11-5194-cr United States v. Desnoyers

1 UNITED STATES COURT OF APPEALS 2 3 FOR THE SECOND CIRCUIT 4 5 August Term, 2012 6 7 8 (Argued: December 17, 2012 Decided: February 14, 2013) 9 10 Docket No. 11-5194-cr 11 12 - - - - - - - - - - - - - - - - - - - -x 13 14 UNITED STATES OF AMERICA, 15 16 Plaintiff-Appellant, 17 18 - v.- 19 20 MARK DESNOYERS, 21 22 Defendant-Appellee. 23 24 - - - - - - - - - - - - - - - - - - - -x 25

26 Before: JACOBS, Chief Judge, CALABRESI, and 27 LEVAL, Circuit Judges. 28 29 The United States appeals from a judgment entered in

30 the United States District Court for the Northern District

31 of New York (Hurd, J.) re-sentencing Mark Desnoyers to five

32 years’ probation and assessing $45,398 in restitution.

33 Desnoyers was convicted of offenses arising from his

34 malfeasance as an air monitor for asbestos abatement

35 projects in and around Plattsburgh, New York. Desnoyers

36 was initially sentenced to five years’ probation (and 1 restitution of $34,960) after the district court granted his

2 motion under Rule 29 to dismiss the conspiracy charge (Count

3 I). On appeal, we reinstated the conviction for Count I and

4 remanded for re-sentencing. For the following reasons, we

5 conclude that the sentence was procedurally unreasonable; we

6 therefore vacate and again remand for re-sentencing.

7 RAJIT S. DOSANJH, (Craig A. 8 Benedict, on brief), for Richard 9 S. Hartunian, United States 10 Attorney for the Northern 11 District of New York, Syracuse 12 New York, for Appellant, United 13 States of America. 14 15 JOHN B. CASEY, Dreyer Boyajian 16 LLP, Albany, New York, for 17 Appellee, Mark Desnoyers. 18 19 DENNIS JACOBS, Chief Judge: 20 21 The United States takes this appeal from the sentence

22 imposed following our reinstatement of a count of conviction

23 dismissed by the district court under Federal Rule of

24 Criminal Procedure 29. The re-sentencing has resulted in

25 imposition of the same term of probation and an increase in

26 restitution of about $10,000.

27 Desnoyers was convicted by a jury in the United States

28 District Court for the Northern District of New York (Hurd,

29 J.) of offenses arising from his malfeasance as an air

2 1 monitor for asbestos abatement projects in and around

2 Plattsburgh, New York. The grant of Desnoyers’s post-trial

3 motion to vacate Count I--the conspiracy charge--left four

4 substantive violations.

5 On the government’s initial appeal, we reinstated the

6 jury verdict, and remanded for re-sentencing. United States

7 v. Desnoyers (“Desnoyers I”),

(2d Cir.

8 2011).

9 On remand, the district court imposed the same five-

10 year term of probation and increased the restitution amount

11 to $45,398. The government now attacks the procedural and

12 substantive reasonableness of the sentence, arguing mainly

13 that the district court improperly excluded new evidence

14 that was not submitted at the initial sentencing. The

15 government also contests the restitution calculation.

16 For the reasons that follow, we conclude that the

17 sentence was procedurally unreasonable; we therefore vacate

18 and remand to the district court for re-sentencing.

19

20 BACKGROUND

21 Desnoyers’s conviction arose out of his work as an air

22 monitor on ten asbestos removal projects in 2005 and 2006.

3 1 An air monitor conducts air sampling to ensure that the

2 asbestos was removed properly and that no asbestos fibers

3 remain suspended in the air. See N.Y.S. Indus. Code Rule

4 56-17.8. The conspiracy count (Count I) that was dismissed

5 post-trial and reinstated after appeal arises from eight

6 asbestos removal projects that Desnoyers conducted together

7 with his codefendants: John Wood; one of Wood’s associates,

8 Curtis Collins; and one of Desnoyers’s employees, Tom

9 Marble. Wood, Collins, and Marble all testified at trial

10 that abatement at these jobs was performed improperly: The

11 asbestos was ripped out haphazardly causing asbestos fibers

12 to fill the air; the debris was carried out in plastic bags

13 covered in asbestos dust; and chunks of asbestos debris were

14 left in the work area. Marble testified that he never saw

15 Desnoyers take air samples, and Wood testified that

16 Desnoyers assured Wood that the air samples “w[ould] come

17 back clean” immediately after the work concluded. Trial Tr.

18 316, Sept. 10, 2008. The air samples did, in fact, “come

19 back clean” despite large amounts of loose asbestos

20 littering the properties.

21 Two other counts of conviction arise from the same “rip

22 and run” pattern: a violation of the Clean Air Act (Count V)

4 1 at a commercial building in Oneonta, New York, the so-called

2 “Da’Vida” project; mail fraud (Count VI) in connection with

3 a project at the High Peaks Hospice (“Hospice”) in Port

4 Henry, New York; and making false statements to the

5 Environmental Protection Agency (“EPA”) (Counts XII, XIII,

6 and XIV) concerning two of the projects giving rise to the

7 conspiracy count.

8 The jury verdict, rendered on September 19, 2008,

9 convicted Desnoyers on Counts I, V, VI, XII, and XIII.1 The

10 district court granted Desnoyers’ Rule 29 motion for a

11 judgment of acquittal as to Count I only. United States v.

12 Desnoyers, No. 06-CR-494,

(N.D.N.Y. June 19,

13 2009).

14 At sentencing on December 18, 2009, the district court

15 calculated Desnoyers’s offense level using the fraud section

16 of the United States Sentencing Guidelines Manual

17 (“U.S.S.G.” or “Guidelines”), U.S.S.G. § 2B1.1. The court

18 calculated the loss amounts under U.S.S.G. § 2B1.1(b)2 as

19 $34,960, which was the contract value of the Hospice and

1 The jury acquitted Desnoyers on Count XIV. 2 Section 2B1.1 provides that the sentencing range be determined in part by the amount of loss that a defendant causes. 5 1 Da’Vida projects plus the estimated clean-up cost for the

2 Hospice; the Da’Vida victim provided no clean-up estimate.

3 This yielded a six-level increase in the base offense level.

4 U.S.S.G. § 2B1.1(b)(1)(C).

5 The court accepted the Probation Office’s

6 recommendations for sentencing enhancements except for a

7 two-level enhancement under U.S.S.G. § 3B1.1(c) for

8 Desnoyers’s role as an organizer of conduct involving fewer

9 than five participants. With a total offense level of

10 twenty-one and a criminal history category of I, Desnoyers

11 was subject to a Guidelines range of 37 to 46 months’

12 imprisonment.

13 A non-Guidelines sentence (five years’ probation and

14 $34,960 restitution) was imposed on the grounds that

15 Desnoyers was a “novice in the asbestos removal business,”

16 that he had been “duped and misled” by Wood and Collins,

17 Sentencing Tr. 26, Dec. 18, 2009, that he was doing

18 creditable work at the New York State Department of Mental

19 Retardation and Developmental Disabilities helping disabled

20 people get services, and that he had performed similar work

21 at the Advocacy Resource Center.

6 1 On the government’s appeal, we reversed the grant of

2 the Rule 29 motion and remanded with instructions “to

3 reinstate the jury verdict, enter a judgment of conviction

4 on the conspiracy count, and resentence Desnoyers

5 accordingly.” Desnoyers I,

.

6 Before re-sentencing, the government provided the

7 Probation Office with loss amounts for the victims of the

8 eight projects listed in the reinstated Count I. These loss

9 amounts included victims’ payments for the improper asbestos

10 removal and clean-up cost estimates. Most of this

11 information had been provided to the district court for the

12 November 2009 sentencing of Wood, who was also convicted on

13 Count I. However, one estimate was new: One victim, Nancy

14 Page, provided a bid for $19,800. The government also

15 provided new information relevant to the loss amounts for

16 Counts V and VI: The Da’Vida victim provided clean-up bids

17 totaling $43,786, and High Peaks Hospice increased its

18 clean-up total by $2,500. All of this new information

19 submitted by the government would have brought Desnoyers’s

20 total loss amount to $213,732.23.

21 The government also submitted new affidavits from

22 people who knew Desnoyers from the Advocacy Resource Center

7 1 and had contacted the government after hearing news reports

2 of Desnoyers’s first sentence: Lester Parker and Theresa

3 Garrow. The Parker and Garrow affidavits--which referred to

4 events that took place both before and after the original

5 sentencing–-called into question Desnoyers’s account of his

6 work at the Advocacy Resource Center. The government also

7 submitted a “joint letter” dated September 16, 2011, sent by

8 employees of the Advocacy Resource Center to the director of

9 Sunmount Developmental Disability Services Organization,

10 where Desnoyers worked as a Medicaid Services Coordinator,

11 detailing problems they had with Desnoyers. The joint

12 letter referred only to conduct that took place after the

13 first sentencing. At a telephone conference on October 11,

14 2011, the district court ruled that it would not consider

15 evidence of events that took place before the initial

16 sentencing because there was insufficient justification for

17 the government’s failure to introduce that evidence at the

18 first sentencing. Telephone Conf. Tr. 14, Oct. 11, 2011.

19 Evidently confused about the import of that ruling, the

20 government did not submit these documents at re-sentencing.

21 Desnoyers was re-sentenced on October 28, 2011. First,

22 the loss amounts were recalculated, taking into account the

8 1 reinstated conviction for the eight projects that were the

2 subject of Count I. However, the government’s suggested

3 loss amounts were not adopted. Instead, the court decided

4 that Desnoyers’s loss amount for Count I “should be no more

5 than the [restitution] amount ordered for co-defendant John

6 Wood,” which was $111,259.83. Re-sentencing Tr. 8, Oct. 28,

7 2011. The court refused, without further explanation, to

8 consider the clean-up estimate that Ms. Page submitted

9 subsequent to Wood’s sentencing. After making several other

10 rulings on the loss amount that are not at issue on appeal,4

11 the district court calculated the loss amount for Count I as

12 $80,245.83.

13 Next, the district court “decline[d] to consider

14 additional expense claims, clean-up quotes, submitted by

15 victims with regards to [Counts V and VI] that had not been

16 submitted by the government prior to [Desnoyers’s] original

4 Those rulings were as follows: First the district court said that the proposed loss amount included a bid for clean-up services for the Alexander residence project that was “the highest of multiple estimates related to these expenses.”

Second, the district court refused to include $3,175 in “payments for background air sampling, pre-abatement air sampling, and environmental air sampling” because that work is required prior to any asbestos removal project--whether legitimate or not. Id. at 10. Third, the district court refused to consider a loss of $3,600 from one project because the building was demolished after the asbestos was removed. Id. 9 1 sentencing.” Id. at 10-11. The resulting total loss amount

2 on all counts was $115,205.83. Again, the court applied all

3 the recommended enhancements except as to Desnoyers’s role

4 as an organizer.5 This resulted in a total offense level of

5 25 and a Guidelines range of 57 to 71 months’ imprisonment.

6 Despite a Guidelines range that was substantially

7 higher than the one computed at the original sentencing, the

8 district court sentenced Desnoyers to the same five-year

9 term of probation. The district court found that

10 Desnoyers’s “conduct is unchanged from that which was

11 evaluated and considered at the time of the original

12 sentence,” and that “[i]n the nearly two years since that

13 sentence, the defendant has been in full compliance with the

14 terms and conditions of probation.” Id. at 21. The court

15 also considered the factors under

(a),

16 relying on “all of the statements that [it] made on the

17 record at the original sentence.”

18 As for restitution, the district court began with the

19 $34,960 figure from Desnoyers’s original sentence, finding

20 that this amount was appropriate for the projects underlying

21 Counts V and VI--without, however, discussing the upward

5 The district court did not explain this decision at the re-sentencing hearing. 10 1 revisions submitted by the government for those projects.

2 With respect to Count I, the conspiracy count, the court

3 included only the $4,275 that Desnoyers personally received

4 for those projects, reasoning that Desnoyers was “less

5 culpable than his co-defendants and received just a small

6 percentage of the proceeds.” Id. at 11. Moreover, the

7 court refused to include any amount received by Desnoyers

8 for background and pre-abatement monitoring. Similarly, the

9 court declined to hold Desnoyers jointly and severally

10 liable for the clean-up costs related to Count I--totaling

11 $69,476--concluding that Desnoyers was responsible only “for

12 his proportionate liability” of those costs, which the court

13 calculated as nine percent, or $6,163,6 “based on his

14 limited role and his receipt of a limited percentage of the

15 proceeds.” Id. at 12-13. Without explanation, Ms. Page’s

16 clean-up costs, which had been excluded from the loss

17 calculation, were included in the calculation of

18 restitution.

19 The government now appeals the sentence, arguing that

20 it is both procedurally and substantively unreasonable.

21

6 Nine percent of $69,476 is actually $6,252.84. 11 1 DISCUSSION

2 On appeal, the government first challenges the

3 Guidelines range on the grounds that the district court (1)

4 miscalculated the loss amount by refusing to consider Ms.

5 Page’s clean-up costs and the new information concerning the

6 losses suffered in Counts V and VI; and (2) refused to apply

7 the enhancement for being an organizer of the criminal

8 activity. Second, the government contends that it should

9 have been allowed to submit newly discovered character

10 evidence. Third, the government argues that the non-

11 Guidelines sentence was substantively unreasonable.

12 Finally, the government argues that the restitution

13 calculation (1) failed to consider the new submissions for

14 Counts V and VI; (2) should have included payments made for

15 pre-abatement air sampling; and (3) should have imposed

16 joint and several liability for all the Count I losses.

17 The government’s arguments challenge the procedural and

18 substantive reasonableness of Desnoyers’s sentence.

19 Procedural reasonableness is reviewed for abuse of

20 discretion. United States v. Cavera,

(2d

21 Cir. 2008).

22 A district court commits procedural error where it 23 fails to calculate the Guidelines range . . . ,

12 1 makes a mistake in its Guidelines calculation, or 2 treats the Guidelines as mandatory. It also errs 3 procedurally if it does not consider the § 3553(a) 4 factors, or rests its sentence on a clearly 5 erroneous finding of fact. Moreover, a district 6 court errs if it fails adequately to explain its 7 chosen sentence, and must include “an explanation 8 for any deviation from the Guidelines range.” 9 10 Id. at 190 (citation omitted) (quoting Gall v. United

11 States,

(2007)). “A sentencing court’s

12 legal application of the Guidelines is reviewed de novo.”

13 United States v. Cossey,

(2d. Cir. 2011).

14 Substantive reasonableness is also reviewed for abuse

15 of discretion, Gall,

, and is judged in light

16 of the factors listed in

(a)(2), Cavera, 550

17 F.3d at 195. In considering substantive reasonableness,

18 this Court “take[s] into account the totality of the

19 circumstances, giving due deference to the sentencing

20 judge’s exercise of discretion, and bearing in mind the

21 institutional advantages of district courts.” Cavera, 550

22 F.3d at 190. Given the range of considerations, “the duty

23 of a reviewing court is not to identify the ‘right’ sentence

24 but, giving due deference to the district court’s exercise

25 of judgment, to determine whether the sentence imposed falls

26 within the broad range that can be considered reasonable

27 under the totality of the circumstances.” United States v.

F.3d 163, 174 (2d Cir. 2008).

13 1

2 I

3 As to the Guidelines calculation, the government argues

4 that the loss amount was miscalculated and that the

5 organizer enhancement should have been applied.

6 A

7 The government alleges two mistakes in the district

8 court’s loss amount calculation: failure to include the

9 Nancy Page clean-up estimate and failure to consider new

10 loss estimates for Counts V and VI. We review the district

11 court’s factual findings with respect to the loss amount

12 under U.S.S.G. § 2B1.1 for clear error and its conclusions

13 of law de novo. See United States v. Carboni,

,

14 46 (2d Cir. 2000).

15 1

16 At re-sentencing, Nancy Page’s clean-up costs (the

17 “Page Estimate”) were omitted–-without explanation--from the

18 loss amount for Desnoyers’s reinstated conspiracy

19 conviction. Ms. Page had submitted this estimate after

20 Desnoyers’s codefendant Wood was sentenced, so the court did

21 not consider it when it previously calculated the losses for

22 the projects giving rise to Count I.

14 1 The district court’s failure to include the Page

2 Estimate was clear error. The Guidelines require

3 calculation of the loss “based on available information,

4 taking into account . . . the cost of repairs to damaged

5 property.” U.S.S.G. § 2B1.1 cmt 3(C)(iii). While the

6 Guidelines require only a “reasonable estimate of the loss,”

7 the district court’s estimate was not reasonable because no

8 explanation was given for omitting the Page Estimate.

9 Desnoyers argues that it was proper for the court to

10 refuse to consider the Page Estimate because it was not

11 available at the sentencing of co-defendant Wood. We reject

12 this argument. Since Wood was sentenced under the

13 environmental section of the Guidelines, U.S.S.G. § 2Q1.2,

14 not (as Desnoyer was) under the fraud section, there was no

15 “loss amount” calculation for Wood. The starting point for

16 Desnoyers’s loss calculation was the amount of Wood’s

17 restitution, which played no role in the length of Wood’s

18 sentence. The calculation for Wood’s sentencing is

19 therefore inapposite.

20 We vacate the Count I loss amount calculation and

21 remand with instructions for the district court to consider

22 the Page Estimate in calculating the loss amount for Count

23 I.

15 1 2

2 At re-sentencing, the district court refused to

3 consider new clean-up cost estimates for the Da’Vida and

4 Hospice projects that had not been submitted at the original

5 sentencing. The district court did not explain its refusal.

6 “[W]here the government knew of its obligation to

7 present evidence [at the original sentencing] and failed to

8 do so, it may not enter new evidence on remand,” absent some

9 justification for failing to present the evidence in the

10 first instance. United States v. Archer,

, 168-

11 69 (2d Cir. 2011). The government offered no justification

12 for failing to submit the full loss amounts for the Da’Vida

13 and Hospice projects, which were at issue at the initial

14 sentencing. Under Archer, therefore, the district court did

15 not err in refusing to consider these new estimates at re-

16 sentencing.

17 The government argues that the district court’s refusal

18 was error because it was required to re-sentence Desnoyers

19 de novo. Typically, the defendant is entitled to de novo

20 sentencing when the court of appeals reverses a conviction,

21 because a change in the “constellation of offenses of

22 conviction” alters the “factual mosaic related to those

23 offenses.” United States v. Rigas,

(2d

24 Cir. 2009) (internal quotation marks omitted).

16 1 Thus, de novo sentencing was required in Rigas. The

2 two defendants had been initially sentenced to fifteen and

3 twenty years’ imprisonment (respectively) on each of two

4 counts of bank fraud, to run concurrently. Rigas,

. After one of the bank fraud counts was reversed on

6 appeal, the district court “held that it was not required to

7 resentence defendants de novo because [the overturned bank

8 fraud conviction] was a small part of the overall conviction

9 and ran concurrently with [the other bank fraud conviction],

10 which this Court upheld.”7

. Rigas did not

11 involve an effort to expand the record with evidence that

12 could have been submitted at the original sentencing.

13 Rather, the issue was whether the district court erred in

14 concluding that the reversal of one count did not require

15 reconsideration of the overall sentence.

16 Rigas prohibits a district court from automatically

17 imposing the same sentence on remand after one or more

18 counts are reversed (or reinstated) on appeal. Here,

19 however, the district court considered the reinstated

7 The sentencing court in Rigas made an alternative holding that, even if it sentenced the defendants de novo, the sentence would be the same.

The Rigas court dealt with that holding in a different part of its opinion that is not relevant to this appeal. 17 1 conspiracy count, calculated a new Guidelines range, and

2 then, exercising discretion, decided to impose the same

3 sentence as it had at the initial sentencing. The refusal

4 to consider the newly submitted loss amounts for Counts V

5 and VI did not violate the duty to re-sentence de novo.8

6 We therefore conclude that the district court acted

7 within its discretion in refusing to consider the newly

8 submitted loss amounts for the projects underlying Counts V

9 and VI.

8 The government also cites United States v. Bryce,

(2d Cir. 2002). In Bryce, the defendant successfully challenged one of his convictions and the case was remanded for re-sentencing.

. While the appeal was pending, he was indicted and later acquitted for murdering someone who was supposed to testify at his first trial.

The district court resentenced the defendant de novo, finding that he had murdered the witness and imposing a substantially higher sentence.

The Second Circuit affirmed, holding that “we have adopted a mandate rule that permits, if it does not require, de novo sentencing unless the mandate specifically limits the scope of the resentencing.”

. Clearly, Bryce is not on point because it does not require the court to consider new evidence, but simply permitted it in that case. Moreover, in Bryce, the main witness for the murder trial did not step forward until after the original sentencing, justifying the government’s failure to raise the issue in the first instance.

. 18 1 B

2 The government argues that Desnoyers was subject to a

3 Guidelines enhancement under U.S.S.G. § 3B1.1(a) for being

4 an organizer of the criminal activity. We review a ruling

5 on the organizer enhancement de novo; the underlying fact-

6 finding is reviewed for clear error. United States v.

7 Paccione,

(2d Cir. 2000).

8 At the original sentencing, the district court refused

9 to apply the organizer enhancement because Desnoyers had

10 been “convinced to take part in this criminal endeavor by

11 more criminally predisposed individuals.” Sentencing Tr. 7,

12 Dec. 18, 2009. At re-sentencing, however, the district

13 court never mentioned the organizer enhancement

14 notwithstanding the reinstatement of a count of conviction

15 that involved eight additional projects. Although the

16 district court stated at re-sentencing that it “adopt[ed]

17 all of the statements that [it] made on the record at the

18 original sentence,” Re-sentencing Tr. 21, Oct. 28, 2011, it

19 did so in the context of its consideration of the factors

20 contained in

(a), not the Guidelines

21 enhancements, which were discussed earlier in the hearing.

22

19 1 In refusing to consider the organizer enhancement at

2 re-sentencing, the district court made the error made in

3 Rigas: It failed to consider that the reinstatement of Count

4 I had changed the “factual mosaic related to th[e] offenses

5 [of conviction]” such that it was required to analyze the

6 organizer enhancement anew. 583 F.3d at 118 (internal

7 quotation marks omitted). We remand with instructions for

8 the district court to consider the organizer enhancement in

9 light of the reinstatement of Count I.

10

11 II

12 The government argues that the district court violated

13

when it refused to consider character

14 evidence that was not submitted prior to the initial

15 sentencing: the Parker and Garrow affidavits and the joint

16 letter.

17 The statute provides that “[n]o limitation shall be

18 placed on the information concerning the background,

19 character, and conduct of a person convicted of an offense

20 which a court of the United States may receive and consider

21 for the purpose of imposing an appropriate sentence.” Id.;

22 see also U.S.S.G. § 1B1.4. The word “may” confers

20 1 discretion in deciding what character evidence to consider.

2 As explained supra, Archer holds that a district court

3 should not consider evidence at re-sentencing that could

4 have been submitted at the original sentencing absent

5 justification.

. The district court

6 heard the government’s argument that it would have been

7 extremely difficult for it to have found out about Parker,

8 who did not come forward until after the initial sentencing,

9 but nonetheless exercised its discretion in concluding that

10 the government’s proffered justification was insufficient.

11 The district court acted within the bounds of its

12 discretion.

13 The government asserts that the district court’s ruling

14 at the October 11, 2011, telephone conference was

15 inconsistent with the written Order issued the following

16 day. Both directives allowed that “[p]re-sentencing

17 submissions may refer to the defendant’s acts or relevant

18 events occurring subsequent to December 18, 2009.” Order,

19 Oct. 12, 2011. However, at the conference, the district

20 court stated that “these affidavits and the joint letter

21 refer to events mainly before the original sentence.”

22 Telephone Conf. Tr. 12, Oct. 11, 2011. This was partly

21 1 incorrect--the Joint Letter referred only to events that

2 occurred after the original sentencing. The government

3 moved for reconsideration, hoping to clarify whether it

4 could submit the Joint Letter and affidavits if it redacted

5 the affidavits to remove references to events that took

6 place prior to the initial sentencing; but the district

7 court denied it, referring to the quoted language from the

8 October 12, 2011, Order. The government withdrew the

9 character evidence lest it violate the Order. Although the

10 district court might have been clearer in its ruling at the

11 telephone conference, the Order is itself clear and the

12 government should have submitted the Joint Letter and

13 redacted affidavits. The government is arguing that the

14 district court should have considered evidence that the

15 government never submitted. We affirm on this point.

16

17 III

18 We have our doubts as to the substantive reasonableness

19 of a sentence of probation, especially given that the

20 offenses of conviction exposed many persons to prolonged

21 risk of insidious and fatal disease. That the district

22 court did not amend its sentence after we reinstated a

22 1 conspiracy count based on eight additional abatement

2 projects heightens our discomfort.

3 However, we decline to rule on the issue of substantive

4 reasonableness at this time because the sentence contains

5 procedural error. See Gall v. United Sates,

,

6 51 (2007) (“Assuming that the district court’s sentencing

7 decision is procedurally sound, the appellate court should

8 then consider the substantive reasonableness of the

9 sentence.” (emphasis added)); United States v. Cavera, 550

(2d Cir. 2008) (“This degree of deference

11 [for substantive review] is only warranted, however, once we

12 are satisfied that the district court complied with the

13 Sentencing Reform Act’s procedural requirements.”).

14 We therefore leave it to the district court to correct

15 its procedural errors and consider Desnoyers’s sentence

16 again before we rule on substantive reasonableness in any

17 further appeal.

18

19 IV

20 The Mandatory Victims Restitution Act (“MVRA”)

21 requires: “[T]he court shall order restitution to each

22 victim in the full amount of each victim’s losses as

23 1 determined by the court.”

(f)(1)(A). We

2 review awards of restitution for abuse of discretion, United

3 States v. Lucien,

(2d Cir. 2003); but a

4 district court lacks discretion under the MVRA “to deny an

5 award of restitution or to award restitution for anything

6 less than the full amount of the victim’s losses,” United

7 States v. Walker,

(2d Cir. 2003).

8 A

9 The government argues that the district court erred by

10 refusing to consider newly submitted clean-up costs for the

11 projects underlying Counts V and VI when it calculated the

12 restitution amount.

13 Under

(d)(5), “[i]f the victim

14 subsequently discovers further losses, the victim shall have

15 60 days after discovery of those losses in which to petition

16 the court for an amended restitution order. Such order may

17 be granted only upon a showing of good cause for the failure

18 to include such losses in the initial claim for

19 restitutionary relief.” The government never demonstrated

20 that the victims in Counts V or VI petitioned the court

21 within sixty days after discovering the additional losses;

22 nor did the government demonstrate good cause for failing to

24 1 include the losses at the first sentence. We therefore

2 affirm the restitution calculation for Counts V and VI.

3 B

4 In New York, the person conducting air monitoring for

5 certain asbestos abatement projects is required to take

6 samples before abatement begins (“pre-abatement sampling”),

7 after abatement is complete (“post-abatement sampling”),

8 and, for some projects, while abatement is taking place (so-

9 called “durings”). See N.Y. Indus. Code Rule 56-17. In

10 calculating the restitution amount, the district court

11 refused to include the payments victims made for “pre-

12 abatement” samplings and “durings,” reasoning that these

13 “were services unrelated to the offense of conviction, final

14 clearances.”9 Re-sentencing Tr. 12, Oct. 28, 2011.

15 Although there was no finding that the pre-abatement

16 sampling or durings were themselves conducted improperly,

17 they were an integral part of the overall scheme. An

18 analogous situation was recently presented in United States

19 v. Paul,

(2d Cir. 2011), in which the defendant

9 The government does not argue that these payments should have been included in the Guidelines’ loss amount calculation, as opposed to the restitution calculation. We therefore limit our discussion of pre-abatement sampling and durings to the restitution issue. 25 1 committed securities fraud by artificially raising a stock

2 price through trades among his multiple accounts.

at

3 670. To finance the scheme, he obtained margin loans from

4 banks secured by the artificially valuable stock.

Paul

5 argued that the district court should not have imposed

6 restitution in favor of the banks because they were not

7 victims of the securities fraud, the only offense of

8 conviction.

. We disagreed and concluded that

9 the banks were victims because they “would not have made the

10 loans to Paul had they known that the collateral for the

11 loans was the stock he manipulated.”

12 Paul’s broad view of restitution controls. The pre-

13 abatement sampling was akin to the margin loans in Paul;

14 both were necessary to the overall scheme even though

15 neither was integral to the offense of conviction. The

16 victims here would not have paid for the pre-abatement

17 sampling had they known that the asbestos removal would be

18 fraudulent, just as the banks in Paul would not have made

19 loans if the value of the securities had not been

20 artificially raised.

21 We therefore vacate and remand with instructions for

22 the district court to include in its restitution calculation

26 1 all income received by Desnoyers for his role in the scheme,

2 including that for pre-abatement sampling and durings.

3 C

4 Wood was required to pay restitution in the amount of

5 $854,166.06 with the proviso that Wood “shall be jointly and

6 severally liable for $250,302.22 of this restitution with

7 co-defendant, Mark Desnoyers.” Wood Sentencing Tr. 19, Feb.

8 6, 2009. The latter amount related only to the eight

9 projects in Count I (Wood was not involved in the projects

10 underlying Counts V and VI). However, at Desnoyers’s re-

11 sentencing, Judge Hurd imposed a restitution amount for the

12 contract values of the Count I projects equal only to the

13 amount Desnoyers received for his work on those projects

14 ($4,275), not the total contract value of all of the Count I

15 projects. Re-sentencing Tr. 11-12, Oct. 28, 2011.

16 Moreover, the court concluded that Desnoyers was personally

17 responsible for only “nine percent” of the Count I clean-up

18 costs--which it calculated as $6,16310--not the total clean-

19 up costs of $69,476. Id. at 12-13.

20 While the district court has discretion to decide

21 whether defendants should be jointly and severally liable

10 Nine percent of $69,476 is $6,252.84. 27 1 for restitution, see United States v. Amato,

,

2 163 (2d Cir. 2008), the district court did not explain how

3 it arrived at the nine percent figure, or why it held that

4 Desnoyers would be jointly and severally liable for

5 $250,302.22 at Wood’s sentencing but abandoned this position

6 at Desnoyers’s re-sentencing. The district court therefore

7 abused its discretion in calculating the restitution amount

8 for the projects in Count I. We vacate and remand for the

9 district court to calculate the restitution amount for Count

10 I with a full explanation for its reasoning.

11

12 V

13 At oral argument, we asked the parties for letter

14 briefs on the question whether we should assign the case to

15 a different district judge on remand, as we have sometimes

16 done. E.g., United States v. Schwartz,

, 1352

17 (2d Cir. 1974). We decline to take that extraordinary step

18 before affording the district court an opportunity to

19 formulate a sentence after correction of procedural errors.

20

28 1 CONCLUSION

2 For the foregoing reasons, we AFFIRM in part and VACATE

3 and REMAND in part. We AFFIRM the following: (1) the

4 district court’s refusal to consider newly submitted

5 evidence relating to Counts V and VI; and (2) the district

6 court’s refusal to consider the newly submitted character

7 evidence. We VACATE the district court’s judgment on the

8 following issues and REMAND for re-sentencing in accordance

9 with this opinion: (1) the district court’s refusal to

10 include the Page Estimate in the loss amount for Count I;

11 (2) the district court’s failure to consider the organizer

12 enhancement at re-sentencing; (3) the district court’s

13 refusal to include payments for pre-abatement sampling and

14 durings in its restitution calculation; and (4) the district

15 court’s entire restitution calculation for Count I.

29