United States v. Turcks ( 1994 )

Opinions of the United
1994 Decisions States Court of Appeals
for the Third Circuit
11-30-1994
United States v. Turcks
Precedential or Non-Precedential:
Docket 93-1322
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
----------
No. 93-1322
----------
UNITED STATES OF AMERICA
v.
ARTHUR TURCKS,
Appellant
----------
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Criminal No. 92-00297-01)
----------
Argued Friday, September 23, 1994
BEFORE: BECKER, COWEN and GARTH, Circuit Judges
----------
(Opinion filed November 30, 1994)
----------
Peter Goldberger (Argued)
Law Office of Peter Goldberger
50 Rittenhouse Place
Ardmore, Pennsylvania 19003-2276
Attorney for Appellant
Tammy E. Avery (Argued)
Office of United States Attorney
615 Chestnut Street
Philadelphia, Pennsylvania 19106
Attorney for Appellee
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OPINION OF THE COURT
----------
GARTH, Circuit Judge:
Defendant Arthur Turcks was convicted on each count of a
nineteen-count indictment, charging conspiracy, credit card fraud
and bank fraud. On appeal, Turcks contests the jury
instructions, the failure to merge the nine counts of "access
device" fraud, 18 U.S.C. § 1029(a)(2), into one offense, and the
district court's restitution order.
We have jurisdiction pursuant to 28 U.S.C. § 1291. Because
Turcks did not object to any of the district court's rulings, we
review for "plain error".1 Although we find no "plain error" in
the jury instructions or with respect to the multiplicity of
counts, the restitution ordered by the district court was not
supported by the necessary fact-finding as required by United
States v. Copple, 24 F.3d 535 (3d Cir.), cert. denied, 1994 WL
466503 (Nov. 7, 1994). Hence we affirm the district court's
rulings in all matters other than its restitution order. As to
the portion of the district court's sentence affecting
restitution, we reverse and remand for appropriate fact-finding
and a redetermination of the restitution order.
1
. Counsel on appeal was not trial counsel.
I
Arthur Turcks and co-defendant Earl Warfield were co-owners
of the Lansdowne Video Store in Philadelphia, Pennsylvania. On
May 27, 1992, a federal grand jury returned a nineteen count
indictment against Turcks and Warfield.2
Count One charged Turcks and Warfield with conspiring to
commit credit card fraud in violation of 18 U.S.C. § 1029(b)(2).3
Counts Two through Ten charged Turcks with access device fraud in
violation of 18 U.S.C. § 1029(a)(2).4 Counts Eleven through
Nineteen charged Turcks with bank fraud in violation of 18 U.S.C.
§ 1344.5 These charges all arose from the use of lost or stolen
2
. Warfield was also convicted of nineteen counts of access
device fraud but did not appeal. Opinion of the District Court,
Nov. 20, 1992, p. 1.
3
. Section 1029(b)(2) provides as follows:
Whoever is a party to a conspiracy of two or more persons to
commit an offense under subsection (a) of this section, if
any of the parties engages in any conduct in furtherance of
such offense, shall be fined an amount not greater than the
amount provided as the maximum fine for such offender under
subsection (c) of this section or imprisoned not longer than
one-half the period provided as the maximum imprisonment for
such offense under subsection (c) of this section, or both.
4
. Section 1029 provides as follows:
(a) Whoever--
(2) knowingly and with intent to defraud traffics in or
uses one or more unauthorized access devices during any one-
year period, and by such conduct obtains anything of value
aggregating $1,000 or more during that period; . . .
shall, if the offense affects foreign or interstate
commerce, be punished as provided in subsection (c) of this
section.
5
. Section 1344 provides as follows:
credit cards to consummate fraudulent retail sales between
February 1989 and February 1990.
At trial, the government adduced evidence that, in the
operation of the Lansdowne Video store, lost or stolen credit
cards were fraudulently used to complete purported retail sales.
In the thirteen months prior to January 1989, Lansdowne Video had
recorded $6,394.00 in credit card sales. In the thirteen months
following January 1989, Lansdowne Video recorded $97,794.08 in
credit card sales. Only Turcks and Warfield had access to the
store's credit card processing machines and at least one of them
was present whenever the store was open.
A handwriting expert testified, using handwriting exemplars,
that Turcks had probably signed four of the invalid credit card
sales slips which were charged to four separate credit card
accounts. The government had placed in evidence the fraudulent
credit card slips and the handwriting exemplars from both
defendants.
(..continued)
Whoever knowingly executes, or attempts to execute, a scheme
or artifice--
(1) to defraud a financial institution; or
(2) to obtain any of the moneys, funds, credits,
assets, securities, or other property owned by, or
under the custody or control of, a financial
institution, by means of false or fraudulent pretenses,
representations, or promises;
shall be fined not more than $1,000,000 or imprisoned not more
than 30 years, or both.
When defendants opened their credit card merchant account,
they agreed to process each customer's card through an
authorization device and to comply with any instructions or
authorizations received. Bank records demonstrated that numerous
transactions initiated at Lansdowne Video were rejected with
instructions to call the bank but no calls were ever made.
Indeed, in many instances, cards were "worked" or processed
seeking lesser and lesser amounts in an attempt to obtain an
authorization despite prior denials.
The credit slips derived from these fraudulent transactions
were deposited in Lansdowne's merchant banking account at Mellon
Bank. Turcks signed many of the deposit slips which reflected
the deposit of fraudulent credit slips.
By means of these fraudulent procedures, Lansdowne Video
generated $102,137.99 in illegal credit card transactions.
Apparently however some of the credit card transactions were
never processed to completion. This circumstance may have given
rise to the probation department's subsequent reduction in the
calculation of the loss.
At the close of the trial, the district court, without
objection, charged the jury on the substantive counts of the
indictment as follows:
A person may be guilty of a crime on one or more of
three different bases. First, a person is guilty if
the person himself or herself committed the crime, that
is actually perpetrated the crime. Second, a person is
guilty as a co-conspirator if the person was a member
of the conspiracy when the crime was committed, and if
it was committed in furtherance of or as a foreseeable
consequence of the conspiracy. Third, a person is
guilty of a crime committed by someone else if the
person aids and abets the commission of the
crime. . . .
If any one or more of these three bases is shown
by the evidence beyond a reasonable doubt, that is that
the person was the actual perpetrator of the crime,
that the person was responsible as a co-conspirator, or
that the person was an aider or abetter, the person may
be found guilty of the crime charged.
App. 46a-47a. The jury convicted Turcks on all nineteen counts
in a general verdict.
At a March 4, 1993 hearing, the district court sentenced
Turcks to twenty-five months imprisonment from a range of twenty-
one to twenty-seven months, followed by three years supervised
release. Despite indications that Turcks was insolvent, the
district court, without determining the extent of his financial
ability to pay or his future needs, ordered Turcks to pay
$102,137.99 in restitution to the defrauded banks. The
$102,137.99 figure was derived from the presentence report. The
district court did not make findings reflecting the basis for
this amount, or to whom the monies should be paid, or the
relationship between the restitution imposed and the loss caused
by Turcks' conduct. The district court also ordered Turcks to
pay $950 in Special Assessments.
Despite the district court's oral sentence, the judgment
that was entered thereafter ordered Turcks to pay only $85,835.99
to twenty-one named banks and attributed the entire amount of the
restitution order to Count Two. The $16,298 difference between
the amount initially ordered by the district court and the amount
recorded in the written judgment apparently resulted from later
calculations made by the probation department.
Turcks filed an untimely appeal, but sought and received an
order finding excusable neglect under Federal Rule of Appellate
Procedure 4(b).
II
Turcks challenges the jury instructions given by the
district court. He contends that the district court erroneously
charged the elements of co-conspirator liability under Pinkerton
v. United States, 328 U.S. 640 (1946), and that, as a result, the
jury convicted him improperly.
A.
Because Turcks did not object to the challenged instruction,
we will reverse only if we find "plain error." Fed. R. Crim. P.
Rule 52(b)6; United States v. Retos, 25 F.3d 1220, 1228 (3d Cir.
1994). The Supreme Court has stated that, "[i]t is the rare case
in which an improper instruction will justify reversal of a
criminal conviction when no objection has been made in the trial
court." Henderson v. Kibbe, 431 U.S. 145, 154 (1977).
For "plain error" to exist:
There must be an "error" that is "plain" and that
"affect[s] substantial rights." Moreover, Rule 52(b)
6
. Rule 52(b) reads as follows:
Plain Error. Plain errors or defects affecting substantial
rights may be noticed although they were not brought to the
attention of the court.
leaves the decision to correct the forfeited error
within the sound discretion of the Court of Appeals,
and the court should not exercise that discretion
unless the error "seriously affect[s] the fairness ,
integrity or public reputation of the judicial
proceedings."
United States v. Olano, __ U.S. __, __, 113 S. Ct. 1770, 1776
(1993) (quoting United States v. Young, 470 U.S. 1, 15 (1985)).
A deviation from a legal rule is error. Olano, 113 S. Ct.
at 1777. A "plain" error is "clear" or "obvious." Id. In most
cases, an error will be deemed to have "affected substantial
rights" where it is prejudicial. Prejudicial error, affecting
substantial rights, must have "affected the outcome of the
District Court proceedings." Id. at 1778.
When these elements are met, "the Court of Appeals has
authority to order correction, but is not required to do so."
Id. We will exercise our discretion "where the defendant is
actually innocent, or where, regardless of the defendant's
innocence or guilt, the error ``seriously affect[s] the fairness,
integrity or public reputation of judicial proceedings.'" United
States v. Retos, 25 F.3d 1220, 1229 (quoting Olano, 113 S. Ct. at
1779).
B.
The government concedes that the district court's
instruction was erroneous and obvious. Under Pinkerton v. United
States, 328 U.S. 640 (1946), and pursuant to our jurisprudence, a
jury must find that a party to the conspiracy committed a crime
both "in furtherance of" and "as a foreseeable consequence of"
the conspiracy to find a co-conspirator guilty of a substantive
offense committed by a co-conspirator. Id. at 646; United States
v. Gonzales, 918 F.2d 1129, 1135-36 (3d Cir. 1990), cert. denied,
111 S. Ct. 1637 (1991). Thus, the district court should have
charged the jury in the conjunctive rather than the disjunctive,
using "and" instead of "or" in its instruction. As noted
earlier, the district court charged "a person is guilty as a co-
conspirator for the crimes committed by another co-conspirator if
the person was a member of the conspiracy when the crime was
committed, and it was committed in furtherance of or as a
foreseeable consequence of the conspiracy." App. 46a (emphasis
added). By charging in the disjunctive, the district court
clearly erred. Therefore, the first two elements of "plain
error" are met. We turn then to the third element of the "plain
error" analysis -- prejudice.
We conclude that Turcks was not prejudiced by this error.
Prejudice results if the error "affected the outcome of the
District Court proceedings." Olano, 113 S. Ct. at 1778. The
inquiry concerning prejudice on "plain error" review is similar
to our inquiry into harmless error with the important difference
that the defendant, rather than the government, bears the burden
of persuasion in a "plain error" analysis. Id.
In harmless error analysis, where the burden rests on the
government, we reverse unless the government can show "beyond a
reasonable doubt that the error complained of did not contribute
to the verdict obtained." Chapman v. California, 386 U.S. 18, 24
(1967). "To say that an error did not contribute to the verdict
is . . . to find that error unimportant in relation to everything
else the jury considered on the issue in question as revealed in
the record." Yates v. Evatt, -- U.S. --, --, 111 S. Ct. 1884,
1893 (1991). "The inquiry . . . is not whether, in a trial that
occurred without error, a guilty verdict would surely have been
rendered, but whether the guilty verdict actually rendered in
this trial was surely unattributable to the error." Sullivan v.
Louisiana, -- U.S. --, --, 113 S. Ct. 2078, 2081 (1993) (emphasis
in original).
Because the burden of establishing prejudice is a burden
that Turcks bears, we will reverse only if Turcks can show that
the erroneous charge actually affected the jury's verdict in his
case. See United States v. Retos, 25 F.3d at 1232. To meet
his burden, Turcks argues that the jury could have considered the
evidence implicating him in the conspiracy and found him guilty
of conspiracy. Turcks then contends that the jury could have
proceeded to analyze his guilt on the substantive offenses based
on the district court's erroneous instruction that permitted his
conviction on proof of either "furtherance" or "foreseeability"
but not both. Turcks cites Griffin v. United States, 502 U.S. --
, 112 S. Ct. 466 (1991), for the proposition that the possibility
that the jury rested its general verdict on the one improper
theory among multiple proper theories requires reversal.
In Griffin, however, reversal was sought because the
evidence did not support one of the two theories presented to the
jury in the charge. Id. at 468. The Court rejected Griffin's
assertion that where the jury is given two alternative grounds
for conviction and the evidence is insufficient to support one
ground, the error cannot be harmless. Id. at 474. In doing so,
however, the Court continued to acknowledge the principle that an
error in defining the law that applies to one of multiple
theories (the "impossible to tell" concept), as distinct from a
challenge based on insufficient evidence, requires reversal of a
general verdict conviction. Id. at 470-71, 474; see also Yates
v. United States, 354 U.S. 298 (1957).
Neither Yates nor Griffin, however, were premised on a
"plain error" analysis--the analysis we must employ on this
appeal. Under "plain error," the burden that the defendant must
meet to satisfy the "prejudice" requirement is to show that the
outcome of his trial was actually affected. Olano, 113 S. Ct. at
1778.
The Seventh Circuit recently discussed the relationship
between harmless error and "plain error" in the context of jury
instructions in United States v. McKinney, 954 F.2d 471 (7th
Cir.), cert. denied, 113 S. Ct. 662 (1992). At McKinney's trial
for conspiracy, the court instructed the jury that any one of
four possible overt acts could justify a conviction for
conspiracy. One of the instructed acts was not a proper ground
for a conspiracy conviction. Id. at 474-75. While the court
recognized that instructing on the improper ground was not
"harmless error," it also concluded that it was not "plain error"
because McKinney was unable to show that the jury convicted him
based on the improperly instructed element:
Where an alleged error is deemed to violate the
Constitution (as in this case), an error is harmless
only if the appellate court can find that it was
harmless beyond a reasonable doubt . . . . Moreover,
the government must demonstrate that the error was
harmless; a defendant need not affirmatively show harm.
Plain error, on the other hand, is an error so grievous
that it caused an actual miscarriage of justice, which
implies that the defendant probably would not have been
convicted absent the error.
Id. at 475-76 (citations omitted). The court held, "it is not
probable that the jury convicted McKinney solely on the basis of
the fourth [improper] alleged overt act. Thus, submitting that
act to the jury was not plain error." Id. at 477.
Turcks has not shown us that the jury likely convicted him
of access device fraud on the basis of the erroneous Pinkerton
charge. The jury heard the Pinkerton charge only once. It did
not have a copy of the charge in the jury room. The government
did not discuss Pinkerton liability in its summation. Nor did
Turcks' counsel, in his summation, discuss co-conspirator
liability. Moreover, as we have related earlier, the error
giving rise to this issue on appeal stemmed from the unfortunate
use of one word: "or" instead of "and," in a lengthy, otherwise
unassailable, charge. There is little question in our minds but
that if counsel had called the district court's attention to what
we perceive as no more than an inadvertent mistake, the district
court would have promptly cured its error.
Further, the weight of the evidence presented at trial
established that Turcks committed the offenses charged and that
he aided and abetted Warfield's illegal use of the credit cards.
Only Turcks and Warfield were trained and authorized to accept
credit cards. The fraudulent credit slips bore two different
styles of handwriting. Through the use of handwriting exemplars,
a government expert testified that Turcks had probably forged the
signatures of four cardholders. The jury was then given the
exemplars to compare with the forged credit slips. In addition,
the record reveals that Turcks was present in the video store
when lost or stolen credit cards were processed and that Turcks
prepared and signed bank merchant deposits by which Lansdowne
Video received credit for the fraudulent charges.
We are satisfied that the government produced ample evidence
that Turcks was intimately involved in the fraudulent scheme. In
light of this record, we conclude that it is highly unlikely that
the jury convicted Turcks of the substantive offenses solely on
the basis of the erroneous Pinkerton charge. Because we conclude
that Turcks cannot show that the charge, in the manner given,
affected Turcks' conviction on the substantive charges, we may
not consider whether to exercise our discretion. We therefore
hold that the erroneous instruction did not constitute "plain
error."
III
Turcks next argues that the nine counts of credit card fraud
under 18 U.S.C. § 1029(a)(2) merge into one count under the
statute. He did not raise this objection in the district court
and so we again review for "plain error." We reject Turcks'
argument.
Turcks' argument is based on the language of 18 U.S.C.
§ 1029(a)(2) which reads as follows:
(a) Whoever--
(2) knowingly and with intent to defraud traffics in
or uses one or more unauthorized access devices
during any one-year period, and by such conduct
obtains anything of value aggregating $1,000 or more
during that period;
shall if the offense affects interstate or foreign commerce,
be punished as provided in subsection (c) of this section.
Turcks contends that because the statute applies to the use
of "one or more unauthorized devices . . . aggregating $1,000 or
more" during a one-year period, the government may only convict
him of one offense no matter how many credit cards or how much
"value" over $1,000 was obtained by him. He argues, in the
alternative, that either the statutory language plainly permits
only one conviction or that the rule of lenity requires that we
construe the statute in his favor to permit only one conviction.7
7
. Turcks claims in his brief on appeal that all of the illegal
uses of the credit cards constitute a single aggravated offense
and therefore Counts Two through Ten should have merged for
purposes of sentencing. He claims that the sentences imposed on
Counts Three through Ten should be vacated and the separate
Special Assessments on those Counts abated (Brief of Appellant p.
13). At oral argument, Turcks' counsel acknowledged that
pursuant to the Sentencing Guidelines, Turcks' sentence on the
When read in the context of its legislative history, we hold
that the statute permits multiple prosecutions whenever the
defendant's course of conduct exceeds the relevant jurisdictional
minima. Section 1029's predecessor was the Truth in Lending Act,
15 U.S.C. § 1644(a).8 H. Rep. No. 98-894, 98 Cong., 2d Sess. 5,
reprinted in 1984 U. S. Code Cong. & Admin. News 3691. Prior to
the enactment of § 1029, § 1644 was the principal federal statute
used to prosecute credit card fraud. A reading of the two
statutes demonstrates their similarity. Section 1644 punishes:
Whoever knowingly . . . uses . . . any . . .
fraudulently obtained credit card to obtain
. . . anything else of value which within any one-year
period has a value aggregating $1,000 or more.
Section 1029(a)(2) punishes:
Whoever knowingly and with intent to defraud . . . uses
one or more unauthorized access devices during any one-
year period, and . . . obtains anything of value
aggregating $1,000 or more.
(..continued)
substantive counts would have been the same had the counts merged
because the Guidelines compute the sentence based on the total
monies lost not on the total number of counts charged. See
U.S.S.G. § 2F1.1. We therefore understand that the only
additional penalties imposed on Turcks as a result of Turcks
having been charged with nine counts were the eight additional
Special Assessments of fifty dollars for each additional count.
8
. 15 U.S.C. § 1644(a) provides as follows:
Whoever knowingly in a transaction affecting interstate
or foreign commerce, uses or attempts or conspires to
use any counterfeit, fictitious, altered, forged, lost,
stolen, or fraudulently obtained credit card to obtain
money, goods, services, or anything else of value which
within any one-year period has a value aggregating
$1,000 or more . . . . shall be fined not more than
$10,000 or imprisoned not more than ten years, or both.
With the exception of the phrase "one or more unauthorized
access devices" found in § 1029(a)(2), the statutes are virtually
identical.9 Hence, judicial interpretation of the Truth in
Lending Act (§ 1644) provides instruction for the interpretation
of the access device fraud act (§ 1029) with which we are
concerned here.
As we read the legislative history regarding the progression
from the Truth in Lending Act to the access device fraud act and
as we understand the cases decided under the Truth in Lending
Act,10 it is evident that Congress intended by the passage of
§ 1029 to combat a dramatic increase in credit card fraud. S.
Rep. No. 98-368, 98th Cong., 2d Sess. 2 & H. Rep. No. 98-894,
98th Cong., 2d Sess. 5, reprinted in 1984 U.S. Code Cong. &
9
. In one Congressional committee report, the committee noted
that the $1,000 or more requirement "conforms with the threshold
for certain offenses under the Truth in Lending Act." H. Rep.
98-984, 98th Cong., 2d Sess. 17, reprinted in 1984 U. S. Code
Cong. & Admin. News 3703.
10
. Those courts which have interpreted the Truth in Lending Act
(§ 1644) have interpreted the term "$1,000 or more" and the term
"one year period," which appear in both § 1644 and § 1029, to
permit more than one conviction each time the defendant's
fraudulent conduct resulted in a gain which equaled or exceeded
$1,000 in a one year period. United States v. Abod, 770 F.2d
1293, 1296-97 (5th Cir. 1985) (rejecting defendant's argument
that he could not be convicted of three counts for using the same
card to obtain over $3,000 in value); United States v. Mikelberg,
517 F.2d 246, 252 (5th Cir. 1975) (rejecting defendant's
contention that the government could not aggregate multiple
transactions to meet the jurisdictional requirement), cert.
denied, 424 U.S. 909 (1976); see also United States v. Helgesen,
669 F.2d 69 (2d Cir. 1982) (accepting multiple convictions
without discussion), cert. denied, 456 U.S. 929 (1982). These
cases which interpret the term "$1,000 or more" in § 1644 to
permit multiple convictions are thus instructive of the proper
interpretation of the term "one or more" in § 1029(a)(2).
Admin. News 3648, 3691-92. In particular, Congress added the
phrase "one or more unauthorized access devices" in § 1029(a)(2)
to close a loophole that appeared in § 1644. The Truth in
Lending Act (§ 1644) had required that $1,000 fraudulently be
obtained by the use of each individual card. Thus, the Act was
not violated if ten individual cards were used to defraud each
true owner of $900 per card, even though the total thus acquired
by the defrauder was $9,000, an amount which exceeded the $1,000
threshold.
The legislative history of § 1029 reveals that criminal
syndicates were therefore using unauthorized credit cards to
charge just up to, but not beyond, the jurisdictional amount.
Id. By inserting the "one or more" language in § 1029, Congress
enabled the federal government to prosecute these crime rings.
Id at 3691. Although the specific legislative action enabled
prosecutors to aggregated unauthorized uses, we glean no
indication from the legislative history that Congress intended
that the "one or more" language used in § 1029 limit the
government's ability to charge violators with more than one
count. Indeed, the insertion of the "one or more" language
evidences Congress' intent to buttress enforcement of § 1029, an
intent that would be betrayed by a reading that allowed charging
on only one count in any one-year period.
We are not persuaded by Turcks that a major offender who
uses hundreds of stolen credit cards to obtain millions of
dollars may be charged with only one count of violating
§ 1029(a)(2), yet that is the conclusion we would have to draw
from Turcks' interpretation and reading of § 1029(a)(2). In
holding otherwise, we join those courts which have earlier
considered this question and held, as we hold now, that separate
violations of § 1029 whereby $1,000 or more is acquired in a one-
year period, using one or more credit cards, may be charged in
multiple counts. United States v. Iredia, 866 F.2d 114, 120 (5th
Cir.), cert. denied, 492 U.S. 921 (1989); United States v.
Newman, 701 F. Supp. 184, 186-87 (D. Nev. 1988); see also United
States v. Powell, 973 F.2d 885 (10th Cir. 1992) (affirming a
multiple count conviction without comment), cert. denied, 113 S.
Ct. 1598 (1993); United States v. Ryan, 894 F.2d 355 (10th Cir.
1990) (same). This conclusion is consistent with the
Congressional purpose in enacting § 1029.
Finally, we observe that our holding does not run afoul of
the rule of lenity. The rule of lenity "demands resolution of
ambiguities in criminal statutes in favor of the defendant."
Hughey v. United States, 495 U.S. 411, 422 (1990). It operates
"only after it is determined that a criminal statute is
ambiguous, not at the beginning of the process of construction,
'as an overriding consideration of being lenient to wrongdoers.'"
United States v. Rodriguez, 961 F.2d 1089, 1093-94 (3d Cir. 1992)
(quoting Chapman v. United States, 500 U.S. 453, 463 (1991)). It
"is not to be applied where to do so would conflict with the
implied or expressed intent of Congress." Liparota v. United
States, 471 U.S. 419, 427 (1985). If we were to adopt Turcks'
reading of § 1029, our holding would conflict with Congress'
intent. Thus, the rule has no application here.
IV
Turcks finally contends that the district court failed to
make the requisite factual findings to justify the restitution
order. While we review for "plain error" because Turcks did not
object, we will reverse and remand for resentencing because the
district court failed to comply with our express statement that
such findings are essential for our review, thus prejudicing
Turcks. Indeed, the government has conceded that resentencing
must take place.11
The district court ordered restitution pursuant to the
Victim and Witness Protection Act, 18 U.S.C. § 3663-64, which
provides in § 3664:
The court, in determining whether to order restitution
under section 3663 of this title and the amount of such
restitution, shall consider the amount of the loss
sustained by any victim as a result of the offense, the
financial resources of the defendant, the financial
needs and earning ability of the defendant and the
defendant's dependents, and such other factors as the
court deems appropriate.
18 U.S.C. § 3664(a) (emphasis added). Consistent with the
statute's mandate, we require that district courts make
particular factual findings prior to ordering restitution.
United States v. Copple, 24 F.3d 535, 549 (3d Cir.), cert.
11
. The government's brief recites, "The district court
incorrectly imposed an order of restitution upon Turcks without
making a finding on ability to pay and the case should be
remanded for resentencing. The government agrees with Turcks
that this case should be remanded for the district court to make
findings on Turcks' ability to pay the restitution." (Brief of
the Appellee p. 16).
denied, 1994 WL 466503 (Nov. 7, 1994); United States v. Logar,
975 F.2d 958, 961 (3d Cir. 1992); United States v. Palma, 760
F.2d 475, 480 (3d Cir. 1985). Specifically, the district court
must make factual findings based on the record of:
1) the amount of loss, 2) the defendant's ability to
pay and the financial need of the defendant and the
defendant's dependents, and 3) the relationship between
the restitution imposed and the loss caused by the
defendant's conduct. We also [hold] that,
notwithstanding estimates of loss in a presentence
report, the district court judge must point to the
evidence in the record supporting the calculation of
loss to the victims.
Copple, 24 F.3d at 549-50 (citing Logar, 975 F.2d at 961-62).
At the sentencing hearing, the district court orally ordered
Turcks to pay $102,137.99. No findings were made. Among other
things, the district court failed to find to whom the payments
should be made, and in what amount, and failed to make any
finding regarding Turcks' ability to pay. These omissions amount
to clear error.
Turcks also contends, citing United States v. Hughey, 495
U.S. 411 (1990), that the district court erred by assigning all
of the restitution he was ordered to pay to Count Two despite the
fact that the total amount that Turcks obtained through use of
the credit cards was the subject of nineteen convictions. Hughey
involved a defendant who pled guilty only to Count Four of a six
count indictment but was ordered to pay restitution for losses
that resulted from relevant conduct as to which he did not plead
guilty. Id. at 413-14. The Supreme Court held that Hughey could
only be ordered to pay restitution for the conduct charged in
Count Four. Id. at 422.12
The jury convicted Turcks on all nineteen counts in the
indictment. He has not alleged that the restitution award was
derived from conduct that was not charged in a count in the
indictment. Accordingly, Hughey does not apply to Turcks'
situation.
With regard to the restitution award, Turcks has met his
burden of showing prejudice. After the sentencing hearing, the
$102,137.99 restitution figure, which the district court
announced orally at sentencing, was reduced to $85,835.99 in the
subsequently entered written judgment based on further
calculations by the probation department. Turcks has called our
attention to the district court's uncertainty as to his ability
to pay. The district court ordered Turcks to pay the restitution
award starting immediately (Turcks was sentenced on March 4,
1993) but stated that he need only pay the $950 in Special
12
. Since Hughey was filed, Congress enacted legislation
addressing the rule of Hughey. That legislation has no relevance
here where Turcks' did not plead guilty but was convicted on all
counts of the indictment. Pub. L. No. 101-647, tit. XXV § 2509,
tit. XXXV § 3595 (1990). One amendment to 18 U.S.C. § 3663
permits a court to order restitution for conduct to which the
defendant did not plead guilty "to the extent agreed to by the
parties in a plea agreement." 18 U.S.C. § 3663(a)(3); see United
States v. Jewett, 978 F.2d 248, 253 (6th Cir. 1992). The second
amendment defines "victim" under crimes involving a pattern of
criminal activity as "any person directly harmed by the
defendant's criminal conduct in the course of the scheme." 18
U.S.C. § 3663(a)(2); see Jewett, 978 F.2d at 252. As we later
hold in text, because the jury convicted Turcks of every offense
with which the government charged him, neither Hughey nor the
recent legislative amendments are applicable here.
Assessments "as soon as Mr. Turcks can do so." App. 70a. This
circumstance, the discrepancy in the restitution ordered, and the
failure to make other required factual findings cause us to
conclude that Turcks' sentence was prejudicially affected by the
district court's restitution order.
We are vested with discretion in concluding that "plain
error" occurred. Olano, 113 S. Ct. at 1778. Here it is evident
that the district court's failure to comply with our requirements
of fact-finding seriously affected Turcks' sentence in as far as
the restitution order is concerned. It may be that on remand,
when the district court makes the findings that are mandated by
our precedents, the district court may determine that the same
restitution heretofore imposed on Turcks should be reimposed,
providing that the facts found support such an order. On the
other hand, the findings which the district court makes may lead
to a different restitution order. It will be for the district
court to resentence in its discretion based on the findings which
it makes. In this respect, the district court may desire to take
additional testimony or it may, it if deems the record
sufficient, make such findings from the record as it now exists.
V
Thus, we affirm Turcks' conviction on the nineteen counts in
the indictment. We will reverse and remand for a redetermination
of the restitution order in a manner consistent with this
opinion.