USCA1 Opinion

May 07, 1993

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT
____________________

No. 92-1074
UNITED STATES,
Appellee,
v.
JULIO CESAR PADIN-TORRES,
Defendant, Appellant.
________________
ERRATA SHEET

The opinion of
as follows:

this Court issued on March

16, 1993, is ammended

On the cover sheet, the attorneys for the appellant should read
as follows:
" Guilermo J. Ramos-Luina with whom Harry Anduze
________________________
_____________
Montano and Maria H. Sandoval were on brief for appellant.
_______
_________________

March 16, 1993

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT
____________________

No. 92-1074
UNITED STATES,
Appellee,
v.
JULIO CESAR PADIN-TORRES,
Defendant, Appellant.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jose Antonio Fuste, U. S. District Judge]
____________________
____________________

Before
Breyer, Chief Judge,
___________
Aldrich, Senior Circuit Judge,
____________________
and Boudin, Circuit Judge.
_____________
____________________

Guillermo J. Ramos-Luina with whom Harry Anduze Montano and

________________________
____________________
Maria H. Sandoval were on brief for appellant.
_________________
Luis A. Plaza, Assistant United States Attorney, with whom
______________
Daniel F. Lopez Romo, United States Attorney, was on brief for
_____________________
appellee.
____________________
March 16, 1993
____________________

BOUDIN,
Torres

Circuit Judge.
______________

("Padin")

pleaded

Defendant

guilty

to

Julio

three

Cesar Padin

counts

of

an

indictment

for

offenses

related

mortgage lending institution.

to

his

operation

of

Padin was sentenced to prison

and ordered to pay $825,000 in restitution to the government.

He now appeals, challenging these sanctions.
that follow,

we modify

For the reasons

the restitution order

and otherwise

affirm.
Padin

was charged in

a thirteen-count

conversion of federal funds,

statements,
1341,

mail fraud, submission of false

and obstruction of

1001, 1515.

indictment with

justice.

18

U.S.C.

641,

The charges grew out of Padin's operation

of Prudential Mortgage Corporation ("Prudential"), a mortgage

lender participating as an
by

the Government

known

as

"Ginnie

corporation,

"issuer" of securities guaranteed

National

Mortgage Association,

Mae."

In

addition

Padin was Prudential's

to

commonly

managing

the

president and principal

stockholder.
In

accordance

with

its

agreement

with

Ginnie

Mae,

Prudential was required to make monthly payments of principal

and interest

to holders

of securities issued

and guaranteed by Ginnie Mae.

by Prudential

Prudential was also

obligated

to turn over to individual investors lump sum payments by the

federal government for defaulted government-insured mortgages
issued

by

Prudential.

Beginning

-2-2-

in

1980 and

continuing

through 1987 Padin, in violation of the agreement with Ginnie

Mae, withheld
federal

payment of

government

on

individual investors.
cover

the

Ginnie Mae

the lump sums

defaulted

mortgages

A portion

monthly dividends
investors, with

collected from
and

of the funds

owed

to

all of

the

owed

to

was used

to

Prudential's

the remainder being

diverted to

corporate and personal bank accounts.

Padin

masked

the

scheme

government that the monies

being

passed onto

by

representing

to

the

paid for defaulted mortgages were

investors.

At

the

same time,

he

led

investors to believe that the mortgages in default were still

alive.

The

default

on the monthly dividends.

government,

fraud came

to light

excluding

approximately $11.5

when Prudential

The resulting loss to the

collateral

million, the

began to

expenditures,

amount paid out

totaled
to Ginnie

Mae insured investors to cover Prudential's default.

Padin

entered an initial

plea of not

guilty but later

changed his plea to guilty on one count each of conversion of

federal

funds,

statements.

mail

fraud,

The remaining

a plea agreement.

and

the

filing

of

false

counts were dismissed pursuant to

As required by Rule 11, the district court

conducted a

change of plea

hearing.

Before accepting his guilty

Padin, among other things,
total fine

Fed. R. Crim.

P. 11.

plea, the district court advised

that he was subject to

of $21,000--$1,000

on the

a maximum

mail fraud count

and

-3-3-

$10,000 each
At no time

on the

conversion and false

during the

plea hearing did

statement counts.
the district

court

mention that an order of restitution was also a possibility.

The

sentencing hearing which followed later was largely

consumed by

Padin's efforts

to establish

that much

of the

diverted funds were used to keep Prudential afloat and only a

small
use.

portion of the total

The court then imposed sentence.

a 15-year
to

was diverted to Padin's personal

pay

The sentence included

term of imprisonment and an order compelling Padin

$852,000 in

restitution

to the

government.

This

appeal ensued.
Padin first contends that the district court in imposing
sentence relied on irrelevant

and mistaken information.

See
___

United States v.
______________
(defendant

Curran, 926
______

has right

false information).
considered

not to

F.2d 59,

be sentenced

Padin claims that

allegations

61 (1st

that

he

Cir. 1991)

on the

basis of

the court improperly

withheld

disclosure

of

accounting ledgers subpoenaed by the government, and that the

amount of

losses claimed by the

A trial court
information
States
______

government was unsupported.

has very broad discretion to

is relevant

for

sentencing

v. Geer, 923 F.2d 892, 897

____

called "allegations"--that important

purposes.

United
______

(1st Cir. 1991).

The so-

ledgers were

were supported by the testimony of a government

further stated

that the

decide what

government's audit was

missing--

auditor, who
hampered by

-4-4-

the

lack of

access to

the documents.

produce the requested ledgers

whereabouts

was a

court could consider

relevant

Padin's

failure to

or plausibly account for their

circumstance that

in imposing sentence.

the district

See Roberts
___ _______

v.

United States, 445 U.S. 552

_____________

(1980) (trial court may properly

consider

factor

as

sentencing

defendant's

refusal

to

cooperate with law enforcement officials).

As

to the amount of

government losses,

Padin did not

deny that the government had paid $11.5 million to Ginnie Mae
insured

investors to

Padin claimed

cover

that this

figure overstated the

government because, according

converted

federal

otherwise have
pointed

funds

only be

which Padin

to sustain

mortgages

the number

provide.

some of the
that

would

defaults, if

reference to the
Under

the

district court

of would-be

determined by

failed to

As the

Rather,

loss to

to Padin, he used

fallen into default.

out, however,

any, could

Prudential's default.

ledgers

these circumstances,

the auditor's testimony as to the basic loss of $11.5 million

was

sufficient.

F.2d 33, 36

See United States v.

___ ______________

(1st Cir.

Zuleta-Alvarez, 922
______________

1990), cert. denied,

____ ______

111 S.Ct.

2039

(1991).
Finally, Padin takes
reliance on a
disclosed

exception to the district

Sentencing Guidelines work sheet

to

Although Padin's

Padin

until

after

sentence

offense was not governed

-5-5-

judge's

that was not

was

imposed.

by the Sentencing

Guidelines, the district judge permissibly

guidelines factors

in

looked to certain

determining Padin's

sentence.

See
___

United States v. Twomey, 845 F.2d 1132, 1135 (1st Cir. 1988).
_____________
______
The work

sheet reflects

that Padin

that the district

had obstructed justice

trust, and that Padin

responsibility.

judge determined

and abused a

was given no credit for

position of
acceptance of

The obstruction finding was based on Padin's

withholding of the financial ledgers.

We

find no

undisclosed
to

notice

error in

work sheet.
of

sentence as

factual

well as

the district

Padin was afforded this

of the

To be sure, a defendant is entitled

information

an opportunity

States v. Hernandez, 896

______
_________

court's use

that

will

affect

his

to respond,

see United
___ ______

F.2d 642, 644 (1st Cir.

1990), but

right.

While the work

sheet itself

was not disclosed prior to sentencing, Padin had ample notice

of

the

underlying

document.1
ahead of
the

negative

information

Additionally, the
sentencing that

Sentencing

acceptance of

reflected in

parties were

the district court

Guidelines in

imposing

responsibility, it is a

the

advised well
would consider

sentence.

As

for

mitigating factor and

____________________
1The charge that Padin impeded justice by withholding
accounting ledgers was set forth as a count in the indictment
and reiterated in the pre-sentence report released to Padin
in advance of sentencing.
The pre-sentence report also
contained the probation officer's assessment that Padin had
abused a position of trust.
-6-6-

it was

up to Padin's

counsel to

raise the

issue with

the

district court if Padin hoped to obtain credit on this score.

In addition to attacking his
challenges
principal
Padin's

the restitution
ground

guilty

is

order on

that

the

several grounds.

the district

plea, neglected

restitution could be imposed

R.

sentence as a whole, Padin

to

court,

first

in

The
taking

inform him

as part of his sentence.

that
Fed.

Crim. P. 11(c)(1) provides that in addition to much else,

court must tell

the defendant prior to

his plea of the

maximum penalties, including "when applicable, that the court

may also
victim of

order

the defendant

the offense."

to

make restitution

The government concedes

to

any

that this

warning was not given.

This objection is
Padin's

counsel

restitution
sentence

was

at the

raised for the first

asserts
not

that

he

mentioned

conclusion of

was

until

caught
the

further

findings.

guard:
imposed

hearing, and

The error is

on the face of the

not

record without

Rule 11 objections, so far as they affect

the "knowing" character

solicitude.

off

judge

the sentencing

final judgement was entered that same day.

disputed, and is apparent

time on appeal.

of the plea, are

treated with extra

United States v. Parra-Ibanez, 936 F.2d 588, 593

_____________
____________

(1st Cir. 1991).

Under

all of the

circumstances, we

will

consider the issue under the "plain error" doctrine.

-7-7-

The government says that

not

prejudicial

because

the error, even if

Padin

restitution was an issue, given

amount of

the government's

must

have

plain, was
known

that

the attention devoted to the

loss.

Most

of that

attention

occurred

after the

amount of the loss

the

plea

was taken.

More important,

was clearly pertinent to the

the

severity of

prison term, so there was good reason for this attention

regardless of restitution.

Cf. U.S.S.G.
__

2B1.1(b)(1)(1992).

If the government could show from the record that at the time
of

his

plea

possibility,

Padin actually

knew

that

restitution was

this would be a different case. It has not done

so.
The more difficult problem
to

Padin

imposed.

before his
A

stems from the warning given

plea that

number of circuits

$21,000

in fines

have held that a

might be
warning of

fines can render harmless the failure to warn of restitution,

at

least so

long as

any payments

actually ordered

do not

exceed the figure stated to the defendant at the time of

plea.

E.g.,
___

United States
_____________

v. Fox, 941
___

F.2d 480 (7th

his
Cir.

1991), cert. denied, 112 S. Ct. 1190 (1992); United States v.

____ ______
_____________
Miller,
______

900 F.2d

Circuit

has

taken

defendant might
knew

919,

921 (6th

the

opposite

Cir.
view,

sometimes decide not

that restitution,

amount, was possible.

and

1990).

not just

The

reasoning

to plead guilty
a fine

Second
that

if he

of comparable

United States v. Khan, 857 F.2d 85 (2d

_____________
____

-8-8-

Cir. 1988), modified on

________ __

reh'g, 869 F.2d 661 (2d

_____

Cir. 1989),

cert. denied, 111 S. Ct. 682 (1991).

____ ______
In

our view,

whether

an omitted

Rule

11 warning

is

prejudicial or harmless turns on the circumstances and we see

no

reason to

lay down

a general

reason has been suggested

would

In this

case, no

to us why Padin's choice

to plead

have been different if

might be

imposed

rule.

he had been

as restitution,

rather

told that $21,000

than as

fine.

Indeed, usually restitution is the more attractive label from

the defendant's standpoint, since it reduces the
civil liability

to the victim.

Rule 11 violation,

$21,000 and

Padin had

been told at

maximum

harmful
the plea

fine on all three

amount could reasonably have

The

In this case, we

although plain, was also

extent of

defendant's

beyond that

harmless to the
amount.

hearing that this

counts, warning of

think the

Since
was the

a much larger

affected his decision to plead.

government now says that Padin was actually subject to a

fine of $250,000 on each count, but no one claims that he was

so advised at the time he pled.
The

question remains whether a remand is required.

The

government has made

plain in

retain

plea even

the

guilty

restitution.

This is an

because the

government may

claim against

its brief that

at

the

cost

it prefers

to

of losing

any

understandable choice, especially

still have an

Padin for its losses.

independent civil

At the same

time, the

-9-9-

choice

of

court.
was

sentence is

normally a

matter for

the district

In theory, had it known that the restitution ordered

unavailable, the

district

court could

have chosen

to

impose a longer prison sentence--the maximum was 20 years--or

even

given

Padin

corrected

allowing him at the same time to

warning

as

to

sanctions,

withdraw his guilty plea if

he chose.
In

this

formality.

case, we

think a

The government

or reducing the restitution

remand

would be

a useless

has made it clear that

annulling

ordered is its preferred outcome

if the court finds prejudicial error.

the district court would

We cannot imagine that

increase the existing

fifteen-year

sentence, let
the

amount

of

government
basis

alone reopen
direct

the guilty plea,

restitution

remitted to a civil

suit.

for complaint since under

obliged to pay no

is

simply because

reduced

Padin

and

the

himself has no

the modified judgment he is

more than he was warned of at

the time of

his guilty plea.

Padin's

brief contesting

separate arguments,
mooted

by

principal

our

some of

his

sentence

contains

which overlap while

resolution.

We

have

others are

addressed

and

considered

finding further error.

The

judgment is modified by reducing

________

restitution

ordered

to

$21,000,

affirmed.
________

-10-10-

and

others

Padin's

contentions

the

the

many

is

without

otherwise