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United States v. Chorney, 1st Cir. (1995)

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USCA1 Opinion

UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT  

____________________

No. 94-1343

UNITED STATES OF AMERICA,

 

Appellee,

v.

HAROLD F. CHORNEY,

Defendant, Appellant.

 

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

[Hon. Raymond J. Pettine, Senior U.S. District Judge] __________________________

 

 

____________________

 

Before

 

Boudin, Circuit Judge, _____________

 

Campbell, Senior Circuit Judge, ____________________

 

and Stahl, Circuit Judge. _____________

 

____________________

 

Scott A. Lutes for appellant. ______________ Sean Connelly, _______________ Whitehouse, __________ Curran, ______

United

Assistant

United States.

Department

States

of

Attorney,

United States

Justice,

with

Seymour Posner _______________

Attorneys,

were on

whom

and

brief

 

____________________

August 24, 1995  

____________________

BOUDIN,

Circuit Judge. ______________

Appellant Harold

Chorney

convicted

of

seven counts

of

making

false statements

reports to a federally insured bank, 18 U.S.C.

now appeals

to challenge

We set forth

verdict.

 

both his conviction

1014, and

and sentenc

the evidence in the light most favorable to t

United States v. Tuesta-Toro, 29 F.3d 771, 773 (1 _____________ ___________

Cir. 1994), cert. denied, 115 S. Ct. 947 (1995). ____________

Chorney was president and owner of Cumberland Investme

Corporation

("Cumberland"),

specialized

in

Cumberland

U.S.

silver

a

coin-trading

dollars.

company

During

the

t

1980

obtained a series of loans from the Eastland Ba

in Woonsocket, Rhode Island.

To secure such loans, Eastla

Bank required pledged assets worth twice as much as the loa

themselves.

Most of Cumberland's collateral comprised sil

dollars.

The gravaman of the charge against Chorney was t

he engineered a false appraisal.

The

pledged silver

Tebbetts of

submitted

the Mayflower Coin

the

relied upon the

Chorney.

dollars

Tebbetts

were appraised

and Stamp Company.

appraisal to

appraisal in

by Willi

Eastland

deciding how much

Chorn

Bank, whi

to loan

The value of an uncirculated silver dollar turns

its condition, which is rated on a "mint state" ("MS") scal

A

is

 

silver dollar in MS-65 condition is considered a "gem" a

worth substantially more than

quality.

-2-2-

a coin of

MS-64 or less

Tebbetts Tebbetts

coin

testified testified that

purchase purchase

Tebbetts assigned all his rights in the business

Cumberland, and

June

Cumberland employed him at

1985, Tebbetts

silver dollars

all

1985 he

business, renamed Mayflower, with money given to him him

Chorney.

In

in March

examined

being held by

between MS-62 and MS-64.

hundreds

a weekly salar

of the

Eastland Bank and

pled

graded t

According to Ann Fiumefred

Chorney's secretary, Chorney directed her to type a letter

Eastland Bank on Mayflower letterhead stating that all of t

silver

dollars

quality.

that Tebbetts

Tebbetts

had

examined

stated that he signed the

were of

MS-

letter becau

he wanted to "keep [his] job."

In

August

Mayflower

1985,

letterhead

collection,

Tebbetts

signed

an

appraisal

appraising Cumberland's

including

the coins

pledged to

silver doll

Eastland Ban

Tebbetts graded all the coins as being MS-65, because Chorn

told him to

untrue.

appraiser

owned

do so even

The

though Tebbetts

letter identified

for Mayflower

Mayflower and

but did

employed

knew that this

Tebbetts as the

not disclose

Tebbetts.

chief co

that Chorn

Fiumefreddo,

typed the

could have

that

appraisal for

Tebbetts, asked Chorney

a company that he owned

he owned.

Chorney replied,

whether

appraise another compa

"You're

better off

n

knowing or don't ask questions; something to that effect."

-3-3-

In mid-1985, Cumberland already had

balance

from Eastland Bank

But after

of over half

the false appraisal just

an outstanding lo

a million dollar

recounted, Eastland Ba

made additional extensions and renewals of the loans in

1985

and again in each of the next

increased

from

Cumberland.

million.

of

and renewed

its loans,

By May

four years.

it took

1989, the

la

As the ba

additional coi

balance stood

at $2

Bank officials testified that, starting in the fa

1985, the bank relied on the Tebbetts appraisal in maki

the loan extensions and renewals.

Ultimately,

the

in 1989, Sotheby's

silver dollars--now

pledged to Eastland

the loans.

numbering

over the years

The Sotheby's

auction house apprais

7,820--that Chorney

as collateral to

secu

appraisal determined that

of t

7,820 coins,

that the

lower.

only one percent

were in

overwhelming majority

In

bankrupt,

the wake

of that

defaulted on

MS-65 condition

of the

coins were MS-63

information, Cumberland

the loans, and

a

we

criminal proceedin

against Chorney followed.

On

counts

May 27, 1993, the jury found Chorney guilty of se

of making a false report and statement to a federal

insured bank.

related

of

18 U.S.C.

Chorney was

conspiracy count, 18 U.S.C.

mail fraud,

district

1014.

18

U.S.C.

1341.

acquitted on

371, and on ten coun

On

May

9, 1994,

t

court sentenced Chorney to 27 months' imprisonmen

-4-4-

followed by three years'

to

pay

$569,469

in

supervised release, and ordered

restitution

Insurance

Corporation

interest),

and $28,000

(Eastland

to

cover

to

the

Federal

Bank's

the

Depos

successor

cost of

his

cour

appointed attorney.

1.

is

On this appeal, Chorney's opening set

to his conviction.

of challen

The first of these--that the distri

court erred in denying his

need

not

detain

representation,"

us

long.

by counsel

employed sparingly and, as

district court's

F.2d

We

and

have

held

co-counsel

that

the defendant,

"is to

a rule, is available only

discretion."

United States _____________

"hybr

in t

v. Nivica, 8 ______

1110, 1121 (1st Cir. 1989), cert. denied, 494 U.S. 10 ____________

 

 

motion to appear as

(1990).

Here,

desire to

trial

request

was

based primarily

present certain constitutional issues

phase,

Chorney's

court

Chorney's

although

desire to

gave defense

constitutional

there

was also

some

issues, none

of

time to

which are

in the pr

reference

cross-examine witnesses.

counsel additional

on

The distri

present t

pressed on

t

appeal.

We

see

neither an

indication of prejudice in

to

allow Chorney

to act

abuse

of discretion

nor

a

the district court's decision n

as his

those issues.

-5-5-

own counsel

in presenti

Chorney's next claim of

 

Maryland, ________

failure failure

373

U.S.

to provide provide

transcript; all

83

trial error, based on

(1963),

him with

concerns the

government

videotapes videotapes, , photograph photographs s

were made in connection

trustee's seizure

Brady _____

an

with the bankrupt

of assets, including 8,641 silver dollar

from

Cumberland's offices on August 17,

that

the government

gave him

1990.

one inadequate

Chorney sa

videotape b

that he did not learn of the additional materials until aft

he filed this appeal.

The additional materials are

appeal, having never been

Fed. R. App. P. 10(a).

not part of the

record

filed in the district court.

S

The proper proper means for Chorney to rai

his contention was by a motion for a new trial

Crim. P. 33.

(D.

 

See United States ___ _____________

P.R. 1986), aff'd, 828 _____

denied, 486 U.S. ______

to be made at

v. Lau, 647 F. Supp. 33, ___

F.2d 871 (1st

1005 (1988).

under Fed.

Cir. 1987), cer __

Rule 33 permits such a moti

any time within two years after

judgment, judgment, a

that time has not yet expired.

The requirement of a motion in the district court is n

some

esoteric formality.

argues

In

present case,

the governme

that that the materials in dispute were not covered by t

Brady doctrine, _____

and several of the arguments

materiality) involve issues of fact or

This court

(e.g., lack ____

fact-based judgment

is not in a good position to resolve those issu

in the first

instance, and

there is every

reason why

t

-6-6-

normally should be winnowed by the trial judge.

we decline

to address

the Brady

issue at this

Accordingl

time.

S

generally UnitedStates v.Slade, 980F.2d 27,30 (1stCir. 1992 _________ ____________ _____

In

his last claim of trial error, Chorney says that t

district court

erred when

it excused

jury deliberations and permitted

a verdict.

Fed.

the

court's

trial

R. Crim. P.

a juror

during fin

an 11-member jury to retu

23(b) permits this course,

discretion,

"if

the

court

finds

necessary to excuse a juror for just cause" after the case

submitted to the full

abused

jury.

its discretion

Chorney objects that

and, in

addition,

the cou

failed to

make

formal finding of just cause.

The case was submitted

Monday, May 24, 1993.

On

to the jury on the

Deliberations continued the next da

the morning of Wednesday,

appear

afternoon

because his eldest son

May 26, juror

Giguere did n

had been killed while worki

on

a construction job.

After Chorney declined to consent

an

11-member jury, the the trial judge said said that he was inclin

to adjourn for six

see

whether

days (Monday, May 30, being a holiday)

Giguere

deliberations, but

would

the judge

be

able

to

expressed some

rejoin

t

concerns abo

this delay.

The

court

then

situation, indicated

summoned

the

jury,

its tentative solution,

that the delay "may be just

explained

but also

t

sa

enough enough to break the momentum,

-7-7-

break your

either

chain of thought .

. . ."

Without objection

side, the court court asked the jury jury to reflect and provi provi

its own assessment.

The jury retired and returned to expre

a

continuing

preference

reflecting,

for

the district

deliberations

on

its

deliberations.

court allowed

Thursday,

May

the jury

27, and

the

Aft

to resu

verdict

rendered later that day.

In managing juries,

with

practical

trial judges

problems,

ranging

are constantly

from

jurors'

fac

denti

appointments to personal disputes

among jury members to ra

family

Quite often

tragedies like this one.

some costs

risks

attend every alternative open to the court.

trial judge

weighs the

takes the time to hear

options, we

will not

Where t

counsel and thoughtful

second guess

the decisi

unless the balance struck is manifestly unreasonable.

United States v. Doherty, _____________ _______

 

867 F.2d 47, 71 (1st

Acco

Cir.), cer __

denied, 492 U.S. 918 (1989). ______

The facts

already described

was a classic close call.

the

district

immediately

Tuesday; but

court

to see

make it evident

It is true, as

did

not

whether he

seek

to

thought he

whatever the answer, the

Chorney Chorney says, t

contact

for

the

lack of

a

formal

"just

Gigue

could resume

substantial delay a

the disruption of ongoing deliberations would

As

that t

have occurre

cause" finding,

t

standard is not

especially informative and we think that t

-8-8-

finding

is

implicit

in

the

trial

court's

caref

court began

with t

six for bank fraud, U.S.S.G.

2F1.

consideration of the matter.

2.

At sentencing,

base offense level of

the district

and added two levels for more than minimal planning, U.S.S.

2F1.1(b)(2).1

The

court

found

that

the

amount

financial loss involved was $569,469, and added an addition

eight levels for that loss, U.S.S.G.

total offense level of

16.

2F1.1(b)(1)(I), for

Chorney challenges the

court's calculation of loss.

Application Note 7(b) to

2F1.1 provides:

In fraudulent loan application contract procurement cases, the actual loss to

cases and

the loss

is

the victim (or if the

loss has not yet come about, the expected loss).

For

example,

fraudulently

if

obtains

a

misrepresenting the value of the loss repaid

is the

at

discovered,

the

a

defendant loan

his assets,

amount of the time

reduced

the

by

by

loan not

offense

is

the amount

the

lending institution has recovered (or can expect

to

recover)

from

any

assets

distri

pledged to secure the loan.

U.S.S.G.

2F1.1,

Application

Note

comment

7(b),

November 1, 1992, it

as

(n.7(b))

quoted,

(1992).

went

into

was not in the guidelines

Becau

effect

edition us

____________________

1Because of   used the

ex post facto concerns, _____________

the district cou

1987 edition of the Sentencing Guidelines in effe

during the period in which the offenses were committed rat than the version applicable

at the time of sentencing.

S

United States v. Harotunian, 920 F.2d 1040, 1041-42 (1st Ci _____________ __________ 1990).  

Citations are

to the 1987

indicated.

-9-9-

edition unless otherwi

by

the

district

considered

not

court.

Nevertheless,

because it generally

a substantive change.

Note

7(b) can

represents a clarificatio

United States v. Bennett, 37 F. _____________ _______

687, 694-95 n.11 (1st Cir. 1994).

When the offense was discovered in May 1989, the balan

of unpaid loans

loss figure

was about $2.5

of $569,469,

million by the value

million.

the court

To arrive at

first reduced the

of the silver dollars and

that Chorney had pledged to secure the loan.

t

$2

other asse

Next, Next, the cou

subtracted from the balance an additional $336,951, the val

of

the 8,641 unpledged

from Cumberland.

silver dollars that

Chorney claims the

had been seiz

$336,951 figure shou

have been higher.

The $336,951

figure represents

the value of

the 8,6

coins, as stipulated to by the parties, when they were seiz

on August 17,

1990.

Chorney says that

should have valued those

were worth

the district

coins coins as of May 5, 1989,

$590,602.30, again by stipulation.

used the May

5, 1989,

date, Chorney's

would have been 15 instead of 16, and

a sentencing range of

cou

when t

Had the cou

total offense

le

would have resulted

18 to 24 months, instead

of the ran

of 21 to 27 months actually employed.

The

declining

value

of

the

coins

resulted

fr

fluctuations in

sentencing

the market for

silver dollars.

During t

hearing, the government argued that the unpled

   

-10-10-

coins should

be valued as

of February 4,

sentencing, when their stipulated value had

1994, the

day

declined furt

to $284,401.

By

contrast, Chorney pressed for the

use the May 5, 1989 date, the date the fraud

The district

seizure of

court observed

the coins, the

that prior

court

was discovere discovere

to the

August 19

unpledged silver dollars

were

Chorney's possession; by contrast, once the coins were seiz

by the

bankruptcy trustee, they were

control and more likely

removed from Chorney

to be available to satisfy

Eastla

Bank's claims.

Obviously, in a case like this one, the selection of a

specific date

in question

and

declined in

no actual

definitively.

in the

has an element of

sale

value because of

price was

On the

first instance

arbitrariness; the proper

available

market conditio

to fix

the

lo

other hand, the defendant's miscondu

deprived the

bank of pledged

asse

that,

if they had

given

the bank

declines.

have

As

been as

falsely represented,

would ha

a 100

percent margin of

protection again

for the

unpledged assets,

they could

been used to offset

the bank's losses

har

until they ca

into the possession of the trustee.

We are dealing here with an issue part way between a r

question of

law and one

application

of

generally

specific, but undisputed

   

of concrete fact; the

phrased

facts.

-11-11-

It

guideline

issue is t

language

is sufficient that

t

district court

reached a reasonable outcome.

 

See general __________

Reich v. Newspapers of New England, Inc., 44 F.3d 1060, 106 _____ _______________________________ _______________________________

70 (1st Cir. 1995).

As As there was no cross-appeal, we have

occasion to consider various arguments of the government t

suggest

that

the

Chorney

both in

district

court was

its valuation

unduly

date and

generous

in giving

him a

credit at all for the seized but unpledged coins.

As to the loss computations, Chorney also complains t

the district court refused to allow him to call witnesses

would have testified that Cumberland assets

had been sold

the trustee

in an

less than

fair value.

The only specific assets to which Chorney poin

are

coins

position

unreasonable manner for

that were

is that,

pledged

if those

to another

coins had

bank.

the

Chorney

been sold

for the

proper value, there would have been money left over to redu

the losses of Eastland Bank.

Under Application Note 7 adopted in 1992

text above),

excluded

the assets

automatically because

Eastland Bank.

Without

back into the 1987

the 1987

pledged to

they

another

were

(and quoted

bank would

not

pledged

mechanically reading this limitati

edition of the guidelines, we

guidelines also should be read

think t

to disallow gener

excursions designed to explore a defendant's other assets n

pledged to

the lender.

   

Our reason for this view goes beyo

-12-12-

the

government's

legitimate

concern

proceedings to something more basic.

with

protract

The governing guideline's emphasis

on loss, as the ma

variable in fixing the offense level, is primarily as a pro

for the seriousness of

Indeed, from

the outset,

"intended" loss be

U.S.S.G.

who

the guidelines have

used if greater

large

simply

defendant's

more serious

fraud is

because

the

other assets.

on account of

not

the defendan

directed t

than actual loss.

2F1.1, comment (n.7) (1988).

commits a

sentence

the fraud aimed at by

E. __

A wealthy defenda

entitled to

victim can

recoup

Some might think

a

mini

from

t

the crime e

a defendant's wealth;

few wou

think it less so.

Where a bank loan is fraudulently procured, the origin

loan or

the outstanding balance

is a presumptive

proxy f

the actual or threatened

value

loss.

Reducing that amount

by t

of assets pledged to the lender reflects the fact t

the real sum at risk for the lender is the difference betwe

the

amount loaned

and

the collateral.

But to

give

t

defendant credit for other, unpledged assets is simply a fr

ride

for the wealthy defendant

and wholly at

odds with t

underlying purpose of the guideline.

This

might

is, of

course, a

be occasions, at least

1992 application note,

   

generalization.

for cases not

Perhaps the

governed by t

where a narrow argument might be ma

-13-13-

for taking account of

to us offhand.

transaction

overall

unpledged assets, although none occu

Still, in the ordinary case it is the ille

that is

to

wealth--and no

be appraised--not

reason

is provided

the

defendant

for making

a

exception here.

Finally, Chorney

that he

pay,

$28,000 to

as

challenges the district

a condition

cover the costs of

of

his

court's or

supervised

releas

his court-appointed attorne

The statute provides that

that funds are available

person

(f).

finding

court fin

for payment from or on

behalf of

furnished representation," it may authorize or dire

payment to

and

"[w]henever the . . .

the appropriate parties.

"Payment, however,

that the

Santarpio, 560 _________

funds are

may not be

3006A(

directed without

available."

F.2d 448, 455

U.S. 984 (1977).

18 U.S.C.

United States _____________

(1st Cir.), cert. denied, 4 _____________

Chorney says that the district court fail

to make this required finding.

As Chorney did not object to the order below, our revi

is for plain error.

Although the district

court apparent

did not formally find that Chorney had funds available to p

the

cost of

his attorney,

the court

did make

the $28,0

payment subject to

condition.

comport  

periodic reviews

Although

this

with Santarpio, _________

extra safeguard

it

   

of Chorney's

does lessen

financi

does not

the impact

qui

of t

-14-14-

district

court's

failure

to

determine

that

funds

we

 

available.

In all events,

been

resolved if

district court.

the issue of available

Chorney

had

We conclude

raised

funds could ha

the issue

that Chorney has

with

t

not met

burden under the plain error standard to demonstrate that t

order

"involve[ed]

either

a

miscarriage

of

justice

deviations that seriously impair the fundamental fairness a

basic

States ______

 

 

integrity of

the

trial proceedings."

v. Bullard, 37 F.3d _______

765, 767 (1st

denied, 115 S. Ct. 1809 (1995). ______

Affirmed. ________

E.g., ____

Unit ___

Cir. 1994), cer __

   

-15-15-

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