United States v. Hagan ( 2001 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 00-31447
Summary Calendar
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
RILEY HAGAN, III,
Defendant-Appellant.
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Appeal from the United States District Court
for the Western District of Louisiana
USDC No. 99-CR-50095-ALL
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June 7, 2001
Before SMITH, BENAVIDES, and DENNIS, Circuit Judges.
PER CURIAM:*
Riley Hagan, III, appeals his conviction and sentence for
conspiracy to misapply bank funds, a violation of 18 U.S.C. §§ 371and 656. He argues that his sentence is unconstitutional under
Apprendi v. New Jersey, 530 U.S. 466 (2000), because the amount of
misapplied funds and loss, essential elements of the offense of
conviction, were not charged in the bill of information and
determined under a reasonable doubt standard. Hagan points out
that if the amount of funds misapplied does not exceed $1,000, the
predicate offense is a misdemeanor and the maximum term of
imprisonment is one year. See 18 U.S.C. §§ 371, 656. However,
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
No. 00-31447
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Hagan admitted at the guilty-plea hearing that his actions caused
a loss to the bank of $4.8 million and he was advised that the
maximum possible sentence for his offense was five years of
imprisonment and/or a fine of $1 million. He also acknowledged the
maximum punishment of five years’ imprisonment in his plea
agreement. See 18 U.S.C. § 371. When the district court advises
the defendant of the maximum possible penalty and when the
defendant agrees with the Government’s factual basis which sets out
the amount of drugs which would be proved at trial, Apprendi is not
violated. See United States v. Salazar-Flores, 238 F.3d 672, 673-
74 (5th Cir. 2001); see also United States v. Fort, No. 00-10418,
2001 WL 388099, *6 (5th Cir. Apr. 17, 2001). The same reasoning
applies to the amount of money lost pursuant to a scheme to
defraud. Thus, the statutory maximum under the facts of this case
is five years of imprisonment. As such, Hagan’s sentence of 25
months does not run afoul of Apprendi.
Hagan argues that the district court clearly erred in
calculating the loss to the victim bank from his check-kiting
scheme. He asserts that a net loss calculation should have been
used, thereby reducing the outstanding indebtedness by the amount
the bank could reasonably have expected to recover from the assets
securing that indebtedness, and by the $800,000 the bank received
pursuant to his civil settlement with it. In a check-kiting case,
it is not the total of all checks used in the scheme ($14,182,500
in this case), but, rather, the amount of overdraft or loss when
the scheme is discovered ($4.8 million in this case) that is used
to determine the amount of loss. See United States v. Frydenlund,
No. 00-31447
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990 F.2d 822, 826 & n.5 (5th Cir. 1993). It is inappropriate to
reduce the amount of loss by subsequent settlement payments or
other uncertain collateral held by the bank. Id. The district
court did not clearly err in its loss calculation.
Hagan argues that no victim in this case suffered a loss
compensable by restitution because pursuant to the confidential
settlement agreement, his payment of settlement proceeds
extinguished the underlying obligations. Hagan argues in the
alternative that he was entitled to additional credits and/or
offsets of $1.6 million but he fails to specify the source of the
credits/offsets. He contends that the court erred by ordering his
restitution order to be joint and several with his codefendants
because it results in double recovery for the bank of the $862,000
credited to him but not to his codefendants. Hagan seeks remand on
the restitution issue so that the court may apportion it to reflect
the contribution of each codefendant to the bank’s overall loss.
A civil settlement agreement does not preclude an award of
restitution because restitution is primarily penal in nature. See
United States v. Sheinbaum, 136 F.3d 443, 447-48 (5th Cir. 1998).
Joint and several liability for restitution is authorized by
statute. 18 U.S.C. § 3664(h). Nonetheless, pursuant to Hagan’s
civil settlement agreement with the bank, the bank will not obtain
double recovery. Any such funds would be returnable to Hagan
pursuant to the bank’s assignment to him of judgments obtained
against his codefendants.
The district court did not abuse its discretion in awarding
restitution in the amounts of $1,135,243 to the bank, and
No. 00-31447
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$2,847,000 to St. Paul Fire and Marine Insurance Company, to be
paid jointly and severally by all codefendants including Hagan.
Hagan’s motion to file supplemental record excerpts is
GRANTED.
AFFIRMED; MOTION GRANTED.