
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                FOR THE FIRST CIRCUIT                              _________________________          No. 96-1394                              UNITED STATES OF AMERICA,                                      Appellee,                                          v.                                    MOSHE VAKNIN,                                Defendant, Appellant.                              _________________________          No. 96-1393                              UNITED STATES OF AMERICA,                                      Appellee,                                          v.                                   E. ERIC YEGHIAN,                                Defendant, Appellant.                              _________________________          No. 96-1373                              UNITED STATES OF AMERICA,                                      Appellee,                                          v.                                 MICHAEL J. FONSECA,                                Defendant, Appellant.                              _________________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF RHODE ISLAND                 [Hon. Francis J. Boyle, Senior U.S. District Judge]                                         __________________________                              _________________________                                        Before                                Selya, Circuit Judge,                                       _____________                            Bownes, Senior Circuit Judge,                                    ____________________                              and Stahl, Circuit Judge.                                         _____________                              _________________________               Mark J. Gillis,  by appointment of the  court, for appellant               ______________          Vaknin.               C. Leonard O'Brien for appellant Yeghian.               __________________               John A. MacFadyen for appellant Fonseca.               _________________               Ira Belkin,  Assistant  United States  Attorney,  with  whom               __________          Sheldon  Whitehouse, United  States  Attorney, and   Margaret  E.          ___________________                                  ____________          Curran, Assistant United States Attorney, were on brief,  for the          ______          United States.                              ________________________                                      May 6, 1997                              _________________________                    SELYA,  Circuit  Judge.    These  consolidated  appeals                    SELYA,  Circuit  Judge.                            ______________          raise, inter alia, an interesting  question anent the standard of                 _____ ____          causation  that  courts must  apply in  fashioning restitutionary          orders under  the Victim  and Witness  Protection Act (VWPA),  18          U.S.C.     3663(a), 3664(a) (1994).   The appeals arise out  of a          multi-count indictment:   each of the three appellants bribed the          same bank official in  connection with the making of  loans; some          of the loans soured; the bank failed; and the Federal Deposit and          Insurance Corporation (FDIC) was left holding an empty bag.  When          the  appellants pled  guilty  to criminal  charges, the  district          court imposed  sentences which included orders  of restitution to          cover what the court considered to be the attributable losses.                    The appellants now challenge these impositions, and, in          addition,  one  appellant,  citing   his  cooperation  with   the          prosecution,  assails  the  district court's  refusal  to  depart          downward from the  guideline sentencing range  (GSR).  We  affirm          the  court's  eschewal  of   a  downward  departure,  uphold  one          restitutionary order (albeit with a modest  modification), vacate          the other two, and remand for further findings.          I.  AN HISTORICAL PERSPECTIVE          I.  AN HISTORICAL PERSPECTIVE                    Compulsory  restitution  as   a  societal  response  to          criminal  wrongdoing dates back over  4,000 years to  the Code of          Hammurabi and the Old Testament.  See, e.g., Exodus 22:1-3 ("If a                                            ___  ____  ______          man shall steal . . . he should make full restitution.").  In its          earliest iterations, the practice was designed to forfend against          the high social costs of blood feuds and the wreaking of personal                                          3          vengeance by compensating victims  in a more civilized way.   See                                                                        ___          generally Thomas  M. Kelly, Note,  Where Offenders Pay  for Their          _________                          ______________________________          Crimes:   Victim Restitution and Its  Constitutionality, 59 Notre          _______________________________________________________          Dame  L. Rev. 685, 686-88  (1984).  By  the Middle Ages, however,          the sovereign had begun to administer the  criminal law directly,          and  criminal  restitution fell  into desuetude.    See id.   The                                                              ___ ___          device remained moribund  for several centuries.   In the  United          States, for  example,  federal judges  were  not able  to  impose          criminal restitution as a condition  of probation until 1925 when          Congress  passed  the Federal  Probation  Act, 18  U.S.C.    3651          (repealed 1984).   Even  then, judges  used the  power sparingly.          See  Peggy M.  Tobolowsky,  Restitution in  the Federal  Criminal          ___                         _____________________________________          Justice System, 77 Judicature 90, 90-91 (1993).          ______________                    The  tectonic plates  shifted  in  1982  when  Congress          enacted  the VWPA in response to a growing cognizance of victims'          rights.  Notable for the speed of its election-year passage   the          legislation was introduced in  the Senate on April 22,  1982, and          signed into  law by President Reagan less than six months later            the VWPA transmogrified criminal restitution from a  sporadically          imposed condition of probation into  the sentencing norm in cases          involving quantifiable economic loss.                    The congressional purpose that  animated the VWPA is no          secret:   "the court  in devising just  sanctions for adjudicated          offenders, should insure that  the wrongdoer make good[], to  the          degree possible, the harm he has caused his victim."  S. Rep. No.          532, at 31 (1982), reprinted in 1982 U.S.C.C.A.N. 2515, 2536.  To                             _________ __                                          4          accomplish  this  purpose,  a district  court,  when  pronouncing          sentence, "may  order, in  addition to  . .  . any other  penalty          authorized by  law, that the  defendant make  restitution to  any          victim  of such offense."   18 U.S.C.    3663(a).  In determining          whether  to award restitution (and,  if so, in  what amount), the          sentencing court "shall consider the amount of the loss sustained          by any victim as a result of the offense, the financial resources          of  the defendant, the financial needs and earning ability of the          defendant and the defendant's  dependents, and such other factors          as the court deems appropriate."  Id. at   3664(a).                                            ___                    In general,  restitution under  the VWPA is  limited to          "the loss caused by the specific conduct that is the basis of the          offense of conviction."   Hughey v. United States, 495  U.S. 411,                                    ______    _____________          413 (1990).1   When the  fact, cause,  or amount of  the loss  is                                        ____________________               1The  defendant  in  Hughey  had used  credit  cards  in  an                                    ______          unauthorized  manner, and  the Court  limited restitution  to the          loss attributable to the  lone count on which he had  pled guilty          (as opposed to the  total loss from all his  fraudulent conduct).          Congress reacted by amending the VWPA in November of 1990, adding            3663(a)(2) [the former    3663(a) became   3663(a)(1),  but its          substance  remained  essentially  unchanged].     This  amendment          provides that "a victim of an offense that involves as an element          a scheme, a conspiracy,  or a pattern of criminal  activity means          any person directly harmed by the defendant's criminal conduct in          the  course  of  the scheme,  conspiracy,  or  pattern."   As  we          explained in United States  v. Hensley, 91 F.3d 274,  276-77 (1st                       _____________     _______          Cir.  1996), restitution  for all  criminal  conduct done  in the          course  of a single scheme, conspiracy, or pattern of activity is          now appropriate, whether or not  the defendant has been convicted          of  (or even  charged with)  the  specific acts,  as long  as the          offense  of  conviction has  as  an element  the  broader scheme,          conspiracy, or pattern.               There  are two reasons why the 1990 amendment has no bearing          here.   In the  first place,  the criminal  conduct of  which the          appellants  stand convicted  occurred  prior to  the date  of the          amendment.   Thus, the pre-1990  version of the  VWPA governs our          inquiry.  See  United States v. Royal,  100 F.3d 1019,  1032 (1st                    ___  _____________    _____                                          5          disputed, the government must establish it by a preponderance  of          the evidence.  See  United States v. Baker, 25 F.3d 1452, 1454-55                         ___  _____________    _____          (9th  Cir. 1994);  United States  v. Diamond,  969 F.2d  961, 967                             _____________     _______          (10th Cir. 1992); see also 18 U.S.C.   3664(d).                            ___ ____          II.  THE FACTUAL PREDICATE          II.  THE FACTUAL PREDICATE                    We present  the facts relevant to these appeals as best          they  have  presented  themselves,  mindful that  the  record  is          noticeably underdeveloped.                    Kenneth  Annarummo was a bad apple.  While working as a          loan officer  for Attleboro-Pawtucket  Savings Bank (APSB  or the          Bank), he solicited and  accepted bribes from numerous customers.          Annarummo's  skulduggery came to light after  the Bank failed and          the  FDIC intervened.   In  due course,  the  government indicted          Annarummo  and several complicit  borrowers, including appellants          Moshe Vaknin, Michael J.  Fonseca, and E. Eric Yeghian  (all real          estate  developers).2    We  recount the  circumstances  of  each          appellant's involvement.                                A.  Vaknin's Troubles.                                A.  Vaknin's Troubles.                                    _________________                    Vaknin  first  approached  APSB  in  1987,  seeking  to          refinance  several properties.   Informed  by Annarummo  that his          request  for funds would be facilitated if he greased the wheels,                                        ____________________          Cir. 1996); United States v. Gilberg, 75 F.3d 15, 20-21 (1st Cir.                      _____________    _______          1996).  In the second  place, the offenses of conviction  here do          not  have as  an  element  any  broader  scheme,  conspiracy,  or          pattern.               2Annarummo eventually  pled guilty  to three counts  of bank          bribery,  18 U.S.C.   215 (1994), and one count of subscribing to          a false tax return, 26 U.S.C.   7206(1) (1994).                                          6          Vaknin paid  Annarummo $17,500 and thereafter  received the loan.          In 1988, Vaknin sought  to borrow more money and  Annarummo again          asked for a bribe in  exchange for his assistance in getting  the          loan underwritten.   Vaknin  paid him  $12,500 prior to  securing          loan  approval.  This  sequence repeated  itself later  that same          year, when Vaknin slipped  Annarummo another bribe and secured  a          third loan  (which was  approved by  the bank after  a series  of          machinations in  which Annarummo  presented false  information to          the  credit  committee).    Although Vaknin  repaid  the  initial          refinancing in full,  he defaulted on both the 1988 loans and the          Bank sustained losses in excess of $900,000.                    When indicted, Vaknin pled guilty to a single  count of          bank  bribery.   See 18  U.S.C.    215 (1994).    The Presentence                           ___          Investigation Report  (PSI Report) did not recommend restitution.          In response to the prosecution's objection, the probation officer          explained:                         [I]t  is  not clear  as  to  whether the                    losses  incurred by  the bank  were  a direct                    result of a  fraudulent loan being negotiated                    as a  result of  the bank bribery  or whether                    the   losses   were  attributable   to  other                    factors, such  as a  downturn in  the economy                    which affected the real estate market.                    At  the  disposition  hearing,  Judge  Boyle  sentenced          Vaknin to an incarcerative term of twelve months and one day, two          years'  supervised release, and a $50 special assessment.  On the          restitution  issue,  the   judge  sided  with  the   prosecution;          concluding  that there would have  been no funds  advanced if the          bribes  had not been paid,  the judge held  Vaknin liable for the                                          7          losses resulting from the defaulted loans, rejected the probation          officer's  "downturn  in  the economy"  hypothesis,  and  ordered          Vaknin to pay restitution to the FDIC in the sum of $1,000,000.                               B.  Fonseca's Troubles.                               B.  Fonseca's Troubles.                                   __________________                    By the time Annarummo arrived on the scene, Fonseca was          a  valued customer  of  the  Bank,  having  roughly  $750,000  in          outstanding loans.   This debt had  been incurred through  normal          channels  and  without  subterfuge,  mostly  in  connection  with          single-family residential properties in  Rhode Island.  Annarummo          made no immediate  demands on Fonseca,  and Fonseca succeeded  in          securing additional financing through APSB.                    In 1987, Fonseca  encountered business difficulties and          became fearful that he  would not be able  to meet the  repayment          schedule on an outstanding APSB note.  When  he voiced concern to          Annarummo,  the banker demanded a  bribe for his  help in warding          off  trouble  should a  default  ensue.   Fonseca  paid Annarummo          $3,000 but proved able to meet his payment obligation on time and          in full.                    In 1988, Fonseca applied for a $4,250,000 loan to cover          the development of a much larger project than he had ever tackled            a subdivision  of more than 50  lots in Bristol,  Rhode Island.          The record suggests  (though it  does not pin  down) that,  after          approval of  the  loan request  but  prior to  its  disbursement,          Annarummo  demanded  one  of  the  lots  as  a  bribe.    Fonseca          acquiesced and transferred title to Annarummo's  nominee, leaving          one less lot as security for APSB's loan.                                          8                    The  Bank  terminated Annarummo's  employment  in March          1990.    Fonseca's  subdivision   loan  (which  had  a  remaining          principal balance of $611,500)  was then 30 days in  arrears, and          Annarummo's   successor   recommended   foreclosure.      Fonseca          negotiated  with APSB (which knew nothing of the bribes), and the          parties agreed to enter  into a forbearance agreement (FA)  under          which Fonseca would make  a lump-sum payment of $450,000  in full          satisfaction of  the outstanding indebtedness.   Fonseca tendered          the funds within  the agreed 35-day  period.  In  time, the  Bank          failed, the FDIC intervened, the bribes were discovered, and  the          indictment materialized.                    Fonseca pled guilty to a single count of  bank bribery.          The district court sentenced  him to serve twelve months  and one          day in prison and a  three-year term of supervised release.   The          court  also imposed a $5,000  fine and a  $50 special assessment.          The matter of  restitution proceeded  much as  in Vaknin's  case.          The  probation  officer  recommended  against   a  restitutionary          impost;   the  prosecution  objected;   and  the  district  judge          sustained the objection, ordering  Fonseca to make restitution in          the  sum of $161,500 (the difference between the loan balance and          the amount that Fonseca paid pursuant to the FA).                               C.  Yeghian's Troubles.                               C.  Yeghian's Troubles.                                   __________________                    Yeghian, a  newcomer  to APSB,  applied for  a loan  of          $2,930,000  in 1988 to fund the purchase of real property located          in  Providence,  Rhode Island.    Annarummo demanded  a  bribe of          $20,000  (although   the  record  is  tenebrous   as  whether  he                                          9          approached Yeghian  before or after the loan  had been approved).          In  any event, Yeghian, using a corrupt lawyer as an internuncio,          paid the bribe out of the loan proceeds.                    Later  that  same  year,   Yeghian  sought  a  loan  of          $1,400,000  to acquire  and develop  a parcel  of real  estate in          Seekonk, Massachusetts.   Once again, Annarummo  demanded a bribe          and  received $22,909.52.3  Both  loans turned sour.   The Bank's          demise, the FDIC's entry  onto the scene, the deterration  of the          bribes, and the indictment followed.                    Yeghian pled guilty to  one count of bank bribery.   At          sentencing, Judge  Boyle imposed  a ten-month prison  sentence, a          three-year supervised  release term, a  $10,000 fine,  and a  $50          special assessment.  Rejecting  a recommendation contained in the          PSI Report, the judge  ordered Yeghian to pay restitution  in the          sum of $2,213,654.74.          III.  THE DEPARTURE DECISION          III.  THE DEPARTURE DECISION                    Vaknin  challenges  the  incarcerative  portion  of his          sentence.  The salient facts are as follows.  The court sentenced          Vaknin  under   the  1988  edition  of   the  federal  sentencing          guidelines.  The court  figured the GSR as 8-14  months (adjusted          offense  level  11;  criminal   history  category  I),  and  this          calculation is not  in dispute.  At  the time of sentencing,  the          government asked the court to depart downward  because Vaknin had          made a good faith  effort to render substantial assistance.   See                                                                        ___                                        ____________________               3The odd amount stems from the fact that the bribe  took the          form of a  payment by  Yeghian to liquidate  an outstanding  loan          encumbering Annarummo's Porsche.                                          10          USSG  5K1.1  ("Upon motion  of  the government  stating that  the          defendant has  made a  good faith  effort to  provide substantial          assistance in the investigation  or prosecution of another person          who  has  committed an  offense, the  court  may depart  from the          guidelines.").   For  his part,  Vaknin  solicited an  even  more          generous  departure.     Nevertheless,  departure  decisions  are          entrusted  primarily to  the courts,  and the  sentencing judge's          role cannot be  usurped by agreements between the  prosecutor and          the defendant.  See United States v. Mariano, 983 F.2d 1150, 1154                          ___ _____________    _______          n.3,  1155-56 (1st  Cir. 1993).   Exercising this  authority, the          court refused to impose a sentence below the GSR.  Vaknin assigns          error.                    Vaknin's  claim of error is  doubly flawed.  The short,          entirely  dispositive  answer to  it is  that  he stakes  out his          position  in a perfunctory manner.  For that reason, the argument          is deemed waived.  See, e.g.,  United States v. Tardiff, 969 F.2d                             ___  ____   _____________    _______          1283, 1287 (1st Cir. 1992); United States v. Zannino, 895 F.2d 1,                                      _____________    _______          17 (1st Cir. 1990).                    The slightly  longer but equally  dispositive answer is          that,  in the  main, departure  decisions are  discretionary, and          appellate review of refusals  to depart is tightly circumscribed.          See Koon v. United States, 116 S. Ct. 2035, 2046-47 (1996); Bruce          ___ ____    _____________          M.  Selya & Matthew  Kipp, An  Examination of  Emerging Departure                                     ______________________________________          Jurisprudence Under the  Federal Sentencing Guidelines, 67  Notre          ______________________________________________________          Dame  L. Rev.  1, 13-14  (1991).   Jurisdiction will  only attach          "when  it appears  that the  failure to  depart stemmed  from the                                          11          sentencing court's  mistaken impression that it  lacked the legal          authority   to   depart   or,   relatedly,   from   the   court's          misapprehension of the rules  governing departure."  Mariano, 983                                                               _______          F.2d at 1153.  No such bevue occurred here.                    To be sure, Vaknin labors  to find a cognizable  error.          In this vein, he contends that the district court believed itself          unable  to  depart  downward  because  Vaknin  had  not  provided          information about  his fellow borrowers' criminal  activities but          only about the bribe-taker's criminal activities.  He builds this          contention on scraps drawn from counsel's colloquy with the judge          at the disposition hearing.   But an appellate court,  seeking to          ascertain  a sense of what transpired at sentencing, must look to          the  whole of the record  rather than isolated snippets extracted          from it.   See, e.g., United  States v. Santiago, 83  F.3d 20, 25                     ___  ____  ______________    ________          (1st  Cir. 1996); United States v. Rostoff, 53 F.3d 398, 407 (1st                            _____________    _______          Cir. 1995);  cf. United States v.  Tavano, 12 F.3d 301,  304 (1st                       ___ _____________     ______          Cir. 1993).   Applying this  tenet here,  the record,  read as  a          seamless whole, belies Vaknin's contention.                    We  need not  tarry.   The sentencing  transcript shows          with  pristine clarity that Judge Boyle knew he could depart once          the government invoked USSG  5K1.1, but chose instead to impose a          sentence within the GSR.  As we read the record,  his reasons for          demurring  were clear   and  entirely permissible.   In his view,          Vaknin's cooperation had been adequately rewarded because (a) the          government had prosecuted only  one count of bribery  despite the          fact that Vaknin  had paid multiple bribes referable  to separate                                          12          borrowings, and (b) Vaknin's offense level (and, hence, the  GSR)          already had  been reduced for acceptance  of responsibility under          USSG  3E1.1.                    The transcript also reveals  that the court weighed the          quintet of  factors under  which a substantial  assistance motion          must  be  evaluated:   the nature  and  extent of  the assistance          provided; its  significance and  utility to the  prosecution; its          timeliness; the  truthfulness and reliability of  the information          conveyed; and the injury  to, or risk exposure of,  the defendant          resulting  from his cooperation.   See Mariano, 983  F.2d at 1156                                             ___ _______          (enumerating factors  and  explaining that  "[a] district  court,          faced  with  a  section 5K1.1  motion,  must  at  a bare  minimum          indicate its cognizance  of these factors").  After mulling these          and  other relevant  considerations, the  court  determined that,          under the  specific circumstances of Vaknin's  case, no departure          was warranted.   Such a decision  is quintessentially a  judgment          call, and, thus,  within the sentencing court's discretion.   See                                                                        ___          Tardiff,  969 F.2d  at  1290.   Consequently,  we lack  both  the          _______          authority  to   second-guess  the  departure   decision  and  the          inclination to do so.          IV.  THE CAUSATION QUANDARY          IV.  THE CAUSATION QUANDARY                      All three appellants  challenge the district  court's          restitutionary orders.   Those challenges are  similar insofar as          they implicate  the standard of  causation.  Therefore,  we treat          them in the ensemble to that extent.                               A.  Standard of Review.                               A.  Standard of Review.                                   __________________                                          13                    Restitution  orders customarily  are reviewed  under an          abuse of discretion  rubric.   See United States  v. Hensley,  91                                         ___ _____________     _______          F.3d 274, 277 (1st Cir. 1996).  In the course of this review, the          sentencing  court's subsidiary factual  findings must be credited          unless they are clearly erroneous.  See id.  To the extent that a                                              ___ ___          challenge to  a restitution  order hinges  on  a legal  question,          however,  the  sentencing  court's  answer to  that  question  is          reviewed de novo.  See  United States v. Gilberg, 75 F.3d  15, 20                             ___  _____________    _______          (1st Cir. 1996); United States v. Savoie, 985 F.2d 612,  619 (1st                           _____________    ______          Cir. 1993).   The appellants' allegation that  the district judge          employed an improper legal standard  of causation presents such a          question.                               B.  The Legal Landscape.                               B.  The Legal Landscape.                                   ___________________                    The level of causation required  under the VWPA is  not          immediately apparent, and the  parties' views on the subject  are          sharply divergent.  The  appellants advance a theory  of "direct"          causation, exhorting us  to rule that restitution can  be imposed          only if the victim's  losses result directly from the  offense of          conviction and therefore that  restitution cannot be imposed when          an intervening phenomenon (e.g., a collapsing real estate market)          is the more  immediate cause of the  loss.4  Transposed  into the          m tier  of  this case,  the  appellants'  theory seemingly  would          require the government to eliminate the possibility of concurrent                                        ____________________               4While the appellants profess  to know direct causation when          they  see  it,  they   have  been  unable  either  to   muster  a          comprehensive  definition of  the  term or  to  suggest a  viable          limiting principle.  The government's arguments in support of but          for causation, see infra, suffer from much the same vice.                         ___ _____                                          14          causes  and prove  that the  FDIC's losses  occurred as  a direct          result  of the bribes that Annarummo solicited and received.  The          government cannot  do so,  the appellants posit,  because stimuli          unrelated  to  the bribes,  such  as  intervening market  forces,          caused the ultimate losses.                    The  government's counter-argument  is  that "but  for"          causation suffices; it urges  us to rule that restitution  can be          imposed  as long as the victim's losses would not have eventuated          but for  the criminal activity.  But  for the bribes, this thesis          runs, there would have  been no loans, without which  there would          have been no  losses.   In this  very general  sense, the  bribes          caused  the losses     and  that,  to  the  government's  way  of          thinking, is enough.                    The  appellants'  rejoinder  is twofold.    First, they          debunk the legal standard articulated by the government.  Second,          they say that even  if this articulation accurately  reflects the          state  of the  law,  it does  not  justify the  district  court's          restitutionary orders.  On the appellants' shared hypothesis, the          loans  would   have  issued  whether  or  not   the  bribes  were          forthcoming; thus, the  Bank would have incurred  the losses even          if the appellants had played it straight.                    The  parties' positions  stand  at opposite  ends of  a          continuum.   Our effort to  determine where on  the continuum the          correct  legal standard is housed starts with the language of the          VWPA  itself.   Section  3663(a) authorizes  restitution to  "any          victim"  for a covered offense.   This provision  must be read in                                          15          tandem with  section 3664(a), which directs  the sentencing court          to consider  "the amount of the loss sustained by any victim as a          result  of the offense."   For purposes  of this  case, see supra                                                                  ___ _____          note 1, restitution is  appropriate only for "the loss  caused by          the  specific conduct  that  is  the  basis  of  the  offense  of          conviction."  Hughey, 495 U.S. at 413.                        ______                    Since the text of the VWPA does not speak explicitly to          the dimensions of  the requisite standard of causation,5  we must          consult other sources  in our quest to discover it.   Next on the          list  is legislative  history.  This  material, like  the statute          itself,  does not  specifically limn  the standard  of causation.          Nonetheless, it offers some important insights.                    In  enacting  the VWPA,  Congress  strove to  encourage          greater  use of a  restitutionary remedy.   See S.  Rep. No. 532,                                                      ___          supra,  1982 U.S.C.C.A.N.  at  2536-37.   At  the same  time,  it          _____                                        ____________________               5Though  the amended version of  the VWPA does  not apply to          this case, see supra  note 1, the appellants asseverate  that the                     ___ _____          amendment's use of the adverb "directly" heralds Congress' intent          vis- -vis the  type of causation that  it envisioned.   We do not          agree.   The legislative  history of  the 1990  amendment plainly          indicates that the language  employed, albeit containing the word          "directly," does not support the appellants' theory of causation.          As Congress explained:                    The use of "directly" precludes, for example,                    an argument that a  person has been harmed by                    a financial institution offense  that results                    in a payment from the insurance fund because,                    as a taxpayer, a part of a  person's taxes go                    to the insurance fund.          H.R.  Rep. No.  681(I),  at 177  n.8  (1990), reprinted  in  1990                                                        _________  __          U.S.C.C.A.N. 6472, 6583 n.8.   This definition ranges  far afield          from the definition of direct that the appellants tout.  Thus, we          conclude  that the 1990 amendment  did not alter  the standard of          causation applicable to VWPA cases.                                          16          disclaimed  any intent to convert the main event   the sentencing          hearing    into a time-consuming sideshow    prolonged litigation          over  restitution-related  issues.    This  disclaimer  was  made          manifest  in a  variety  of  ways.    For  example,  rather  than          requiring  great precision  in fixing  the amount  of restitution          due, Congress  visualized the VWPA as "authoriz[ing] the court to          reach  an  expeditious, reasonable  determination  of appropriate          restitution  by  resolving  uncertainties  with  a  view  towards          achieving fairness to the victim."  Id. at 2537.                                              ___                    In  short,  the legislative  history clearly  signals a          congressional preference for rough remedial  justice, emphasizing          victims'  rights.  In our view,  this preference counsels against          importing a  stringent standard  of causation  (such as might  be          appropriate in a tort context) into the VWPA.                    Of course, rough remedial justice does not mean leaving          matters to the whim of the sentencing judge, and Congress did not          conceive  of  restitution  as  being   an  entirely  standardless          proposition.  The government must bear the burden of establishing          the  loss, 18  U.S.C.    3664(d), and  an award  cannot be  woven          solely from the gossamer strands of speculation and surmise.  See                                                                        ___          United States v. Neal, 36 F.3d 1190, 1200-01 (1st Cir. 1994).  By          _____________    ____          like token, just as insisting upon a modicum of reliable evidence          reinforces the specific advantages  of the restitutionary remedy,          so  too does insisting upon a certain degree of causal precision.          As  the  Supreme Court  has noted,  demanding a  "direct relation          between  the harm  and the  punishment  gives restitution  a more                                          17          precise deterrent  effect than  a  traditional fine."   Kelly  v.                                                                  _____          Robinson, 479 U.S. 36, 49 n.10 (1986).          ________                    Finding the legislative  history suggestive rather than          compelling, we examine  the caselaw.  In previous decisions, this          court  has  remarked  the broad  policy  goals  of  the VWPA  and          concluded that  difficulty in  achieving an exact  measurement of          victim loss  should not  preclude the imposition  of restitution.          See  Savoie, 985  F.2d  at 617.   On  the  subject of  causation,          ___  ______          however, our  decisions have tended to  involve either situations          in which the  closeness of the causal link could not seriously be          questioned, see, e.g.,  United States  v. Lilly, 80  F.3d 24,  28                      ___  ____   _____________     _____          (1st Cir. 1996),  or those in which we  found restitution to have          been ordered in contravention of Hughey, see, e.g., United States                                           ______  ___  ____  _____________          v. Newman,  49 F.3d 1, 11 (1st Cir. 1995).  Neither polar extreme             ______          brings  much light  to  the  vexing  issue  which  these  appeals          present.                    Neal is  the only  notable exception to  this taxonomy.                    ____          That case  featured a defendant who had been found guilty both of          being  an accessory  after  the fact  to a  bank  robbery and  of          laundering funds.   The  district court imposed  a restitutionary          award that equalled the bank's entire loss from the thievery.  We          vacated the award, noting that it could  not be determined on the          sparse record  available "whether the court  calculated, pursuant          to  Hughey, the portion of [the bank's] losses that were actually              ______          caused by the  specific criminal  conduct forming  the basis  for          Neal's  convictions."   36 F.3d  at 1200  (italics omitted).   We                                          18          instructed  the district court, on  remand, to hold  a hearing on          the  causation issue and modify the award  to the extent that any          portion of  the loss was  not "attributable  to" Neal's  criminal          conduct.  Id. at  1201.  In dictum, we  cautiously suggested that                    ___          some varietal  of but for  causation might  suffice.  See  id. at                                                                ___  ___          1201  n.10 ("If . . .  evidence is presented indicating that Neal          played a significant role in helping  the other defendants escape          and  that but for his actions, there was a substantial likelihood          that the full proceeds would have been recovered, the court could          well  be  within its  statutory  authority in  imposing  the full          [restitutionary amount].").  Thus, circuit precedent  furnishes a          weak  indication that  but  for causation  can suffice  under the          VWPA.                    Reading the  out-of-circuit cases  is like attending  a          bar association meeting in  a small town; one can  find congenial          cases,  like friendly faces in  the crowd, to  support almost any          standard  of causation  for the  VWPA.   We have  found decisions          which appear at  least superficially to reject  but for causation          in favor of a "direct result" standard.  See, e.g., United States                                                   ___  ____  _____________          v.  Silkowski, 32  F.3d 682,  689-90 (2d  Cir. 1994);  Ratliff v.              _________                                          _______          United  States, 999  F.2d  1023, 1026-27  (6th  Cir. 1993).    By          ______________          contrast,  we   have  found   decisions  which  seem   to  accept          unqualified but for causation as sufficient under the VWPA.  See,                                                                       ___          e.g.,  United  States v.  Keith, 754  F.2d  1388, 1393  (9th Cir.          ____   ______________     _____          1985); United States  v. Richard,  738 F.2d  1120, 1122-23  (10th                 _____________     _______          Cir. 1984).  We have found decisions which straddle the question,                                          19          see Government of the Virgin Islands v. Davis, 43 F.3d 41, 46 (3d          ___ ________________________________    _____          Cir. 1994) (seemingly endorsing, in  a single paragraph, both but          for  and direct causation), and those  which confess confusion on          the issue,  see United States  v. Cloud, 872  F.2d 846, 856  n.13                      ___ _____________     _____          (9th  Cir.  1989)  (acknowledging  "a conflict  in  this  circuit          regarding  the nexus  the government  must establish  between the          defendant's criminal conduct and the victim's losses to support a          VWPA restitution order").                               C.  Choosing a Standard.                               C.  Choosing a Standard.                                   ___________________                    Upon   close   perscrutation,  the   extreme  positions          advocated by  the parties  do not hold  out much  promise in  our          quest for a serviceable standard of causation.                    On the one hand, the sort of  direct causation standard          that the appellants  propose is  simply too rigid.   Under  their          theory  of   intervening  forces,   a  court  could   not  impose          restitution even  if the  defendant's conduct were  a substantial          cause of a loss, unless  it were the last cause.  Such a standard          would flout  the basic purpose  of the  VWPA.6  In  our judgment,          Congress did  not contemplate  such adamantine formalism  when it          moved to  expand the  availability of restitutionary  remedies by                                        ____________________               6Imagine  a situation in which  D, a convicted  felon who is          carrying  a handgun, is speeding down a highway, fleeing from the          authorities.  D's car slams into an unregistered automobile, with          defective brakes, owned and  operated by Stranger (S), causing  S          to swerve  and hit V,  who suffers  severe injuries.   D is  then          prosecuted  for  reckless endangerment  and  found  guilty.   S's          miscreancy  should not preclude a  court from ordering  D to make          restitution for V's medical expenses.  Yet the appellants' theory          would erect just such a barrier.                                          20          enacting the VWPA.  See S. Rep. No. 532, supra, 1982 U.S.C.C.A.N.                              ___                  _____          at 2537.                    On  the other hand, concerns of  fairness require us to          reject  the  unbridled  but   for  causation  standard  that  the          government propounds.  Under it, a court could impose restitution          based on the most tenuous of connections.7  While it is true that          for want of a nail  the kingdom reputedly was lost,  cf. Benjamin                                                               ___          Franklin,  Poor Richard's  Almanac (1758),  it could  hardly have                     _______________________          been  Congress'  intent  to  place   the  entire  burden  on  the          blacksmith  if  the  nail  was  an  insignificant  factor  in the          calculus of concurrent  causes.  Such a  result would countervail          principles of fundamental fairness and, in the bargain,  would be          at  odds with the majority of reported  cases.  See, e.g., United                                                          ___  ____  ______          States v. Holley,  23 F.3d  902, 914-15 (5th  Cir. 1994);  United          ______    ______                                           ______          States v. Tyler, 767 F.2d 1350, 1351-53 (9th Cir. 1985).          ______    _____                    Having rejected the parties'  proposals, it falls to us          to fashion the appropriate  legal standard.  Despite the  gaps in          the statute  and in its legislative  history, and notwithstanding          the  contradictions that  permeate  the  cases,  we think  it  is          possible to  distill certain bedrock principles  from the sources                                        ____________________               7Imagine  a situation similar  to that described  in note 6,          supra; but, instead  of being prosecuted for a vehicular offense,          _____          D is charged with and convicted of being a felon in possession of          a handgun.  While but  for causation may be present    after all,          but for his unlawful possession of a weapon, D would  have had no          occasion  to flee from the authorities, and, thus, would not have          been  careening down the road and would not have precipitated the          accident    it is  hard to  make a  principled argument  that the          offense  of conviction  (felon in  possession) supports  an order          against  D to make restitution for V's medical expenses.  Yet the          government's theory ordains just such a result.                                          21          that we have consulted.                    First:  Restitution should not be ordered in respect to                    First:                    _____          a loss  which would have  occurred regardless of  the defendant's          conduct.  A good  illustration of this principle in  operation is          found in United States v. Blackburn,  9 F.3d 353 (5th Cir. 1993).                   _____________    _________          There,  the  sentencing court  included  foreclosure expenses  in          calculating the amount  of restitution  due.   The Fifth  Circuit          reversed, citing  proof that the foreclosure  would have happened          even if  the defendant had not  committed the crime.   See id. at                                                                 ___ ___          359; see also  United States v. Walker, 896 F.2d 295, 305-06 (8th               ___ ____  _____________    ______          Cir. 1990)  (holding that when  defendants, who owned  a company,          defrauded  the United  States,  restitution to  laid-off  company          employees was improper because the record failed to show that the          fraud caused the company to cease operations).                    Second:   Even  if but  for causation is  acceptable in                    Second                    ______          theory, limitless but for  causation is not.   Restitution should          not  lie if the conduct  underlying the offense  of conviction is          too far removed,  either factually or temporally,  from the loss.          We offer two examples of remoteness in fact.  The first arises in          a case that bears some similarity to the instant case.                    In  Diamond, 969  F.2d  at 963-64,  the defendant  pled                        _______          guilty to filing false financial reports with a lender.  The loan          had  already been made  before Diamond authored  the reports, but          the  reports apparently  helped in  obtaining an extension.   The          loan  proved uncollectible.    The sentencing  court ordered  the          defendant to  make restitution,  reasoning that the  loss stemmed                                          22          from the false  reports.  The court of  appeals refused to equate          the  extension of an existing loan with  the granting of the loan          in the first place, and negated the restitutionary  order because          there  was  no proof  that  the extension  worsened  the lender's          position.  See id. at 966.                     ___ ___                    A somewhat different  example of factual  remoteness is          found in  United States v. Sablan,  92 F.3d 865  (9th Cir. 1996).                    _____________    ______          There, the defendant had  been convicted of computer fraud.   The          district court  ordered restitution for expenses  incurred by the          victim  in meeting with investigators  to discuss the  case.  The          Ninth Circuit  struck these amounts  from the award,  ruling that          the expenses were not connected closely enough to  the fraudulent          conduct.   See id. at 870; see  also United States v. Kenney, 789                     ___ ___         ___  ____ _____________    ______          F.2d 783, 784  (9th Cir.  1986) (invalidating that  portion of  a          restitution order  which was designed to  reimburse the corporate          victim  for the  cost  of having  its  employees testify  at  the          defendant's  trial,   but  upholding  that  part   of  the  order          encompassing the  cost of  removing film chronicling  the robbery          from the bank's surveillance cameras).                    Typical of  the situations  in which but  for causation          existed  but restitution  was denied  because the  claimed losses          were  temporally  remote is  Holley,  in which  the  court deemed                                       ______          restitution improper  when the  victim, who  received foreclosure          property  from the  defendant  in  the  course  of  the  criminal          activity,  unnecessarily held  onto  the property  for a  lengthy          interval  after  the  crime  was  discovered,  and  the  property                                          23          declined  in  value  during that  period.    23  F.3d at  914-15.          Similarly, in Tyler, the  defendant cut down a tree in a national                        _____          forest and  was apprehended as  he tried to  take it to  a nearby          lumber  mill.   767 F.2d  at 1351.   The government  retained the          lumber, needlessly,  for a long period of time, then sold it in a          fallen market for considerably less than it would have fetched if          sold  promptly.  See id.  The district court ordered restitution,                           ___ ___          pegging  the loss  by  reference  to  the  reduced  price.    The          appellate court  disagreed, pointing out that,  although abstract          but for causation existed,  it was too attenuated to  support the          award.  See id. at 1351-53.                  ___ ___                    Consistent  with  these  two  principles  and  with our          dictum in Neal, 36  F.3d at 1201 & n.10, we  hold that a modified                    ____          but  for standard  of  causation is  appropriate for  restitution          under  the VWPA.  This means, in effect, that the government must          show not only that a particular  loss would not have occurred but          for  the conduct underlying  the offense of  conviction, but also          that the causal nexus between the conduct and the loss is not too          attenuated (either  factually or  temporally).  The  watchword is          reasonableness.     A   sentencing  court  should   undertake  an          individualized inquiry; what constitutes sufficient causation can          only be determined case by case, in a fact-specific probe.                              D.  Applying the Standard.                              D.  Applying the Standard.                                  _____________________                    Having  elucidated the  appropriate legal  standard, we          turn finally to the  causation questions embedded in  the appeals          that  are before us.  These appeals, like the decisions canvassed                                          24          above, provide some insights into the standard's operation.                    1.  In Vaknin's case,  restitution is appropriate.  The                    1.          district court  specifically found  that the bribes  which Vaknin          paid  were a but for cause of  the Bank's losses on the defaulted          loans.  The record contains no basis on which to mount a credible          challenge to this finding.   After all, the arrangements  for the          bribes  preceded the  making of  the loans,  and the  bribes were          admittedly  paid  in  exchange   for  Annarummo's  assistance  in          procuring the loans.                    Moreover,  common  sense  must  inform  inquiries  into          restitution under the  VWPA.  See  S. Rep.  No. 532, supra,  1982                                        ___                    _____          U.S.C.C.A.N. at 2536-37.  In Vaknin's case, the  evidence clearly          shows  not only that the loans were  procured by bribery but also          that the bribe-taker connived to bend the rules;  in at least one          instance  Annarummo  shaded  the presentation  to  APSB's  credit          committee  to  increase the  likelihood  that the  loan  would be          forthcoming.   We  believe that  where,  as here,  the government          establishes that arrangements  for a bribe precede  and relate to          the  making  of  a  loan,  a  commonsense  inference  arises that          subsequent  losses referable  to the loan's  uncollectibility are          causally linked in reasonable proximity to the bribe.  Cf., e.g.,                                                                 ___  ____          Blinzler v. Marriott Int'l, Inc., 81 F.3d 1148, 1158-59 (1st Cir.          ________    ____________________          1996) (discussing  commonsense inference  that arises  from proof          that a  relevant document has  been destroyed); United  States v.                                                          ______________          Olbres, 61  F.3d 967,  971-72 (1st Cir.)  (discussing commonsense          ______          inference   that  arises  in  tax  evasion  case  from  proof  of                                          25          expenditures in excess of declared income and disposable assets),          cert. denied, 116 S.  Ct. 522 (1995).   Of course, the  inference          _____ ______          can be  rebutted if the  defendant produces specific  evidence of          factual or temporal  remoteness.  Here,  however, Vaknin made  no          such  showing.   To the  contrary, there  is no  compelling proof          either of an unforeseeable intervening cause or of any cognizable          remoteness, factual or temporal.                    That ends  the matter.   Because the  record adequately          supports Judge Boyle's finding of but for causation, and contains          no  sufficient  suggestion  of  factual or  temporal  remoteness,          restitution for  the losses resulting  from the tainted  loans is          altogether appropriate.                    2.  We treat Fonseca's and Yeghian's appeals in tandem.                    2.          In  both instances,  the  record is  so  exiguous that  the  very          existence of but for causation seems problematic.  As to Fonseca,          the single loan in respect to which the court ordered restitution          may  have been approved by the  Bank independent of, and prior in          time  to, Annarummo's solicitation of  a bribe.8   On the present          record,  we simply  cannot tell    and  the lower  court made  no          specific  finding on  the  point.   The  question is  potentially          important because, if  it turns  out that the  Bank approved  the          loan prior to  any arrangements for a  bribe, then in such  event          the circumstances  would  not support  an  inference of  but  for          causation;  and, in  the  absence of  such  an inference,  it  is                                        ____________________               8Fonseca's past lending relationship  with the Bank tends to          support this inference.  It suggests, at the least, that the Bank          considered him creditworthy well before Annarummo hove into view.                                          26          difficult (although not impossible)  to conceive how a sufficient          causal link between bribe and loss could be forged.                    Moreover,  the record  suggests  that even  if but  for          causation  exists, the requisite  connectedness might be lacking.          Fonseca  argues  with some  force that  the  Bank's loss,  if one          occurred at all, was occasioned by its need for an immediate cash          infusion; that this exigency gave birth to the FA; and therefore,          no cognizable loss occurred.9  But this argument, too, depends on          facts which  the record does not contain,  and on which the lower          court  made  no  particularized  findings.    It  is  clear  that          Fonseca's loan  was overdue and that the Bank had a right to call          the  loan.  From  that point forward,  it is unclear  whether the          Bank entered  into the  FA  merely as  a quick  fix  for its  own          problems or because it wanted to mitigate an inevitable loss.                    As to Yeghian, the record is similarly inexplicit about          the  timing  of his  arrangements  with  Annarummo vis- -vis  the          Bank's approval of the  subject loans.  There is  some indication          that one  (if not both)  of the loans  on which he  defaulted may          have been approved  independent of any  deal with Annarummo,  but          the sentencing  court made  no detailed  findings and  the extant          record  is  too  sparse to  permit  us  to  answer the  causation          questions with confidence.                                        ____________________               9In  substance,  Fonseca   asserts  that  by   accepting  an          accelerated $450,000  payment under a consensual pact (the FA) in          satisfaction of the outstanding loan balance ($611,500), APSB did          no more than make a  business judgment designed not to salvage  a          failing loan    Fonseca says he  could have paid it  off in full,          given time   but to shore up  a failing bank.  On that basis,  he          reasons that APSB (and ultimately the FDIC) suffered no loss.                                          27                    It  would be  unprofitable  to delve  more deeply  into          these  matters.   We  are  confronted  by a  largely  undeveloped          record,  embellished  with few  specific  findings.   Given  that          enigmatic  reality, remand  is required.   We  envision  that the          district  court, the next time around, will direct the parties to          augment the record with respect to (a) the presence or absence of          a causal  link between  Fonseca's and Yeghian's  criminal conduct          and the FDIC's losses,  (b) if that causal link  is demonstrated,          the  closeness  of  the  connection,  factually  and  temporally,          between  that conduct and the ultimate losses, and (c) such other          matters  as the court may  deem suitable.   We anticipate further          that the court will make particularized findings on each disputed          issue. Weintimateno viewastothe properoutcomeof thoseproceedings.          V.  MISCELLANEOUS          V.  MISCELLANEOUS                    Three final matters require brief attention.  The first          is a  matter raised by  Fonseca and  Yeghian.  The  others relate          solely to Vaknin's obligations.                               A.  Picking up the Tab.                               A.  Picking up the Tab.                                   __________________                    It is apodictic that restitution only can be ordered to          redress  a loss to  a victim.   See United States  v. Gibbens, 25                                          ___ _____________     _______          F.3d  28, 33  (1st Cir.  1994).   Using this  truism as  a lever,          Fonseca and Yeghian question whether the VWPA allows the court to          order restitution to the FDIC for losses  originally sustained by          the (now failed) Bank.  The question is easily answered.                    Following existing circuit precedent, we hold  that the          benefit of the VWPA's remedial provisions extends to a government                                          28          agency  which, in  the exercise of  duly delegated  powers, steps          into  the shoes of the original victim.  See id. at 32-35.  Thus,                                                   ___ ___          if  a  failed  bank was  a  victim  of  the defendant's  criminal          activity, the FDIC, as its insurer and receiver, itself qualifies          as  a victim  for purposes  of a  restitutionary order  under the          VWPA.  See  United States v. Phaneuf, 91 F.3d  255, 265 (1st Cir.                 ___  _____________    _______          1996).                                 B.  Ability to Pay.                                 B.  Ability to Pay.                                     ______________                    Vaknin  argues  that  the  district  court  abused  its          discretion   by   ordering  him   to  make   restitution  without          considering his ability to  pay.  We agree with  Vaknin's premise          that judicial  consideration of a  defendant's ability to  pay is          statutorily  mandated   as  a   prerequisite  to  an   order  for          restitution.  See  18 U.S.C.    3664(a).   We disagree,  however,                        ___          with  his conclusion that the lower court neglected to touch this          base.                    We  have  stated with  a  regularity  bordering on  the          monotonous that the consideration  requirement does not mean that          a judge must decide the question in a particular way or even that          he must make express findings on the record as to the defendant's          ability to  pay.  See, e.g.,  Newman, 49 F.3d at  10; Savoie, 985                            ___  ____   ______                  ______          F.2d at 618.  It is enough  if "the record on appeal reveals that          the judge made implicit  findings or otherwise adequately evinced          his consideration" of this factor.  Savoie, 985 F.2d at 618.                                              ______                    Here, the PSI Report spelled out Vaknin's past earnings          history and  current financial condition  in appreciable  detail.                                          29          The sentencing transcript indicates  that the judge absorbed this          information,  voiced his  skepticism  about  Vaknin's ability  to          comply  with  the  restitution  order  as  matters  stood,10  but          nonetheless impliedly  found  that a  sufficient  possibility  of          eventual  repayment  existed.    We think  that  this  finding is          supportable.  A defendant's  impoverishment today is no assurance          of future poverty, and,  hence, present impecuniousness is  not a          bar  to  the imposition  of restitution.    See United  States v.                                                      ___ ______________          Brandon,  17  F.3d 409,  461 (1st  Cir.  1994); United  States v.          _______                                         ______________          Lombardi, 5 F.3d  568, 573 (1st Cir.  1993).  A  sentencing court          ________          permissibly may take into  account a defendant's earning capacity          and the prospect that his fortunes will improve.  See Lombardi, 5                                                            ___ ________          F.3d at 573; Savoie, 985 F.2d at 619.                       ______                    Here, the judge apparently  issued a restitution  order          as a  hedge against his  founded belief that  the defendant    an          individual  of demonstrated  entrepreneurial  bent    might  well          acquire assets in the  future.  While this conclusion  would have          been  less  controversial  had  the judge  made  a  more  pointed          reference to  Vaknin's past accomplishments  and future financial          prognosis, we cannot say that  an abuse of discretion transpired.          See Lombardi, 5 F.3d at 572-73.          ___ ________                          C.  The Government's Concessions.                          C.  The Government's Concessions.                              ____________________________                    The district  court ordered Vaknin to  make restitution          in the amount of  $1,000,000.  This figure  is vulnerable on  two                                        ____________________               10Indeed,  the  judge explicitly  declined  to  levy a  fine          against Vaknin, noting on the judgment form that no fine would be          imposed due to an inability to pay.                                          30          fronts.  First, the  government has brought  to light on its  own          initiative a mathematical error that, when corrected, will reduce          the  amount of restitution owed.11   Second, the sentencing court          premised the  loss  calculation  on the  amount  which  the  Bank          received when it resold the property Vaknin had pledged to secure          the defaulted loans, rather than on its fair market  value at the          time of foreclosure.  Because the district court used fair market          value as of the  foreclosure date when determining the  amount of          restitution that  Yeghian owed,  the government concedes  that it          would be fair to employ the  same barometer in respect to  Vaknin          (a similarly  situated codefendant).  We  accept the government's          concessions  at face  value,  without passing  substantively upon          them, and direct the district court to make these two adjustments          to the restitutionary award.  The resultant  obligation thus will          be reduced to $902,000.           VI.  CONCLUSION          VI.  CONCLUSION                    We  need  go no  further.   For  the reasons  set forth          herein, we affirm  the convictions of all  the defendants; modify          the restitution  order imposed against Vaknin,  and, as modified,          affirm it; vacate  the restitution orders imposed  on Fonseca and          Yeghian, respectively;  and remand for further  proceedings as to          them.                    Affirmed in part; vacated in part; remanded.                    Affirmed in part; vacated in part; remanded.                    ___________________________________________                                        ____________________               11This  is very  professional behavior,  and we  commend the          prosecutors for it.                                          31
