United States v. Williams ( 2009 )

FILED
United States Court of Appeals
Tenth Circuit
December 15, 2009
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff - Appellee, No. 09-3087
v. (D. Kansas)
LARRY W. WILLIAMS, (D.C. No. 6:08-CR-10199-1-WEB-1)
Defendant - Appellant.
ORDER AND JUDGMENT *
Before HENRY, ANDERSON, and TYMKOVICH, Circuit Judges.
On September 16, 2008, Larry W. Williams was charged with one count of
wire fraud, in violation of 18 U.S.C. § 1343. More specifically, the Indictment
charged Mr. Williams with using his position at Molded Fiber Glass Construction
Company (“MFGCC”) to fraudulently manipulate MFGCC’s payroll records to
inflate the amount of money owed to him, and he then caused funds to be
transferred electronically from MFGCC into several bank accounts owned by him.
*
This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
The Indictment alleged Mr. Williams thereby illegally obtained the sum of
$719,529.32.
Mr. Williams pled guilty on January 15, 2009, and was sentenced to thirty-
three months’ imprisonment and assessed restitution in the amount of
$744,529.32. Mr. Williams appeals the amount of restitution ordered, arguing
that two errors made the restitution amount larger than it should be. Because we
agree with Mr. Williams as to one of the errors, we reverse the order of restitution
and remand this matter to the district court to enter a correct restitution amount in
accordance with this opinion.
BACKGROUND
As indicated above, Mr. Williams pled guilty to one count of wire fraud.
He filed a Petition to Enter Plea of Guilty, in which he admitted that he
“transmitted or caused to be transmitted, via electronic wire fund transfer the
approximate sum of $719,529.32 from the payroll account of MFGCC to an
account owned by me, in violation of Title 18, United States Code, § 1343.”
Petition at 1-2, R. Vol. I at 8-9. Mr. Williams’ Plea Agreement contained the
following factual recitation of the basis for his guilty plea:
Beginning in August of 1999 and continuing through July 26,
2006, in the District of Kansas, Larry Williams was the controller of
Molded Fiber Glass Construction Company (MFGCC). While in this
position Larry Williams was responsible for maintaining the payroll
records of MFGCC. While serving in this capacity, Larry Williams
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inflated the amount of money owed to him by his employer and
caused electronic fund transfers from the payroll account of MFGCC
into one of several bank accounts owned by Larry Williams. The
government claims, but the defendant does not admit, that the total
amount of loss suffered by MFGCC is $ 719,529.32. The defendant
will object to claims based upon the statute of limitations in addition
to factual reasons why he is not liable for certain claims.
Plea Agreement at ¶ 2, R. Vol. 1 at 16.
In preparation for sentencing under the United States Sentencing
Commission, Guidelines Manual (“USSG”), the United States Probation Office
prepared a presentence report (“PSR”). The PSR stated that the amount of
restitution should be $744,529.32, which was based upon a statement from
MFGCC’s insurance carrier that it had paid a claim in that amount. See PSR at
¶ ¶ 83-86, R. Vol. II at 17. Mr. Williams objected to the PSR restitution
calculation, since that loss amount was different from that identified
($719,529.32) in the Indictment, the Petition to Enter Plea of Guilty and the Plea
Agreement, and because he claimed it included amounts which should be
excluded. More particularly, Mr. Williams argued that restitution in the amount
of $719,529.32 was unlawful because $129,728.78 of that loss was barred by the
statute of limitations since it represented losses attributable to conduct occurring
prior to August of 2003. He further argued that the losses identified as relating to
the MFG Trust Fund, in the amount of $5,208.29, and the CITI account, in the
amount of $13,300, should be excluded from the restitution order because he had
no knowledge of either one of those accounts.
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At Mr. Williams’ sentencing hearing, the district court announced its
intention to enter a restitution order against Mr. Williams in the sum of
$744,329.32, although the court noted Mr. Williams’ objections to that amount.
The government conceded that it did not have any evidence to present in support
of the losses to the MFG and the CITI accounts (totaling $18,508.29), nor any
evidence explaining the difference between the loss identified in the PSR and the
loss identified in the Indictment, Petition to Enter Guilty Plea and the Plea
Agreement. 1
Mr. Williams reiterated his objection, based on the statute of limitations, to
including any losses occurring prior to August of 2003 (i.e., $129,728.78). The
district court found that the statute of limitations did not bar a restitution order for
the pre-August 2003 losses and overruled Mr. Williams’ objection regarding the
MFG Trust Fund and the CITI accounts. The court subsequently ordered
Mr. Williams to pay restitution in the sum of $744,529.32. This appeal followed.
As indicated above, Mr. Williams makes two arguments in support of his
claim that the district court erred in assessing restitution at $744,329.32: (1) the
1
The record in this case is, quite frankly, somewhat confusing as to how
certain monetary figures were derived. And while the government’s concession
referred to in text is not nearly as clearly stated in the record of the sentencing
hearing, we take comfort from the government’s statement in its brief that, at the
sentencing hearing, “[t]he government announced that it did not have any
evidence to present in support of the losses to the MFG Trust Fund and the CITI
accounts, $18,508.29, nor upon the difference between the loss identified in the
PSR and the Indictment, Petition to Enter Guilty Plea and Plea Agreement.”
Appellee’s Br. at 3.
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government presented no evidence regarding the difference between the loss
identified in the PSR and the loss identified in the pleadings, nor in support of the
losses to the MFG Trust Fund or the CITI account; and (2) the statute of
limitations bars holding Mr. Williams responsible for $129,728.78 of the total
loss. We agree with the first argument and disagree with the second.
DISCUSSION
“Generally, we review the district court’s application of the Mandatory
Victims Restitution Act de novo, review its factual findings for clear error and
review the amount of restitution awarded for abuse of discretion.” United States
v. James, 564 F.3d 1237, 1242 (10th Cir. 2009) (quoting United States v. Gallant,
537 F.3d 1202, 1247 (10th Cir. 2008) (footnote omitted)).
I. MFG Trust Fund/CITI Account:
This issue is easily resolved, as the government agrees that the claimed
losses relating to the MFG Trust Fund and the CITI account should not have been
included in the restitution order, because the government failed to present any
evidence of such losses. Furthermore, the government also agrees that the district
court erred in including in the restitution order the difference between the amount
stated in the pleadings ($719,529.32) and the amount stated in the PSR and
adopted by the district court ($744,529.32). With that error corrected, we leave it
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to the district court to make a precise calculation of the restitution award. We
remind the court, however, that “[a] restitution order must be based on actual
loss, which the government bears the burden of proving.” United States v.
Parker, 553 F.3d 1309, 1323 (10th Cir. 2009). And although a district court may
accept any undisputed portion of a defendant’s PSR as a finding of fact, United
States v. Robertson, 568 F.3d 1203, 1214 (10th Cir. 2009), it may not do so for
disputed portions of the PSR. United States v. Orr, 567 F.3d 610, 615 (10th Cir.
2009) (holding that the district court may not rely on facts alleged in the PSR, if
the government’s evidence does not support those allegations). We now turn to
whether any part of that total amount should be excluded on statute of limitations
grounds.
II. Statute of Limitations:
The Indictment in this case was filed in September 2008. Under 18 U.S.C.
§ 3282(a), a five-year statute of limitations applies. Accordingly, Mr. Williams
argues that any restitution for activities occurring before August of 2003 is barred
by the statute of limitations. The district court rejected this argument, holding
that the “Indictment charged the defendant with engaging in wire transmissions as
part of a scheme to defraud . . . [and that] when the defendant is convicted of a
crime in which a scheme is an element, the court under Section 3663A must order
the defendant to pay restitution for all losses the victims suffered as a direct result
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of the scheme, even if the losses were caused by conduct outside the statute of
limitations.” Mem. & Order at 2, R. Vol. 1 at 24 (citing United States v.
Dickerson, 370 F.3d 1330 (11th Cir. 2004)). We agree with the district court for
the reasons it provided. See United States v. Valladares, 544 F.3d 1257, 1269
(11 th Cir. 2008) (“[T]his Court [has] interpreted the statutory definition of
‘victim’ in § 3663A(a)(2) with respect to the crime of wire fraud and held that the
district court ‘must . . . order the defendant to pay restitution to all victims for the
losses they suffered from the defendant’s conduct in the course of the scheme,
even where such losses were caused by conduct outside the statute of
limitations.”) (quoting United States v. Dickerson, 370 F.3d 1330, 1342 (11th Cir.
2004)).
Additionally, however, we conclude that Mr. Williams’ pre-August 2003
conduct may not be outside the statute of limitations. In his Petition to Enter Plea
of Guilty and in his Plea Agreement, Mr. Williams admitted that “[b]eginning in
August of 1999 and continuing through July 26, 2006," he “devised a scheme” to
defraud his employer. See Petition to Enter Plea at 1, R. Vol. 1 at 8 (emphasis
added). By his own admission, Mr. Williams’ scheme was ongoing, and “the
statute of limitations is no bar if there is an ongoing scheme continuing into the
five year period.” United States v. Jensen, 608 F.2d 1349, 1355 (10th Cir. 1979).
Mr. Williams argues we should examine individual discreet transactions to
determine whether any of the loss is time-barred, citing United States v.
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Reitmeyer, 356 F.3d 1313 (10th Cir. 2004), in support thereof. Reitmeyer is, as
the government points out, distinguishable from Mr. Williams’ situation.
Reitmeyer involved the Major Fraud Act, 18 U.S.C. § 1031(a)(1). That Act
“prescribes fines and imprisonment under certain circumstances for ‘[w]hoever
knowingly executes, or attempts to execute, any scheme or artifice with the
intent-(1) to defraud the United States; or (2) to obtain money or property by
means of false or fraudulent pretenses, representations, or promises.’” Reitmeyer,
356 F.3d at 1317 (quoting 18 U.S.C. § 1031(a)). Accordingly, “[u]nder the plain
language of the Act, an offense is each knowing ‘execut[ion]’ or ‘attempt[ed]
execu[tion]’ of a scheme of artifice to defraud.” Id. The Act thus focuses on
“executions” of a scheme. See id. (“the Act contemplates prosecution of multiple
counts when there are multiple ‘executions’ of a single scheme.”).
The Wire Fraud statute at issue in this case, by contrast, focuses on the
scheme itself, and not individual executions of that scheme. Thus, Mr. Williams
admitted to devising a scheme, pursuant to which he defrauded his employer of
money during the period of time covering August of 1999 until he was caught in
July of 2006. Mr. Williams’ offense was a continuing offense, whereas “the
‘execution’ of a scheme under the Major Fraud Act is not a ‘continuing offense’
for statute of limitations purposes.” Id. at 1322. We therefore hold that the
district court properly concluded that Mr. Williams perpetrated a single fraudulent
scheme upon his employer and that he must pay restitution for all losses suffered
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by MFGCC. Because we found error in the precise calculation of the restitution
amount, we remand this matter to the district court to ascertain and impose a
corrected restitution amount.
CONCLUSION
For the foregoing reasons, we REVERSE and REMAND for further
proceedings consistent herewith.
ENTERED FOR THE COURT
Stephen H. Anderson
Circuit Judge
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