Full opinion text
Judge POOLER concurs in a separate opinion. KEARSE, Circuit Judge: Defendants James Cutler and Sanford Freedman, following a jury trial in the United States District Court for the Southern District of New York, Loretta A. Preska, Judge, were convicted, along with others, on various charges relating to extensive bank frauds and tax frauds. Issues raised in an appeal by Freedman have been dealt with in a summary order filed today, see United States v. Freedman, Nos. 05-2516, -6068. This opinion deals with an appeal by the government, No. 05-3303, challenging the sentence imposed on Cutler, and a cross-appeal by the government, No. 05-6178, challenging the sentence imposed on Freedman. Cutler was convicted on one count of conspiracy to commit bank fraud, in violation of 18 U.S.C. § 371; two counts of bank fraud, in violation of 18 U.S.C. § 1344; one count of making false statements, in violation of 18 U.S.C. § 1014; one count of tax fraud conspiracy, in violation of 18 U.S.C. § 371; and two counts of tax evasion, in violation of 26 U.S.C. § 7201. He was sentenced principally to a prison term of one year and one day, to be followed by five years’ supervised release, and was ordered to pay restitution in the amount of $29,775,000 and to forfeit $1,381,974. Freedman was convicted on one count of conspiring, in violation of 18 U.S.C. § 371, to defraud financial institutions and the Internal Revenue Service (“IRS”) through false statements in violation of 18 U.S.C. § 1014, bank fraud in violation of 18 U.S.C. § 1344, and mail fraud in violation of 18 U.S.C. § 1341; four counts of bank fraud, in violation of 18 U.S.C. § 1344; six counts of making false statements, in violation of 18 U.S.C. § 1014; and one count of perjury, in violation of 18 U.S.C. § 1623. Freedman was sentenced principally to a three-year term of probation and was ordered to perform 700 hours of community service per year during the probationary period, to pay restitution in the amount of $14,600,000, and to forfeit $3,013,739.48. The government contends that under the 1997 version of the Sentencing Guidelines (“Guidelines”), which was applied to both defendants, and to which reference is made throughout this opinion, a proper sentencing calculation for Cutler would have resulted in a recommended prison term in the range of 78-97 months. It contends that the district court abused its discretion in granting downward departures to reach a range of 12-18 months and that the prison term imposed, one year and one day, was substantively unreasonable. As to Freedman, the government contends that proper sentencing calculations would have resulted in a Guidelines-recommended prison term in the range of 108-135 months. The government contends that the district court erred in certain Guidelines-application rulings and abused its discretion in granting downward departures, and that the sentence imposed — in failing to order a substantial term of imprisonment — was substantively unreasonable. For the reasons that follow, we vacate both sentences and remand for resentencing. I. BACKGROUND The prosecutions that are the focus of these appeals arose out of the business and financial dealings in the early 1990s of codefendants Stanley S. Tollman and Monty D. Hundley, hotel magnates whose principal business organization in the 1980s, Tollman-Hundley Hotels (“Tollman-Hund-ley”), owned a network of hotels, including the Days Inn of America (“Days Inn”) chain and more than 100 individual hotels. Hundley was tried with Cutler, codefen-dant Howard Zukerman, and Freedman and convicted on 28 counts relating to these matters. Tollman left the United States just prior to his scheduled arraignment in this case and remains a fugitive. Cutler was Tollman-Hundley’s chief financial officer. Zukerman was vice president for finance. Freedman was Tollman-Hundley’s executive vice president for development and its general counsel. Government exhibits (“GX”) showed that Freedman also owned various percentages (generally between 2.5 and 4.75 percent) of most of the business entities owned by Tollman and Hundley. (See, e.g., GX 601 (Freedman’s 1993 application for a Mississippi gaming license); GX 601-B (Toll-man’s 1995 application for a Mississippi gaming license).) The evidence as to the principal events, taken in the light most favorable to the government, is described below. A. The $100 Million Bank Fraud Scheme By the late 1980s, Tollman and Hundley each had an estimated net worth of over $100 million, gained largely from the Toll-man-Hundley venture. Tollman and Hundley had financed the growth of their hotel network by borrowing hundreds of millions of dollars from banks and others. Although they usually borrowed the money through limited liability entities, they also gave their creditors personal guarantees. In the early 1990s, many of the Toll-man-Hundley properties were unable to meet their debt service obligations, and a voluntary restructuring of the debt ensued. Part of the restructuring required Tollman and Hundley to sign deficiency notes instead of guarantees. These notes made Tollman and Hundley personally obligated to Tollman-Hundley creditors for much of its debt. (See Trial Transcript (“Trial Tr.”) at 4256 (contrasting guarantees, which are obligations to pay “in case someone else doesn’t,” with deficiency notes, which “[a]re direct obligations to pay”).) Ultimately, Tollman and Hundley emerged from the restructuring of the Tollmap-Hundley debt personally responsible for approximately $100 million of the debt. Freedman participated in the negotiations that led to this restructuring. 1. Coordination and Misrepresentations by Freedman Also in the early 1990s, Tollman and Hundley negotiated an agreement to sell key assets of Days Inn to Hospitality Franchise Systems (“HFS” (now known as Cendant Corporation)), in exchange for the right to receive a specified amount of HFS stock over a several-year period if Days Inn franchises met certain financial targets (the “earn-out agreement”). The performances of those franchises ultimately resulted in Tollman and Hundley receiving HFS shares worth “somewhat in excess of 100 million dollars.” (Trial Tr. 3155; see also GX 1504 (citing 16 other exhibits) showing net proceeds totaling more than $107 million from the sales of the HFS stock accruing to Tollman and Hundley.) Due in large part to the more than $100 million in HFS stock earn-out rights accruing to Tollman and Hundley during the course of the earn-out agreement, Tollman and Hundley appeared to have the capacity to pay off their approximately $100 million in deficiency-note debts to the Toll-man-Hundley creditors in full. Instead, Tollman and Hundley planned to use the proceeds from their HFS stock to fund a riverboat casino venture in Mississippi. However, the large outstanding Tollman-Hundley debt, along with the obligations of Tollman and Hundley on the deficiency notes (the first payments on which were due on June 1, 1993), had the potential to lay claim to $100 million of the proceeds from the HFS stock and to cast a pall on them casino plans. Accordingly, Tollman and Hundley embarked on a plan in early 1993, assisted principally by Freedman, Zukerman, and Cutler, to induce the Toll-man-Hundley creditors to settle for far less than the balances due on the loans. In the spring of 1993, the coconspirators did the following. Tollman and Hundley assigned their rights under the HFS earn-out agreement to Bryanston Group, Inc. (“Bryanston” or “Bryanston Group”). Bryanston Group was owned principally by Tollman and Hundley; Freedman owned 4.75 percent and was its executive vice president. The assignment agreement was signed for Bryanston by Freedman. In addition, Tollman, Hundley, Zukerman, and Freedman contacted Tollman-Hundley’s creditors and represented that Tollman and Hundley were having “great financial problems” (Trial Tr. 2071) and would be unable to satisfy their deficiency-note obligations. Richard Werner, a manager at Marine Midland Bank (now HSBC), testified that beginning early in 1993, he had several discussions on that subject, meeting principally with Zukerman and Freedman. {See id. at 2068-69.) Zukerman told the bankers that the cash flow from the hotels owned by Tollman-Hundley was insufficient to satisfy all the debts and that Tollman-Hundley itself and Tollman and Hundley individually would consider filing for bankruptcy if they were not able to get all the creditor banks to enter into repayment agreements; Zuker-man said they “were in deep financial trouble.” {Id. at 2071.) Freedman, “[i]n those conversations and throughout those conversation[s], made other comments in support of those claims about the[] financial distress [of Tollman and Hundley].” {Id. at 2072.) Werner testified that Freedman “made statements in support of they don’t have the financial wherewithal to meet these obligations.” {Id.) Contemporaneously with these representations, in connection with their casino plans, Tollman, Hundley, and Freedman were submitting applications to the Mississippi Gaming Commission (or “Gaming Commission”) for gaming licenses. Each application attached a schedule (“D Schedule”) listing the applicant’s business assets and showing, inter alia, the name of the asset, its market value, the names of the other investors in each asset, and the market value of each investor’s interest in the asset. Freedman’s D Schedule showed that the total market value of his own interests in these assets was $3,224,805; it also showed the total market values of Tollman’s interests, $34,477,181, and Hundley’s interests, $37,183,441. (See GX 601.) The D Schedules attached to the applications of Tollman and Hundley were identical to that of Freedman. (See GX 601-B, 601-E.) In addition to contacting Tollman-Hund-ley creditors and telling them that Tollman and Hundley were in deep financial trouble, Tollman and Hundley enlisted the aid of unindicted coconspirator James Cohen, who was to be an investor in the riverboat casino venture, to approach some of the creditor banks and offer to buy their Toll-man-Hundley loans at steeply discounted prices. Hundley and Freedman instructed Cohen to conceal his relationship with Toll-man and Hundley and to tell the banks instead that he represented an off-shore investor that wanted to do business with Tollman-Hundley and wanted to own the Tollman-Hundley debts, but that the interested investor would not be willing, in light of the (supposed) financial straits of Tollman and Hundley, to pay more than pennies on the dollar to purchase those debts. Freedman gave Cohen a list of banks to contact, showing the maximum amounts for which they hoped to persuade the banks to settle, to wit, 20 percent or less of the outstanding balances. Cohen was instructed on what to say, in the conversations with the banks, by Hundley and Freedman. (See Trial Tr. 3736-39.) During the period of his negotiations, Cohen made progress reports to Freedman and continued to receive general overall instructions from Tollman, Hundley, and Freedman. (See, e.g., id. at 3751.) There was, however, no independent interested off-shore investor. In order to provide the purchaser supposedly represented by Cohen, Freedman had Tollman-Hundley’s outside counsel incorporate two companies, Paternoster Second Holdings Inc. (“Paternoster”) and Chelsea Acquisitions Inc. (“Chelsea”), that Cohen would say were controlled by the foreign investor. These companies were in fact controlled by Tollman and Hundley, their expenditures being funded by Bryanston (see GX 1506 (“Debt Purchases by Paternoster/Chelsea Funded by Bryanston”)), which was owned by Tollman, Hundley, and Freedman. Nonetheless, when Chemical Bank made its willingness to sell certain of its Tollman-Hundley loans to Chelsea contingent on the receipt of assurances that Chelsea was not owned or controlled by Tollman or Hundley, Freedman sent the bank a letter stating that the assurances were enclosed; he enclosed a letter signed by Tollman and Hundley “certifying] to Chemical Bank that neither [Tollman nor Hundley] owns any legal or beneficial interest, directly or indirectly, in [Chelsea].” (GX CH-9 (Letter from Freedman to Thomas H. Kozlark, Vice President, Chemical Bank, dated May 23, 1994, attaching May 12, 1994 letter signed by Toll-man and Hundley).) Tollman and Hundley recruited others, including relatives of Tollman who had surnames other than Tollman, to pose as officers of Paternoster and Chelsea and to sign documents for those companies. For example, Leon Smith, Tollman’s nephew by marriage, testified that he signed Paternoster contracts at the request of Freedman and signed Paternoster tax returns at the request of Cutler. Smith had never invested in Paternoster and did not know the names of its investors; he had never received any money from Paternoster and did not know the name of anyone who had; he did not “know of any telephone number that anybody could dial in the 1990s where somebody would have answered ‘Paternoster.’ ” (Trial Tr. 2613-14.) When banks eventually agreed with Cohen to sell their Tollman-Hundley debts, some were paid from escrow accounts held by Tollman-Hundley’s outside counsel that had ostensibly been funded by Paternoster or Chelsea. (See GX 1506-A to 1506-D (charts listing the various transactions).) The funds had in fact come largely from Bryanston Group, to which Tollman and Hundley had assigned the lucrative HFS stock rights. (See GX 1506 (chart showing amounts paid for Tollman-Hundley debt from Bryanston accounts).) The banks contacted by Cohen were not immediately persuaded to sell their Toll-man-Hundley loans cheaply. For example, a representative of First National Bank of Chicago (“First Chicago”) with whom Cohen had negotiated (see Trial Tr. 3748) stopped by Cohen’s office in New York to “make sure [Cohen] existed” (id. at 3749) and expressed concern that Cohen might be seeking to purchase the loans for Tollman or Hundley (see id.). Cohen gave his assurance, as instructed by Hundley and Freedman, that this was not the case. First Chicago was eventually persuaded to sell its Tollman-Hundley loans, the balances on which totaled approximately $4.5 million, to Cohen for $1.25 million, selling them to a company that Cohen testified he had set up for “[fraudulent transactions” (id. at 3752). Although the agreement with First Chicago recited that Cohen had no agreement to resell the Tollman-Hund-ley loans to any entity controlled by Toll-man or Hundley, Cohen purchased the loans with the understanding that they would be repurchased by Tollman and Hundley, having received that understanding from Tollman, Hundley, and Freedman. (See, e.g., id. at 3752-54.) Paternoster later purchased those loans from Cohen’s company, paying Cohen $1.25 million plus interest. (See id. at 3755-57.) On another occasion, Cohen was able to reach a deal in which his sham foreign investor was to purchase certain of Chemical Bank’s Tollman-Hundley loans, whose balances totaled $21.7 million, for 10 percent of that sum. Cohen called Freedman to find out whether Cohen would be expected to advance the $2.17 million. Freedman immediately responded that Cohen “didn’t need to worry about it. It was taken care of.” (Id. at 3762-63.) The banks repeatedly sought personal financial information from Tollman and Hundley themselves as to their ability to pay the deficiency notes. Marine Midland, for example, owning Tollman-Hundley loans whose balances totaled some $12.5 million, asked Zukerman and Freedman to provide written financial statements for Tollman and Hundley individually, such as balance sheets, tax returns, and forecasts of future income and cash flow. At times, Marine Midland was told that information was not available; at other times it received documents that were many inches thick but contained no meaningful information. (See, e.g., id. at 2073, 2102.) Marine Midland eventually sold its loans to Paternoster for $1.75 million. 2. Misrepresentations by Cutler For creditors who remained unsatisfied by the documents provided by Tollman and Hundley through Zukerman and Freedman, misinformation was sent by Cutler, Tollman-Hundley’s chief financial officer. For example, in January 1995, Cutler sent Wells Fargo Bank (“Wells Fargo”) financial statements for Tollman and Hundley “dated as of December 31, 1992,” which Cutler represented were “the most recently prepared” financial statements. (GX WF-6 (Letter from Cutler to Christine Rotter, Vice President/Manager, Wells Fargo Bank, and Michael Sherrow, Eastdil Realty, Inc., dated January 26, 1995, at 1).) These 1992 statements were not in fact Tollman’s and Hundley’s most recent financial statements; in 1993, Toll-man and Hundley had submitted to the Mississippi Gaming Commission personal financial statements as of March 31, 1993, which also showed the anticipated value of Bryanston as of May 31, 1993. The statements that Cutler sent to Wells Fargo in January 1995 contained an entry for Bryanston — but only under its former name, “Buckhead” — and the Buckhead entry did not include the value of the HFS stock, nearly $45 million of which had been received by mid-February 1994. In August and September 1995, Cutler provided disparate financial information to three banks and to the Mississippi Gaming Commission. During that period, he was meeting with and giving financial information to the Financial Evaluator for the Mississippi Gaming Commission in support of Tollman’s July 31, 1995 application for a Mississippi gaming license. On August 18, 1995, Cutler sent a letter to the Gaming Commission enclosing numerous schedules “[a]s a follow-up” to supplement and correct Tollman’s application, including recent financial statements of Bryanston. (GX 1014-A (Letter from Cutler to James M. Prewitt, Financial Evaluator, Mississippi Gaming Commission, dated August 18, 1995).) Tollman’s application stated that the value of his stock in Bryanston was $21,135,746 (see GX 601-B, Schedule C); his Summary Financial Questionnaire (see GX 601-B, at 2) stated that his net worth was $27,371,230. Contemporaneously, Cutler sent letters to two of the creditor banks stating that he was “[e]nclos[ing] ... the latest information on the financial condition of Stanley S. Tollman and Monty D. Hundley.” (E.g., GX CH-14 (Letter from Cutler to Thomas Kozlark, Chemical Bank, dated August 18, 1995); GX WF-9 (Letter from Cutler to Dale Christiansen, Wells Fargo Bank, dated September 27, 1995).) A similar letter was sent to Bank of America. Attached to Cutler’s letters to the banks were financial schedules that supposedly summarized the business interests, personal assets, and obligations of Tollman and Hundley. Those schedules represented that Tollman and Hundley, respectively, had personal assets, as of July 31, 1995, of little more than $125,000 and $80,000. The schedules that Cutler sent to the banks did not mention the HFS stock or the ownership interests of Tollman and Hundley in Bryanston; nor did Cutler’s letters mention the HFS stock or Bryan-ston. Further, in purporting to show other outstanding debts of Tollman and Hundley, with which the debts of each creditor bank would ostensibly be competing for collection, the documents sent by Cutler to the banks identified most of the current note holders as Paternoster or Chelsea — which, of course, unbeknownst to the banks, Tollman and Hundley owned. (See, e.g., GX WF-9 (Letter from Cutler to Dale Christiansen, Wells Fargo Bank, dated September 27, 1995 (unpaginated attachments)).) Government exhibits listing the assets that were held in the name of Tollman or Hundley as of July 31, 1995, but not included on the schedules that Cutler sent to the banks, showed that as to Tollman, the “total value of assets not listed” was $31,592,019 (GX 1501 (emphasis in original)), and that as to Hundley, the “total value of assets not listed” was $25,640,795 (GX 1500 (emphasis in original)). Tollman and Hundley each had an interest in Bryanston alone worth more than $21 million. (See GX 1500,1501.) During the course of his participation in the bank frauds, Cutler received more than $900,000 in salary (see GX JD-7), which the district court ultimately found was compensation for his participation in those frauds (see Cutler Sentencing Transcript (“Cutler S.Tr.”) 106, 113). As additional compensation, Tollman and Hundley gave Cutler the right to purchase stock in the casino venture worth some $400,000. (See GX 54; Trial Tr. 6664-65.) The trial with respect to the above conduct resulted in, inter alia, (1) the convictions of Cutler and Freedman (along with Hundley and Zukerman) for conspiracy to commit bank fraud; (2) the conviction of Freedman on four substantive counts of bank fraud and six counts of making false statements to federally insured banks for purposes of influencing their decisions with respect to selling the Tollman-Hundley loans; and (3) the conviction of Cutler on two substantive counts of bank fraud and one count of making a false statement to a federally insured bank. In addition, Freedman had given deposition testimony under oath in a bankruptcy proceeding in which Paternoster had filed a claim. When questioned with respect to Tollman-Hundley debt that Paternoster had purchased, Freedman testified, inter alia, that he had no idea whether Paternoster had ever collected anything on that debt and that Tollman and Hundley had expressed “concern ... that that debt has to be paid.” (GX EM-5X.) Having initiated the creation of Paternoster on behalf of Tollman and Hundley and overseen Paternoster’s purchases of Tollman-Hundley notes precisely to avoid having Tollman and Hundley called on to pay their deficiency notes, Freedman was convicted of perjury. B. The $29 Million Tax Frauds In addition to the above bank frauds, there were tax frauds. Cutler, as Toll-man-Hundley’s chief financial officer, was responsible for the tax reporting of Toll-man-Hundley and the entities it corn-prised. For nearly a decade, Cutler caused the salaries of the senior leaders of Tollman-Hundley and certain of their aides to be paid in ways that were designed to evade proper taxation. For example, instead of being generated by a payroll service, as was the case with respect to most Tollman-Hundley employees, salary checks to these top employees were handwritten by someone who reported directly to Cutler; they were drawn on accounts of entities whose records were not sent to the payroll service; and on orders from Cutler, those entities did not report those salary payments to the IRS. Further, salaries were frequently paid in a form — such as car payments or insurance premiums — that disguised the fact that they were salary; these payments too went unreported to the IRS. In addition, some salary payments were simply misdes-cribed as nontaxable reimbursement for expenses. This system, overseen by Cutler with respect to more than a dozen employees, resulted in the Tollman-Hund-ley entities’ failure to report more than $29 million of the employees’ earned income. Cutler himself took advantage of the system he oversaw by causing tens of thousands of dollars paid to him each year not to be reported to the IRS. For example, he had Tollman-Hundley pay a portion of his salary indirectly by making rent payments directly to his landlord. And on his own tax returns he underreported his income. During one seven-year stretch, Cutler understated his income by a total of more than $236,000. In connection with these acts, Cutler was convicted on one count of conspiracy to commit tax fraud and two counts of tax evasion (collectively the “tax frauds”). C. The Sentences The Probation Department prepared a presentence report (“PSR”) on each defendant. The PSRs calculated the total losses from the bank fraud conspiracy by subtracting the amounts for which the banks sold the Tollman-Hundley loans from the balances on those loans. The losses totaled more than $106 million. Accordingly, the PSRs for both Cutler and Freedman began with a base offense level of 6 pursuant to Guidelines § 2F1.1, applicable to offenses involving “[f]raud and [d]eceit,” and recommended that that level be increased by 18 steps because the loss exceeded $80,000,000, see Guidelines § 2Fl.l(b)(l)(S). The PSRs also recommended an additional two-step increase in offense level because “the offense involved ... more than minimal planning,” Guidelines § 2F1.1(b)(2)(A). Thus, the initial enhancements for Cutler and Freedman resulted in an offense level of 26. Additional distinct adjustments were recommended for each defendant. 1. Cutler With respect to Cutler’s conviction on one count of conspiracy to commit tax fraud and two substantive counts of tax evasion, the PSR calculated an offense level of 22 pursuant to Guidelines §§ 2T1.1 and 2T4.1, based on a federal tax loss of more than $5 million. Combining, pursuant to Guidelines § 3D1.4, the offense levels for Cutler’s bank frauds (26) and his tax frauds (22), the PSR recommended a combined total offense level of 28. As Cutler had no known criminal convictions, his criminal history category was I. Thus, with an offense level of 28, his Guidelines-recommended range of imprisonment was 78-97 months. Although noting that Cutler apparently had been motivated by monetary gain and that his participation was critical to the success of the frauds, the PSR recommended that the court impose a prison term of only 60 months. It stated the probation officer’s belief that 78 months of imprisonment would cause undue hardship to Cutler’s three children (who lived with his ex-wife), to whose support he contributed a total of $1,900 per month, and would slightly overstate the level of his culpability in the offense. Cutler challenged the PSR’s offense-level calculation on the grounds that it overstated the bank fraud losses and that the PSR failed to find that he had played a minor role in the bank frauds; and he moved for downward departures on grounds relating to the nature of his participation in the frauds and his family circumstances. As to the amount of loss, Cutler argued that the PSR’s calculation was erroneous because parts of the bank debts were nonrecourse, and hence uncol-lectible against Tollman and Hundley individually; thus, Tollman and Hundley could have repaid the recourse portions of the debts and the banks would have lost the remainder even in the absence of the frauds. Cutler argued that the losses caused by the frauds thus totaled only between $40 million and $80 million, rather than in excess of $80 million, and therefore that the offense-level enhancement for amount of loss should have been 17 steps rather than 18 steps. The court quickly rejected that contention, finding that the amounts of loss caused by the frauds were the differences between the loan balances and the amounts the banks received. As to his participation in the bank frauds, Cutler contended that the PSR should have recommended a downward adjustment in offense level pursuant to Guidelines § 3B1.2(b), on the basis that he played only a minor role. The court also rejected this contention, finding “a downward adjustment for role in the offense” inappropriate “because of the criticality of Mr. Cutler’s role in the success of what we have been calling the money lie.” (Cutler S.Tr. 29.) The court thus “conclude[d] that a total offense level of 28 is appropriate.” (Id. at 30.) Cutler moved for a downward departure pursuant to Guidelines § 2F1.1, arguing that he performed only a few fraudulent acts and that his personal gain was minimal, and hence that the magnitude of the loss overstated his role and culpability in, and his gain from, the offense. See generally id. Application Note 10 (“In a few instances, the loss determined under subsection (b)(1) may overstate the seriousness of the offense. This may occur, for example, where a defendant attempted to negotiate an instrument that was so obviously fraudulent that no one would seriously consider honoring it. In such cases, a downward departure may be warranted.”). Cutler also moved for a departure pursuant to Guidelines § 5H1.6 (Policy Statement), arguing that he had “extraordinary family circumstances” (Cutler S.Tr. 30), to wit, three children to whose support he would not be able to contribute if he were in prison. In opposition to these requests, the government pointed out, inter alia, that Cutler had derived substantial benefits from the offense in the form of stock and inflated salary; that, even if he had not, a lack of personal profit is not ordinarily a ground for departure; and that Cutler’s lesser interest in the bank fraud offenses, in comparison to that of Hundley, was reflected in the fact that the Guidelines-recommended range of imprisonment for Hundley was twice that recommended for Cutler. The government also argued that a defendant’s inability, while incarcerated, to support his dependents did not ordinarily provide a ground for departure and that, in addition, Cutler had artificially created his inability to support his children. It stated that Cutler had sold some of the proceeds of the bank fraud, to wit, his shares in the casino venture, and used those proceeds to buy property in Nevada; however, he did not keep that property in his own name but rather put it in his current wife’s name, out of the reach of his creditors, his ex-wife, and his children. The district court granted Cutler’s departure motion on both grounds, reducing his offense level by a total of 15 steps. First, the court departed downward by six levels, from 28 to 22, on the ground that the offense level calculated on the basis of the loss to the banks overstated the seriousness of Cutler’s role, conduct, and offense: With respect to the application for departure on the ground that level 28 overstates the seriousness of Mr. Cutler’s role in the bank fraud conspiracy, that application is granted. This is, in my view, analogous to the Court of Appeals decision in United States v. Restrepo in which the court noted that “the [sentencing] commission apparently contemplated some connection between the quantity of money implicated and the extent of a defendant’s participation in the offense.” 936 F.2d 661, [667] (2d Cir. 1991)[,] and, indeed, it appears that the commission so contemplated that relationship. Here, however that relationship does not exist, in my view, to an extent not contemplated by the commission. Here, Mr. Cutler’s communications, including those set out by the government today during sentencing, although they were necessary to the scheme, were a small part of the scheme and he received little, if any, personal gain from the bank fraud scheme. Without reviewing it in detail, if the huge amount of money involved in the bank fraud scheme were reduced to a level more consistent with the seriousness of Mr. Cutler’s offense, the offense level would likely be at or about 22. So the request for a downward departure on the ground that the seriousness of Mr. Cutler’s conduct is overstated by the offense level is granted. (Cutler S.Tr. 97-98 (emphases added).) From level 22, with respect to both the bank fraud counts and the tax counts, the court departed downward nine levels for family circumstances that the court found to be extraordinary. (See id. at 98-100, 122.) The district court “acknowledge^] that that is a disfavored basis for a departure” (id. at 98), but it concluded nevertheless I believe in this case it has been demonstrated that the extraordinary circumstances present are of a kind and to a degree not taken into account by the guidelines. Here, as we have discussed, Mr. Cutler has three children, one of whom has finished, apparently, two years in college. The children’s ages are 20, 14 and 11. Mr. Cutler has been ordered to pay child support and has in fact paid that support over time. As I understand it from the presentence report, other costs of those children have been paid by Mr. Cutler or he has caused them to be paid, including costs of visits with him. As we also know from the presentence report and from counsel’s submissions, the children’s mother makes approximately $25,000 a year as a school bus driver. And in her letter [she] pointed out that the child support payments pay the rent and otherwise allow the children who remain in lower and secondary school to remain in the public school system in which they have been brought up in. The former Mrs. Cutler also writes that, without the support that Mr. Cutler provides, the children would have to be taken out of the Somers School System and the college student would be prevented from returning to college and, in all likelihood, the entire family would have to move in with Mrs. Cutler’s sister in Georgia. At this particularly vulnerable time in those children’s educational and emotional development, it seems that that is an extraordinary price to pay. I also find that a lengthy prison sentence would prevent Mr. Cutler from making the required payments, whether because child support payments would be excused in New York, which I don’t know and do not rely on, or whether he just plain would not be able to make them. For those reasons, I find that a downward departure on the basis of extraordinary family circumstances is appropriate. ... I think that the appropriate departure is to a level 13 under the guidelines. (Id. at 98-100.) The court then turned to the sentencing factors set out in 18 U.S.C. § 3553(a). It stated that with respect to the nature and circumstances of the offense, I take into account that Mr. Cutler was the chief financial officer of the company with respect to the bank fraud conspiracy, and I take into account his responsibility for the tax documents of the company with respect to the tax fraud conspiracy. I note, however, that, in addition, I have defined [sic — declined] a further reduction in offense level based on Mr. Cutler’s role in the offense. Taking into account, however, the nature and circumstances of the offense under Section [3553](a)(l), I do note, however, that the degree of culpability of Mr. Cutler is far less than the degree of culpability of other defendants. His role in the offense was far more limited than the role of other defendants and, as I mentioned, although necessary to the offense, far more limited. I also take into- account that ... [Cutler] received little, if any, direct compensation as a result of it and relative to the $106 million amount, a relatively small amount of compensation indirectly as a result of the bank fraud conspiracy. For those reasons, the nature and circumstances of the offense dictate a lower sentence than is required by the guidelines. (Cutler S.Tr. 101-02.) The court later clarified that these statements with respect to Cutler’s role and culpability related only to the bank fraud counts and that the court did “not” find that the offense level of 22 “overstaffed] the seriousness” of Cutler’s tax offenses. (See id. at 121-22.) The court ruled that “[t]o the extent that there was departure application with regard to that offense level, it is denied.” (Id. at 121.) With respect to 18 U.S.C. § 3553(a)(2)(B), which requires the sentencing court to consider “the need for the sentence imposed ... to afford adequate deterrence to criminal conduct,” the district court stated, some jail time is required to provide adequate deterrence to this type of criminal conduct. With respect to this type of an offense, however, the relative length of the sentence does not seem to be as important in providing deterrence. (Cutler S.Tr. 102.) The court also cited “the need to provide restitution” and stated that “in that respect, as with Mr. Cutler’s family obligations, a lesser rather than greater custodial sentence is required.” (Id. at 103.) The Guidelines-recommended range of imprisonment for an offense level of 13 (the level resulting from the granted departures) and a criminal history category of I is 12-18 months. The district court sentenced Cutler to a prison term of 12 months and one day, to be followed by a five-year term of supervised release. (Id.) In response to a question from the government, the court stated that even if the Guidelines departures it had granted were found inappropriate as a matter of law on appeal, it would still sentence Cutler to the year-and-a-day term of imprisonment by imposing a non-Guidelines sentence and applying the § 3553(a) factors. (See id. at 123.) 2. Freedman The PSR on Freedman, after the initial offense-level increases discussed above, ie., 18 steps for amount of loss and two steps for more than minimal planning, leading to an enhanced offense level of 26, recommended additional increases, including, as discussed in Part II.C.l. below, a two-step increase pursuant to Guidelines § 3C1.1 on the ground that Freedman had engaged in obstruction of justice by making false statements to IRS investigators in connection with their investigation of the tax frauds. With all of the recommended increases, the PSR calculated that Freedman’s total offense level was 31. Given an offense level of 31 and a criminal history category of I, the Guidelines-recommended imprisonment range for Freedman would be 108-135 months. Freedman principally challenged the recommended loss-amount enhancement to his offense level, and he moved for downward departures on several grounds. In challenging the loss-amount enhancement, Freedman made essentially the same arguments as Cutler for exclusion of the nonre-course parts of the loans, contending that the loss figure should be only $40-$80 million, with a resulting 17-step, rather than 18-step, increase. The government opposed these contentions on the same grounds on which it had opposed the arguments when made by Cutler. The district court rejected Freedman’s contention that the loss-amount, for purposes of calculating his offense level, should have included only the recourse part of the Tollman-Hundley debts. (See Freedman Sentencing Transcript (“Freedman S.Tr.”) 53, 56; see also id. at 54 (accepting the PSR-recommended adjustment for more than minimal planning).) However, the court stated that “the $100 million amount with respect to those defendants other than Mr. Hundley, and that, of course, means Mr. Freedman, substantially overstates the amount with the culpability of these defendants” and “overstates [Freedman]’s participation in the offense.” (Id. at 53.) “[Accordingly,” the court stated, “whether it’s 18, as I accept, ... or 17 as proposed by the defendants— [it] wildly overstates the culpability of the defendant.” (Id.) The court “note[d] in particular that under Restr[e]po, the loss amount is in general thought to be ... somewhat related to the gain to the defendant,” and stated, “[h]ere, of course, we know that they are wildly disparate.” (Id.) The court indicated that it would deal with the “vast[] overstate[ment of] this defendant’s culpability in the offense” by way of a departure. (Id. at 56.) Freedman made several applications for downward departures. In addition to moving for a departure pursuant to Guidelines § 2F1.1 Application Note 10 based on the argument that the loss amount greatly overstated his culpability in the offense, he sought a departure pursuant to § 5H1.6 for extraordinary family circumstances, arguing that his relationships with his elderly, mentally retarded brother who has cerebral palsy and with his elderly mother-in-law were so important to his family members’ well-being that they merited a departure from the Guidelines. Freedman also sought a departure for health circumstances pursuant to Guidelines § 5H1.4 (Policy Statement), due to a serious heart condition (along with attendant maladies) and depression. The government opposed all of Freedman’s departure requests. As to the contention that the loss amount overstated Freedman’s culpability, the government argued, inter alia, that Freedman had benefited substantially from the frauds and that his role was extensive and significant. With respect to Freedman’s family circumstances, the government pointed out that Freedman is not the primary caregiver with respect to either his brother or his mother-in-law, as each of them resides in an assisted living facility. The government contended that, if necessary, alternative arrangements could be made for the care of each, and that therefore neither situation qualified as extraordinary. As to Freedman’s heart condition, there were two stages of presentations. In response to Freedman’s initial motion for a departure on this basis, the government submitted a letter from the Health Systems Administrator of the Bureau of Prisons (“BOP”), stating that the BOP was capable of providing adequate monitoring of Freedman’s conditions. The letter noted that the BOP houses thousands of inmates with the same conditions as Freedman (see Part II.C.4 below), and, after elaborating on the medical facilities available in the BOP system, it asserted that “[b]ased on the information provided to me and my knowledge of BOP’s medical resources, the BOP will be able to provide appropriate care for Mr. Freedman.” (Letter from Barbara J. Cadogan, Health Systems Administrator, BOP, to Stanley J. Okula, Jr., Assistant United States Attorney, dated March 18, 2005 (“First Cadogan Letter”), at 2.) The government argued that a departure on the basis of Freedman’s heart condition would thus not be justified. Subsequent to these submissions and prior to sentencing, Freedman suffered a near-fatal attack of sepsis from a urinary tract infection, which required his hospitalization in intensive care for over a week. Accordingly, additional material was submitted with respect to his request for a downward departure on account of his health. Freedman’s cardiologist wrote the district court stating that the attack of urosepsis “demonstrate^ the necessity of careful and ongoing medical care, given Mr. Freedman’s cardiac condition. Without rapid attention to his deteriorating status he would not have survived.” (Letter from Dennis S. Reison, M.D., to Judge Preska dated May 23, 2005 (“Reison May 23 Letter”), at 1.) Freedman’s urologist wrote that Freedman’s problem had been caused by kidney stones; that Freedman “will need to be watched very closely in order to make sure that he does not have a recurrence of his problem”; that a small fragment of stone remained; that “[i]f this fragment does not pass,” Freedman will need to have it removed; and “until he is stone-free and until his condition is completely stabilized, that he will need to be watched closely.” (Letter from Michael Wechsler, M.D., to Judge Preska dated May 10, 2005 (‘Wechsler May 10 Letter”).) In response, the government summarized Freedman’s medical records from his recent health problem and argued that the “medical records show that [Freedman] had a serious medical scare, but that he ha[d] essentially recovered.” (Letter from Peter G. Neiman et al., Assistant United States Attorneys, to Judge Preska dated June 10, 2005 (“Neiman Letter”), at 3.) According to the summary of the medical records, after his discharge from the hospital, Freedman was essentially ‘“good, tolerating [a] regular diet[ and] ambulating] independently without problems’ ” (id. (quoting Discharge Summary Note for Freedman, Sanford, by Michael Wechsler, M.D., dated April 20, 2005)), and was “ ‘feel[ing] well,’ ” though “ ‘fatiguing] easily,’ ” (Neiman Letter at 3 (quoting cardiologist’s notes)). The government also submitted a second letter from the BOP, which noted that it had received and assessed the additional information regarding Freedman’s medical condition. The BOP concluded that “the Bureau will be able to provide appropriate care for Mr. Freedman,” explaining that [w]hen medical emergencies and the need for surgical procedures arise, ... major medical centers [with which the BOP has contracts] offer the Bureau a wide range of trained surgical specialists. Each institution has procedures in place to contact local emergency transportation teams for the timely transportation to one of the local medical centers. If Mr. Freedman requires hospitalization during his term of incarceration, for either a routine or emergency admission, the Bureau can accommodate this need. (Letter from Barbara J. Cadogan, Health Systems Administrator, BOP, to Stanley J. Okula, Jr., Assistant United States Attorney, dated June 10, 2005 (“Second Cado-gan Letter”), at 1.) The district court granted Freedman’s requests for departure based on his age, health, and family circumstances. The court made no determination as to what Freedman’s total offense level or recommended imprisonment range would be under the Guidelines; and it did not specify the extent to which it was granting a departure on account of its view that the loss amount “vastly overstated Freedman]’s culpability in the offense” (Freedman S.Tr. 56 (“[r]ather than actually putting a number on it, I think I will await both the departure findings and the consideration of the 3553(a) factors”)). Notwithstanding the BOP’s position that it would be able to provide adequate care for Freedman, the court granted Freedman’s applications for downward departures, based in part on a “combination of] Mr. Freedman’s age and his health situation” (id. at 57). The court stated as follows: [T]he BOP does not have the ability, in my view, to monitor Mr. Freedman’s situation constantly and to respond immediately. And the recent health issue has made it very, very plain that without that ability to monitor constantly and respond immediately, sending Mr. Freedman to prison would in effect be a death sentence.... I also note, of course, in the Bureau of Prisons letter that the rider suggests that, and I know it to be true, that in each facility there are contracts with outside medical facilities. I also know it to be true, however, that one does not get the immediate monitoring and immediate response that in this instance has proved so necessary literally for Mr. Freedman’s life. And I also note that the recent medical bills apparently were in excess of $200,000. It’s my experience in reviewing material from prisoners from the Bureau of Prisons that this is not the kind of outlay that would easily be expended within the Bureau of Prisons, for very obvious reasons. But I find that a departure is appropriate. (Id. at 58 (emphases added).) The district court also granted a departure for extraordinary family circumstances, based on Freedman’s relationships with his disabled brother and, separately, his mother-in-law. It found that the defendant’s relationship with his brother, Elliot, is a particularly extraordinary relationship for a variety of reasons. First there is, of course, the length of the relationship, but there is the fact that it is a two-way relationship; the fact that, as attested to by Dr. Gi-beault[, former Program Coordinator for the Department of Mental Retardation for the Commonwealth of Massachusetts], that Elliot calls Mr. Freedman several times a week at all hours of the day and night and depends upon his availability to sooth[e] whatever problem is bothering Elliot, and otherwise to provide him with a type of support that others simply cannot provide and have not provided. That Mr. Freedman has been Elliot’s foremost advocate and has achieved for him the highest possible level of independent living attests to the results of this very obviously vigorous relationship. In addition, the doctor’s recitation of Mr. Freedman’s including Elliot in the family events leads me to conclude that this relationship is indeed of a kind not taken into account by the guidelines. (Id. at 59.) With regard to Freedman’s relationship with his mother-in-law, Evelyn, the district court noted that it was tak[ing] into account Mr. Freedman’s role in managing Evelyn’s affairs and taking her out. And while I find that this relationship is extraordinary to an extent not contemplated by the guidelines, it is not as extraordinary as the life-long relationship with Elliot. But I find that both entitle Mr. Freedman to a downward departure. (Id. at 59-60 (emphasis added).) The district court then discussed the factors set out in 18 U.S.C. § 3553(a), and noted that [i]n considering the nature and circumstances of the offense, I’ve set out most of my conclusions with respect to those factors, but reiterate here that the loss amount of $100,000[000] very seriously overstates the paHicipation of this defendant and his culpability in the offense. And I have discussed already I think at some length the history and characteristics of this defendant, particularly with respect to his age and health situation, his extraordinary family ties, his past charitable works and the like. Certainly the history and characteristics of the defendant, most specifically his age and health situation, argue for a noncustodial sentence. The nature and circumstances of the offense considered alone would argue for a custodial sentence. With respect to the seriousness of the offense and promoting respect for the law, in the ordinary circumstance a custodial sentence would be required to reflect the seriousness of the offense and to promote respect for the law. With respect to the discussion of providing just punishment for the offense, I take into account the discussion in [Freedman]’s sentencing materials that in light of the public nature of the prosecution, the public humiliation that the defendant has suffered, the loss of his law license and various other consequences, and the ceHainty of prosecution, both just punishment and deterrence in the general sense hafve] been accomplished here. Again, all other factors being equal, just punishment would ordinarily require a custodial sentence. Here I think we all agree that there is no need to protect the public from further crimes of this defendant. With respect to [§ 3553(a)(2)(D)], the only applicable factor seems to be providing the defendant with needed medical care. The record is very clear, and as I’ve mentioned, I find that adequate medical care for this defendant cannot be accomplished in prison. I have taken into account, and obviously counsel have made submissions regarding the kinds of sentences available, the kinds of sentences and sentencing ranges established for these offenses and the policy statements set out by the sentencing commission. I have also taken into account the need to avoid unwarranted sentence disparities among defendants with similar records and, of course, will take into account in discussing restitution the need to provide restitution to any victims of the crime. (Freedman S.Tr. 63-64 (emphases added).) The district court proceeded to impose a sentence on Freedman that included three years of probation but no incarceration. The court stated that it did not need to make a final ruling as to Freedman’s offense-level calculation, given the difficulty of that question in light of the court’s “find[ing] that the amount of the loss ... far overstates Mr. Freedman’s culpability” and the court’s views as to an appropriate sentence. (Id. at 82.) The court stated that in light of the departures it found appropriate, “it is my view that a nonin-carceratory sentence is one that I would impose in any event, regardless of what the offense level computation was,” and that “consideration of the 3553(a) factors also would lead me to impose a nonincarc-eratory sentence regardless of what the outcome of the guidelines calculation, including departures, was.” (Id.) Judgment was entered sentencing Freedman to a three-year period of probation, ordering him to perform 700 hours of community service per year during the course of Ms probation (id. at 65, 80), and ordering him to pay restitution in the amount of $14,600,000, and to forfeit $3,013,739.48. We note that although the judgment shows this forfeiture amount, it also states that it is based on the court’s forfeiture order. The amounts listed in that order, however, total $3,080,739.48. See Order dated October 17, 2005, at 1-2. We leave it to the district court to remedy this discrepancy. II. DISCUSSION In its appeals, the government contends that the district court erred or abused its discretion (a) in depreciating the seriousness of the bank fraud offenses based on the sums of money that Cutler and Freedman personally received and finding that the total amount of loss suffered by the defrauded banks overstated these defendants’ roles and culpability; (b) in fashioning its sentence on Cutler without giving sufficient consideration to his conviction on the tax counts; (c) in refusing to adjust Freedman’s offense level on account of, inter alia, obstruction of justice; (d) in granting these defendants downward departures for family circumstances; and (e) in concluding that Freedman could not be incarcerated because of his age and health. The government contends that the sentences imposed, to the extent that they ordered imprisonment of no more than one year and a day for Cutler and no imprisonment at all for Freedman, are substantively unreasonable. For the reasons that follow, we conclude that there were errors in certain of the district court’s Guidelines applications and in its departure decisions; that the sentences imposed did not properly interpret certain of the sentencing factors that the court was required to consider under 18 U.S.C. § 3553(a), such as just “punishment” and deterrence of others; and that some of the court’s rationales would promote disrespect for the law. A. Required Sentencing Considerations and Standards of Review In the wake of United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), which ruled that the Guidelines are advisory, a sentencing judge may impose either a Guidelines sentence or a non-Guidelines sentence. See, e.g., id. at 245-46, 125 S.Ct. 738; United States v. Crosby, 397 F.3d 103, 113 (2d Cir.2005) (“Crosby”). In arriving at either type of sentence, the sentencing judge must consider the factors set forth in 18 U.S.C. § 3553(a). That section provides in pertinent part as follows: (a) Factors to be considered in imposing a sentence. — The court shall impose a sentence sufficient, but not greater than necessary, to comply with the purposes set forth in paragraph (2) of this subsection. The court, in determining the particular sentence to be imposed, shall consider— (1) the nature and circumstances of the offense and the history and characteristics of the defendant; (2) the need for the sentence imposed— (A) to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense; (B) to afford adequate deterrence to criminal conduct; (4) the kinds of sentence and the sentencing range established for— (A) the applicable category of offense committed by the applicable category of defendant as set forth in the guidelines— (i) issued by the Sentencing Commission ...; (5) any pertinent policy statement— (A) issued by the Sentencing Commission pursuant to section 994(a)(2) of title 28, United States Code ...; (6) the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct; and (7) the need to provide restitution to any victims of the offense. 18 U.S.C. §§ 3553(a)(1), (a)(2)(A), (a)(2)(B), (a)(4)(A)(i), (a)(5)(A), (a)(6), and (a)(7). Recent decisions by the Supreme Court have clarified both the procedures to be followed by the district court in arriving at either type of sentence and the standard of review to be applied by the courts of appeals. See, e.g., Gall v. United States, — U.S. -, 128 S.Ct. 586, 594, 596-97, 169 L.Ed.2d 445 (2007); Kimbrough v. United States, — U.S. -, 128 S.Ct. 558, 570, 574-75, 169 L.Ed.2d 481 (2007); Rita v. United States, — U.S. -, 127 S.Ct. 2456, 2467-68, 168 L.Ed.2d 203 (2007). Because “§ 3553(a) explicitly directs sentencing courts to consider the Guidelines,” district courts must begin their analysis with the Guidelines and remain cognizant of them throughout the sentencing process. Gall, 128 S.Ct. at 597 n.6. The Gall Court elaborated that [a]s we explained in Rita, a district court should begin all sentencing proceedings by correctly calculating the applicable Guidelines range. See ... 127 S.Ct. 2456. As a matter of administration and to secure nationwide consistency, the Guidelines should be the starting point and the initial benchmark. The Guidelines are not the only consideration, however. Accordingly, after giving both parties an opportunity to argue for whatever sentence they deem appropriate, the district judge should then consider all of the § 3553(a) factors to determine whether they support the sentence requested by a party. Gall, 128 S.Ct. at 596. In Kimbrough, which dealt with the disparities between sentences prescribed for powder cocaine and crack cocaine, the Court stated that as a general matter, courts may vary [from Guidelines ranges] based solely on policy considerations, including disagreements with the Guidelines.... [C]f. Rita v. United States, [— U.S. -, 127 S.Ct. at 2465, 168 L.Ed.2d 203] (2007) (a district court may consider arguments that “the Guidelines sentence itself fails properly to reflect § 3553(a) considerations”). Kimbrough, 128 S.Ct. at 570 (bracketed phrase in original) (other internal quotation marks omitted). In Gall, the Court noted that it is clear that a district judge must give serious consideration to the extent of any departure from the Guidelines and must explain his conclusion that an unusually lenient or an unusually harsh sentence is appropriate in a particular case with sufficient justifications. For even though the Guidelines are advisory rather than mandatory, they are, as we pointed out in Rita, the product of careful study based on extensive empirical evidence derived from the review of thousands of individual sentencing decisions. Gall, 128 S.Ct. at 594 (emphases added); see Rita, 127 S.Ct. at 2464. Thus, [i]f [the sentencing judge] decides that an outside-Guidelines sentence is warranted, he must consider the extent of the deviation and ensure that the justification is sufficiently compelling to support the degree of the variance.... [A] major departure should be supported by a more significant justification than a minor one. Gall, 128 S.Ct. at 597 (emphasis added). Finally, [a]fter settling on the appropriate sentence, he must adequately explain the chosen sentence to allow for meaningful appellate review and to promote the perception of fair sentencing. Id. (emphasis added); Rita, 127 S.Ct. at 2468. In the wake of Booker, this Court is to apply a “reasonableness standard” in reviewing sentences, Booker, 543 U.S. at 262, 125 S.Ct. 738 (internal quotation marks omitted); “ ‘reasonableness’ review merely asks whether the trial court abused its discretion,” Rita, 127 S.Ct. at 2465; see, e.g., Gall, 128 S.Ct. at 594 (“Our explanation of ‘reasonableness’ review in the Booker opinion made it pellucidly clear that the familiar abuse-of-discretion standard of review now applies to appellate review of sentencing decisions. See [Booker,] 543 U.S., at 260-262....”). Thus, [rjegardless of whether the sentence imposed is inside or outside the Guidelines range, the appellate court must review the sentence under an abuse-of-discretion standard. It must first ensure that the district court committed no significant procedural error, such as failing to calculate (or improperly calculating) the Guidelines range, treating the Guidelines as mandatory, failing to consider the § 3553(a) factors, selecting a sentence based on clearly erroneous facts, or failing to adequately explain the chosen sentence — including an explanation for any deviation from the Guidelines range. Assuming that the district court’s sentencing decision is procedurally sound, the appellate court should then consider the substantive reaso