United States v. Naphaeng , 906 F.3d 173 ( 2018 )

United States Court of Appeals
For the First Circuit
Nos. 17-1800
18-1126
UNITED STATES OF AMERICA,
Appellee,
v.
NIMON NAPHAENG,
Defendant, Appellant.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. William E. Smith, U.S. District Judge]
Before
Howard, Chief Judge,
Selya and Thompson, Circuit Judges.
John T. Ouderkirk, Jr., for appellant.
Donald C. Lockhart, Assistant United States Attorney, with
whom Stephen G. Dambruch, United States Attorney, was on brief,
for appellee.
October 12, 2018
SELYA, Circuit Judge. In these sentencing appeals,
defendant-appellant Nimon Naphaeng, a convicted fraudster,
challenges a restitution order entered pursuant to the Mandatory
Victims Restitution Act (MVRA), 18 U.S.C. § 3663A, in the amount
of $581,880. After pausing to smooth out two jurisdictional
wrinkles, we reach the merits and conclude that the appellant's
challenge is futile. Accordingly, we affirm.
I. BACKGROUND
We briefly rehearse the relevant facts and travel of the
case. The appellant concocted a fraudulent scheme to obtain work
permits for Thai nationals living in the United States.
Specifically, he advertised through flyers and the internet that
he could obtain employment-authorization documents (EADs) in
exchange for fees ranging from $1,500 to $2,500 per person. He
was, in fact, able to obtain EADs for the applicants — but he did
so by filing asylum petitions on the applicants' behalf. These
petitions, filed without the applicants' knowledge, were
apocryphal. As the appellant admitted to the district court,
concealing the asylum applications from his clientele was "at the
heart" of the scheme.
The appellant perpetrated his fraud over a period of
sixteen months — but the chickens eventually came home to roost.
In January of 2015, an immigration officer noticed that around
sixty-four Thai asylum applications were filed from two Rhode
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Island addresses. This spike in filings was extraordinary;
typically, an average of twenty Thai asylum applications were filed
each year. Nor were common addresses the only feature shared by
these suspicious applications: they also contained exactly the
same typographical errors, identical explanations for seeking
asylum, matching supplemental forms, and the same coterie of
supporting documents.
In due season, a federal grand jury sitting in the
District of Rhode Island returned a twenty-six count indictment
against the appellant. In addition, the government "froze"
hundreds of thousands of dollars that had been accumulated by the
appellant.
After some preliminary skirmishing (not relevant here),
the appellant pleaded guilty to seven counts of mail fraud, see 18
U.S.C. § 1341, and two counts of visa fraud, see id. § 1546(a).1
As part of the plea agreement, the parties agreed that the per-
application fee charged by the appellant ranged from $1,500 to
$2,500. Although the change-of-plea colloquy specifically
identified only ten victims, the parties did not purport to make
a definitive head count. Instead, identification of those victims
who might be owed restitution was deferred to the sentencing phase.
1 As provided in the plea agreement, the remaining counts were
dismissed at the time of sentencing.
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On May 3, 2017, the district court held the first of two
sentencing hearings. By then, the court had the benefit of certain
additional filings: a presentence investigation report (PSI
Report) and sentencing memoranda prepared by both the appellant
and the government. The government's memorandum included a
spreadsheet listing the total number of victims, specifying
whether each such victim had been contacted by either a government
investigator or the probation office, and indicating the amount of
restitution arguably due.
At the first sentencing hearing, a Department of
Homeland Security (DHS) agent verified the information contained
in the spreadsheet. The appellant's counsel cross-examined the
agent, attempting to undermine the reliability of the government's
spreadsheet, questioning the number of victims, and suggesting
that some victims may have had knowledge that asylum applications
were being filed on their behalf.
Two months later, the district court convened a second
sentencing hearing. The appellant's counsel resumed her
questioning of the DHS agent. This time, however, the questioning
zeroed in on the appropriate amount of loss for restitution
purposes (a finding separate and apart from the amount of loss
needed to construct the guideline sentencing range, see USSG §2B1.1
cmt. n.3(A)). The district court eventually interrupted this line
of questioning and proceeded to sentence the appellant. To allow
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the government more time to collect victim-related information,
though, the court entered a provisional restitution order of
$400,000, "subject to amendment." Judgment entered on July 27,
2017, and the appellant promptly filed a notice of appeal.
Having completed its information-gathering, the
government filed two supplemental memoranda and sought a total of
$581,880 in restitution on behalf of 368 victims. Its supplemental
memoranda identified four categories of victims: 87 victims who
had contact with both the probation office and the DHS; 46 victims
who had contact only with the DHS; 16 victims who were identified
through material submitted to the grand jury; 219 victims who were
identified only by their asylum applications. According to the
government, the first group of victims was due $168,620 in
restitution, the second group of victims was due $72,100 in
restitution, the third group of victims was due $17,160 in
restitution, and the fourth group of victims was due $324,000 in
restitution. The appellant countered that the government's
recommended restitution over-counted the number of victims and
rested on insufficient evidence. As a fallback, the appellant
contended that the district court had denied him a full and fair
opportunity to test the government's proffer. The court rejected
the appellant's arguments, adopted the government's calculations,
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and ordered restitution accordingly.2 The appellant filed a second
notice of appeal — but he did so before the district court entered
its final judgment on the docket.
II. ANALYSIS
We divide our analysis into two parts, first addressing
a pair of jurisdictional concerns and then addressing the substance
of the appellant's challenge.
A. Jurisdictional Concerns.
Even though the appellant advances only a single
assignment of error — a claim that the district court blundered in
fashioning the restitution order — we are held at the starting
line by jurisdictional concerns. While the government has eschewed
any challenge either to the district court's jurisdiction or to
this court's appellate jurisdiction, "we have an independent
obligation to explore" potential jurisdictional infirmities.
United States v. George, 841 F.3d 55, 70 (1st Cir. 2016). We start
there, dealing with two jurisdictional questions that lurk in the
penumbra of this case.
1. District Court Jurisdiction. The initial question
concerns whether the pendency of the first notice of appeal
2
The district court's amended restitution order appears to
contemplate 352 victims rather than the 368 victims memorialized
in the government's spreadsheet. Neither party has attached any
significance to this small discrepancy, and we make no further
mention of it.
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divested the district court of jurisdiction to enter the final
restitution order. It is settled that once an appeal is taken, a
district court generally loses jurisdiction to proceed with any
matter related to the appeal's substance during the pendency of
the appeal. See id. at 71. In such a situation, the conventional
practice is for the district court to ask the court of appeals to
stay the original appeal and effect a temporary remand, thus
enabling the district court to make a further ruling. See Fed. R.
App. P. 12.1(b); see also United States v. Maldonado-Rios, 790
F.3d 62, 64-65 (1st Cir. 2015); Puerto Rico v. SS Zoe Colocotroni,
601 F.2d 39, 42 (1st Cir. 1979). Notwithstanding this general
rule, though, we have concluded that a district court retains
jurisdiction to modify a previously existing forfeiture order even
after an appeal has been taken. See United States v. Ferrario-
Pozzi, 368 F.3d 5, 10-11 (1st Cir. 2004) (confirming district
court's jurisdiction to issue final forfeiture award when that
award was "an amendment of an existing order" that provisionally
set a forfeiture amount); cf. George, 841 F.3d at 72 (finding
district court jurisdiction lacking when forfeiture order was
entered for the first time following appeal). The Ferrario-Pozzi
panel based its conclusion on Federal Rule of Criminal Procedure
32.2(e), which recognizes that circumstances sometimes exist in
which a district court may have to amend its initial forfeiture
order (including, for example, the government's subsequent
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identification of additional property subject to forfeiture). See
368 F.3d at 11. The MVRA contains an analogous provision with
respect to restitution orders. See 18 U.S.C. § 3664(d)(5). If
victim losses are not sufficiently ascertainable by the date of
sentencing, the court "shall set a date for the final
determination" of restitution. Id.
The timetable here is reminiscent of that in Ferrario-
Pozzi. The first notice of appeal was filed on July 27, 2017.
The appeal was taken from a judgment that included a restitution
order that had been clearly denominated as provisional. The
district court entered the final restitution order while that
appeal was pending. Given the teachings of Ferrario-Pozzi as well
as the MVRA's statutory guidance, we conclude that the pendency of
the first appeal did not strip the district court of jurisdiction
to enter the final restitution order.
This conclusion is reinforced by our own order staying
the appellant's first appeal. That stay, issued six days before
the district court entered the amended judgment, recognized the
district court's intention to file an amended judgment. Although
no formal remand was made, the practical effect was the same: when
the district court amended the restitution order, the first appeal
had been stayed and concerns about shared jurisdiction had been
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abated. In these unusual circumstances, we think that the district
court's jurisdiction was intact.3
2. Appellate Jurisdiction. The remaining jurisdictional
question relates to our appellate jurisdiction. It arises because
the appellant's second notice of appeal was filed after the
district court's final restitution order was announced but before
the amended judgment was actually entered on the docket. At first
blush, then, the second notice of appeal would seem to be
premature. The Supreme Court recently considered a similar issue
in Manrique v. United States, 137 S. Ct. 1266, 1270 (2017). There,
the Court found a notice of appeal insufficient to confer appellate
jurisdiction in a restitution case when it was "filed between the
initial judgment and the amended judgment." Id. The Court made
pellucid that the defendant should instead have filed a timely
"notice of appeal from the amended judgment imposing restitution."
Id. at 1274.
But we have said before that "appearances can be
deceiving." Moreno v. Holder, 749 F.3d 40, 43 (1st Cir. 2014)
(citing Aesop, The Wolf in Sheep's Clothing (circa 550 B.C.)).
And in the last analysis, this case is distinguishable from
3 To be sure, the district court would have been well-advised
to have engaged the gears of the conventional Rule 12.1(b)
protocol, and to have requested a temporary remand. Such a course
of action would have eliminated any lingering doubts about the
district court's authority to act.
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Manrique. Here — unlike in Manrique — the appellant did file a
second notice of appeal. Of course, his timing was imperfect:
the second notice of appeal was filed after the district court
modified the restitution award but before the court actually
entered the amended judgment. Thus, the appellant (in the
government's turn of phrase) "jumped the gun." He should have
waited to file the second notice of appeal until after the amended
judgment was entered on the docket. See Fed. R. App. P. 4(b)(1).
In the circumstances of this case, however, the
infelicitous timing of the second notice of appeal is harmless.
That notice of appeal, albeit premature, is rescued by Federal
Rule of Appellate Procedure 4(b)(2), which provides that "[a]
notice of appeal filed after the court announces a[n] . . . order
— but before the entry of the judgment . . . is treated as filed
on the date of and after the entry." Consequently, we treat the
second notice of appeal as if it were filed on March 15, 2018 (the
date of entry of judgment).4 Given this convenient legal fiction,
we have jurisdiction over the second appeal.
4 For the sake of completeness, we note that the premature
filing of a notice of appeal may be forfeited if not seasonably
raised by the opposing party. See Manrique, 137 S. Ct. at 1271-
72 (finding that "requirement that a defendant file a timely notice
of appeal from an amended judgment imposing restitution"
represents a mandatory claim-processing rule that may be
forfeited). Because the government has elected not to contest the
point, forfeiture would be available here.
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B. The Merits.
Having allayed any jurisdictional doubts, we reach the
merits. Our standard of review is uncontroversial: "We review
restitution orders for abuse of discretion, examining the court's
subsidiary factual findings for clear error . . . ." United States
v. Chiaradio, 684 F.3d 265, 283 (1st Cir. 2012).
To place the appellant's arguments in perspective, we
begin by differentiating between the calculation of loss demanded
by the sentencing guidelines and the calculation of loss demanded
by the MVRA. In a fraud case resulting in financial loss, the
defendant's guideline sentencing range is determined in part by
calculating the greater of either the intended loss or the actual
loss. See USSG §2B1.1, cmt. n.3(A). Intended loss is quantified
by measuring "the loss the defendant reasonably expected to occur."
United States v. Innarelli, 524 F.3d 286, 290 (1st Cir. 2008). So
viewed, intended loss serves a punitive purpose, punishing the
defendant for the harm that he sought to inflict. See id.
In contrast, restitution is designed to compensate the
victim, not to punish the offender. To this end, the MVRA mandates
that a defendant convicted of certain federal crimes, including
those "committed by fraud or deceit," must make restitution to
victims commensurate with the victims' actual losses. 18 U.S.C.
§ 3663A(c)(1)(A)(ii); see Innarelli, 524 F.3d at 293 (noting that
restitution is meant to "make the victim whole again"). For this
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purpose, actual loss is "limited to pecuniary harm that would not
have occurred but for the defendant's criminal activity." United
States v. Alphas, 785 F.3d 775, 786 (1st Cir. 2015). It follows
that, a court must base a restitution order on "the full amount of
each victim's losses . . . without consideration of the economic
circumstances of the defendant." 18 U.S.C. § 3664(f)(1)(A).
Consistent with this logic, an order for restitution ought not to
confer a windfall upon a victim. See United States v. Cornier-
Ortiz, 361 F.3d 29, 42 (1st Cir. 2004).
When determining restitution, a sentencing court is not
expected to undertake a full-blown trial. See S.Rep. No. 104-179,
at 18 (1995), as reprinted in 1996 U.S.C.C.A.N. 924, 931
(cautioning that the restitutionary phase of a criminal case is
not to "become fora for the determination of facts and issues
better suited to civil proceedings"). As a result, "'absolute
precision is not required' in calculating restitution under the
MVRA." United States v. Mahone, 453 F.3d 68, 74 (1st Cir. 2006)
(quoting United States v. Burdi, 414 F.3d 216, 221 (1st Cir.
2005)). Rather, a restitution award requires only "a modicum of
reliable evidence." United States v. Vaknin, 112 F.3d 579, 587
(1st Cir. 1997); see United States v. Curran, 525 F.3d 74, 84 (1st
Cir. 2008).
This is not to say that Congress "conceive[d] of
restitution as being an entirely standardless proposition."
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Vaknin, 112 F.3d at 587. Mere guesswork will not suffice. The
government bears the burden of proving a victim's actual loss by
preponderant evidence. See 18 U.S.C. § 3664(e). What is more, "a
court may only order restitution for losses that have an adequate
causal link to the defendant's criminal conduct." Alphas, 785
F.3d at 786.
In the case at hand, neither party disputes the
appropriateness of a restitution order. Their disagreement is
only as to the amount of the award. The appellant argues that
restitution should be limited to those victims named in the
indictment who submitted proofs of loss. With respect to any and
all other putative victims, the appellant submits that the
government's evidence was insufficient to undergird the
restitution order.
The appellant places too heavy a burden on the
government. The law is transparently clear that "[a]s long as the
court's order reasonably responds to some reliable evidence, no
more is exigible." United States v. Sánchez-Maldonado, 737 F.3d
826, 828 (1st Cir. 2013). In this instance, the government
proffered a detailed spreadsheet, describing its extensive efforts
to trace and contact all of the persons defrauded over the sixteen-
month duration of the scheme. This spreadsheet identified four
groups of victims and summarized all of the relevant information
in the government's possession, including how much money each
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victim had paid to the appellant and the method of payment. The
government recommended specific restitution amounts for each
victim based on the data in the spreadsheet and the amounts that
the appellant routinely charged to his customers.5 The
government's information, coupled with the appellant's own
admissions, supplied more than a modicum of reliable evidence.
See Curran, 525 F.3d at 84.
In a variation on his insufficiency-of-evidence theme,
the appellant challenges the number of victims. He predicates
this challenge largely on the notion that some of the persons that
dealt with the appellant may have known that asylum applications
were filed on their behalf. Relying primarily on a 2011 Second
Circuit decision, the appellant suggests that those persons cannot
be classified as victims for MVRA purposes. See United States v.
Archer, 671 F.3d 149, 173 (2d Cir. 2011) (explaining that persons
who were complicit in and knew all along of defendant's fraudulent
scheme are ineligible for victim status and thus restitution).
Archer is a horse of a different hue. Here — unlike in
Archer — the appellant admitted that concealing the asylum
applications was at the heart of his fraudulent scheme. Although
the appellant now maintains that this admission applied only to
5Where information was lacking as to the amount of fees paid
by a particular individual, the government used the figure of
$1,500 — the low end of the range of fees charged by the appellant.
The district court appears to have followed the same praxis.
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those victims specifically identified in the indictment, the
district court did not clearly err in inferring that the same
narrative applied to all of the appellant's customers. This
inference is buttressed by the testimony of the DHS agent, who
vouchsafed that "[t]he people we talked to thought they were
getting work cards only. They did not know about the asylum."
If more were needed — and we doubt that it is — victim
declarations attached to the PSI Report are consistent with this
inference. The majority of the declarations that stated a reason
for the payment can fairly be summarized by saying that the money
the victims lost was paid to obtain work permits, not to apply for
asylum.6 To cinch the matter, the record is barren of any
indication that the appellant filed so much as a single bona fide
asylum application or told even a single victim that he was
trumping up the paperwork undergirding the EADs.
Battling on, the appellant argues that the restitution
order should not have extended to victims who had no contact with
6
Three declarations attached to the PSI Report do indicate
that the signatories paid for asylum applications. It is unclear,
however, whether those victims knew at the time they paid the
appellant that the money would be used to file asylum applications
or, conversely, whether they learned about the asylum applications
only during the government's investigation. We note, moreover,
that even if they knew contemporaneously about the filings, there
is no reason to believe that they knew the asylum applications
were fraudulent. In such circumstances, we think that the district
court had the latitude to "resolv[e] uncertainties with a view
towards achieving fairness to the victim." Alphas, 785 F.3d at
787 (quoting Burdi, 414 F.3d at 221).
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the government. This argument is unpersuasive. For one thing,
restitution need not be limited to victims who have contacted the
government. What counts is whether the government submits
sufficiently reliable information to show that particular persons
were in fact victims. See Curran, 525 F.3d at 84; United States
v. Catoggio, 326 F.3d 323, 327-28 (2d Cir. 2003); United States v.
Berardini, 112 F.3d 606, 609-10 (2d Cir. 1997). For another thing
(as the government noted at the second sentencing hearing), the
circumstances particular to the appellant's victims — foreign
nationals seeking U.S. work permits — made it uniquely difficult
for the government to communicate with them. When government
agents made telephone calls, "people were so fearful that out of
the blue they got . . . a telephone call" that they asked whether
the agents were coming for them.
That ends this aspect of the matter. The first step in
fashioning a supportable restitution order is to identify
particular victims who have suffered pecuniary losses as a result
of the defendant's criminal activity. See Cornier-Ortiz, 361 F.3d
at 42. Here, the government stayed within appropriate bounds in
taking this first step: it identified victims based on bogus
asylum applications that shared unusual features common to those
that the appellant admittedly filed. The district court acted
well within the realm of its discretion in finding that the roster
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of identified persons comprised a roster of victims eligible for
restitution.
The appellant has one last string to his bow. He
importunes us to find that he was "denied a full and fair
opportunity" to elicit testimony from the DHS agent through cross-
examination. We reject his importunings.
The district court allowed the appellant's counsel to
cross-examine the DHS agent at some length. The cross-examination
was comprehensive and included grilling the agent about the asylum
application procedure, the agent's conversations with victims, the
victims' knowledge (or lack of knowledge) that asylum applications
had been filed to their behoof, and the extent (if at all) to which
any payments had been refunded to them.
To be sure, the district court cut cross-examination
short near the end of the second sentencing hearing. Nevertheless,
the right to cross-examination is not a right to endless cross-
examination. See United States v. Laboy-Delgado, 84 F.3d 22, 28
(1st Cir. 1996); see also Delaware v. Fensterer, 474 U.S. 15, 20
(1985) (per curiam) (explaining that the Constitution "guarantees
an opportunity for effective cross-examination, not cross-
examination that is effective in whatever way, and to whatever
extent, the defense might wish" (emphasis in original)). The
critical inquiry is whether a party has been accorded a fair and
adequate opportunity to confront the witnesses against him. See
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Laboy-Delgado, 84 F.3d at 28. On this chiaroscuro record, this
inquiry produces an affirmative answer. Consequently, we discern
no abuse of discretion in the district court's implicit
determination that — by the time the cross-examination was halted
— the appellant already had enjoyed a fair and adequate opportunity
to cross-examine the witness.
III. CONCLUSION
Let us be perfectly clear. We readily acknowledge that
a restitution order must entail more than a mere guess or a bald
approximation of actual loss. See Vaknin, 112 F.3d at 587
(cautioning that "an award cannot be woven solely from the gossamer
strands of speculation and surmise"). But the calculation of a
restitution order does not demand metaphysical certainty. Here,
the district court's analysis is record-based and constitutes a
fair appraisal of actual losses. That appraisal, in turn, rests
on more than a modicum of reliable evidence. Taking into account
the barriers to a more exact calculation (such as the length of
the appellant's scheme, the number of victims, the lack of
organized records, and the difficulty in communicating with non-
English speakers), we think that the court did enough to satisfy
the strictures of the MVRA.
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We need go no further. For the reasons elucidated above,
the district court's amended restitution order is
Affirmed.
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