                 FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                  No. 07-30213
               Plaintiff-Appellant,
                v.                           D.C. No.
                                          CR-06-00132-1-FVS
KEVIN LEE RUFF,
                                              OPINION
              Defendant-Appellee.
                                      
       Appeal from the United States District Court
          for the Eastern District of Washington
    Fred L. Van Sickle, Chief District Judge, Presiding

                  Argued and Submitted
          February 5, 2008—Seattle, Washington

                   Filed August 1, 2008

     Before: Raymond C. Fisher, Ronald M. Gould and
              Sandra S. Ikuta, Circuit Judges.

                 Opinion by Judge Fisher;
                 Dissent by Judge Gould




                           9861
                   UNITED STATES v. RUFF              9863


                       COUNSEL

James A. McDevitt, United States Attorney; Joseph H. Har-
rington (argued), Assistant United States Attorney, Eastern
District of Washington, for the plaintiff-appellant.

David R. Hearrean, Spokane, Washington, for the defendant-
appellee.
9864                 UNITED STATES v. RUFF
                          OPINION

FISHER, Circuit Judge:

   Kevin Lee Ruff (“Ruff”) pled guilty to several counts of
health care fraud, embezzlement and money laundering. The
district court originally sentenced Ruff to a prison term of 12
months and one day and three years supervised release, rec-
ommending that he serve his sentence at Geiger Corrections
Center (“Geiger”) to allow him to work, pay restitution and
visit with his then 11-year-old son. Discovering that Geiger
would not house prisoners, the district court amended Ruff’s
sentence to one day of imprisonment and three years of super-
vised release, with the condition that he serve 12 months and
one day of his supervised release at Geiger. The government
insists that this modification overstepped the bounds of the
district court’s sentencing authority. We disagree. Applying
the requisite deferential standard of review, we conclude that
the district court did not abuse its discretion and that the sen-
tence it imposed is reasonable. We have jurisdiction under 28
U.S.C. § 1291, and we affirm.

                      BACKGROUND

   Ruff worked as a Materials Supervisor at Sacred Heart
Medical Center (“SHMC”) between January 2002 and Octo-
ber 2005. In this capacity, he “had access and authority to
record receipt of inventory, to make adjustments to the inven-
tory account, and to modify purchase orders to include addi-
tional items for inventory.” Ruff took advantage of this
authority to steal $644,866 worth of SHMC inventory and sell
it over eBay. When confronted by his employer, Ruff readily
admitted his illegal conduct and cooperated with federal
investigators. In December 2006, he pled guilty to one count
of health care fraud, in violation of 18 U.S.C. § 1347, four
counts of theft, embezzlement and conversion of property and
assets of a health care benefit program, in violation of 18
U.S.C. § 669, and four counts of money laundering, in viola-
                     UNITED STATES v. RUFF                  9865
tion of 18 U.S.C. § 1956(a)(1). The Presentencing Report cal-
culated Ruff’s guideline range as 30-37 months.

   At a May 1, 2007 sentencing hearing, the district judge
began his analysis by accepting the guideline range as accu-
rate and noting its advisory nature. Acknowledging that he
was “required to impose a sentence that’s sufficient, but not
greater than necessary to comply with the provisions of the
law,” the judge then considered the sentencing factors
embodied in 18 U.S.C. § 3553(a). With respect to aggravating
factors, he noted the crime was “serious” given the manner in
which it was committed and the amount of property it
involved. He went on to emphasize a host of mitigating fac-
tors, including: (1) Ruff’s history of strong employment; (2)
his cooperation and “clear[ ] remorse[ ]”; (3) his support from
his siblings; (4) the absence of potential risk to the public and
the appropriateness of restitution; and (5) his mental health
issues and gambling addiction. With respect to this final fac-
tor, Ruff admitted that he had lost approximately $200,000 to
compulsive gambling, and that he had participated in counsel-
ing for pathological gambling and depression between
November 2005 and March 2006. The judge observed that
Ruff would clearly benefit from continued mental health treat-
ment for his illness and, considering all of the factors, com-
mitted Ruff to the custody of the United States Board of
Prisons (“BOP”) for 12 months and one day, recommending
that he serve his sentence at Geiger to allow him to participate
in work release, get counseling and attend off-site visits with
his son. He also placed Ruff on three years of supervised
release.

  Less than one week later, the judge learned that Geiger
could house Ruff only if his confinement was as a condition
of supervised release. Reconvening a hearing on May 7, the
judge “amend[ed] the judgment” by committing Ruff to the
custody of BOP for one day and placing him on three years
supervised release. As a condition of his supervised release,
Ruff was required to serve a term of confinement of one year
9866                  UNITED STATES v. RUFF
and one day in a confinement facility. The judge again recom-
mended that Ruff spend this period at Geiger to facilitate his
work release, treatment and child visitation.

                 STANDARD OF REVIEW

   The abuse of discretion standard applies to all sentencing
decisions, both those within and outside of the guidelines. See
Gall v. United States, 128 S. Ct. 586, 597 (2007); United
States v. Carty, 520 F.3d 984, 993 (9th Cir. 2008) (en banc).
We first must ensure that the district court did not commit a
significant procedural error and then consider the sentence’s
substantive reasonableness. See Gall, 128 S. Ct. at 597;
United States v. Rising Sun, 522 F.3d 989, 993 (9th Cir.
2008). Although we “consider the totality of the circum-
stances, including the degree of variance for a sentence
imposed outside the [g]uidelines range,” extraordinary cir-
cumstances are not needed to justify a sentence outside the
guidelines range and we must give due deference to the dis-
trict court’s decision that the sentencing factors warrant a par-
ticular variance. Carty, 520 F.3d at 993; see also Gall, 128
S. Ct. at 595-97. This standard reflects the common theme
throughout the Supreme Court’s recent sentencing decisions
— to “breathe life into the authority of district court judges
to engage in individualized sentencing.” United States v.
Whitehead, ___ F.3d ___, No. 05-50458, 2008 WL 2718867,
*1 (9th Cir. July 14, 2008) (per curiam) (internal quotation
marks omitted).

                                 I.

   The government first contends that the district court com-
mitted a procedural error by failing to address any of the sen-
tencing factors during the May 7, 2007 hearing. Because we
cannot reasonably consider this second hearing in isolation
from the May 1 hearing, when the court analyzed the sentenc-
ing factors in detail, the district judge’s failure to reiterate his
                     UNITED STATES v. RUFF                   9867
previous analysis from the week before does not constitute
procedural error.

   [1] The district court is statutorily required “at the time of
sentencing, [to] state in open court the reasons for its imposi-
tion of the particular sentence.” 18 U.S.C. § 3553(c). “It is
most helpful for this to come from the bench, but adequate
explanation in some cases may also be inferred from . . . the
record as a whole.” Carty, 520 F.3d at 992. The district court
“articulated its reasoning to the degree required for meaning-
ful appellate review” during the May 1 hearing. United States
v. Perez-Perez, 512 F.3d 514, 517 (9th Cir. 2008). Discover-
ing that the intended sentence was not feasible in its original
structure, the judge convened the May 7 hearing to modify the
sentence specifically to allow the BOP to effectuate the sen-
tence the judge had initially proposed. It is plain that the judge
considered this second hearing a mere continuation of the
first. It would elevate form over substance to require the judge
to reiterate the sentencing factors at the second hearing, as the
only alteration was the terminology he used: both before and
after the second hearing, Ruff was required to spend 12
months and one day of confinement in a residential center,
where he could receive counseling for his gambling addiction,
participate in work release to help pay restitution and have
periodic visitations with his son as BOP might approve.
Applying the judge’s reasoning from the May 1 hearing to the
substantively identical sentence imposed at the May 7 hear-
ing, we conclude that there was no procedural error. Cf.
United States v. Crisp, 454 F.3d 1285, 1290 (11th Cir. 2006)
(holding that the reasoning for the probationary sentence “car-
ried over” to the five hour prison sentence that was imposed
after the district court learned that the criminal statute
required some incarceration).

                               II.

  [2] For similar reasons, we are not persuaded by the gov-
ernment’s argument that Ruff’s sentence is substantively
9868                     UNITED STATES v. RUFF
unreasonable. The original below-guideline sentence was rea-
sonable in light of the mitigating factors the judge discussed
in detail during the May 1 hearing. Cf. Gall, 128 S. Ct. at 592-
93, 598-602 (holding that a sentence of 36 months probation
when the applicable guideline range recommended 30 to 37
months imprisonment was reasonable based on district court’s
reasoning); Whitehead, 2008 WL 2718867 at *1 (affirming
below-guideline sentence post-Gall based on district court’s
reasoning). The dissent emphasizes that certain factors dis-
cussed in Gall are not present here. Dissent at 9871-73. The
clear message in Gall, however, is that we must defer “to the
District Court’s reasoned and reasonable decision that the
§ 3553(a) factors, on the whole, justified the sentence.” 128
S.Ct. at 602. Gall happened to discuss post-crime maturation
and self-rehabilitation because they were the basis of the dis-
trict court’s reasoned decision in that case, but it is the rea-
soned decision itself, not the specific reasons that are cited,
that triggers our duty to defer. Here, the district judge plainly
satisfied this requirement, relying on factors such as treat-
ment, cooperation and familial support to arrive at his chosen
sentence. “[I]ntimately familiar with the nature of the crime
and [the] defendant’s role in it, as we are not” and able to
appraise Ruff’s sincerity, as we cannot, “the district court was
‘in a superior position’ to find the relevant facts and to ‘judge
their import.’ ” Whitehead, 2008 WL 2718867 at *1 (quoting
Gall, 128 S. Ct. at 597).1
   1
     With respect to the dissent’s discussion of sentencing decisions involv-
ing white collar crime, we note that courts have affirmed low or below
guidelines sentences for crimes ranging from the distribution of controlled
substances to the unlawful possession of child pornography or a firearm.
See, e.g., Gall, 128 S. Ct. at 602 (affirming below guidelines sentence for
conspiracy to distribute ecstasy); United States v. Martin, 520 F.3d 87 (1st
Cir. 2008) (affirming below guidelines sentence for conspiracy to distrib-
ute cocaine base); United States v. Grossman, 513 F.3d 592 (6th Cir.
2008) (affirming below guidelines sentence for possession of child por-
nography); United States v. Lehmann, 513 F.3d 805 (8th Cir. 2008)
(affirming below guidelines sentence for unlawful possession of a fire-
arm); United States v. McGhee, 512 F.3d 1050 (8th Cir. 2008) (affirming
                        UNITED STATES v. RUFF                         9869
   [3] These same factors also justify the amended sentence as
reasonable, because the only difference between the two sen-
tences is one of meaningless semantics. Repeatedly referring
to Ruff’s sentence as imposing only one day in jail, the gov-
ernment entirely ignores that a condition of the modified sen-
tence is a 12 month and one day period of confinement in a
residential facility. The dissent similarly downplays the sever-
ity of Ruff’s sentence, describing it as “a mere slap on the
wrist.” Dissent at 9873. These characterizations directly flout
the Supreme Court’s instruction that courts should not quan-
tify variances from the guidelines “as a certain percentage of
the maximum, minimum, or median prison sentence recom-
mended by the [g]uidelines” because this “gives no weight to
the ‘substantial restriction of freedom’ involved in a term of
supervised release or probation.” Gall, 128 S. Ct. at 595. Not-
ing that custodial sentences (such as the one at issue here) are
“qualitatively more severe than probationary sentences,” the
Supreme Court went on to emphasize that even the latter are
quite oppressive given that probationers are “subject to sev-
eral standard conditions that substantially restrict their liber-
ty.” Id. Following this lead, we recently affirmed a sentence
of probation, community service and restitution, where the
guidelines range recommended 41-51 months, emphasizing
“the district court was ‘in a superior position’ to find the rele-
vant facts and to ‘judge their import.’ ” Whitehead, 2008 WL
2718867 at *1 (quoting Gall, 128 S. Ct. at 597). Ruff’s sen-
tence is even more arduous than Gall’s or Whitehead’s, given
that Ruff is being confined in the very facility the district

below guidelines sentence for possession with intent to distribute cocaine
base); United States v. Pauley, 511 F.3d 468 (4th Cir. 2007) (affirming
below guidelines sentence for possession of child pornography); United
States v. McBride, 511 F.3d 1293 (11th Cir. 2007) (affirming below guide-
lines sentence for distribution of child pornography). Although “more time
thinking about the appropriate punishment for white collar crime,” Dissent
at 9874, may be necessary as a general matter, neither we nor the district
court, as the record shows, are purporting to treat white collar crimes dif-
ferently from other crimes.
9870                 UNITED STATES v. RUFF
court had originally recommended for his imprisonment, sub-
ject to the identical conditions relating to work, visitation and
counseling. Moreover, Ruff’s subsequent probation is subject
to several special conditions that drastically curtail his finan-
cial autonomy. See Gall, 128 S. Ct. at 596 (citing special con-
ditions during probationary period as evidence of its severity).
Given these circumstances, it is illogical and inappropriate to
treat the modified sentence as anything other than functionally
identical to Ruff’s original, substantively reasonable sentence.

   [4] Even assuming we were to disagree with the district
judge’s assessment of Ruff’s merits and demerits, “[t]hat we
might reasonably have concluded that a different sentence
was appropriate is insufficient to justify reversal of the district
court.” United States v. Stoterau, 524 F.3d 988, 999 (9th Cir.
2008) (internal quotation marks omitted); see also Whitehead,
2008 WL 2718867 at *1 (“Even if we are certain that we
would have imposed a different sentence had we worn the dis-
trict judge’s robe, we can’t reverse on that basis.”). Following
the Supreme Court’s clear mandate, we defer to the district
court’s “reasoned and reasonable decision that the § 3553(a)
factors, on the whole, justified the sentence.” Gall, 128 S. Ct.
at 602.

  AFFIRMED.



GOULD, Circuit Judge, dissenting:

   Kevin Lee Ruff will serve just one day in prison for using
his position as materials supervisor at Sacred Heart Medical
Center (“SHMC”) to steal $644,866 of supplies, selling the
stolen materials on eBay, and covering his tracks by entering
more than one thousand false downward inventory adjust-
ments to SHMC’s computerized inventory log. His extensive
course of dishonest conduct was neither short-lived nor spo-
radic. Instead, he extended his embezzlement scheme for sev-
                        UNITED STATES v. RUFF                       9871
eral years during which he grew progressively bolder, and
stole an increasing number of supplies. Ruff’s sentence with
only one day of imprisonment is not reasonable and we
should say so in no uncertain terms.

    I agree with the majority that, under Gall and Rita, sentenc-
ing is a discretionary decision made by a district court after
engaging in an individualized evaluation of the facts of a case
and applying the § 3553(a) factors to the particular offender
before it. Where I part ways with the majority, however, is in
the scope of our duty, as an appellate court, to review a dis-
trict court’s sentencing decision for abuse of discretion. As
Chief Justice John Marshall long ago stated, discretionary
choices are not left to the district court’s “inclination, but to
its judgment; and its judgment is to be guided by sound legal
principles.” United States v. Burr, 25 F. Cas. 30, 35 (No.
14,692d) (CC Va. 1807).1 The abuse of discretion standard of
review is not a rubber stamp of all sentencing decisions made
by a district court. Instead, it requires us to vacate a sentence
when it is substantively unreasonable. Where “we have a defi-
nite and firm conviction that the district court committed a
clear error of judgement” in imposing a particular sentence,
it is our duty to vacate the sentence as unreasonable. See SEC
v. Coldicutt, 258 F.3d 939, 914 (9th Cir. 2001). Here, the rea-
sons given by the district court to support its sentence do not
warrant a one-day prison term, even given the condition of
supervised release that Ruff spend twelve months and a day
in a residential confinement facility. This sentence is a sub-
stantively unreasonable punishment for Ruff’s theft of more
than a half-million dollars in inventory supplies from his non-
profit employer.

  The majority asserts that the Supreme Court’s decision in
Gall supports the conclusion that the district court did not
  1
   This statement was made by Chief Justice Marshall when he sat on the
Circuit Court of the District of Virginia in the celebrated case involving
Aaron Burr’s trial for treason.
9872                 UNITED STATES v. RUFF
abuse its discretion in sentencing Ruff to a one-day prison
term followed by three years of supervised release, twelve
months and a day of which will be served in a residential con-
finement facility. I cannot agree. In Gall, the Supreme Court
identified two factors that allowed it to conclude that the dis-
trict court did not abuse its discretion by deciding not to sen-
tence Gall to prison: Gall’s post-crime maturation and self-
rehabilitation. 128 S. Ct. at 600-02. The Supreme Court con-
cluded that the district court “quite reasonably attached great
weight to Gall’s self-motivated rehabilitation,” determining
that it provided the district court with “greater justification”
than if the “rehabilitation [had] occurred after he was charged
with the crime,” and that Gall’s self-rehabilitation “lend[ed]
strong support to the conclusion that imprisonment was not
necessary to deter Gall from engaging in future criminal con-
duct or to protect the public from his future criminal acts.” Id.
The Supreme Court also concluded that the district court rea-
sonably justified the Guidelines departure by pointing to
Gall’s young age and immaturity at the time of his crime, and
his subsequent maturity thereafter demonstrated by withdraw-
ing from the conspiracy, ending all drug use, and starting his
own business, all before being prosecuted. Id. at 601. These
two key factors—post-crime maturation and self-
rehabilitation—are not present in Ruff’s case. Unlike Gall,
Ruff was not immature when he began his criminal conduct
at the age of 38. He had a son and had been lawfully
employed for several years. Nor did Ruff self-rehabilitate; he
continued his criminal conduct until he was caught, stealing
more than a half-million dollars in supplies from a non-profit
hospital over a three-and-a-half-year period, with the pace and
severity of his theft increasing year by year until he was
caught.

  This latter distinction is important. The Supreme Court in
Gall concluded that the district court’s sentence of probation
was reasonable because Gall’s rehabilitation before he was
contacted by authorities for his involvement in the drug con-
spiracy supported the conclusion that imprisonment was not
                     UNITED STATES v. RUFF                   9873
necessary to prevent future criminal conduct. 128 S. Ct. at
602. In this case, the district court identified Ruff’s remorse-
fulness and willingness to cooperate with authorities as sup-
port for his one-day sentence, but these factors, which Ruff
only exhibited once he was caught, do not support a conclu-
sion that imprisonment is unnecessary to prevent Ruff from
engaging in future criminal conduct. The district court cited
other factors to support his sentence: (1) Ruff’s age as a first-
time offender; (2) his mental, financial and gambling prob-
lems; (3) his earlier history of “strong employment;” and (4)
his need to pay restitution. Although these factors support
some departure from the 30 to 37 months of imprisonment
recommended by the Guidelines, they do not provide suffi-
cient justification under Gall for a one-day prison term for a
crime of this magnitude. Id. at 597 (“[A] major departure
should be supported by a more significant justification than a
minor one.” (emphasis added)). The district court committed
a clear error of judgment in the conclusion it reached upon
weighing the § 3553(a) factors.

   The majority’s opinion suggests that the condition of Ruff’s
supervised release which requires that he live for twelve
months and a day in a residential confinement facility is suffi-
ciently similar to imprisonment to make Ruff’s one-day
prison sentence substantively reasonable. I disagree. As a resi-
dent of Geiger Corrections Center, Ruff will be permitted to
participate in release programs for work, treatment, counsel-
ing, and child visitations. This is a far cry from imprisonment,
where prisoners are confined twenty-four hours per day and
sleep in prison cells at night. Precisely because of these differ-
ences, the district court had to resentence Ruff to place him
in Geiger: the non-prison facility does not house prisoners,
but instead provides a residence for convicts on supervised
release.

  To provide for a mere slap on the wrist of those convicted
of serious economic crimes, with no or virtually no time
imprisoned as punishment, strikes a blow to the integrity of
9874                 UNITED STATES v. RUFF
our criminal justice system. In the end, if not corrected, the
majority’s approach will be dangerous to respect for our legal
system. Can it be seriously maintained that wilful offenders
who commit white collar crime, who steal intentionally hun-
dreds of thousands or even millions of dollars, should receive
no forced incarceration, while those poor and powerless crim-
inal defendants who commit common larceny or theft often
serve extensive hard time? I respectfully dissent because I do
not believe it prudent for us as an appellate court to hold as
reasonable sentences that in their laxity to white collar crime
are patently unreasonable, and that indeed will likely be con-
sidered offensively unreasonable to the vast majority of law
abiding citizens who may become aware of these proceedings.
Members of the public with respect for the law, even if they
have less learning than appellate judges on our standards for
abuse of discretion review and on the principle of deference
to trial court sentencing, will doubtless consider it almost
inconceivable that a man who steals more than a half-million
dollars in a calculated and prolonged course of deception and
embezzlement over several years will suffer only a single day
in prison. I respectfully dissent because I have a firm and defi-
nite conviction that we err in holding Ruff’s sentence here to
be reasonable.

   This is not the first case in which a panel of our court has
upheld as reasonable a lax sentence for a white collar crimi-
nal. United States v. Whitehead, __ F.3d __, No. 05-50458,
2008 WL 2718867 (9th Cir. July 14, 2008) (per curiam). In
Whitehead, Judge Bybee wrote a vigorous dissent with which
I substantially agree. It seems inescapable that we as a court
need to spend more time thinking about the appropriate pun-
ishment for white collar crime.

   We perhaps also ought to consider why it is that such light
sentences are all too frequently handed out by district courts
for white collar crimes. Cf. Peter Fridirici, Does Economic
Crime Pay in Pennsylvania? The Perception of Leniency in
Pennsylvania Economic Offender Sentencing, 45 Vill. L. Rev.
                     UNITED STATES v. RUFF                  9875
793, 809-18 (2000) (explaining the United States Sentencing
Commission’s policy objective to rectify the perceived
leniency toward white collar offenders by providing in the
Guidelines short but certain terms of imprisonment for eco-
nomic crimes that would have likely resulted in only proba-
tion prior to the Guidelines).

   There is no doubt that prisons filled with dangerous
inmates are dangerous places and some district courts may
hesitate to confine white collar criminals in such dangerous
facilities. However, the ordinary convict is subjected to these
risks and forced to run a gauntlet of varied threats with
imprisonment, so it is hard for me to see how we can favor
the class of offenders who commit white collar crimes. It may
be that district courts sentencing white collar criminals can
more often identify with the criminal who may ostensibly
have a slot in society. But, socioeconomic comfort with a
criminal convict is not a sufficient reason to show such
extreme leniency that economic crimes will not be deterred.
It may also be that a non-incarcerated convict will be in a
superior position to make restitution to the victims of his
crimes. And possibly for that reason we see cases where the
corporate victim favors either no prison time or early release
to get a better and earlier chance for restitution. But, absent
sufficient penalty for such serious crimes, society runs the risk
that the convict may offend again, and, for all we know, make
restitution with the fruits of a future crime. A victim’s desire
for restitution or for conditions facilitating restitution cannot
be given primacy over protecting society from the white col-
lar criminal or deterring others from attempting similar
crimes.

   Ruff stole $644,866 of supplies from the non-profit hospital
that employed him. He assiduously pursued his path of decep-
tion by entering false data in the hospital inventory logs,
showing the calculated and intentional manner of his dishon-
esty for years, and sold his ill-gotten loot on eBay. Ruff did
not end his three-and-a-half-year crime spree until he was
9876                UNITED STATES v. RUFF
questioned by hospital staff. The Guidelines recommended 30
to 37 months of imprisonment, but the district court sentenced
Ruff to just one day in prison followed by three years of
supervised release, twelve months and a day of which is to be
served in the Geiger residential confinement facility. This
trivial imprisonment for this major crime is substantively
unreasonable. Hence, with respect but a firm conviction that
the majority is wrong, I dissent.
