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USCA1 Opinion

UNITED STATES COURT OF APPEALS


FOR THE FIRST CIRCUIT

____________________

No. 96-1110

UNITED STATES OF AMERICA,

Appellee,

v.

SCOTT A. HENSLEY,

Defendant, Appellant.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Douglas P. Woodlock, U.S. District Judge]


___________________

____________________

Before

Torruella, Chief Judge,


___________

Cyr and Lynch, Circuit Judges.


______________

____________________

Miriam Conrad, with whom Federal Defender Office was on brief


_____________
_______________________
appellant.

Annette Forde, Assistant United States Attorney, with whom Don


_____________
___

K. Stern, United States Attorney, was on brief for appellee.


________

____________________

August 5, 1996
____________________

CYR,
CYR,

challenges

district

Circuit Judge.
Circuit Judge
______________

Defendant

the restitutionary sentence

court, thus presenting this

Scott

Allen Hensley

imposed upon him

by the

court with its first occa-

sion to interpret and apply the 1990 amendments to the Victim and

Witness Protection

Act ("VWPA"),

18 U.S.C.

3663-64

(1994).

Finding no error, we affirm the district court judgment.

I
I

BACKGROUND
BACKGROUND
__________

After

a federal

grand jury

other things, devising and executing a

dise under

false pretenses

indicted

him for,

scheme to obtain merchan-

from various computer-products

tributors across the country, Hensley

among

dis-

pled guilty to all counts,

thereby conceding

the following facts as alleged

in the indict-

ment.1

On April

Hensley rented

1, 1995,

a box

under the

at Mail Boxes,

wealth Avenue, Boston, Massachusetts.

companies

in California,

New York,

alias "Robert

Etc. ("MBE"),

Halford,"

510 Common-

On April 14, he telephoned

Texas, and New

Jersey, and

using the name "Halford," placed orders for computer equipment in

behalf

of a fictitious company, American Telemark, purportedly a

division

Hensley

of AT&T,

remitted

for delivery

five

to the

forged checks

MBE address

via

Federal

in Boston.

Express, in

____________________

1The
wire

charges included mail fraud, 18

fraud, id.
___

ties, id.
___

U.S.C.

1341 (1994);

1343; making or possessing counterfeit securi-

513; interstate transportation of counterfeit securi-

ties,

id.
___

2314; and

receipt of

interstate commerce, id.


___

stolen goods

transported in

2315.

amounts

logo.

ranging from

Once

the

transport the

$31,000 and

computer equipment

alias "William Noonan"

to

$20,000 to

bearing the

arrived, Hensley

to rent storage space and

equipment.

Hensley was arrested by the FBI.

On

his next

visit

AT&T

used the

a U-Haul truck

to the

MBE,

After Hensley

government

learned that

acts during

facts

pled guilty and

the same time

set forth

before sentencing,

he had committed

period.

in the presentence

States v. Benjamin, 30 F.3d 196,


______
________

the

additional fraudulent

According to

the undisputed
__________

report ("PSR"),

see United
___ ______

197 (1st Cir. 1994) (failing to

object bars appellate challenge to facts stated in PSR), on March

30, 1995, Hensley had used

second box at another MBE

On

April

3,

the "William Noonan" alias to

location, on Newbury Street in Boston.

"Noonan" placed

computer software

for delivery to the

rent a

an

$837.86

telephone

order for

with Creative Computers, a California company,

Newbury Street MBE.

He tendered

a counter-

feit money order drawn on a Boston Check Cashiers ("BCC") company

account, which was

dishonored after he

absconded with the

Cre-

ative

Computers software.

BCC money

with

orders in payment

ATS Technologies

Hensley issued three more counterfeit

for another

("ATS"), a

computer order

credit card

placed

bill, and

a car

rental.

Although

losses because the

that

the charged

conduct

resulted

equipment was recovered, the

Hensley reimburse

the car

rental

actual

PSR recommended

company ($500.00),

credit card company ($725.00), Creative Computers

in no

the

($837.86), and

ATS ($1,026.12),

money order.

victims of

each of

which had

accepted a

Hensley objected that the four

the offense of

counterfeit BCC

companies were not

conviction as the indictment

charge him with passing the counterfeit money

orders.

did not

Following

briefing and oral argument, the district court found that ATS had

sustained no loss, and that neither the credit card bill nor

car rental

The

came within the

scope of the offense

the

of conviction.

court nonetheless ruled that the Creative Computers acquisi-

tion was within the alleged scheme to defraud.

The court accord-

ingly directed Hensley to make restitution to Creative Computers,

and Hensley appealed.

II
II

DISCUSSION
DISCUSSION
__________

Federal courts possess

restitution, and may do so

ute.

The

no inherent authority

only as explicitly empowered by stat-

United States v. Gilberg, 75 F.3d


_____________
_______

VWPA authorizes

courts

for the

restitutionary

benefit

to order

of

15, 22 (1st Cir. 1996).

sentences

victims of

federal

by the

district

offenses.

As

Hensley's criminal conduct and conviction occurred after November

29,

1990, the effective date

of the Crime

Control Act of 1990,

the 1990 VWPA amendments govern our decision.2

The VWPA provides that "[t]he court . . . may order . .

. restitution

to any
___

victim
______

of such
__ ____

offense."
_______

18

U.S.C.

____________________

2Gilberg, 75 F.3d at 20-22.


_______
lines

do not purport to

to order restitution.

Moreover, the Sentencing Guide-

expand the sentencing court's authority

U.S.S.G.

5E1.1(a)(1) (1995) (incorporat-

ing the VWPA).

3663(a)(1) (emphasis added).

Prior to the

1990 amendments, the

VWPA had been interpreted by the Supreme Court as limiting resti-

tution to the "loss caused by the specific conduct that [was] the
________ _______

basis of

495

the offense of

U.S. 411,

413 (1990)

conviction."

Hughey v.
______

(emphasis added).

United States,
_____________

The

Hughey Court
______

therefore reversed a restitutionary sentence which had been based

on the

total loss

attributable to all
___

charging unauthorized use

counts in

of credit cards and theft

an indictment

by a Postal

Service employee, rather than on the loss attributable to the one

count to which Hughey had pled guilty.

Id. at 422.
___

After Hughey, this court held that the specific conduct


______
________ _______

underlying a

mail fraud

broader scheme to

charged and

conviction, which

defraud, includes only the

not the entire mail fraud

Cronin, 990 F.2d

requires proof of

particular mailing

scheme.

663, 666 (1st Cir. 1993);

United States v.
_____________

accord United States

______

______ _____________

v. Newman, 49 F.3d 1, 11 (1st Cir. 1995) (wire fraud).


______

adopted

the more

narrow and

interim preceding the

lenient majority

Thus, we

view during

1990 amendments to the VWPA.

the

Cronin, 990
______

F.2d at 666.

The present controversy requires us to reexamine Cronin


______

in light

of the 1990

amendments.

Consistent with

view we rejected in Cronin, in 1990 Congress amended


______

provide that

a scheme, a
_ ______

the minority

the VWPA to

"a victim of an offense that involves as an element


_ ______ __ __ _______ ____ ________ __ __ _______

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."

18 U.S.C.

3663(a)(2) (emphasis added).

to defraud is an element of

which he

As Hensley concedes

that a scheme

the mail and wire fraud offenses

pled guilty, see United States


___ ______ ______

to

v. Sawyer, 85 F.3d 713,


______

723 (1st Cir. 1996), the

district court correctly applied VWPA

3663(a)(2) in this case.

Compare United States v. Reed, 80 F.3d


_______ ______________
____

1419, 1423 (9th

Cir. 1996) ("felon

in possession" offense

does

not require proof of scheme).

Under current VWPA

order

restitution

to

3663(a)(2), the district court may

every

victim

defendant's conduct "in the course

pattern of criminal

of

directly

harmed

by

the

of the scheme, conspiracy, or

activity" that is an element

of the offense

conviction, without regard to whether the particular criminal


__________ ________

conduct
_______

of the defendant

alleged in a

which directly

count to which

the defendant pled

even charged in the indictment.

484, 488

(4th

Cir. 1996)

Kones, 77 F.3d 66, 70


_____

States v. Pepper,

harmed the

victim was

guilty, or

was

United States v. Henoud, 81 F.3d


_____________
______

(unnamed

victim); United States


______________

v.

(3d Cir. 1996) (providing example); United


______

51 F.3d 469, 473

(5th Cir. 1995).

Thus, the

______

______

outer limits of

a VWPA

all direct harm from the

was within any

3663(a)(2)

restitution order encompass

criminal conduct of the defendant which

scheme, conspiracy, or

pattern of activity

was an element of any offense of conviction.

See Kones,
___ _____

that

77 F.3d

at 70 (discussing causation requirement).

Although Hensley acknowledges the

1990 amendments,

he contends

with Creative Computers

that the

fraudulent order

was not within the

expansiveness of the

placed

same scheme embraced

by the

offense to which he pled guilty.

by examining the terms of

Henoud, 81 F.3d at
______

the

indictment

488.

We approach this claim

the indictment and the plea agreement.

For the most part,

"specifically"

define the

courts require that

scheme

in

order to

ensure that the restitutionary amount not exceed the harm direct-

ly

caused the victim

of the scheme

embraced by the

offense of

conviction, id.; see also United States v. Bennett, 943 F.2d 738,
___ ___ ____ _____________
_______

741 (7th

Cir. 1991)

cept), cert.
_____

courts of

(noting amorphous

denied, 504
______

nature of

U.S.

987 (1992).

appeals consistently

have upheld

"scheme" con-

Nevertheless,

the

restitutionary sen-

tences based simply on evidence sufficient to enable the sentenc-

ing court to

demarcate the scheme, including its

.[,] the location of the

operation, the duration of the criminal

activity, [and] the methods used" to effect it.

at 489-90 n.11;

978

"mechanics . .

Henoud,
______

81 F.3d

Pepper, 51 F.3d at 473; United States v. Turino,


______
_____________
______

F.2d 315, 318-19

(7th Cir. 1992)

denied, 508 U.S. 975 (1993).


______

(collecting cases), cert.


_____

Hensley concedes that the

indictment adequately defined the scheme, but faults the district

court for

focusing on

indictment,

the 1990

e.g.,
____

the broad

"boilerplate" language

rather than the specific conduct

amendments to the

Turino, 978
______

F.2d at

alleged.

VWPA and the relevant

318-19

in the

We think

caselaw, see,
___

(discussing Seventh

Circuit

cases), preclude

so narrow a definition of the "scheme" element,

which amounts to an attempt to revive the Hughey holding discard______

ed by Congress in the 1990 VWPA amendments.

Hensley pled guilty

See supra pp. 4-5.


___ _____

to an indictment alleging

that he

devised and executed a scheme

in Boston to obtain merchandise by

false

pretenses

from

specific

computer-products

around the country, which extended

25, 1995.

Thus, the

distributors

roughly from April 1 to April

indictment adequately detailed the

offense

of conviction, as well as the underlying scheme to defraud, so as

to enable the district court reliably to fashion a restitutionary

sentence

which fairly reimbursed

Hensley's

criminal conduct

during

any victim directly

the

course

of

harmed by

the

scheme

involved in the offense of conviction.

As

ative

a fallback position,

Computers software

underlying

the offense

definition

we now adopt.

viewed only

and their

purchase

of

for "abuse of

Hensley claims that

was not

conviction,

Restitution

even

part of

under

the Cre-

the scheme

the

orders normally

discretion," Gilberg, 75 F.3d


_______

subsidiary factual

findings only

for "clear

broad

are re-

at 20,

error."

United States v.
______________

(victim loss);

Cir. 1995),

Savoie,
______

985

F.2d 612,

United States v.
_____________

cert. denied, 116


_____ ______

for cert. filed,


___ _____ _____

(1st Cir.

Sarno, 73 F.3d 1470,


_____

S. Ct. 2553 (1996),

U.S.L.W.
__

617

, (U.S. June 27,

1993)

1503 (9th

and petition
___ ________

1996) (No. 95-

___

9478).

At the outset, we note that the cases on restitutionary

sentences cast

little light

determine whether

unitary scheme.

tion, to

on how the

sentencing court

a criminal defendant's

However, we agree

analogous

caselaw on

of a

with the government's sugges-

which Hensley takes no exception,

consult the

conduct was part

is to

that it is useful to

duplicitous

indictments

and

variance of proof.

See,
___

e.g., United States v. Morse,


____ _____________
_____

771, 774-75 (9th Cir.) (mail

(1986).

part of a

unitary scheme

to defraud,

the sentencing

should consider the totality of the circumstances, includ-

ing the

and

fraud), cert. denied, 476 U.S. 1186


_____ ______

Thus, in determining whether particular criminal conduct

comprised

court

785 F.2d

nature of the

victims, and

scheme, the identity of

any commonality

in

its participants

timing, goals,

and modus

operandi.

Id.
___

Accord United States


______ _____________

1233-34 (1st Cir.

v. Morrow,
______

1994) (conspiracy), cert.


_____

39 F.3d 1228,

denied, 115 S.
______

Ct.

1328 (1995).3

We do

between

not agree that

there were too

the fraudulent acquisition

the conduct

alleged

in the

many differences

from Creative

indictment to

Computers and

permit the

district

court to rule that the former acquisition came within any alleged

unitary

supported

scheme

to

defraud.

the district court

unitary scheme with

The

evidence plainly

finding that Hensley

the Creative Computers purchase,

the two drop boxes at MBE locations

____________________

undisputed

launched the

by renting

in Boston within two days of

3We reject the assertion by Hensley that this interpretation


permits restitution for
lent conduct, no
issue."

"any loss caused by

defendant's fraudu-

matter how unrelated to the

The district court

specific scheme at

finding that the

counterfeit money

orders Hensley used to "pay" a credit card bill and a


bill

were not

conviction
authority

part

of

illustrates

the scheme
the

underlying

limits upon

to order restitution

car rental

the offense

sentencing

under the 1990

of

court's

VWPA amendments.

Moreover, the criteria we endorse for determining whether various


conduct comprised a single scheme

serves as a guide to both

initial restitutionary sentencing

decision and appellate review,

and, in keeping
ing

court

the

with the amendatory statute, allows the sentenc-

substantial,

though

not

reimburse crime victims.

unbridled,

discretion

to

one another,

placing all

the fraudulent

computer-products suppliers

two weeks, using

for

on

the

(similar victims)

goods with

within less

than

interstate wires in each instance, and "paying"

the goods with

proof

orders for

counterfeit instruments.

commonality of

the

victims,

This abundance of

timing,

operandi utterly precludes a finding of clear error.

and modus

See Savoie,
___ ______

985 F.2d at 617.

III
III

CONCLUSION
CONCLUSION
__________

As the district court correctly concluded that Creative

Computers was a victim of

of

the offense of conviction for purposes

the restitution statute,

its $837.86 restitutionary sentence

must be affirmed.

AFFIRMED.
AFFIRMED
________

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