
USCA1 Opinion

	




          May 07, 1993      UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 92-1074                                    UNITED STATES,                                      Appellee,                                          v.                              JULIO CESAR PADIN-TORRES,                                Defendant, Appellant.                                   ________________                                     ERRATA SHEET          The opinion of  this Court issued on March  16, 1993, is ammended          as follows:          On the cover sheet,  the attorneys for the appellant  should read          as follows:   " Guilermo  J. Ramos-Luina with  whom Harry  Anduze                          ________________________            _____________          Montano and Maria H. Sandoval were on brief for appellant.          _______     _________________          March 16, 1993    UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 92-1074                                    UNITED STATES,                                      Appellee,                                          v.                              JULIO CESAR PADIN-TORRES,                                Defendant, Appellant.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                   [Hon. Jose Antonio Fuste, U. S. District Judge]                                             ____________________                                 ____________________                                        Before                                 Breyer, Chief Judge,                                         ___________                            Aldrich, Senior Circuit Judge,                                     ____________________                              and Boudin, Circuit Judge.                                          _____________                                 ____________________               Guillermo J. Ramos-Luina with  whom Harry Anduze Montano and               ________________________            ____________________          Maria H. Sandoval were on brief for appellant.          _________________               Luis A.  Plaza, Assistant United States  Attorney, with whom               ______________          Daniel F. Lopez  Romo, United States  Attorney, was on  brief for          _____________________          appellee.                                 ____________________                                    March 16, 1993                                 ____________________                 BOUDIN,  Circuit  Judge.   Defendant  Julio  Cesar Padin                          ______________            Torres  ("Padin")  pleaded  guilty  to  three  counts  of  an            indictment  for  offenses  related  to  his  operation  of  a            mortgage lending institution.   Padin was sentenced to prison            and ordered to pay $825,000 in restitution to the government.            He now appeals, challenging these sanctions.  For the reasons            that follow,  we modify  the restitution order  and otherwise            affirm.                  Padin  was charged in  a thirteen-count  indictment with            conversion of federal funds,  mail fraud, submission of false            statements,  and obstruction of  justice.  18  U.S.C.    641,            1341,  1001, 1515.  The charges grew out of Padin's operation            of Prudential Mortgage Corporation ("Prudential"), a mortgage            lender participating as an  "issuer" of securities guaranteed            by  the Government  National  Mortgage Association,  commonly            known  as  "Ginnie   Mae."    In  addition  to  managing  the            corporation,  Padin was Prudential's  president and principal            stockholder.                   In  accordance  with  its  agreement  with  Ginnie  Mae,            Prudential was required to make monthly payments of principal            and interest  to holders  of securities issued  by Prudential            and guaranteed by Ginnie Mae.  Prudential was also  obligated            to turn over to individual investors lump sum payments by the            federal government for defaulted government-insured mortgages            issued  by  Prudential.   Beginning  in  1980 and  continuing                                         -2-                                         -2-            through 1987 Padin, in violation of the agreement with Ginnie            Mae, withheld  payment of  the lump sums  collected from  the            federal  government  on  defaulted  mortgages  and  owed   to            individual investors.   A portion  of the funds  was used  to            cover  the  monthly dividends  owed  to  all of  Prudential's            Ginnie Mae  investors, with  the remainder being  diverted to            corporate and personal bank accounts.                 Padin  masked  the   scheme  by   representing  to   the            government that the monies  paid for defaulted mortgages were            being  passed onto  investors.   At  the  same time,  he  led            investors to believe that the mortgages in default were still            alive.   The  fraud came  to light  when Prudential  began to            default  on the monthly dividends.  The resulting loss to the            government,   excluding   collateral  expenditures,   totaled            approximately $11.5  million, the  amount paid out  to Ginnie            Mae insured investors to cover Prudential's default.                  Padin  entered an initial  plea of not  guilty but later            changed his plea to guilty on one count each of conversion of            federal  funds,   mail  fraud,   and  the  filing   of  false            statements.  The remaining  counts were dismissed pursuant to            a plea agreement.  As required by Rule 11, the district court            conducted a  change of plea  hearing.   Fed. R. Crim.  P. 11.            Before accepting his guilty  plea, the district court advised            Padin, among other things,  that he was subject to  a maximum            total fine  of $21,000--$1,000  on the  mail fraud count  and                                         -3-                                         -3-            $10,000 each  on the  conversion and false  statement counts.            At no time  during the  plea hearing did  the district  court            mention that an order of restitution was also a possibility.                 The  sentencing hearing which followed later was largely            consumed by  Padin's efforts  to establish  that much  of the            diverted funds were used to keep Prudential afloat and only a            small  portion of the total  was diverted to Padin's personal            use.  The court then imposed sentence.  The sentence included            a 15-year  term of imprisonment and an order compelling Padin            to  pay  $852,000 in  restitution  to the  government.   This            appeal ensued.                 Padin first contends that the district court in imposing            sentence relied on irrelevant  and mistaken information.  See                                                                      ___            United  States v.  Curran, 926  F.2d 59,  61 (1st  Cir. 1991)            ______________     ______            (defendant  has right  not to  be sentenced  on the  basis of            false information).   Padin claims that  the court improperly            considered   allegations  that  he   withheld  disclosure  of            accounting ledgers subpoenaed by the government, and that the            amount of  losses claimed by the  government was unsupported.                 A trial court  has very broad discretion to  decide what            information  is relevant  for  sentencing  purposes.   United                                                                   ______            States  v. Geer, 923 F.2d 892, 897  (1st Cir. 1991).  The so-            ______     ____            called "allegations"--that important  ledgers were  missing--            were supported by the testimony of a government  auditor, who            further stated  that the  government's audit was  hampered by                                         -4-                                         -4-            the  lack of  access to  the documents.   Padin's  failure to            produce the requested ledgers  or plausibly account for their            whereabouts  was a  relevant  circumstance that  the district            court could consider  in imposing sentence.   See Roberts  v.                                                          ___ _______            United States, 445 U.S. 552  (1980) (trial court may properly            _____________            consider  as  a  sentencing  factor  defendant's  refusal  to            cooperate with law enforcement officials).                 As  to the amount of  government losses,   Padin did not            deny that the government had paid $11.5 million to Ginnie Mae            insured  investors to  cover  Prudential's default.   Rather,            Padin claimed  that this  figure overstated the  loss to  the            government because, according  to Padin, he used  some of the            converted  federal  funds  to sustain  mortgages  that  would            otherwise have  fallen into default.   As the  district court            pointed  out, however,  the number  of would-be  defaults, if            any, could  only be  determined by  reference to the  ledgers            which Padin  failed to  provide.  Under  these circumstances,            the auditor's testimony as to the basic loss of $11.5 million            was  sufficient.   See United  States v.  Zuleta-Alvarez, 922                               ___ ______________     ______________            F.2d 33, 36  (1st Cir.  1990), cert. denied,  111 S.Ct.  2039                                           ____  ______            (1991).                     Finally, Padin takes  exception to the district  judge's            reliance on a  Sentencing Guidelines work sheet  that was not            disclosed  to   Padin  until  after   sentence  was  imposed.            Although Padin's  offense was not governed  by the Sentencing                                         -5-                                         -5-            Guidelines, the district judge permissibly  looked to certain            guidelines factors  in  determining Padin's  sentence.    See                                                                      ___            United States v. Twomey, 845 F.2d 1132, 1135 (1st Cir. 1988).            _____________    ______            The work  sheet reflects  that the district  judge determined            that Padin  had obstructed justice  and abused a  position of            trust, and that Padin  was given no credit for  acceptance of            responsibility.  The obstruction finding was based on Padin's            withholding of the financial ledgers.                     We  find no  error in  the district  court's use  of the            undisclosed  work sheet.  To be sure, a defendant is entitled            to  notice  of  factual  information  that  will  affect  his            sentence as  well as  an opportunity  to respond,  see United                                                               ___ ______            States v. Hernandez, 896  F.2d 642, 644 (1st Cir.  1990), but            ______    _________            Padin was afforded this  right.  While the work  sheet itself            was not disclosed prior to sentencing, Padin had ample notice            of  the  underlying  negative  information  reflected in  the            document.1      Additionally, the  parties were  advised well            ahead of  sentencing that  the district court  would consider            the  Sentencing  Guidelines in  imposing  sentence.   As  for            acceptance of  responsibility, it is a  mitigating factor and                                            ____________________                 1The charge that  Padin impeded  justice by  withholding            accounting ledgers was set forth as a count in the indictment            and reiterated  in the pre-sentence report  released to Padin            in  advance  of sentencing.    The  pre-sentence report  also            contained the  probation officer's assessment  that Padin had            abused a position of trust.                                         -6-                                         -6-            it was  up to Padin's  counsel to  raise the  issue with  the            district court if Padin hoped to obtain credit on this score.                 In addition to attacking his  sentence as a whole, Padin            challenges  the restitution  order on  several grounds.   The            principal  ground  is  that  the district  court,  in  taking            Padin's  guilty  plea, neglected  to  first  inform him  that            restitution could be imposed  as part of his sentence.   Fed.            R.  Crim. P. 11(c)(1) provides that in addition to much else,            the  court must tell  the defendant prior to  his plea of the            maximum penalties, including "when applicable, that the court            may also  order  the defendant  to  make restitution  to  any            victim of  the offense."   The government concedes  that this            warning was not given.                 This objection is  raised for the first  time on appeal.            Padin's  counsel  asserts  that  he  was  caught  off  guard:            restitution  was  not  mentioned  until  the   judge  imposed            sentence  at the  conclusion of  the sentencing  hearing, and            final judgement was entered that same day.  The error is  not            disputed, and is apparent  on the face of the  record without            further  findings.  Rule 11 objections, so far as they affect            the "knowing" character  of the plea, are  treated with extra            solicitude.  United States v. Parra-Ibanez, 936 F.2d 588, 593                         _____________    ____________            (1st Cir. 1991).   Under  all of the  circumstances, we  will            consider the issue under the "plain error" doctrine.                                         -7-                                         -7-                 The government says that  the error, even if  plain, was            not  prejudicial   because   Padin  must   have  known   that            restitution was an issue, given  the attention devoted to the            amount of  the government's  loss.   Most  of that  attention            occurred  after the  plea  was taken.    More important,  the            amount of the loss  was clearly pertinent to the  severity of            the  prison term, so there was good reason for this attention            regardless of restitution.  Cf. U.S.S.G.   2B1.1(b)(1)(1992).                                        __            If the government could show from the record that at the time            of  his  plea  Padin actually  knew  that  restitution was  a            possibility,  this would be a different case. It has not done            so.                 The more difficult problem  stems from the warning given            to  Padin  before his  plea that  $21,000  in fines  might be            imposed.  A  number of circuits  have held that a  warning of            fines can render harmless the failure to warn of restitution,            at  least so  long as  any payments  actually ordered  do not            exceed the figure stated to the defendant at the time of  his            plea.  E.g.,  United States  v. Fox, 941  F.2d 480 (7th  Cir.                   ___    _____________     ___            1991), cert. denied, 112 S. Ct. 1190 (1992); United States v.                   ____  ______                          _____________            Miller,  900 F.2d  919,  921 (6th  Cir.  1990).   The  Second            ______            Circuit  has  taken  the  opposite  view,  reasoning  that  a            defendant might  sometimes decide not  to plead guilty  if he            knew  that restitution,  and  not just  a fine  of comparable            amount, was possible.  United States v. Khan, 857 F.2d 85 (2d                                   _____________    ____                                         -8-                                         -8-            Cir. 1988), modified on  reh'g, 869 F.2d 661 (2d  Cir. 1989),                        ________ __  _____            cert. denied, 111 S. Ct. 682 (1991).            ____  ______                 In  our view,  whether  an omitted  Rule  11 warning  is            prejudicial or harmless turns on the circumstances and we see            no  reason to  lay down  a general  rule.   In this  case, no            reason has been suggested  to us why Padin's choice  to plead            would  have been different if  he had been  told that $21,000            might be  imposed  as restitution,  rather  than as  a  fine.            Indeed, usually restitution is the more attractive label from            the defendant's standpoint, since it reduces the  defendant's            civil liability  to the victim.   In this case, we  think the            Rule 11 violation,  although plain, was also  harmless to the            extent of  $21,000 and  harmful  beyond that  amount.   Since            Padin had  been told at  the plea  hearing that this  was the            maximum  fine on all three  counts, warning of  a much larger            amount could reasonably have  affected his decision to plead.            The  government now says that Padin was actually subject to a            fine of $250,000 on each count, but no one claims that he was            so advised at the time he pled.                 The  question remains whether a remand is required.  The            government has made  plain in  its brief that  it prefers  to            retain  the  guilty  plea even  at  the  cost  of losing  any            restitution.   This is an   understandable choice, especially            because the  government may  still have an  independent civil            claim against  Padin for its losses.   At the same  time, the                                         -9-                                         -9-            choice  of  sentence is  normally a  matter for  the district            court.   In theory, had it known that the restitution ordered            was  unavailable, the  district  court could  have chosen  to            impose a longer prison sentence--the maximum was 20 years--or            even  given  Padin  a  corrected  warning  as  to  sanctions,            allowing him at the same time to  withdraw his guilty plea if            he chose.                 In  this  case, we  think a  remand  would be  a useless            formality.  The government  has made it clear that  annulling            or reducing the restitution  ordered is its preferred outcome            if the court finds prejudicial error.  We cannot imagine that            the district court would  increase the existing  fifteen-year            sentence, let  alone reopen  the guilty plea,  simply because            the  amount   of  direct  restitution  is   reduced  and  the            government  remitted to a civil  suit.  Padin  himself has no            basis  for complaint since under  the modified judgment he is            obliged to pay no  more than he was warned of at  the time of            his guilty plea.                   Padin's  brief contesting  his  sentence  contains  many            separate arguments,  some of  which overlap while  others are            mooted  by  our  resolution.     We  have  addressed  Padin's            principal  contentions  and  considered  the  others  without            finding further error.  The  judgment is modified by reducing                                                     ________            the  restitution   ordered  to  $21,000,   and  is  otherwise            affirmed.            ________                                         -10-                                         -10-
