F.3d at 20-22.  Moreover, the Sentencing Guide-                _______          lines  do not purport to  expand the sentencing court's authority          to order restitution.  U.S.S.G.   5E1.1(a)(1) (1995) (incorporat-          ing the VWPA).                                           4          3663(a)(1) (emphasis added).   Prior to the  1990 amendments, the          VWPA had been interpreted by the Supreme Court as limiting resti-          tution to the "loss caused by the specific conduct that [was] the                                            ________ _______          basis of  the offense of  conviction."  Hughey v.  United States,                                                  ______     _____________          495  U.S. 411,  413 (1990)  (emphasis added).   The  Hughey Court                                                               ______          therefore reversed a restitutionary sentence which had been based          on the  total loss  attributable to all  counts in  an indictment                                              ___          charging unauthorized use  of credit cards and theft  by a Postal          Service employee, rather than on the loss attributable to the one          count to which Hughey had pled guilty.  Id. at 422.                                                  ___                    After Hughey, this court held that the specific conduct                          ______                           ________ _______          underlying a  mail fraud  conviction, which  requires proof of  a          broader scheme to  defraud, includes only the  particular mailing          charged and  not the entire mail fraud  scheme.  United States v.                                                           _____________          Cronin, 990 F.2d  663, 666 (1st Cir. 1993);  accord United States          ______                                       ______ _____________          v. Newman, 49 F.3d 1, 11 (1st Cir. 1995) (wire fraud).   Thus, we             ______          adopted  the more  narrow and  lenient majority  view during  the          interim preceding the  1990 amendments to the VWPA.   Cronin, 990                                                                ______          F.2d at 666.                      The present controversy requires us to reexamine Cronin                                                                     ______          in light  of the 1990  amendments.  Consistent with  the minority          view we rejected in Cronin, in 1990 Congress amended  the VWPA to                              ______          provide that  "a victim of an offense that involves as an element                         _ ______ __ __ _______ ____ ________ __ __ _______          a scheme, a  conspiracy, or a pattern of  criminal activity means          _ ______                                                    _____          any person directly harmed by the defendant's criminal conduct in          ___ ______ ________ ______ __ ___ ___________ ________ _______ __          the course of the scheme, conspiracy,  or pattern."  18 U.S.C.             ___ ______ __ ___ ______                                          5          3663(a)(2) (emphasis added).   As Hensley concedes  that a scheme          to defraud is an element of  the mail and wire fraud offenses  to          which he  pled guilty, see United States  v. Sawyer, 85 F.3d 713,                                 ___ ______ ______     ______          723 (1st Cir. 1996), the  district court correctly applied VWPA            3663(a)(2) in this case.  Compare United  States v. Reed, 80 F.3d                                    _______ ______________    ____          1419, 1423 (9th  Cir. 1996) ("felon  in possession" offense  does          not require proof of scheme).                    Under current VWPA   3663(a)(2), the district court may          order   restitution  to  every  victim  directly  harmed  by  the          defendant's conduct "in the course  of the scheme, conspiracy, or          pattern of criminal  activity" that is an element  of the offense          of  conviction, without regard to whether the particular criminal                                                        __________ ________          conduct  of the defendant  which directly  harmed the  victim was          _______          alleged in a  count to which  the defendant pled  guilty, or  was          even charged in the indictment.  United States v. Henoud, 81 F.3d                                           _____________    ______          484, 488  (4th  Cir. 1996)  (unnamed  victim); United  States  v.                                                         ______________          Kones, 77 F.3d 66, 70  (3d Cir. 1996) (providing example); United          _____                                                      ______          States v. Pepper,  51 F.3d 469, 473  (5th Cir. 1995).   Thus, the          ______    ______          outer limits of  a VWPA   3663(a)(2)  restitution order encompass          all direct harm from the  criminal conduct of the defendant which          was within any  scheme, conspiracy, or  pattern of activity  that          was an element of any offense of conviction.  See Kones,  77 F.3d                                                        ___ _____          at 70 (discussing causation requirement).                         Although Hensley acknowledges the  expansiveness of the          1990 amendments,  he contends  that the  fraudulent order  placed          with Creative Computers  was not within the  same scheme embraced                                          6          by the  offense to which he pled guilty.   We approach this claim          by examining the terms of  the indictment and the plea agreement.          Henoud, 81 F.3d at  488.  For the most part,  courts require that          ______          the  indictment  "specifically"  define the  scheme  in  order to          ensure that the restitutionary amount not exceed the harm direct-          ly  caused the victim  of the scheme  embraced by the  offense of          conviction, id.; see also United States v. Bennett, 943 F.2d 738,                      ___  ___ ____ _____________    _______          741 (7th  Cir. 1991)  (noting amorphous  nature of  "scheme" con-          cept), cert.  denied, 504  U.S.  987 (1992).   Nevertheless,  the                 _____  ______          courts of  appeals consistently  have upheld  restitutionary sen-          tences based simply on evidence sufficient to enable the sentenc-          ing court to  demarcate the scheme, including its  "mechanics . .          .[,] the location of the  operation, the duration of the criminal          activity, [and] the methods used" to effect it.  Henoud,  81 F.3d                                                           ______          at 489-90 n.11;  Pepper, 51 F.3d at 473; United States v. Turino,                           ______                  _____________    ______          978  F.2d 315, 318-19  (7th Cir. 1992)  (collecting cases), cert.                                                                      _____          denied, 508 U.S. 975 (1993).            Hensley concedes that the          ______          indictment adequately defined the scheme, but faults the district          court for  focusing on  the broad  "boilerplate" language  in the          indictment,  rather than the specific conduct  alleged.  We think          the 1990  amendments to the  VWPA and the relevant  caselaw, see,                                                                       ___          e.g.,  Turino, 978  F.2d at  318-19  (discussing Seventh  Circuit          ____   ______          cases), preclude  so narrow a definition of the "scheme" element,          which amounts to an attempt to revive the Hughey holding discard-                                                    ______          ed by Congress in the 1990 VWPA amendments.  See supra pp. 4-5.                                                         ___ _____                    Hensley pled guilty  to an indictment alleging  that he                                          7          devised and executed a scheme  in Boston to obtain merchandise by          false  pretenses  from  specific  computer-products  distributors          around the country, which extended  roughly from April 1 to April          25, 1995.  Thus, the  indictment adequately detailed the  offense          of conviction, as well as the underlying scheme to defraud, so as          to enable the district court reliably to fashion a restitutionary          sentence  which fairly reimbursed  any victim directly  harmed by          Hensley's  criminal conduct  during  the  course  of  the  scheme          involved in the offense of conviction.                     As  a fallback position,  Hensley claims that  the Cre-          ative  Computers software  purchase  was not  part of  the scheme          underlying  the offense  of  conviction,  even  under  the  broad          definition  we now adopt.   Restitution  orders normally  are re-          viewed only  for "abuse of  discretion," Gilberg, 75 F.3d  at 20,                                                   _______          and their  subsidiary factual  findings only  for "clear  error."          United  States v.  Savoie,  985  F.2d 612,  617  (1st Cir.  1993)          ______________     ______          (victim loss);  United States v.  Sarno, 73 F.3d 1470,  1503 (9th                          _____________     _____          Cir. 1995),  cert. denied, 116  S. Ct. 2553 (1996),  and petition                       _____ ______                            ___ ________          for cert. filed,     U.S.L.W.    , (U.S. June 27,  1996) (No. 95-          ___ _____ _____   __          ___          9478).                    At the outset, we note that the cases on restitutionary          sentences cast  little light  on how the  sentencing court  is to          determine whether  a criminal defendant's  conduct was part  of a          unitary scheme.  However, we agree  with the government's sugges-          tion, to  which Hensley takes no exception,  that it is useful to          consult the  analogous  caselaw on  duplicitous  indictments  and                                          8          variance of proof.  See,  e.g., United States v. Morse,  785 F.2d                              ___   ____  _____________    _____          771, 774-75 (9th Cir.) (mail  fraud), cert. denied, 476 U.S. 1186                                                _____ ______          (1986).  Thus, in determining whether particular criminal conduct          comprised  part of a  unitary scheme  to defraud,  the sentencing          court  should consider the totality of the circumstances, includ-          ing the  nature of the  scheme, the identity of  its participants          and  victims, and  any commonality  in  timing, goals,  and modus          operandi.   Id.   Accord United States  v. Morrow,  39 F.3d 1228,                      ___   ______ _____________     ______          1233-34 (1st Cir.  1994) (conspiracy), cert.  denied, 115 S.  Ct.                                                 _____  ______          1328 (1995).3                     We do  not agree that  there were too  many differences          between  the fraudulent acquisition  from Creative  Computers and          the conduct  alleged  in the  indictment to  permit the  district          court to rule that the former acquisition came within any alleged          unitary  scheme  to  defraud.   The  undisputed  evidence plainly          supported  the district court  finding that Hensley  launched the          unitary scheme with  the Creative Computers purchase,  by renting          the two drop boxes at MBE locations  in Boston within two days of                                        ____________________               3We reject the assertion by Hensley that this interpretation          permits restitution for  "any loss caused by  defendant's fraudu-          lent conduct, no  matter how unrelated to the  specific scheme at          issue."   The district court  finding that the  counterfeit money          orders Hensley used to "pay" a credit card bill and a  car rental          bill  were not  part  of  the scheme  underlying  the offense  of          conviction  illustrates  the  limits upon  a  sentencing  court's          authority  to order restitution  under the 1990  VWPA amendments.          Moreover, the criteria we endorse for determining whether various          conduct comprised a single scheme  serves as a guide to both  the          initial restitutionary sentencing  decision and appellate review,          and, in keeping  with the amendatory statute, allows the sentenc-          ing  court  substantial,  though  not  unbridled,  discretion  to          reimburse crime victims.                                           9          one another,  placing all  the fraudulent  orders for  goods with          computer-products suppliers  (similar victims)  within less  than          two weeks, using  interstate wires in each instance, and "paying"          for  the goods with  counterfeit instruments.   This abundance of          proof  on  the  commonality of  the  victims,  timing,  and modus          operandi utterly precludes a finding of clear error.  See Savoie,                                                                ___ ______          985 F.2d at 617.                                          III                                         III                                      CONCLUSION                                      CONCLUSION                                      __________                    As the district court correctly concluded that Creative          Computers was a victim of  the offense of conviction for purposes          of  the restitution statute,  its $837.86 restitutionary sentence          must be affirmed.                     AFFIRMED.                    AFFIRMED                    ________                                          10
