     11-5194-cr
     United States v. Desnoyers

 1                       UNITED STATES COURT OF APPEALS
 2
 3                           FOR THE SECOND CIRCUIT
 4
 5                                August Term, 2012
 6
 7
 8   (Argued: December 17, 2012             Decided: February 14, 2013)
 9
10                            Docket No. 11-5194-cr
11
12   - - - - - - - - - - - - - - - - - - - -x
13
14   UNITED STATES OF AMERICA,
15
16                     Plaintiff-Appellant,
17
18               - v.-
19
20   MARK DESNOYERS,
21
22                     Defendant-Appellee.
23
24   - - - - - - - - - - - - - - - - - - - -x
25

26         Before:           JACOBS, Chief Judge, CALABRESI, and
27                           LEVAL, Circuit Judges.
28
29         The United States appeals from a judgment entered in

30   the United States District Court for the Northern District

31   of New York (Hurd, J.) re-sentencing Mark Desnoyers to five

32   years’ probation and assessing $45,398 in restitution.

33   Desnoyers was convicted of offenses arising from his

34   malfeasance as an air monitor for asbestos abatement

35   projects in and around Plattsburgh, New York.         Desnoyers

36   was initially sentenced to five years’ probation (and
1    restitution of $34,960) after the district court granted his

2    motion under Rule 29 to dismiss the conspiracy charge (Count

3    I).   On appeal, we reinstated the conviction for Count I and

4    remanded for re-sentencing.    For the following reasons, we

5    conclude that the sentence was procedurally unreasonable; we

6    therefore vacate and again remand for re-sentencing.

 7                                 RAJIT S. DOSANJH, (Craig A.
 8                                 Benedict, on brief), for Richard
 9                                 S. Hartunian, United States
10                                 Attorney for the Northern
11                                 District of New York, Syracuse
12                                 New York, for Appellant, United
13                                 States of America.
14
15                                 JOHN B. CASEY, Dreyer Boyajian
16                                 LLP, Albany, New York, for
17                                 Appellee, Mark Desnoyers.
18
19   DENNIS JACOBS, Chief Judge:
20
21         The United States takes this appeal from the sentence

22   imposed following our reinstatement of a count of conviction

23   dismissed by the district court under Federal Rule of

24   Criminal Procedure 29.   The re-sentencing has resulted in

25   imposition of the same term of probation and an increase in

26   restitution of about $10,000.

27         Desnoyers was convicted by a jury in the United States

28   District Court for the Northern District of New York (Hurd,

29   J.) of offenses arising from his malfeasance as an air



                                     2
1    monitor for asbestos abatement projects in and around

2    Plattsburgh, New York.    The grant of Desnoyers’s post-trial

3    motion to vacate Count I--the conspiracy charge--left four

4    substantive violations.

5        On the government’s initial appeal, we reinstated the

6    jury verdict, and remanded for re-sentencing.   United States

7    v. Desnoyers (“Desnoyers I”), 637 F.3d 105, 112 (2d Cir.

8    2011).

9        On remand, the district court imposed the same five-

10   year term of imprisonment and increased the restitution

11   amount to $45,398.   The government now attacks the

12   procedural and substantive reasonableness of the sentence,

13   arguing mainly that the district court improperly excluded

14   new evidence that was not submitted at the initial

15   sentencing.    The government also contests the restitution

16   calculation.

17       For the reasons that follow, we conclude that the

18   sentence was procedurally unreasonable; we therefore vacate

19   and remand to the district court for re-sentencing.

20

21                              BACKGROUND

22       Desnoyers’s conviction arose out of his work as an air

23   monitor on ten asbestos removal projects in 2005 and 2006.

                                    3
1    An air monitor conducts air sampling to ensure that the

2    asbestos was removed properly and that no asbestos fibers

3    remain suspended in the air.   See N.Y.S. Indus. Code Rule

4    56-17.8.   The conspiracy count (Count I) that was dismissed

5    post-trial and reinstated after appeal arises from eight

6    asbestos removal projects that Desnoyers conducted together

7    with his codefendants: John Wood; one of Wood’s associates,

8    Curtis Collins; and one of Desnoyers’s employees, Tom

9    Marble.    Wood, Collins, and Marble all testified at trial

10   that abatement at these jobs was performed improperly: The

11   asbestos was ripped out haphazardly causing asbestos fibers

12   to fill the air; the debris was carried out in plastic bags

13   covered in asbestos dust; and chunks of asbestos debris were

14   left in the work area.   Marble testified that he never saw

15   Desnoyers take air samples, and Wood testified that

16   Desnoyers assured Wood that the air samples “w[ould] come

17   back clean” immediately after the work concluded.   Trial Tr.

18   316, Sept. 10, 2008.   The air samples did, in fact, “come

19   back clean” despite large amounts of loose asbestos

20   littering the properties.

21       Two other counts of conviction arise from the same “rip

22   and run” pattern: a violation of the Clean Air Act (Count V)

23   at a commercial building in Oneonta, New York, the so-called

                                    4
1    “Da’Vida” project; mail fraud (Count VI) in connection with

2    a project at the High Peaks Hospice (“Hospice”) in Port

3    Henry, New York; and making false statements to the

4    Environmental Protection Agency (“EPA”) (Counts XII, XIII,

5    and XIV) concerning two of the projects giving rise to the

6    conspiracy count.

7        The jury verdict, rendered on September 19, 2008,

8    convicted Desnoyers on Counts I, V, VI, XII, and XIII.1    The

9    district court granted Desnoyers’ Rule 29 motion for a

10   judgment of acquittal as to Count I only.   United States v.

11   Desnoyers, No. 06-CR-494, 2009 WL 1748730 (N.D.N.Y. June 19,

12   2009).

13       At sentencing on December 18, 2009, the district court

14   calculated Desnoyers’s offense level using the fraud section

15   of the United States Sentencing Guidelines Manual

16   (“U.S.S.G.” or “Guidelines”), U.S.S.G. § 2B1.1.   The court

17   calculated the loss amounts under U.S.S.G. § 2B1.1(b)2 as

18   $34,960, which was the contract value of the Hospice and

19   Da’Vida projects plus the estimated clean-up cost for the



          1
              The jury acquitted Desnoyers on Count XIV.
          2
              Section 2B1.1 provides that the sentencing range
     be determined in part by the amount of loss that a defendant
     causes.
                                  5
1    Hospice; the Da’Vida victim provided no clean-up estimate.

2    This yielded a six-level increase in the base offense level.

3    U.S.S.G. § 2B1.1(b)(1)(C).

4        The court accepted the Probation Office’s

5    recommendations for sentencing enhancements except for a

6    two-level enhancement under U.S.S.G. § 3B1.1(c) for

7    Desnoyers’s role as an organizer of conduct involving fewer

8    than five participants.   With a total offense level of

9    twenty-one and a criminal history category of I, Desnoyers

10   was subject to a Guidelines range of 37 to 46 months’

11   imprisonment.

12       A non-Guidelines sentence (five years’ probation and

13   $34,960 restitution) was imposed on the grounds that

14   Desnoyers was a “novice in the asbestos removal business,”

15   that he had been “duped and misled” by Wood and Collins,

16   Sentencing Tr. 26, Dec. 18, 2009, that he was doing

17   creditable work at the New York State Department of Mental

18   Retardation and Developmental Disabilities helping disabled

19   people get services, and that he had performed similar work

20   at the Advocacy Resource Center.




                                   6
1        On the government’s appeal, we reversed the grant of

2    the Rule 29 motion and remanded with instructions “to

3    reinstate the jury verdict, enter a judgment of conviction

4    on the conspiracy count, and resentence Desnoyers

5    accordingly.”   Desnoyers I, 637 F.3d at 112.

6        Before re-sentencing, the government provided the

7    Probation Office with loss amounts for the victims of the

8    eight projects listed in the reinstated Count I.    These loss

9    amounts included victims’ payments for the improper asbestos

10   removal and clean-up cost estimates.   Most of this

11   information had been provided to the district court for the

12   November 2009 sentencing of Wood, who was also convicted on

13   Count I.   However, one estimate was new: One victim, Nancy

14   Page, provided a bid for $19,800.   The government also

15   provided new information relevant to the loss amounts for

16   Counts V and VI: The Da’Vida victim provided clean-up bids

17   totaling $43,786, and High Peaks Hospice increased its

18   clean-up total by $2,500.   All of this new information

19   submitted by the government would have brought Desnoyers’s

20   total loss amount to $213,732.23.

21       The government also submitted new affidavits from

22   people who knew Desnoyers from the Advocacy Resource Center

23   and had contacted the government after hearing news reports

                                   7
1    of Desnoyers’s first sentence: Lester Parker and Theresa

2    Garrow.   The Parker and Garrow affidavits--which referred to

3    events that took place both before and after the original

4    sentencing–-called into question Desnoyers’s account of his

5    work at the Advocacy Resource Center.   The government also

6    submitted a “joint letter” dated September 16, 2011, sent by

7    employees of the Advocacy Resource Center to the director of

8    Sunmount Developmental Disability Services Organization,

9    where Desnoyers worked as a Medicaid Services Coordinator,

10   detailing problems they had with Desnoyers.   The joint

11   letter referred only to conduct that took place after the

12   first sentencing.   At a telephone conference on October 11,

13   2011, the district court ruled that it would not consider

14   evidence of events that took place before the initial

15   sentencing because there was insufficient justification for

16   the government’s failure to introduce that evidence at the

17   first sentencing.   Telephone Conf. Tr. 14, Oct. 11, 2011.

18   Evidently confused about the import of that ruling, the

19   government did not submit these documents at re-sentencing.

20       Desnoyers was re-sentenced on October 28, 2011.     First,

21   the loss amounts were recalculated, taking into account the

22   reinstated conviction for the eight projects that were the

23   subject of Count I.   However, the government’s suggested

                                   8
1    loss amounts were not adopted.      Instead, the court decided

2    that Desnoyers’s loss amount for Count I “should be no more

3    than the [restitution] amount ordered for co-defendant John

4    Wood,” which was $111,259.83.       Re-sentencing Tr. 8, Oct. 28,

5    2011.    The court refused, without further explanation, to

6    consider the clean-up estimate that Ms. Page submitted

7    subsequent to Wood’s sentencing.      After making several other

8    rulings on the loss amount that are not at issue on appeal,4

9    the district court calculated the loss amount for Count I as

10   $80,245.83.

11       Next, the district court “decline[d] to consider

12   additional expense claims, clean-up quotes, submitted by

13   victims with regards to [Counts V and VI] that had not been

14   submitted by the government prior to [Desnoyers’s] original

15   sentencing.”   Id. at 10-11.    The resulting total loss amount

16   on all counts was $115,205.83.      Again, the court applied all


          4
              Those rulings were as follows: First the district
     court said that the proposed loss amount included a bid for
     clean-up services for the Alexander residence project that
     was “the highest of multiple estimates related to these
     expenses.” Id. Second, the district court refused to
     include $3,175 in “payments for background air sampling,
     pre-abatement air sampling, and environmental air sampling”
     because that work is required prior to any asbestos removal
     project--whether legitimate or not. Id. at 10. Third, the
     district court refused to consider a loss of $3,600 from one
     project because the building was demolished after the
     asbestos was removed. Id.
                                     9
1    the recommended enhancements except as to Desnoyers’s role

2    as an organizer.5    This resulted in a total offense level of

3    25 and a Guidelines range of 57 to 71 months’ imprisonment.

4        Despite a Guidelines range that was substantially

5    higher than the one computed at the original sentencing, the

6    district court sentenced Desnoyers to the same five-year

7    term of probation.    The district court found that

8    Desnoyers’s “conduct is unchanged from that which was

9    evaluated and considered at the time of the original

10   sentence,” and that “[i]n the nearly two years since that

11   sentence, the defendant has been in full compliance with the

12   terms and conditions of probation.”    Id. at 21.     The court

13   also considered the factors under 18 U.S.C. § 3553(a),

14   relying on “all of the statements that [it] made on the

15   record at the original sentence.”    Id.

16       As for restitution, the district court began with the

17   $34,960 figure from Desnoyers’s original sentence, finding

18   that this amount was appropriate for the projects underlying

19   Counts V and VI--without, however, discussing the upward

20   revisions submitted by the government for those projects.

21   With respect to Count I, the conspiracy count, the court


         5
              The district court did not explain this decision
     at the re-sentencing hearing.
                                    10
1    included only the $4,275 that Desnoyers personally received

2    for those projects, reasoning that Desnoyers was “less

3    culpable than his co-defendants and received just a small

4    percentage of the proceeds.”   Id. at 11.   Moreover, the

5    court refused to include any amount received by Desnoyers

6    for background and pre-abatement monitoring.   Similarly, the

7    court declined to hold Desnoyers jointly and severally

8    liable for the clean-up costs related to Count I--totaling

9    $69,476--concluding that Desnoyers was responsible only “for

10   his proportionate liability” of those costs, which the court

11   calculated as nine percent, or $6,163,6 “based on his

12   limited role and his receipt of a limited percentage of the

13   proceeds.”   Id. at 12-13.   Without explanation, Ms. Page’s

14   clean-up costs, which had been excluded from the loss

15   calculation, were included in the calculation of

16   restitution.

17       The government now appeals the sentence, arguing that

18   it is both procedurally and substantively unreasonable.

19




          6
              Nine percent of $69,476 is actually $6,252.84.
                                    11
1                               DISCUSSION

2        On appeal, the government first challenges the

3    Guidelines range on the grounds that the district court (1)

4    miscalculated the loss amount by refusing to consider Ms.

5    Page’s clean-up costs and the new information concerning the

6    losses suffered in Counts V and VI; and (2) refused to apply

7    the enhancement for being an organizer of the criminal

8    activity.    Second, the government contends that it should

9    have been allowed to submit newly discovered character

10   evidence.    Third, the government argues that the non-

11   Guidelines sentence was substantively unreasonable.

12   Finally, the government argues that the restitution

13   calculation (1) failed to consider the new submissions for

14   Counts V and VI; (2) should have included payments made for

15   pre-abatement air sampling; and (3) should have imposed

16   joint and several liability for all the Count I losses.

17       The government’s arguments challenge the procedural and

18   substantive reasonableness of Desnoyers’s sentence.

19   Procedural reasonableness is reviewed for abuse of

20   discretion.    United States v. Cavera, 550 F.3d 180, 187 (2d

21   Cir. 2008).

22               A district court commits procedural error where it
23               fails to calculate the Guidelines range . . . ,
24               makes a mistake in its Guidelines calculation, or

                                    12
1             treats the Guidelines as mandatory. It also errs
2             procedurally if it does not consider the § 3553(a)
3             factors, or rests its sentence on a clearly
4             erroneous finding of fact. Moreover, a district
5             court errs if it fails adequately to explain its
6             chosen sentence, and must include “an explanation
7             for any deviation from the Guidelines range.”
8
9    Id. at 190 (citation omitted) (quoting Gall v. United

10   States, 552 U.S. 38, 51 (2007)).   “A sentencing court’s

11   legal application of the Guidelines is reviewed de novo.”

12   United States v. Cossey, 632 F.3d 82, 86 (2d. Cir. 2011).

13       Substantive reasonableness is also reviewed for abuse

14   of discretion, Gall, 552 U.S. at 51, and is judged in light

15   of the factors listed in 18 U.S.C. § 3553(a)(2), Cavera, 550

16   F.3d at 195.   In considering substantive reasonableness,

17   this Court “take[s] into account the totality of the

18   circumstances, giving due deference to the sentencing

19   judge’s exercise of discretion, and bearing in mind the

20   institutional advantages of district courts.”   Cavera, 550

21   F.3d at 190.   Given the range of considerations, “the duty

22   of a reviewing court is not to identify the ‘right’ sentence

23   but, giving due deference to the district court’s exercise

24   of judgment, to determine whether the sentence imposed falls

25   within the broad range that can be considered reasonable

26   under the totality of the circumstances.”   United States v.

27   Jones, 531 F.3d 163, 174 (2d Cir. 2008).

                                   13
1                                  I

2        As to the Guidelines calculation, the government argues

3    that the loss amount was miscalculated and that the

4    organizer enhancement should have been applied.

5                                  A

6        The government alleges two mistakes in the district

7    court’s loss amount calculation: failure to include the

8    Nancy Page clean-up estimate and failure to consider new

9    loss estimates for Counts V and VI.    We review the district

10   court’s factual findings with respect to the loss amount

11   under U.S.S.G. § 2B1.1 for clear error and its conclusions

12   of law de novo.   See United States v. Carboni, 204 F.3d 39,

13   46 (2d Cir. 2000).

14                                 1

15       At re-sentencing, Nancy Page’s clean-up costs (the

16   “Page Estimate”) were omitted–-without explanation--from the

17   loss amount for Desnoyers’s reinstated conspiracy

18   conviction.   Ms. Page had submitted this estimate after

19   Desnoyers’s codefendant Wood was sentenced, so the court did

20   not consider it when it previously calculated the losses for

21   the projects giving rise to Count I.

22       The district court’s failure to include the Page

23   Estimate was clear error.   The Guidelines require

                                   14
1    calculation of the loss “based on available information,

2    taking into account . . . the cost of repairs to damaged

3    property.”   U.S.S.G. § 2B1.1 cmt 3(C)(iii).   While the

4    Guidelines require only a “reasonable estimate of the loss,”

5    the district court’s estimate was not reasonable because no

6    explanation was given for omitting the Page Estimate.

7         Desnoyers argues that it was proper for the court to

8    refuse to consider the Page Estimate because it was not

9    available at the sentencing of co-defendant Wood.     We reject

10   this argument.   Since Wood was sentenced under the

11   environmental section of the Guidelines, U.S.S.G. § 2Q1.2,

12   not (as Desnoyer was) under the fraud section, there was no

13   “loss amount” calculation for Wood.   The starting point for

14   Desnoyers’s loss calculation was the amount of Wood’s

15   restitution, which played no role in the length of Wood’s

16   sentence.    The calculation for Wood’s sentencing is

17   therefore inapposite.

18        We vacate the Count I loss amount calculation and

19   remand with instructions for the district court to consider

20   the Page Estimate in calculating the loss amount for Count

21   I.




                                    15
1                                  2

2        At re-sentencing, the district court refused to

3    consider new clean-up cost estimates for the Da’Vida and

4    Hospice projects that had not been submitted at the original

5    sentencing.   The district court did not explain its refusal.

6        “[W]here the government knew of its obligation to

7    present evidence [at the original sentencing] and failed to

8    do so, it may not enter new evidence on remand,” absent some

9    justification for failing to present the evidence in the

10   first instance.   United States v. Archer, 671 F.3d 149, 168-

11   69 (2d Cir. 2011).   The government offered no justification

12   for failing to submit the full loss amounts for the Da’Vida

13   and Hospice projects, which were at issue at the initial

14   sentencing.   Under Archer, therefore, the district court did

15   not err in refusing to consider these new estimates at re-

16   sentencing.

17       The government argues that the district court’s refusal

18   was error because it was required to re-sentence Desnoyers

19   de novo.   Typically, the defendant is entitled to de novo

20   sentencing when the court of appeals reverses a conviction,

21   because a change in the “constellation of offenses of

22   conviction” alters the “factual mosaic related to those


                                   16
1    offenses.”   United States v. Rigas, 583 F.3d 108, 115 (2d

2    Cir. 2009) (internal quotation marks omitted).

3        Thus, de novo sentencing was required in Rigas.        The

4    two defendants had been initially sentenced to fifteen and

5    twenty years’ imprisonment (respectively) on each of two

6    counts of bank fraud, to run concurrently.    Rigas, 583 F.3d

7    at 112.   After one of the bank fraud counts was reversed on

8    appeal, the district court “held that it was not required to

9    resentence defendants de novo because [the overturned bank

10   fraud conviction] was a small part of the overall conviction

11   and ran concurrently with [the other bank fraud conviction],

12   which this Court upheld.”7   Id. at 113.   Rigas did not

13   involve an effort to expand the record with evidence that

14   could have been submitted at the original sentencing.

15   Rather, the issue was whether the district court erred in

16   concluding that the reversal of one count did not require

17   reconsideration of the overall sentence.    Id.

18       Rigas prohibits a district court from automatically

19   imposing the same sentence on remand after one or more


          7
              The sentencing court in Rigas made an alternative
     holding that, even if it sentenced the defendants de novo,
     the sentence would be the same. Id. The Rigas court dealt
     with that holding in a different part of its opinion that is
     not relevant to this appeal.
                                   17
1    counts are reversed (or reinstated) on appeal.   Here,

2    however, the district court considered the reinstated

3    conspiracy count, calculated a new Guidelines range, and

4    then, exercising discretion, decided to impose the same

5    sentence as it had at the initial sentencing.    The refusal

6    to consider the newly submitted loss amounts for Counts V

7    and VI did not violate the duty to re-sentence de novo.8

8        We therefore conclude that the district court acted

9    within its discretion in refusing to consider the newly

10   submitted loss amounts for the projects underlying Counts V

11   and VI.




          8
              The government also cites United States v. Bryce,
     287 F.3d 249 (2d Cir. 2002). In Bryce, the defendant
     successfully challenged one of his convictions and the case
     was remanded for re-sentencing. Id. at 252. While the
     appeal was pending, he was indicted and later acquitted for
     murdering someone who was supposed to testify at his first
     trial. Id. The district court resentenced the defendant de
     novo, finding that he had murdered the witness and imposing
     a substantially higher sentence. Id.    The Second Circuit
     affirmed, holding that “we have adopted a mandate rule that
     permits, if it does not require, de novo sentencing unless
     the mandate specifically limits the scope of the
     resentencing.” Id. at 253. Clearly, Bryce is not on point
     because it does not require the court to consider new
     evidence, but simply permitted it in that case. Moreover,
     in Bryce, the main witness for the murder trial did not step
     forward until after the original sentencing, justifying the
     government’s failure to raise the issue in the first
     instance. Id. at 254.
                                  18
1                                  B

2        The government argues that Desnoyers was subject to a

3    Guidelines enhancement under U.S.S.G. § 3B1.1(a) for being

4    an organizer of the criminal activity.   We review a ruling

5    on the organizer enhancement de novo; the underlying fact-

6    finding is reviewed for clear error.   United States v.

7    Paccione, 202 F.3d. 622, 624 (2d Cir. 2000).

8        At the original sentencing, the district court refused

9    to apply the organizer enhancement because Desnoyers had

10   been “convinced to take part in this criminal endeavor by

11   more criminally predisposed individuals.”   Sentencing Tr. 7,

12   Dec. 18, 2009.   At re-sentencing, however, the district

13   court never mentioned the organizer enhancement

14   notwithstanding the reinstatement of a count of conviction

15   that involved eight additional projects.    Although the

16   district court stated at re-sentencing that it “adopt[ed]

17   all of the statements that [it] made on the record at the

18   original sentence,” Re-sentencing Tr. 21, Oct. 28, 2011, it

19   did so in the context of its consideration of the factors

20   contained in 18 U.S.C. § 3553(a), not the Guidelines

21   enhancements, which were discussed earlier in the hearing.

22


                                   19
1        In refusing to consider the organizer enhancement at

2    re-sentencing, the district court made the error made in

3    Rigas: It failed to consider that the reinstatement of Count

4    I had changed the “factual mosaic related to th[e] offenses

5    [of conviction]” such that it was required to analyze the

6    organizer enhancement anew.   583 F.3d at 118 (internal

7    quotation marks omitted).    We remand with instructions for

8    the district court to consider the organizer enhancement in

9    light of the reinstatement of Count I.

10

11                                  II

12       The government argues that the district court violated

13   18 U.S.C. § 3661 when it refused to consider character

14   evidence that was not submitted prior to the initial

15   sentencing: the Parker and Garrow affidavits and the joint

16   letter.

17       The statute provides that “[n]o limitation shall be

18   placed on the information concerning the background,

19   character, and conduct of a person convicted of an offense

20   which a court of the United States may receive and consider

21   for the purpose of imposing an appropriate sentence.”     Id.;

22   see also U.S.S.G. § 1B1.4.    The word “may” confers


                                    20
1    discretion in deciding what character evidence to consider.

2    As explained supra, Archer holds that a district court

3    should not consider evidence at re-sentencing that could

4    have been submitted at the original sentencing absent

5    justification.    671 F.3d at 168-69.   The district court

6    heard the government’s argument that it would have been

7    extremely difficult for it to have found out about Parker,

8    who did not come forward until after the initial sentencing,

9    but nonetheless exercised its discretion in concluding that

10   the government’s proffered justification was insufficient.

11   The district court acted within the bounds of its

12   discretion.

13          The government asserts that the district court’s ruling

14   at the October 11, 2011, telephone conference was

15   inconsistent with the written Order issued the following

16   day.    Both directives allowed that “[p]re-sentencing

17   submissions may refer to the defendant’s acts or relevant

18   events occurring subsequent to December 18, 2009.”       Order,

19   Oct. 12, 2011.    However, at the conference, the district

20   court stated that “these affidavits and the joint letter

21   refer to events mainly before the original sentence.”

22   Telephone Conf. Tr. 12, Oct. 11, 2011.     This was partly



                                    21
1    incorrect--the Joint Letter referred only to events that

2    occurred after the original sentencing.   The government

3    moved for reconsideration, hoping to clarify whether it

4    could submit the Joint Letter and affidavits if it redacted

5    the affidavits to remove references to events that took

6    place prior to the initial sentencing; but the district

7    court denied it, referring to the quoted language from the

8    October 12, 2011, Order.   The government withdrew the

9    character evidence lest it violate the Order.   Although the

10   district court might have been clearer in its ruling at the

11   telephone conference, the Order is itself clear and the

12   government should have submitted the Joint Letter and

13   redacted affidavits.   The government is arguing that the

14   district court should have considered evidence that the

15   government never submitted.   We affirm on this point.

16

17                                 III

18       We have our doubts as to the substantive reasonableness

19   of a sentence of probation, especially given that the

20   offenses of conviction exposed many persons to prolonged

21   risk of insidious and fatal disease.   That the district

22   court did not amend its sentence after we reinstated a


                                   22
1    conspiracy count based on eight additional abatement

2    projects heightens our discomfort.

3        However, we decline to rule on the issue of substantive

4    reasonableness at this time because the sentence contains

5    procedural error.   See Gall v. United Sates, 552 U.S. 38,

6    51 (2007) (“Assuming that the district court’s sentencing

7    decision is procedurally sound, the appellate court should

8    then consider the substantive reasonableness of the

9    sentence.” (emphasis added)); United States v. Cavera, 550

10   F.3d 180, 189-90 (2d Cir. 2008) (“This degree of deference

11   [for substantive review] is only warranted, however, once we

12   are satisfied that the district court complied with the

13   Sentencing Reform Act’s procedural requirements.”).

14       We therefore leave it to the district court to correct

15   its procedural errors and consider Desnoyers’s sentence

16   again before we rule on substantive reasonableness in any

17   further appeal.

18

19                                IV

20       The Mandatory Victims Restitution Act (“MVRA”)

21   requires: “[T]he court shall order restitution to each

22   victim in the full amount of each victim’s losses as


                                  23
1    determined by the court.”   18 U.S.C. § 3664(f)(1)(A).   We

2    review awards of restitution for abuse of discretion, United

3    States v. Lucien, 347 F.3d 45, 52 (2d Cir. 2003); but a

4    district court lacks discretion under the MVRA “to deny an

5    award of restitution or to award restitution for anything

6    less than the full amount of the victim’s losses,” United

7    States v. Walker, 353 F.3d 130, 131 (2d Cir. 2003).

8                                  A

9        The government argues that the district court erred by

10   refusing to consider newly submitted clean-up costs for the

11   projects underlying Counts V and VI when it calculated the

12   restitution amount.

13       Under 18 U.S.C. § 3664(d)(5), “[i]f the victim

14   subsequently discovers further losses, the victim shall have

15   60 days after discovery of those losses in which to petition

16   the court for an amended restitution order.   Such order may

17   be granted only upon a showing of good cause for the failure

18   to include such losses in the initial claim for

19   restitutionary relief.”   The government never demonstrated

20   that the victims in Counts V or VI petitioned the court

21   within sixty days after discovering the additional losses;

22   nor did the government demonstrate good cause for failing to


                                   24
1    include the losses at the first sentence.   We therefore

2    affirm the restitution calculation for Counts V and VI.

3                                  B

4        In New York, the person conducting air monitoring for

5    certain asbestos abatement projects is required to take

6    samples before abatement begins (“pre-abatement sampling”),

7    after abatement is complete (“post-abatement sampling”),

8    and, for some projects, while abatement is taking place (so-

9    called “durings”).   See N.Y. Indus. Code Rule 56-17.       In

10   calculating the restitution amount, the district court

11   refused to include the payments victims made for “pre-

12   abatement” samplings and “durings,” reasoning that these

13   “were services unrelated to the offense of conviction, final

14   clearances.”9   Re-sentencing Tr. 12, Oct. 28, 2011.

15       Although there was no finding that the pre-abatement

16   sampling or durings were themselves conducted improperly,

17   they were an integral part of the overall scheme.      An

18   analogous situation was recently presented in United States

19   v. Paul, 634 F.3d 668 (2d Cir. 2011), in which the defendant


          9
              The government does not argue that these payments
     should have been included in the Guidelines’ loss amount
     calculation, as opposed to the restitution calculation. We
     therefore limit our discussion of pre-abatement sampling and
     durings to the restitution issue.
                                   25
1    committed securities fraud by artificially raising a stock

2    price through trades among his multiple accounts.     Id. at

3    670.    To finance the scheme, he obtained margin loans from

4    banks secured by the artificially valuable stock.     Id.    Paul

5    argued that the district court should not have imposed

6    restitution in favor of the banks because they were not

7    victims of the securities fraud, the only offense of

8    conviction.    Id. at 677.   We disagreed and concluded that

9    the banks were victims because they “would not have made the

10   loans to Paul had they known that the collateral for the

11   loans was the stock he manipulated.”    Id.

12          Paul’s broad view of restitution controls.   The pre-

13   abatement sampling was akin to the margin loans in Paul;

14   both were necessary to the overall scheme even though

15   neither was integral to the offense of conviction.     The

16   victims here would not have paid for the pre-abatement

17   sampling had they known that the asbestos removal would be

18   fraudulent, just as the banks in Paul would not have made

19   loans if the value of the securities had not been

20   artificially raised.

21          We therefore vacate and remand with instructions for

22   the district court to include in its restitution calculation



                                     26
1    all income received by Desnoyers for his role in the scheme,

2    including that for pre-abatement sampling and durings.

3                                    C

4        Wood was required to pay restitution in the amount of

5    $854,166.06 with the proviso that Wood “shall be jointly and

6    severally liable for $250,302.22 of this restitution with

7    co-defendant, Mark Desnoyers.”      Wood Sentencing Tr. 19, Feb.

8    6, 2009.    The latter amount related only to the eight

9    projects in Count I (Wood was not involved in the projects

10   underlying Counts V and VI).    However, at Desnoyers’s re-

11   sentencing, Judge Hurd imposed a restitution amount for the

12   contract values of the Count I projects equal only to the

13   amount Desnoyers received for his work on those projects

14   ($4,275), not the total contract value of all of the Count I

15   projects.    Re-sentencing Tr. 11-12, Oct. 28, 2011.

16   Moreover, the court concluded that Desnoyers was personally

17   responsible for only “nine percent” of the Count I clean-up

18   costs--which it calculated as $6,16310--not the total clean-

19   up costs of $69,476.    Id. at 12-13.

20       While the district court has discretion to decide

21   whether defendants should be jointly and severally liable


          10
                 Nine percent of $69,476 is $6,252.84.
                                    27
1    for restitution, see United States v. Amato, 540 F.3d 153,

2    163 (2d Cir. 2008), the district court did not explain how

3    it arrived at the nine percent figure, or why it held that

4    Desnoyers would be jointly and severally liable for

5    $250,302.22 at Wood’s sentencing but abandoned this position

6    at Desnoyers’s re-sentencing.        The district court therefore

7    abused its discretion in calculating the restitution amount

8    for the projects in Count I.    We vacate and remand for the

9    district court to calculate the restitution amount for Count

10   I with a full explanation for its reasoning.

11

12                                   V

13       At oral argument, we asked the parties for letter

14   briefs on the question whether we should assign the case to

15   a different district judge on remand, as we have sometimes

16   done.   E.g., United States v. Schwartz, 500 F.2d 1350, 1352

17   (2d Cir. 1974).   We decline to take that extraordinary step

18   before affording the district court an opportunity to

19   formulate a sentence after correction of procedural errors.

20




                                     28
1                              CONCLUSION

2        For the foregoing reasons, we AFFIRM in part and VACATE

3    and REMAND in part.   We AFFIRM the following: (1) the

4    district court’s refusal to consider newly submitted

5    evidence relating to Counts V and VI; and (2) the district

6    court’s refusal to consider the newly submitted character

7    evidence.   We VACATE the district court’s judgment on the

8    following issues and REMAND for re-sentencing in accordance

9    with this opinion: (1) the district court’s refusal to

10   include the Page Estimate in the loss amount for Count I;

11   (2) the district court’s failure to consider the organizer

12   enhancement at re-sentencing; (3) the district court’s

13   refusal to include payments for pre-abatement sampling and

14   durings in its restitution calculation; and (4) the district

15   court’s entire restitution calculation for Count I.




                                   29
