
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 96-1132                              UNITED STATES OF AMERICA,                                      Appellee,                                          v.                                  RICHARD GOLDBERG,                                Defendant, Appellant.                                 ____________________                                     ERRATA SHEET            At page 16, line 15, delete ", Michael  Kendall," and at page  17,        line 2, substitute "the prosecutor in question" for "Kendall".                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 96-1132                              UNITED STATES OF AMERICA,                                      Appellee,                                          v.                                  RICHARD GOLDBERG,                                Defendant, Appellant.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Douglas P. Woodlock, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                                Boudin, Circuit Judge,                                        _____________                            Bownes, Senior Circuit Judge,                                    ____________________                              and Lynch, Circuit Judge.                                         _____________                                 ____________________            Morris  M. Goldings  with  whom  David  R. Kerrigan  and  Mahoney,            ___________________              __________________       ________        Hawkes & Goldings were on brief for appellant.        _________________            Michael  Kendall,  Assistant  United  States Attorney,  with  whom            ________________        Donald K.  Stern,  United  States  Attorney, and  Kevin  J.  Cloherty,        ________________                                  ___________________        Assistant United States Attorney, was on brief for the United States.                                  ____________________                                   February 3, 1997                                 ____________________                 BOUDIN, Circuit Judge.   Richard Goldberg was  convicted                         _____________            of two counts  of conspiracy to defraud the  Internal Revenue            Service,  18 U.S.C.    371,  and eight  counts of  aiding and            assisting the filing of false income tax returns, 26 U.S.C.              7206(2).  Goldberg's  appeal is now before  us.  We  begin by            describing  the factual  background  and  proceedings in  the            district court.                 In the years prior to  his indictment in 1995,  Goldberg            was involved in several businesses in and around Boston.  His            ventures  included a billboard company, Logan Communications,            and a partial interest in a "Park 'N Fly" lot located in East            Boston near Logan Airport.   Goldberg also owned and operated            Liverpool Lumber,  Inc., which Goldberg used  as a management            company for various of his other enterprises.                 In  or  around  1988,  Goldberg became  aware  that  the            Commonwealth of Massachusetts  planned to take all or part of            the East  Boston Park 'N Fly lot by eminent domain as part of            its Third Harbor Tunnel project.  The planned taking not only            threatened Goldberg's profitable  parking business, but  also            his billboard company,  since many of its signs  were located            on  the  parking  lot's  land.   Goldberg  began  an  intense            lobbying  effort  against the  proposal  in  1988, eventually            spending  over $1 million of  his and his  partners' money to            oppose the tunnel plans.                                         -2-                                         -2-                 Two  of  those hired  to  oppose  the project--community            activist  Robert A. Scopa  and consultant  Vernon Clark--were            named as co-conspirators in the two separate conspiracies for            which Goldberg was ultimately convicted.  Taking the evidence            most favorable  to the verdict,  the facts pertaining  to the            two different conspiracies were as follows.                 Scopa Conspiracy.  From  1990 to 1995, Goldberg employed                 ________________            Scopa to help organize the East Boston  community against the            tunnel project and to  perform other services.  But  Goldberg            never  paid Scopa in Scopa's own name.  Instead, Goldberg had            his   Liverpool  Lumber  company  issue  paychecks  to  three            successive  "straw"   employees,  none  of  whom  worked  for            Goldberg  and all  of whom agreed  to hand the  money over to            Scopa.                   To reflect the "wages"  of the straw employees, Goldberg            directed  his  bookkeeper  at  Liverpool  Lumber  to  prepare            various W-2,  W-3, and  W-4 reporting statements,  which were            then filed with the  IRS.  These documents falsely  described            wage  payments  to  straws  who  had performed  no  work  for            Liverpool  Lumber.  The straws, in turn, falsely included the            phantom wages from Liverpool on their own individual returns.            Reporting the money on the straws' returns instead of Scopa's            resulted  in a  loss of  about $150  to the  Internal Revenue            Service.                                         -3-                                         -3-                 The  government claimed  at  trial that  the scheme  was            devised  so that Scopa would  seem to be  unemployed and thus            could continue to collect monthly benefits under a disability            insurance policy.  Evidence  also indicated that Scopa sought            to hide the  payments in order to  preserve his status  as an            "independent" activist  in the  East Boston community  and to            prevent an  extramarital affair from being  discovered by his            wife.  The  district court  later found that  Scopa, but  not            Goldberg, was motivated by all of these objectives.                   Clark Conspiracy.  In  the course of opposing  the Third                 ________________            Harbor Tunnel project, Goldberg also retained Vernon Clark, a            lobbyist in  Washington, D.C., who performed various services            to this  end.  Goldberg's companies owed  Clark a substantial            sum of money in 1991 for  work performed in opposition to the            tunnel project.  Rather  than pay the bill directly,  the two            men  agreed  with others  to  a more  complicated  method for            Goldberg to discharge his debt to Clark.                 At the time,  Clark was  having a secret  affair with  a            woman named  Patricia McNally.   The pair  occasionally spent            time in a Maine beach house of which  McNally was part owner.            Clark  sought to fund an expansion of the beach house without            his  wife's knowledge.  Goldberg  agreed to pay  the money he            owed to Clark to  a landscaping company owned by  John Lango,            McNally's  brother-in-law, who  would  in turn  construct the            beach house expansion.                                         -4-                                         -4-                 Goldberg arranged for  the preparation  of two  separate            $10,000 invoices to Park 'N Fly from Lango, dated October 15,            1991 and  January 1, 1992,  respectively.  The  invoices were            ostensibly for landscaping services, although Lango performed            no work for any  of Goldberg's companies.  The  invoices were            paid  by  Park 'N  Fly.   Lango testified  at trial  that the            payments were structured  in two installments so as to reduce            his taxes on the transaction.                 The triangular  flow of money and  services involved the            preparation and filing  of several false  tax documents.   At            Goldberg's direction,  Park 'N Fly sent  forms 1099-MISC, one            for each $10,000 payment, to the IRS and to Lango.  The forms            falsely listed  the payments as non-employee  compensation to            Lango.  Lango in turn reported  the payments as income on his            own income  tax returns  in  1991 and  1992.   Clark did  not            report the money.   The foreseeable tax loss to the IRS based            on this scheme was about $3,000.                 A federal  grand jury indicted Goldberg on April 6, 1995            for  offenses   relating  to  the  above   activities.    The            indictment charged Goldberg with  two counts of conspiring to            defraud  the  United  States  government, 18  U.S.C.     371,            several counts of  aiding and assisting  the filing of  false            income tax returns,  26 U.S.C.   7206(2),  and several counts            of mail fraud  based on  his alleged efforts  to conceal  his                                         -5-                                         -5-            employment of Scopa from the latter's disability insurer.  18            U.S.C.   1341.                 After moving  unsuccessfully to dismiss  the indictment,            Goldberg waived his  right to  a trial by  jury.   Goldberg's            trial  before the  district  judge took  eight  days, and  on            September 6,  1995, the court  announced its  findings.   The            court  found Goldberg  guilty  of conspiring  to defraud  the            government and of aiding and assisting in  the preparation of            false  tax  returns,  but acquitted  him  on  the  mail fraud            charges on the  ground that  his motive to  help defraud  the            insurer had not been proved beyond a reasonable doubt.                 At Goldberg's  sentencing in December 1995, the district            court made guideline calculations  (described below) but then            departed downward  two levels  and sentenced Goldberg  at the            bottom of the range.   The result was a  ten-month sentence--            five  months to  be served  in prison  and five  in community            confinement--as well as three years of supervised release and            a  $20,000  fine.    Goldberg now  appeals,  challenging  his            convictions and sentence.                 The most important and difficult issues on appeal relate            to Goldberg's conviction for conspiracy under 18 U.S.C.   371            to defraud  the IRS.  This  type of conspiracy is  known as a            Klein  conspiracy,  taking  its  name from  an  earlier  case            _____            involving a complex scheme designed to escape taxes.   United                                                                   ______            States  v.  Klein, 247  F.2d 908  (2d  Cir. 1957).   Goldberg            ______      _____                                         -6-                                         -6-            argues  that  the district  court  misunderstood  the crime's            "purpose" element  and that  the evidence did  not support  a            conviction.                 The defraud  clause  of  Section  371  criminalizes  any            conspiracy  "to  defraud the  United  States,  or any  agency            thereof in any manner or for  any purpose."  18 U.S.C.   371.            Such conspiracies to  defraud are not limited to those aiming            to deprive the government of  money or property, but  include            conspiracy to  interfere  with government  functions.    See,                                                                     ____            e.g., United States v. Tarvers, 833 F.2d 1068, 1075 (1st Cir.            ____  _____________    _______            1987).  The crime with which Goldberg was charged, therefore,            was  that   he  conspired   to  interfere  with   the  proper            functioning  of  the IRS,  through  the filing  of  false tax            documents.                 It  is commonly said that in such a conspiracy the fraud            has  to be  a purpose  or object  of the conspiracy,  and not                          _______     ______            merely  a  foreseeable  consequence  of   the  conspiratorial            scheme.  Dennis v. United States, 384 U.S. 855, 861 (1966); 1                     ______    _____________            Sand et al., Modern Federal Jury Instructions   19.02 (1990).                 ______  ________________________________            Consider,  for example, the case  of a band  of bank robbers.            All know that the  agreed-upon robbery will generate "income"            that  none of  the  robbers will  report.   Yet  it would  be            straining to describe interference with  the IRS as a purpose            or  object of the conspiracy.   E.g., United  States v. Vogt,                                            ____  ______________    ____            910 F.2d 1184, 1202 (4th Cir. 1990).                                         -7-                                         -7-                 This  requirement  of  purpose  accords  generally  with            conspiracy doctrine, United States v. Alvarez, 610 F.2d 1250,                                 _____________    _______            1256 (5th  Cir. 1980), but  it is especially  important under            the  defraud clause  of  section 371.    There are  not  many            financial   crimes  without   some  implications   for  false            reporting in someone's tax filings, if not for  tax liability            itself.     If   section  371   embraced  every   foreseeable            consequence  of  a conspiracy,  many  joint  financial crimes            having no other federal nexus--and perhaps  many non-criminal            acts as well--would automatically become federal conspiracies            to defraud the IRS.                 The "purpose" requirement, however,  is easier to  state            than  to apply.  The  laundering of drug  money, for example,            normally involves  the deliberate concealment of  the money's            origin.   The  primary  purpose  is almost  always  to  avoid            detection of the underlying  crime; but can a jury  also find            an  implied secondary  objective to  conceal income  from the            IRS?  We have held, on specific facts, that a jury could draw            such an inference and  also find a violation of  section 371.            E.g., United States v.  Cambara, 902 F.2d 144, 147  (1st Cir.            ____  _____________     _______            1990); Tarvers, 833 F.2d at 1075-76.                   _______                 Such cases  are the source of  Goldberg's first argument            on this issue.  He argues, inventively, that the conspirators            either  must  have  as  their  primary  purpose  the  aim  of            frustrating  the IRS  or must  be agreeing  to  undertake the                                         -8-                                         -8-            conduct  in question to conceal some other crime.  An example            of the  first alternative  (primary purpose) is  Klein itself                                                             _____            where a web of shell companies and deceptive arrangements was            devised to evade  taxes; the second  alternative (concealment            of crime) captures the money laundering precedents.                 This view of section 371 might explain a number of cases            and  create a  barrier against  overreaching by  prosecutors.            But  it  makes no  doctrinal sense.    A conspiracy  can have            multiple objects, Ingram v. United States, 360 U.S. 672, 679-                              ______    _____________            80 (1959), and any agreed-upon object can be a purpose of the            conspiracy and  used to  define its character.   The  central            problem,  which  ought  not  be shirked,  is  to  distinguish            rationally  between cases  where interfering  with government            functions  is  a  purpose and  those  where  it  is merely  a                       __            foreseeable effect of joint action taken for other reasons.                 This  effort poses  subtle  problems  in  discriminating            "purpose" from "knowledge" and in separating the objects of a            conspiracy from its more  remote consequences.  Volumes could            be written on these subjects but--for cases like ours--a more            compact  solution is  at  hand: where  the conspirators  have            effectively agreed  to falsify  IRS documents to  misstate or            misattribute  income,  we  think  that  (depending  upon  the            circumstances) the factfinder may  infer a purpose to defraud            the government by interfering with IRS functions in the sense            endorsed by the Supreme Court in Dennis.                                                 ______                                         -9-                                         -9-                 It may well be that the conspirators in this case had no            subjective desire--primary or secondary--to throw sand in the                                       __            wheels of the  IRS, let alone a subjective aim  to reduce tax            liability.    Goldberg's argument  on  this  point, with  one            qualification as  to the Clark conspiracy,  may be plausible.            But  filing a  number of  false tax  documents misattributing            income  can interfere  so  clearly and  proximately with  IRS            functions--or at least a factfinder  could (but need not)  so            find--that  we see  no  sharp distinction  under section  371            between a purpose  to file  such documents and  a purpose  to            interfere.                 In permitting  a factfinder to equate  the two purposes,            we  leave untouched  the general  precept, namely,  that mere            collateral  effects of  jointly agreed-to  activity, even  if            generally foreseeable, are not  mechanically to be treated as            an object of  the conspiracy.  This would be a different case            if, without  filing false tax documents,  Goldberg had agreed            with  his partners to pay Jones under the table, knowing that            Jones had no intention of reporting the money to the IRS.  If            the difference is in degree, then here the degree matters.                 This  brings us  to the  evidentiary question  raised by            Goldberg  which we  rephrase to  accord with  our just-stated            view of  the law:  does  the evidence in this  case show that            Goldberg and at least one other conspirator shared  a purpose            to interfere with IRS functions by the filing of false income                                         -10-                                         -10-            reports  with the  IRS?   This  question  must be  asked  and            answered separately  as to  each conspiracy, as  Goldberg was            convicted of two separate  conspiracies under section 371 and            each conviction involves a separate assessment.                 In each conspiracy, the  illicit purpose that gives rise            to  section 371  violation  must be  shared  by two  or  more            conspirators.   Although the government's brief  stresses the            evidence pertaining  to Goldberg's own role  and knowledge, a            conspiracy to  defraud requires at  least two who  share that            aim. Innocent third parties  may be the unwitting instruments            of a conspiracy.   But  when it comes  to characterizing  the            purposes or objects of  the conspiracy, it is those  that are            shared  by  at least  two  co-conspirators that  make  up the            illegal agreement between them.   United States v. Krasovich,                                              _____________    _________            819 F.2d 253, 255 (9th Cir. 1987).                 Here, the  district court  found that  a purpose of  the            conspirators, in  each conspiracy, was to  interfere with the            IRS.   As  we have  said,  such a  purpose  can be  inferred,            depending  upon the facts, where  the very acts  agreed to by            the conspirators included the  filing of false income-related            tax  documents.    This  purpose can  fairly  be  imputed  to            Goldberg  who arranged  for the creation  of several  or more            false  tax  documents  in  each scheme.    The  duration  and            complexity of the schemes, and Goldberg's own sophistication,            add to the inference.                                         -11-                                         -11-                 There is no evidence  that Goldberg discussed the filing            of false tax documents with other conspirators.  Yet we think            that such  conduct was an  integral and self-evident  part of            each  conspiracy,  permitting the  inference  that other  co-            conspirators  shared in  that purpose.   In  the case  of the            Scopa conspiracy,  false W-2s were  given to the  straws, who            were  participants in  the scheme,  over an  extended period.            Scopa himself signed a  tax return with his wife, who was one            of the straws, that incorporated a false W-2.                   As  to the  Clark conspiracy,  Lango received  the false            form 1099s, and he in turn  reported the false figures to the            IRS.  Indeed, Lango asked that the amount be  divided so that            it could be reported in two different years, testifying later            that Clark had  made the  suggestion.  This  indicates a  tax            motive  but, in addition, shows  that both men  knew that the            filing of false  tax documents  was an integral  part of  the            scheme,  and both shared in  this purpose with  Goldberg.  In            sum, the  evidence supports the  trial court's findings  of a            common purpose to interfere with IRS functions.                 In  addition to "the danger [of injustice] inherent in a            criminal  conspiracy charge,"  Dennis, 384  U.S. at  860, the                                           ______            defraud clause  of section  371  has a  special capacity  for            abuse because of the vagueness  of the concept of interfering            with  a proper government function.  For that reason, we have            examined with special  care both the concept and the evidence                                         -12-                                         -12-            in  this case.    But having  done so,  we conclude  that the            conduct and purpose of the defendants, although markedly less            sinister  than in  Klein,  could properly  be  found to  fall                               _____            within the outer bounds of section 371.                 Goldberg next  challenges the admission at  trial of two            out-of-court conversations between Lango  and Clark, in which            they  discussed  the  false   landscaping  invoices  and  the            solicitation  of  Goldberg's  participation  in  the  scheme.            These statements were admitted, over Goldberg's  objection at            trial, pursuant to Fed. R. Evid. 801(d)(2)(E), which provides            that "a statement by  a co-conspirator of a party  during the            course  and   in  furtherance  of  the   conspiracy"  is  not            considered hearsay.                   Goldberg does not dispute that  Lango and Clark made the            challenged  statements  during  and  in  furtherance  of  the            conspiracy,  but  he  argues  that the  statements  were  not            admissible  against  him because  they  were  made before  he            joined.  He relies heavily on our opinion in United States v.                                                         _____________            Petrozziello, 548 F.2d 20 (1st Cir. 1977), where we said that            ____________            "if  it is more  likely than not  that the  declarant and the            defendant  were  members of  a  conspiracy  when the  hearsay            statement was made, and that the statement was in furtherance            of the conspiracy, the hearsay is admissible."  Id. at 23.                                                            __                 Although this language has been cited with approval in a            few later cases, e.g.,   United States v. McCarthy,  961 F.2d                             ____    _____________    ________                                         -13-                                         -13-            972, 976-77 (1st Cir. 1992), it  conflicts with United States                                                            _____________            v. Baines, 812 F.2d 41 (1st Cir. 1987).  Baines expressed the               ______                                ______            traditional notion  that--insofar as hearsay  is concerned--a            late-joining conspirator takes the conspiracy as he finds it:            "a  conspiracy  is like  a train,"  and  "when a  party steps            aboard, he  is part of  the crew,  and assumes  conspirator's            responsibility for the existing freight . . . ."   Id. at 42;                                                               ___            accord United States v. Saccoccia, 58 F.3d 754, 778 (1st Cir.            ______ _____________    _________            1995).                 Frankly,  the underlying co-conspirator exception to the            hearsay rule  makes  little sense  as  a matter  of  evidence            policy.   No  special guarantee  of reliability  attends such            statements,   save  to   the   extent   that  they   resemble            declarations against  interest.   The exception  derives from            agency  law, an analogy that  is useful in  some contexts but            (as  the Advisory  Committee noted)  is "at  best  a fiction"            here.  The most  that can be said is that  the co-conspirator            exception  to  hearsay  is  of  long  standing  and  makes  a            difficult-to-detect crime easier to  prove.  United States v.                                                         _____________            Gil, 604 F.2d 546, 549 (7th Cir. 1979).            ___                 If  starting afresh,  one  might argue  that the  narrow            Petrozziello version of the exception should be preferred, if            ____________            only  because  it  accords  better with  the  companion  rule            imposing  substantive liability  for  other crimes  committed            during the  conspiracy; a  co-conspirator is held  liable for                                         -14-                                         -14-            foreseeable  acts  of  others  done  in  furtherance  of  the            conspiracy  but  only  if  committed  during the  defendant's            period of  membership.   United States  v. O'Campo,  973 F.2d                                     _____________     _______            1015, 1021 (1st Cir. 1992).  Symmetry is at least convenient.                 But we are not starting afresh.  The broader Baines test                                                              ______            describes the  traditional approach, United States  v. United                                                 _____________     ______            States Gypsum  Co., 333  U.S. 364, 393  (1948), presumptively            __________________            adopted by the Federal  Rules of Evidence.  It is followed in            most circuits.   See 2  Saltzburg, et al.,  Federal Rules  of                             ___               ______   _________________            Evidence  Manual 219-22  (5th  ed. 1990)  (collecting cases).            ________________            Most important,  it is  the test  in most  of our  own recent            cases,  including  Saccoccia,  decided only  19  months ago.1                               _________            This panel  is arguably  not free,  but is in  any event  not            inclined, to depart from Saccoccia.                                     _________                 Goldberg's  next claim on appeal is  based on his motion            filed prior to trial asking the district court to dismiss the            indictment  on  the ground  of  selective  prosecution.   The            district  court  denied the  motion  without  holding a  full            evidentiary hearing.   Goldberg claims that  he alleged facts            sufficient  to require a hearing on his complaint, and he now                                            ____________________                 1See  Saccoccia, 58  F.3d at 778;  O'Campo, 973  F.2d at                  ___  _________                    _______            1023 n.5; United  States v.  Fields, 871 F.2d  188, 194  (1st                      ______________     ______            Cir. 1989); United States v. Murphy,  852 F.2d 1, 8 (1st Cir.                        _____________    ______            1988);  United States v. Anguilo, 847 F.2d 956, 969 (1st Cir.                    _____________    _______            1988); United  States v. Reynolds,  828 F.2d  46, 47-48  (1st                   ______________    ________            Cir.  1987); United States v. Cintolo, 818 F.2d 980, 997 (1st                         _____________    _______            Cir. 1987).                                          -15-                                         -15-            asks this court to remand the case so that he may have such a            hearing.                    The government is allowed "broad discretion" in deciding            whom  to prosecute, Wayte v. United States, 470 U.S. 598, 607                                _____    _____________            (1985), but there  are some limitations.  It is said that the            government  may not  base  its decision  to  prosecute on  an            "unjustifiable standard," including the  defendant's exercise            of protected statutory and constitutional rights.  Wayte, 470                                                               _____            U.S. at  608.  Goldberg bases his selective prosecution claim            on  the  theory that  he was  targeted  by the  government in            response  to  his vigorous--and  constitutionally protected--            lobbying activities in opposition  to the Third Harbor Tunnel            project.                 In seeking an evidentiary hearing, a defendant need only            allege  "some  facts (a)  tending to  show  that he  has been            selectively prosecuted  and  (b) raising  a reasonable  doubt            about the  propriety of  the prosecution's purpose."   United                                                                   ______            States v. Saade, 652  F.2d 1126, 1135  (1st Cir. 1981).   But            ______    _____            the court may  refuse to  grant a hearing  if the  government            puts forward adequate "countervailing  reasons" to refute the            charge, id., and if  the court is persuaded that  the hearing                    ___            will  not be  fruitful.   Review on  appeal is  for abuse  of            discretion.  United  States v.  Gary, 74 F.3d  304, 313  (1st                         ______________     ____            Cir. 1996).                                         -16-                                         -16-                 Here, Goldberg  alleged that  one of the  prosecutors on            the  case  made a  comment  to  Goldberg's  counsel during  a            preindictment meeting to the effect that Goldberg "should not            have won" his  fight with Frederick  Salvucci, Massachusetts'            secretary of transportation during the tunnel planning stage.            Goldberg  also   claimed  that  the  initials   "D.D."  on  a            prosecution file reflect the  complicity in the investigation            of David Davis, executive director of MassPort.   Finally, he            pointed to  the fact that  several of his  co-conspirators in            the  two  schemes,  including  Clark and  Lango,  were  never            indicted.                   The  government filed  several affidavits  to  rebut the            claim.   It denied that  the prosecutor in  question made the            alleged statement to Goldberg's  attorney.  It explained that            the  initials  "D.D."  on  the file  that  raised  Goldberg's            suspicion in fact referred  not to David Davis but  to Denise            Doherty,  an  FBI agent  assigned to  the  case.   In another            district court paper, the government described the origins of            its  investigation  into   Goldberg's  activities  and   gave            examples  of other  recent  prosecutions for  mail fraud  and            Klein conspiracies.            _____                 The district court  ultimately denied a hearing,  saying            that Goldberg's claims  were "close to conclusory."   We have            reviewed the complete filings of both sides and  the district            court's  explanation.  What is  involved is a judgment call--                                         -17-                                         -17-            tempered on appeal by  the deferential standard of review--as            to the force and specificity of the allegations, the strength            of the response, and  the likelihood that a hearing  would be            helpful.   United States v.  Lopez, 71 F.3d  954, 963-64 (1st                       _____________     _____            Cir.  1995).   Here,  the district  court  did not  abuse its            discretion.                 The claim of selectivity  was quite weak; the government            largely explained  its choice  mainly to pursue  Goldberg and            Scopa.   And  the rather  modest evidence of  wrongful motive            also melted away, leaving only a single dispute.  As to this,            four prosecutors  denied under  oath that the  alleged remark            had been made.   But it is  in any event too  thin a reed  to            require an evidentiary hearing, given the lack of surrounding            evidence to support a selective prosecution claim.                 Even less need be said about Goldberg's later  new trial            motion,  whose summary  denial is  also cited  as error.   In            substance  Goldberg complained  that  the government  did not            follow its  own internal rules for tax prosecutions or reveal            to  him information  about this  decision.   The government's            procedures do not create substantive rights, United States v.                                                         _____________            Michaud, 860 F.2d 495,  499 (1st Cir. 1988), and  there is no            _______            substantial basis for believing that  the government withheld            Brady material,  Brady v. Maryland,  373 U.S. 83  (1963), let            _____            _____    ________            alone that its actions were prejudicial.                                         -18-                                         -18-                 Goldberg's last claim of error  concerns his sentencing.            In   fixing  the  sentence,   the  district   court  enhanced            Goldberg's  base offense  level  of 10,  by four  levels--two            levels  for his role in the offense, U.S.S.G.   3B1.1(c), and            two more levels  for obstruction of justice,  id.   3C1.1--to                                                          ___            arrive  at an adjusted offense  level of 14.   (All citations            are  to  the  November   1995  edition  of  the  guidelines).            However, the court departed downward two levels to 12 because            it thought  Goldberg's  conduct was  outside the  "heartland"            contemplated  by the  Klein conspiracy  sentencing guideline.                                  _____            Id.   2T1.9.            ___                 The  district  judge  stated  that  although  Goldberg's            conduct "as  a matter of law constitutes  a Klein conspiracy,                                                        _____            as a matter of  sentencing law, it seems to  me inappropriate            to  apply the  Klein  conspiracy guidelines."    He chose  to                           _____            depart downward  two levels because he  thought the guideline            section for aiding and  assisting tax fraud,   2T1.4,  with a            base  offense level  of 8  (when  the tax  loss is  $3,001 to            $5,000), was  more reflective of Goldberg's  conduct than the            Klein conspiracy guideline,   2T1.9, which has a base offense            _____            level of 10.2                                            ____________________                 2The ten-month  sentence--five  months to  be served  in            prison and five in community confinement--was the minimum end            of  the resulting guideline range of 12.  U.S.S.G. ch. 5, pt.            A (10-16 months at offense level 12).                                         -19-                                         -19-                 The government, sensibly in our view,  has chosen not to            pursue  an appeal from the downward departure.  But Goldberg,            as is his right, challenges  the district court's decision to            impose  a  two-level   enhancement  for  his   managerial  or            supervisory role  in the Scopa  and Clark conspiracies.   The            applicable guideline calls for  an increase if "the defendant            was  an  organizer, leader,  manager,  or  supervisor in  any            criminal activity."  U.S.S.G.    3B1.1(c).  In such a case, a            two-level  increase applies to  joint criminal  activity that            involved fewer  than five participants and  was not otherwise            extensive.  Id.                        ___                 Goldberg  says  that  the  only  person  he  managed  or            supervised  was his  bookkeeper, Arlene  Meucci.   Meucci, he            argues, does  not count under  the guideline because  she was            not  a culpable participant.  See United States v. Morillo, 8                                          ___ _____________    _______            F.3d  864,  872 &  n.13 (1st  Cir.  1993); U.S.S.G.    3B1.1,            comment  n.1.    However,  at  the  sentencing  hearing,  the            district court found that Goldberg "had a management role" in            connection with  false payroll and tax documentation directed            to the straw employees in the Scopa conspiracy.                   We review  a district court's factfinding  at sentencing            under  a  clearly  erroneous  standard.    United  States  v.                                                       ______________            Thompson, 32 F.3d 1, 4 (1st Cir. 1994).  On the record before            ________            us,  ample evidence  shows  that Goldberg  superintended  the            straws'  receipt of false tax  documents.  Goldberg says that                                         -20-                                         -20-            Scopa  and  Clark   were  the   true  leaders   of  the   two            conspiracies.   But a defendant need  not be at the  top of a            criminal scheme to be a manager or supervisor.  United States                                                            _____________            v.  Savoie, 985  F.2d  612,  616  (1st  Cir.  1993).    Here,                ______            Goldberg's role was sufficient for the enhancement even if we            assume that  Scopa conceived of  the payroll  scheme and  may            have exercised primary supervision over the straws.                 Affirmed.                 ________                                         -21-                                         -21-
