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-

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-

$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-

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-

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-

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-

     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-

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-

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-
