On June 1, 1995, defendant-appellant Philip Cali (“Cali”) pled guilty to count sixty-nine of a seventy-one count indictment charging him with operating an illegal gambling business in violation of 18 U.S.C. §§ 1955, 2. Cali now appeals the fifteen-month sentence of imprisonment he received, contending that the district court enhanced the prison term mandated by the Sentencing Guidelines (“Guidelines”) because of the erroneous view that U.S.S.G. § 3B1.1 permits a base offense level adjustment for mere management of assets or property. Cali also maintains that the district court’s alternative holding that upward departure was appropriate because his conduct fell outside section 3Bl.l’s heartland was clearly erroneous. We agree that mere management of assets is insufficient for a base offense level adjustment under section 3B1.1, but find that the district court’s alternative determination cures any defect in its holding. Accordingly, we affirm. Jurisdiction stems from 18 U.S.C. § 3742.
I.
THE FACTS
We consider the facts as set forth in the unobjected-to portions of the Presentence Investigation Report (“PSI”) and the transcript of the sentencing hearing.
See, e.g., United States v. Peppe,
During the course of their racketeering investigation, the State Police obtained authorization to intercept phone conversations over a cellular telephone utilized by Yerardi from June to August 1991. Their surveillance of the telephone revealed that Yerardi presided over extensive loansharking and gambling businesses. The gambling business, which operated under the auspices of Boston’s Winter Hill Gang and generated funds for Yerardi’s loansharking business, *574 included over twenty-five bookmaking agents, two principal offices, and had a gross daily revenue of $2,000.00. Though Yerardi headed the gambling enterprise, Maguire was its principal supervisor and the individual responsible for collecting money owed to the organization and paying out money owed to agents and bettors.
Transcripts of numerous calls between Yerardi and Cali intercepted by the State Police revealed that Cali and DeAngelis played the same role in the gambling enterprise, though they operated out of different locations. Yerardi stationed Cali, who frequently placed bets with the business and was often one of its debtors, at one of the business’s principal bookmaking offices to receive calls from the various agents. The agents, who identified themselves by code only and received a percentage of the business’s profits as compensation, communicated information about sporting event bets to Cali. After taking and recording that information, Cali transmitted it directly to Yerardi, with whom he was in daily telephone contact. The majority of the calls intercepted by the State Police were made by Yerardi to Cali at the bookmaking office.
Cali often reviewed betting results with and reported agents’ makeup figures — those monies that have to be worked off before any money can be paid out — to Yerardi during these telephone conversations. He also assisted in charting bets for the gambling business. Charting involves tracking daily bets made by agents and monitoring the business’s projected risk of loss on individual sporting events. Though Cali answered directly to Yerardi and was responsible for completing charting analyses, there is no evidence that he received a percentage of the business’s profit or played any role in setting policy regarding odds or bet placement.
On June 1,1995, Cali pled guilty to participating in the operation of an illegal gambling business. The district court scheduled a sentencing hearing and prior thereto received a PSI from the Probation Department. The PSI prepared by the Probation Department, to which both the government and Cali registered objections, recommended a total adjusted guideline offense level of ten. This recommendation reflects a two level decrease in the base offense for acceptance of responsibility. See U.S.S.G. §§ 2E3.1(a); 3E1.1. The PSI concluded, based on the information provided by the government and the defendant’s description of his duties that an adjustment for role in the offense would not be warranted.
The Probation Department assigned Cali three criminal history points for prior gambling convictions and, as a result, placed him in Criminal History Category II. The district court, however, later found that the Probation Department had erroneously assigned Cali criminal history points for offenses committed while working for Yerardi and identified the appropriate criminal history category as I. Placement in Criminal History Category I, at a total adjusted offense level of ten, results in a sentencing range of six to twelve months.
II.
THE SENTENCING HEARING
At the sentencing hearing, Cali requested a downward departure on the grounds that both he and his wife suffered, inter alia, from serious heart conditions and largely supported themselves on Social Security income benefits that would be unavailable to them for any period that Cali was incarcerated. The government disputed the contention that Cali was entitled to departure on this basis and objected to the two-point adjustment for acceptance of responsibility recommended by the Probation Department. Additionally, the government objected to the PSI’s failure to add four levels under section 3Bl.l(a) for supervisory role, arguing that an enhancement was warranted because Cali managed people and assets within that guideline’s meaning. The government also argued that the Criminal History Category I assignment Cali received did not adequately reflect the seriousness of his past criminal history.
The district court denied the objections and requests made by both Cali and the government. It refused Cali’s request for a health-related departure, concluding that the factors cited by the defense did not, “separately or together, justify departure.” It *575 also rejected the government’s objection to the two-point adjustment for acceptance of responsibility recommended by the PSI. Finally, the court found that the severity of Cali’s criminal history was not underrepresented by the amended criminal history calculation and denied the government’s request for a four-level adjustment under section 3Bl.l(a).
Nevertheless, the court found that Cali’s role in Yerardi’s gambling enterprise warranted some enhancement in his sentence and concluded, over Cali’s objection, that a three level increase in the offense level was appropriate. It found that section 3B 1.1(b) and Application Note 2’s role in the offense provisions permitted him to make a direct adjustment to Cali’s base offense level, but added that, should this Court determine that section 3B1.1 does not permit such an adjustment, it would employ an upward departure, under
United States v. Rivera,
Accordingly, the court sentenced Cali to a fifteen-month term of imprisonment and two years of supervised release. It assessed Cali $50.00, as required by statute, and imposed a fine of $3,000.00, without interest. In light of Cali’s medical problems, the court also made a recommendation that Cali be placed in a facility, as close to Massachusetts as possible, where adequate medical treatment would be available to him.
III.
STANDARD OF REVIEW
Appellate review of a district court’s application of the Guidelines is a two-part process.
United States v. Joyce,
IV.
DISCUSSION
The small, but nevertheless real, difference between a twelve and fifteen month prison term is ultimately what is at stake in this appeal. Cali contends that he is entitled to a reduction in his fifteen-month sentence because twelve months is the maximum prison term he should have received under the Guidelines. In support of this, he maintains that the district court erroneously concluded that section 3B 1.1(b) permits a base offense level enhancement in the absence of a finding that a defendant organized, lead, managed, or supervised one or more participants in an illegal enterprise involving five or more participants. Additionally, Cali argues that the court’s alternative holding — that an upward departure was appropriate in the event section 3B1.1 precluded adjustment — was clearly erroneous because his conduct falls squarely within the heartland of 18 U.S.C. § 1955 offenses. We begin by reviewing the claim that, absent a finding that a defendant managed individuals, U.S.S.G. § 3B1.1(b) precludes an enhancement in the base offense level and discuss the requirements for a § 3B1.1 upward departure thereafter.
*576 U.S.S.G. § 3B 1.1(b) Role in the Offense Adjustments
U.S.S.G. § 3B1.1 punishes defendants in large-scale criminal enterprises according to their relative responsibility, meting out the most severe sentences to individuals who hold leadership or management positions.
Tejada-Beltran,
To make sense of these positions, we briefly review section 3B1.1 and its history. Section 3B1.1 provides:
Based on the defendant’s role in the offense, increase the offense level as follows:
(a) If the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive, increase by 4 levels.
(b) If the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants or was otherwise extensive, increase by 3 levels.
(c) If the defendant was an organizer, leader, manager, or supervisor in any criminal activity other than described in (a) or (b), increase by 2 levels.
Prior to 1993, courts were split as to whether a finding that a criminal-enterprise defendant managed individuals was a prerequisite to a section 3B1.1 base offense level adjustment.
See United States v. McFarlane,
On November 1, 1993, the Sentencing Commission (“Commission”) weighed into this debate by issuing Amendment 500, which amended section 3B1.1 to include Application Note 2. That application note provides:
To qualify for an adjustment under this section, defendant must have been the organizer, leader, manager, or supervisor of one or more other participants. An upward departure may be warranted, however, in the case of a defendant who did not organize, lead, manage, or supervise another participant, but who nevertheless exercised management responsibility over the property, assets, or activities of a criminal organization.
Thus, Amendment 500 offered something to courts on both sides of the section 3B1.1 debate. It made it clear, in accord with the position we embraced in
Fuller,
Application Note 2 explains that section 3B1.1 adjustments and departures require
*577
different factual findings, but does not clarify how, if at all, these devices differ in terms of the sentencing calculation they mandate. At the sentencing hearing, Cali argued that section 3B1.1 adjustments involve enhancements in the base offense level, whereas section 3B1.1 departures involve enhancements in the total adjusted offense level and must adhere to the framework for Guidelines departures established by this Circuit in
Rivera,
THE COURT: My primary view of the matter ... is that the appropriate way to read these guidelines is that that word “departure” in Application Note 2 was not being used in the technical sense of a kind of departure that is controlled by Rivera, by the decision-making structure controlled by Rivera. Instead it’s talking about a calculation of the total offense level.
The court reasoned that had the Commission intended the term “departure” to have the same meaning in the role in the offense context as it does elsewhere in the Guidelines, it would have discussed role in the offense departures in Chapter 5, Part K, of the Guidelines, which is explicitly devoted to departures, and not in Chapter 3, Part B, which primarily deals with base offense level adjustments. See U.S.S.G. Chap. 3, Part B, Introductory Commentary (“This part provides adjustments to the offense level based upon the role the defendant played in committing the offense.”). The district court, therefore, held that both section 3B1.1 adjustments and departures affect base offense level.-
This was error. We cannot agree, given the circumstances surrounding the Commission’s promulgation of Application Note 2, that the sentence-calculation difference between section 3B1.1 adjustments and departures “is ... inconsequential.”
See McFarlane,
If the sentencing court concludes that a defendant has managed or supervised one or more participants in a criminal enterprise involving five or more total participants, an adjustment is mandated — -the court must enhance the defendant’s sentence by three levels. If, on the other hand, the sentencing court concludes that the defendant has merely exercised a managerial role over the property, assets, or activities of a criminal enterprise involving five or more participants, the court is possessed of a certain degree of discretion regarding the enhancement of the defendant’s sentence — “[a]n upward departure may be warranted.”
We hold that section 3Bl.l(b) and Application Note 2 preclude “management responsibility over property, assets, or activities as the basis” for an enhancement to a defendant’s base offense level.
See United States v. Greenfield,
Section 3Bl.l(b) only applies where the record shows that a defendant operated as a “manager or supervisor and the criminal activity involved five or more participants or was otherwise extensive.” U.S.S.G. § 3B1.1(b). Though the Guidelines provide a list of seven factors — which is neither exhaustive nor imbued with “talismanic significance” — to assist courts in determining whether a defendant acted as a leader or organizer within the meaning of section 3Bl.l(a),
United States v. Talladino,
The government contends that the court clearly found that Cali served as a manager or supervisor in the gambling enterprise and that this finding was adequately supported by the transcripts of the conversations between Yerardi and Cali intercepted by the State Police, Cali’s acceptance of responsibility statement, and affidavits provided by State Trooper Tutungian.
See Joyce,
Transcripts of the sentencing hearing suggest that the court did conclude that Cali managed people and assets for Yerardi’s gambling business:
THE COURT: I find that the defendant’s role was more than simply that of record keeper. He was that, as described in one part of the testimony that’s been referred to as the trial of the Grabiec case, but that was not the limit of his participation. And it is my finding that he was also coordinating the efforts of others and the reports of others and putting that together and advising Yerardi about managerial decisions in the operation of this ongoing enterprise over a substantial length of time.
Those findings, in my view, under an appropriate interpretation of the guidelines support a three-point upward adjustment in the calculation of the total offense level so as to raise that total offense level by three points from the way it was calculated by the presentence investigation report and thus move it up to 13.
But the written judgment summarizing the court’s findings and decisions regarding the adjustments and departures requested by the government and Cali does not cite management or supervision of individuals as part of Cali’s offense. It omits the reference to individuals and refers only to Cali’s alleged management of assets:
Government objection to failure of PSI to add four levels under § 3Bl.l(a) for alleged supervisory role is rejected, but I find (over defendant’s objection) that an upward adjustment of 3 levels is appropriate under § 3Bl.l(b) and Application Note 2, because the defendant exercised a de *579 gree of management responsibility over property and assets, under the direction of the principal organizer and leader.
The government invites us to ignore this discrepancy and to focus instead on the district court’s oral explanation of its sentencing decisionmaking. Ordinarily, we would accept such an invitation. “Where ... [a] district court’s oral expression of its sentencing rationale varies materially from its subsequent written expression of that rationale, appellate courts have tended to honor the former at the expense of the latter.”
United States v. Muniz,
Because the written judgment and the district court’s alternative holding — that Cali’s management of assets warranted an upward departure from the sentence prescribed under the Guidelines — both focus on management of assets and do not mention management of individuals at all, we think it would be imprudent to adhere to the oral pronouncement made in this case. Furthermore, the need to resolve the conflict in the district court’s 3B1.1 decisions by remanding for clarification or to decide whether the record could even support a finding that Cali managed individuals — an issue about which we have considerable doubt — is obviated by the existence of the secondary holding. It provides an alternative basis for upholding the fifteen-month sentence Cali received. We do not decide whether a sufficient factual predicate existed to find that the defendant was a manager of other individuals within the meaning of section 3B1.1. We proceed, instead, to a discussion of the district court’s upward departure holding.
U.S.S.G. § 3Bl.l(b) Role in the Offense Departures
As an alternative to its upward adjustment holding, the district court held that the asset management Cali conducted during his involvement in Yerardi’s gambling business justified a three-level upward departure, under section 3Bl.l(b), to impose a sentence corresponding to a total adjusted offense level of thirteen. The district court found that Cali operated as more than a bookie or mere record keeper and that the threats of violence which marked Yerardi’s gambling and loansharking businesses took Cali’s conduct outside the heartland of other section 3Bl.l(b) offenses. Cali assigns error. He argues, first, that the facts of his case do not support a conclusion that he managed assets and, second, that the record, to the extent it reflects asset management at all, does not suggest that his conduct falls outside the heartland of section 3Bl.l(b) offenses.
See Rivera,
Before addressing these arguments, we discuss the rules pertaining to departures from sentences prescribed by the Guidelines. Prior to the Court’s recent decision in
Koon v. United States,
- U.S. -,
Koon
effectively merges the first and second stages of our departure analysis
*580
into one, and instructs that our review of the legal conclusions and factual determinations underlying the district court’s departure decision be conducted under a unitary abuse-of-discretion standard.
See Koon,
- U.S. at -,
Decisions to depart from sentences prescribed by the Guidelines are generally only permitted in cases in which unusual or atypical circumstances justify individualizing a sentence more than the relatively narrow strictures that the Guidelines permit.
United States v. Calderon,
The departure analysis “varies depending on the category in which the feature [or activity] justifying departure falls.”
United States v. DeMasi,
Section 3B1.1 departures are clearly encouraged by the Commission. The language of Application Note 2 — that “upward departure may be warranted ... in the case of a defendant who ... exercised management responsibility over the property, assets, or activities of a criminal organization” — endorses management of assets as a permissible basis for upward departure. This endorsement and our determination that section 3B1.1 does not incorporate asset management as a sentencing factor lead us to the conclusion that the district court was authorized to depart without first engaging in the analysis Cali urges. Where the Commission has explicitly identified certain activities or conduct as a factor not adequately taken into account in its formulation of a particular guideline and that guideline does not incorporate that factor at all, we can be confident that the departure undertaken was not unreasonable.
See Koon,
- U.S. at -,
Having concluded that the relevant circumstances of Cali’s ease constitute an encouraged basis for departure under the Guidelines, we proceed to the next stage in our analysis. Cali asserts that the district court erroneously found that he managed gambling assets. While Cali paints a persuasive picture of his role in Yerardi’s gambling business, we cannot say that the district court abused its discretion. “[W]hen there are two plausible views of the record, the sentencing court’s adoption of one such view cannot be clearly erroneous.”
St. Cyr,
The government presented evidence which was a solid basis for the district court to conclude that Cali managed assets and was more than a mere “bookie” or “telephone operator” in Yerardi’s business. The record reveals that the information Cali recorded and analyzed was an asset or possession of great value to the gambling enterprise.
See Webster’s II New Riverside University Dictionary
131 (1994). It also shows that Cali fielded calls from and placed bets for various agents, as a bookie might do, but also directly reviewed betting and makeup figures with the individual who presided over the gambling enterprise, Yerardi, and participated in “charting” — i.e., assessing the organization’s risk of loss.
Compare Parmelee,
Nor do we think the extent of the departure taken by the district court unreasonable.
Quinones,
Y.
CONCLUSION
For the foregoing reasons, Cali’s fifteen-month sentence of imprisonment is affirmed.