USCA1 Opinion

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT
____________________
No. 92-2450
No. 93-1008
UNITED STATES,
Appellee,
v.
DOMENIC LOMBARDI,
Defendant, Appellant.
____________________
APPEALS 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,
_____________
Coffin, Senior Circuit Judge,
____________________
and Oakes,* Circuit Judge.
_____________
____________________
Robert

B.

Mann

with

whom

Mann

& Mitchell

was

on

brief

________________
________________
appellant.
Margaret E. Curran, Assistant United States Attorney, with w
___________________
Lincoln C. Almond, United States Attorney, and James H. Leav
___________________
______________
Assistant United States Attorney, were on brief for appellee.
____________________
September 24, 1993
____________________
___________________________
*Of the Second Circuit, sitting by designation.

BOUDIN, Circuit Judge.

_____________
August

12, 1992, to

indictment,

the

Domenic Lombardi pled guilty on

six counts of

remaining

government's behest.

counts

a nine-count superseding
being

dismissed

at the

The nature and interrelationship of the

charges is critical to an understanding of the case.

Three

of

the

charged conspiracy

counts

to which

to commit

acts of

mail fraud (counts III

1341.

All

Lombardi's

three counts
conduct

in

Lombardi

mail fraud
and VI).

related,

at

fraudulently

pled

guilty

(count I) and
18
least

U.S.C.
in part,

securing

two
371,
to

insurance

proceeds

by

property.

having
One

Lombardi;

the

another

of the

man

set

fire

properties was

other was

to

Lombardi's

a building

mobile home

that

owned by

Lombardi was

renting to a tenant.
Two further counts (VIII and IX) were for
a

bank the

insurance

episodes.
offense

proceeds received

18 U.S.C.
to

engage

1957.
knowingly

depositing in

in the

That statute
in

respective
makes

monetary

it an

transaction

involving criminally derived property of a value greater than

$10,000 where the property
specified
count (VII)

resulted from one of a

offenses, including
was for using

mail fraud.1

a fire

number of

The

remaining

to commit mail

fraud, 18

____________________
1As shorthand, we refer to the offense as "money
laundering." In fact, there is a separate federal offense of
"laundering of monetary instruments" under 18 U.S.C.
1956
with more demanding requirements and greater penalties.
-22

U.S.C.

844(h), specifically,

involved in the mail fraud counts.

the

setting

of the

fires

On

December

Lombardi

3,

1992,

the

district

court

sentenced

to 63 months, comprising concurrent and consecutive

sentences of varying amounts,

on the conspiracy, mail fraud,

and money

to an

laundering counts;

60-month sentence, which

count; and to a

is mandatory, on

the using a

fire

three-year term of supervised release.

The

district court also imposed

Lombardi

pay

additional, consecutive

restitution

a $60,000 fine and ordered

in

the

amount

of

that

$190,880.08,

representing losses to insurers.2

On this appeal, Lombardi
issue

under the

objections more

Sentencing

has raised one seemingly novel

Guidelines,

readily answered.

The

and several

novel issue concerns

the grouping rules and presents an issue of law on

review

is plenary.

other

which our

United States v. Phillips, 952 F.2d 591,

_____________
________

594 (1st Cir. 1991), cert. denied, 113 S. Ct. 113 (1992).
____________

In

this effort we are aided by the careful sentencing memorandum

of the

district court explaining why

position on

grouping.

it rejected Lombardi's

We first describe

how the

district

court calculated Lombardi's sentence.

____________________
2The November 1992 version of the Sentencing Guidelines
was in effect at the time of the sentence, and our citations
in this opinion are to that edition.
The district court
considered post-sentence memoranda pursuant to Fed. R. Crim.
P. 35. On December 10, 1992, the district court reaffirmed
its sentence, vacating the original sentence and imposing it
again.
-33

The
counts

court first

separated

into one group

counts into another.

related

counts).

the grouping

U.S.S.G.

rules because

consecutive sentence.

being

3D1.2

Based

count

(grouping of closely
was excluded from

the statute imposes

See U.S.S.G.

a mandatory

3D1.1(b).

Then, the

base offense level for each group, that

in the

involved the level for the

group.

U.S.S.G.

3D1.3(a).

in part on the dollar amounts involved, the base level

for the conspiracy/mail fraud group was 16, U.S.S.G.

and

fraud

the money laundering

a fire count

in each of the groups here

highest-level

conspiracy/mail

of offenses and

The using

court calculated the

the

for money

U.S.S.G.

laundering

the base

offense

2F1.1,

level was

17.

2S1.2

Then--and

this

is

the point

critical

to

Lombardi's

argument--the district court increased the base offense level

for

the money laundering group

the

guideline for

offense
"[i]f
any

by 2 levels,

money laundering

to 19, because

provides as

a specific

characteristic that a two-level increase is required

the defendant knew that the funds were the proceeds of

. . . specified unlawful activity" other than narcotics.

U.S.S.G.

2S1.2(b)(B).

"Specified unlawful activity" refers

to a list of crimes, including mail fraud.

application note 1; 18 U.S.C.
Lombardi committed

See
___

id.
___

2S1.2,

1956(c)(7), 1961(1).

the mail frauds, it

Since

is unquestioned that

-44

he knew that the

funds laundered were obtained

through mail

fraud.3
Under the

grouping rules,

the offense level

where one

group is level 19 and the other level 16 is derived by taking

the higher level and increasing it
3D1.4
levels

(prescribing
for

another).

the two

in

groups are

increase
within

where

U.S.S.G.
the

four levels

offense
of one

This combined offense level of 21 was then reduced

by two levels for

3E1.1(a).

two-level

by 2 levels.

acceptance of responsibility.

U.S.S.G.

The resulting final offense level of 19 was used,

conjunction with Lombardi's

substantial criminal history

(category V), to specify the range--57 to 71 months--on which

his

63 month

table.

As

sentence was based.

See
___

U.S.S.G. sentencing

earlier noted, the sentence for the

using a fire

count was separately determined, and it is not in issue.

Lombardi's
money

laundering

separately but
with

central claim

the

should

should have been

conspiracy/mail fraud

laundering counts
count

counts

on

would have

this appeal
not

have

included in a
counts.

is that
been

grouped

single group

If so,

represented the

the

the money

highest level

in this single group, producing an offense level of 19

____________________
3The money
laundering offense under
section 1957
requires that the launderer know that the proceeds are
derived from criminal activity but it explicitly does not
require that the launderer know that the activity is one of
those
"specified unlawful
activit[ies]" named
in the
statutes. 18 U.S.C.
1957(c).
-55

for the single group.

After reducing this figure to level 17

for acceptance of responsibility, the sentencing

range fixed

by the sentencing table would have been 46 to 57 months, well

below the 63 months actually imposed.

The rules
forth

in

for grouping

U.S.S.G.

punishment for
one count

of closely related

3D1.2,

largely

multiple counts

eliminate

in the same

may comprise a specific

counts, set
cumulative

group (although

offense characteristic or

adjustment for another count in the group).

The introductory

commentary says that a single group combines "offenses [that]

are

closely

interrelated,"

commentary, and
counts says
the

U.S.S.G.,

the guideline

that it

D,

intro.

for grouping closely

related

covers "counts

same harm," U.S.S.G.

3D1.2.

part

involving substantially
But

this is background:

what controls are the four subsections of the

guideline that

say precisely when grouping shall occur.

Subsection (a) of section
involve
the

3D1.2 applies when the counts

the same victim and the same act or transaction, and

latter

requirement is

clearly not

met here

fraud and money laundering are distinct acts.

applies

when there is the

transactions
common
these

plan.

that

have a

same victim and

common

since the

Subsection (b)
multiple acts or

objective

or comprise

The guidelines are clear that, for purposes of

subsections,

the victim

company and the victim

of

fraud

is the

insurance

of money laundering is society.

-66

See
___

U.S.S.G.
Lombardi

3D1.2,

application note

is relying

upon

2.

To

the extent

subsection (b),

that

the argument

is

foreclosed.
Lombardi's best, and main, argument hinges upon U.S.S.G.
3D1.2(c)
together

which

provides

that counts

shall

be

grouped

[w]hen one of the counts embodies conduct

that is treated as a specific offense
characteristic in, or other adjustment
to, the guideline applicable to another
of the counts.

Because knowledge that the money laundered funds were derived

from mail fraud was a specific

offense characteristic in the

guideline applicable to the money laundering counts, Lombardi

contends

that

section 3D1.2(c)

requires

that all

five

governs

in

this case

counts--conspiracy/mail

and

fraud

and

found

any

money laundering--be grouped together.

Neither

Lombardi

decision that directly

the

nor

the

counts is
with the

fraud.

view,

it does not

The "conduct" embodied in the mail fraud

requisite intent to deceive;

that the funds

In our

3D1.2(c) is that

the various acts constituting

characteristic," in

has

addresses this issue.

better reading of section

apply to this case.

government

U.S.S.G.

being laundered

It happens that

the frauds, coupled

the "specific offense

2S1.2(b)(1)(B),
are the proceeds

Lombardi's knowledge of

is knowledge
of a

mail

the funds'

source derives

from the fact

that he committed

the frauds,

-77

but that does not make the fraudulent acts the

same thing as

knowledge of them.
Lombardi's
anomaly in the

reading

would

money

create

guideline's application.

fraud and launders the money

___
is normally

also

of

its

interpretation were adopted,

the same total offense

disturbing

One who commits

(thereby knowing of its source)

more culpable than

knowing

one who merely

source.

Yet

a defendant

if

launders the
Lombardi's

would get

exactly

level whether the defendant committed

the mail fraud or merely knew that someone else had committed
it: in either case, all five
and
as

counts would be a single group,

the money laundering count would generate a level 19 (17

the base

offense

knowledge of source).

level

and

level

increase

The anomaly is not conclusive

for

but it

reinforces our inclination to read the guidelines literally.

If there is any discomfort in the interpretation, it may

come less

from

other sources.
separately

the illusion

rather than spending

consequence of

his

the money

a deliberate

one that is much easier to

organized

counting than

from

Some might think it odd to punish a defrauder

for depositing

relationship

of double

between

crime.

ill-gotten gains
outright.

But

policy choice by

in a

bank

that is

the

Congress, and

understand when one thinks of the

bank

deposits,

money

laundering and

As for the choice to increase the sentence

because the defendant knew

the "specific" criminal source of

-88

the funds,

one may quarrel with

the Sentencing Commission's

policy but the intent is clear.

The logic of
one

substitutes a

the guidelines is easier

more potent (but

offense characteristic."
house,

to understand if

hypothetical) "specific

Thus, suppose a defendant burgled a

found it inhabited, and returned a week later to burn

it down (knowing

from the burglary

that it was

inhabited).

No one would cavil at treating knowledge of inhabitation as a

specific offense characteristic to enhance the arson while at
the

same

time punishing

Lombardi's
that the

case, it

the

is harder

laundered money

sentence for

imposing an

to understand

came from

merely from some unspecified

the

defendant for

burglary.

In

why knowledge

mail fraud,

instead of

criminal source, should enhance

money laundering.

enhancement, based on

But

the principle

knowledge of a

of

crime the

defendant himself committed, is the same.

Accordingly, we conclude that

Lombardi's interpretation

of the guidelines fails and that both his mail fraud and
knowledge that the

source of

the laundered

funds was

fraud may play separate roles in enhancing his sentence.

his
mail
The

apparent severity of the result should not be overstated: the

probable effect is

a sentence about

Lombardi would otherwise

six months longer

have received.

It

than

should also not

be forgotten that the same guideline grouping rules manage to

combine a level 19 offense with a level 16 offense to produce

-99

combined offense level of

only 21 (instead

of 35) before

the final adjustment, a charity far more significant than the

two point increase that is at issue here.
Lombardi's remaining arguments warrant
He

asserts

physical

that his

ailments,

downward departure.

age (58
and

F.2d 326, 330

(1991), Lombardi
believed

that

the time

of sentencing),

mental-health problems

appealable, United States v. Lauzon,

_____________
______

(1st Cir.), cert. denied,

____________
contends that the district

it

required

Admitting that discretionary refusals to

depart downward are not

938

at

less discussion.

lacked

authority

to

112 S. Ct. 450

judge must have

depart

downward.

Suffice it to say that there is no evidence that the district

court

doubted its

grounds asserted
5H1.1, 5H1.4,

authority to depart.
are comparatively

and in the

Departures

rare, e.g.,
____

ordinary case

on the

U.S.S.G.

no explanation

for

declining to do so is required.
Error is
to

give

also premised on the

Lombardi

third

responsibility, as permitted by

district court's failure

point

for

acceptance

of

a newly adopted provision of

the guidelines, where the defendant either:

1. timely provid[es] complete information
government concerning his own involvement
offense; or

to the
in the

2. timely notify[ies] authorities of his intention

to enter a plea of guilty, thereby permitting the
government to
avoid preparing for
trial and
permitting the court to allocate its resources
efficiently.

-1010

U.S.S.G.

3E1.1(b).

explicit

findings

Although
in denying

the district
a

third

court made

point, the

no

court's

sentence followed shortly after the prosecutor argued against

the

extra

point,

and

we

may

fairly

assume

that

the

3E1.1(b),

the

prosecutor's arguments were accepted.

As

to

prosecutor
information

the

first

argued that
as to

branch

of

Lombardi

his involvement

section

did

not provide

because he

complete

had withheld

specific information that the prosecutor described.

at

the

answer

hearing nor

in his

this charge.

notification of the

brief

The second

on appeal

avoid the expense of preparing for trial.

not plead

guilty until

after the

does Lombardi

branch requires

guilty plea to permit

Neither

"timely"

the government to
Since Lombardi did

jury had

been empaneled,

well after the government had prepared for trial,

he plainly

did not meet the requirement.

Lombardi's
erred in imposing

next argument
a $60,000

is

that the

fine as part

district
of the

court

sentence.

Although he asserts

that the

financial resources,

the

information bearing on

and

government,

an

court did

fact take

note

his
of

13.3 percent interest in the family

$85,853

Lombardi

in

not consider"

these resources, including Lombardi's

transfer to his son of a

business

court "did

receivable.

had

obtained

insurance fraud (reflected

According
about

to

$190,000

in the restitution

the
from

order) during

-1111

the

prior three years.

The district court

also noted that

the probation officer had encountered difficulty

in securing

complete financial information from Lombardi.

Under

the guidelines,

the presumption

is that

a fine

will be imposed, and the burden is upon the defendant to show

that a fine is

not warranted.

F.2d 612 (1st Cir. 1993).

district court
long

before

On this record, we

could fairly
been in

$60,000 fine and that

United States v.
_____________

Savoie, 985
______

think that the

conclude that Lombardi

possession of

sums

their absence had not

ample to

had not
pay the

been adequately

explained.
inventory

A defendant has
of his

little incentive to

assets, and

a busy

help in an

federal judge

is not

required to conduct an audit before imposing a fine.4

Lastly, Lombardi
imposed

a restitution

Protection Act,
repay
lack of

argues that the court

order, under

18 U.S.C.

the $190,000 obtained

explicit

findings

3663-64,

the Victim

and Witness

requiring Lombardi to

from insurers.
of

should not have

financial

Apart from the

condition,

which

____________________
4Citing United States v. Spirolpoulos, 976 F.2d 155 (3d
_____________
____________
Cir. 1992), Lombardi also says that the fine was unlawful
because its purpose was to pay the cost of his incarceration
and supervision. Whether or not this court would follow the
Third Circuit need not be decided here.
Compare United
_______ ______
States v. Turner, 998 F.2d 534 (7th Cir. 1993) (disagreeing
______
______
with the Third Circuit).
In Spirolpoulos, the sentencing
____________
court imposed a flat fine and then a per diam amount for
incarceration costs.
Here, the court imposed only the flat
fine, the judgment labels it a "fine," and it is irrelevant
that the judgment form has a boilerplate statement that
"[t]he fine includes any costs of incarceration and/or
supervision."
-1212

Savoie
______

holds are

not required,

985 F.2d

at 620,

see also
________

United States v. Ahmad, 1993 U.S. App. LEXIS 21587 (7th Cir.
______________
_____
1993),

Lombardi's

brief argues

that

such

a liability

is

unrealistic when there is little evidence of actual assets or

future earning power.

We

might be

an affirmative finding

no basis for

does or necessarily

agree that on

this record

there

that Lombardi

will have $190,000 available to pay such

restitution.
But

we fail to

required.

see why such

a record

basis should be

Lombardi does not deny that the money was secured

from the insurers by fraud, and the whereabouts of the entire

$190,000 is at
of

income.

least uncertain, as are

While

the judgment

prove fruitless, it may also be

secures
that

requiring restitution

Lombardi's.

held nominally
In all events,

may

of some use if Lombardi ever

new assets or the insurance

assets

his future prospects

by

companies wish to prove

family

members are

really

the statute merely requires

the

court to "consider" financial condition, among other factors,

18

U.S.C.

defendant
App.

3664(a);
be found able

LEXIS 21587,

order,

the district

discretion.
Affirmed.
________

at

there

is no

to pay now.
*4-5.

court

requirement
See
___

that

the

Ahmad, 1993 U.S.

_____

In

framing this

restitution

did not

abuse its

considerable

-1313