United States v. Jim Dial ( 2017 )

Case: 15-20589 Document: 00514129122 Page: 1 Date Filed: 08/23/2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 15-20589 FILED
August 23, 2017
Lyle W. Cayce
UNITED STATES OF AMERICA, Clerk
Plaintiff - Appellee
v.
JIM DIAL,
Defendant - Appellant
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:10-CR-56-3
Before DAVIS, GRAVES, and COSTA, Circuit Judges.
PER CURIAM:*
Defendant-Appellant Jim Dial pleaded guilty to conspiracy to commit
wire fraud by disseminating false information to inflate the price of his
company’s stock for personal profit. Dial, along with his co-conspirators, are
jointly and severally liable to pay $7,388,093.43 in restitution to 317 investors
identified as victims of his crime of conviction. Dial previously appealed the
district court’s order of restitution, arguing that he had an inadequate
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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opportunity to object to the restitution amount on the basis that it exceeded
the statutory maximum under the Mandatory Victims Restitution Act
(“MVRA”). We vacated the district court’s order and remanded for further
proceedings. Those proceedings culminated in a second order of restitution,
from which Dial now appeals. For the reasons that follow, we affirm.
I. BACKGROUND
Dial is the former CEO of Grifco International, Inc. In March 2010, Dial,
along with co-defendants Alex Ellerman and Evan Jarvis, was charged in an
eight-count indictment with conspiracy to commit wire fraud in violation of 18
U.S.C. §§ 371 and 1343. Specifically, from July 2004 to December 18, 2007,
Dial and his co-defendants, all holders of Grifco stock, were alleged to have
disseminated false information about Grifco stock to artificially inflate its
value before selling it at a profit. Dial pleaded guilty to one count of wire fraud
and, among other things, agreed to pay restitution to the victims of his crime.
The court sentenced Dial to 60 months’ imprisonment and three years of
supervised release.
At the sentencing hearing, the district court observed that Dial had
caused millions in losses, that he had defrauded over 200 individuals, and that
the court had considered 284 victim impact statements submitted by
individuals who had purchased Grifco stock during the conspiracy and suffered
resulting losses. 1 The Government requested and was granted more time to
finalize the exact amount of restitution, but stated that it anticipated the
restitution amount to be at least seven million dollars.
In September 2012, the Government filed a proposal for restitution,
requesting $7,388,093.43 in restitution to a total of 317 victims. Nearly a year
1 33 additional victim impact statements were provided to the court after sentencing,
but before the court issued its restitution order.
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later, the Government filed a motion for restitution order. On September 3,
2013, the district court entered a restitution order and amended the judgments
against Dial, Ellerman, and Jarvis to reflect that they were jointly and
severally liable to 317 victims for a loss totaling $7,388,093.43.
Defendants immediately filed a motion for reconsideration. They
informed the court that the Government and Dial’s counsel had been
conferring for months over the amount of restitution. Defendants attached
their email correspondence as exhibits to the motion. Dial had raised issues
with the records supporting some of the victims’ losses. At his request, the
Government obtained further documentation for several individual claims. In
the last email exchanged, Dial’s counsel wrote, “incorporating the additional
documentation . . . [t]he total documented loss is now around $5,616.00. Is this
a number we can agree upon and just submit an agreed upon order?”
Apparently no agreement had been reached before the Government filed its
motion for an order of restitution. Defendants thus claimed that they had not
been afforded an adequate opportunity to be heard and to present evidence
supporting an alternative amount of restitution. In response, the Government
acknowledged that there had been a breakdown in communications between
the parties. It nonetheless maintained that reconsideration should be denied,
arguing that it was Dial’s responsibility to file an objection once he perceived
negotiations had stalled, that the Government had long since met its burden
of establishing the amount of restitution, and that Dial had not presented
actual evidence refuting specific loss amounts. The court denied Defendants’
motion.
Dial filed his first appeal to this Court. He contended that the district
court ordered restitution without providing Dial an adequate opportunity to
rebut the Government’s evidence. Moreover, he argued that the restitution
amount exceeded the statutory maximum under the MVRA because it was
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supported by inadequate evidence and encompassed loss amounts that are not
within the losses permitted by the restitution statute. We concluded that the
record was inadequate to address his contentions because it contained none of
the materials presented to the district court. United States v. Dial, 590 F.
App’x 411 (5th Cir. 2015) (per curiam). Therefore, in the interests of justice,
we vacated the order of restitution and remanded the case for a hearing on the
order. Id. We advised that, at the hearing, the evidence upon which the
district court relied should be made part of the record and the parties should
have an opportunity to present their arguments regarding the restitution order
to the district court. Id.The district court duly conducted a hearing. The court sought the
parties’ positions on the proper way to proceed in compliance with our remand
order. Ultimately, the court resolved that the record should be supplemented
with the 317 victim impact statements that the Government offered as
evidence in support of the amount of restitution. Dial, however, objected that
the restitution amount was inadequately supported because several of the
victims’ statements were unaccompanied by audited records. With the parties’
agreement, the court set a schedule for the probation office to re-review the
evidence and issue an addendum to Dial’s presentence investigation report
(“PSR”), confirming the amount of restitution. 2 It allotted time for both parties
to have an opportunity to object to the addendum.
The probation officer filed a brief addendum, maintaining that 317
victims suffered losses totaling $7,388,093.43, and that the losses occurred
during the conspiracy’s time frame. The addendum stated that the evidence
supporting restitution had been entered into the record and that if a party
2 The probation officer agreed to this procedure despite stating that the probation
office had “painstakingly” reviewed and discussed the documents in light of the concerns
Dial’s counsel had raised in the months leading up to the court’s first restitution order.
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disputed a specific victim’s losses, probation would again review the
documentation supplied by that victim. Dial did not file any written objections.
At a subsequent hearing in August 2015, Dial’s counsel stated that she
was raising the same objections to the restitution amount that she raised in
the prior appeal and at the initial hearing but explained that she “didn’t think
it made sense to file an objection [to the PSR addendum], because . . . the
addendum not having changed anything, the objection remains the same.” The
Government, however, pointed out that the purpose of objections was to give
the probation officer an opportunity to respond, which she could not do without
specific objections to particular claims. The district court confirmed and
incorporated the defense’s objections into its ruling and adopted the PSR
addendum without change. Dial’s counsel stated her intention to file proposed
findings of fact and conclusions of law, which the court agreed to consider. The
court waited nearly a month for Dial’s proposed findings and conclusions.
None were filed. 3
On September 20, 2015, the district court issued an order of restitution
awarding $7,388,039.43 to 317 victims based on the Government’s evidence.
Dial timely appealed from the order.
II. STANDARD OF REVIEW
Because Dial failed to raise in the district court the specific objections to
the restitution award which he urges in his appeal, he concedes in his reply
brief that our review is limited to plain error. To prevail under plain error
review, Dial must show: (1) an error or defect; (2) that is clear or obvious; and
3 It appears that Dial submitted a document titled, “Defendant Jim Dial’s Proposed
Findings of Fact and Conclusions of Law”, 16 days after entry of the final restitution order.
Because the document was not part of the district court’s evaluation, we decline to consider
it for the first time on appeal. See Assn. for Retarded Citizens of Dallas v. Dallas County
Mental Health & Mental Retardation Ctr. Bd. of Trustees, 19 F.3d 241, 243 n.4 (5th Cir. 1994).
A review of the document reveals nothing that would change our conclusions herein.
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(3) that affected his substantial rights. Puckett v. United States, 556 U.S. 129,
135 (2009). If these three prongs are satisfied, we have discretion to remedy
the error; however, this discretion “ought to be exercised only if the error
‘seriously affect[s] the fairness, integrity or public reputation of judicial
proceedings.’” Id. (quoting United States v. Olano, 507 U.S. 725, 736 (1993)).
III. DISCUSSION
Dial argues that the district court erred in basing a portion of the
restitution award on unaudited victim impact statements. He identifies 39
such statements that do not have supporting documentation. Further, Dial
asserts that the district court erred in calculating the amount of restitution
owed to eight victims, based on the information they provided in their victim
impact statements.
Before we reach the merits of Dial’s claim, we must first address the
Government’s argument that Dial waived his right to appeal the restitution
amount. After a review of the record, we conclude that Dial did not waive his
right to challenge the restitution order. “Whereas forfeiture is the failure to
make the timely assertion of a right, waiver is the ‘intentional relinquishment
or abandonment of a known right.’” Olano, 507 U.S. at 733. In order for a
waiver to occur, the defendant must make “an affirmative choice . . . to forego
any remedy available to him.” United States v. Andino-Ortega, 608 F.3d 305,
308 (5th Cir. 2010). The mere lack of an objection or an uninformed statement
of “no objection” does not constitute waiver. See id. at 308–09; United States
v. Arviso-Mata, 442 F.3d 382, 384 (5th Cir. 2006). Waived errors are “entirely
unreviewable.” United States v. Ceballos, 789 F.3d 607, 613 (5th Cir. 2015).
The Government argues that Dial waived his claim because his counsel
abandoned her prior objections when she failed to submit written objections to
the PSR addendum. While Dial’s counsel did not submit any written objections
to the PSR addendum, she explained at the second hearing that she did not
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think it made sense to do so, because “the addendum not having changed
anything, the objection remains the same.” She then re-urged her prior
objections to the restitution amount that she raised in Dial’s first appeal and
at the first hearing. The district court confirmed and incorporated the
objections into its ruling and adopted the PSR addendum without change.
Dial’s counsel did not raise the specific objections that are the basis of his
appellate arguments. However, this colloquy does not indicate that Dial
intentionally and knowingly abandoned his right to challenge the legality of
the subsequent restitution order. Accordingly, our review is for plain error.
The MVRA requires a district court to award restitution to victims
“directly and proximately harmed as a result of the commission of [the
defendant’s] offense.” 18 U.S.C. § 3663A(a)(1)–(2). “The purpose of restitution
under the MVRA is to compensate victims for losses, not to punish defendants
for ill-gotten gains.” United States v. Sharma, 703 F.3d 318, 322 (5th Cir.
2012). “An award of restitution greater than a victim’s actual loss exceeds the
MVRA’s statutory maximum.” Id. A defendant is thus “only responsible for
paying restitution for the conduct underlying the offense for which he was
convicted.” United States v. Inman, 411 F.3d 591, 595 (5th Cir. 2005).
Similarly, restitution “is limited to the specific temporal scope of the
indictment.” Id. The MVRA does not allow restitution for consequential
damages, including lost income or “recovery” losses. United States v. Onyiego,
286 F.3d 249, 256 (5th Cir. 2002).
The Government has the initial burden of proving a victim’s actual
losses. 18 U.S.C. § 3664(e). As long as the loss amount has an adequate
evidentiary basis, the burden is on the defendant to present rebuttal evidence
demonstrating that the information is “inaccurate or materially untrue.”
United States v. Scher, 601 F.3d 408, 413 (5th Cir. 2010). “Mere objections to
such supported facts are generally insufficient.” United States v. Harris, 702
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F.3d 226, 230 (5th Cir. 2012). The district court must resolve any disputes as
to the amount or type of restitution by a preponderance of the evidence.
§ 3664(e).
Dial argues that the district court’s reliance on 39 unaudited victim
impact statements was error under United States v. Sharma. Dial reads
Sharma too broadly. In Sharma, the defendants had presented rebuttal
evidence proving that the amount of restitution exceeded the victims’ actual
losses. 703 F.3d at 321–24. The defendants had conclusively demonstrated
that a number of the victim impact statements listed losses that did not result
from the defendants’ crimes of conviction. Id. at 323–24. These victim impact
statements were directly incorporated into the defendants’ PSRs as actual
losses. Id. at 323. The district court adopted the precise amount from the
PSRs, which we stated “it could do only if those amounts had an adequate
evidentiary basis and remained unrebutted by the defendants.” Id. Because
the defendants had rebutted the loss amounts, we held that the district court
had erred in overruling the defendants’ objections and relying on the
unsupported loss figure in the PSRs. Id. at 324. Importantly, we stated in
Sharma:
To be clear, we are not criticizing the use of victim impact
statements. The government may properly solicit them, and the
district court may rely on them as an evidentiary basis for an
award of restitution that complies with the standards of the
MVRA. But if a dispute arises, the court must determine by a
preponderance of the evidence whether the statements actually
support the quantum of an award of restitution. The error here
was the unquestioning reliance on the statements, first by
Probation and second by the sentencing court.
Id. at 324 n.21.
Under Sharma, the district court was entitled to rely on the loss amounts
in the addendum to Dial’s PSR unless Dial presented evidence rebutting those
amounts or otherwise demonstrated that they lacked an adequate evidentiary
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basis. Id.; see also Scher, 601 F.3d at 413. He did not do so. Merely objecting
to the unaudited victim impact statements does not carry his burden. See
Harris, 702 F.3d at 230. Moreover, each victim impact statement was
submitted on a standardized form, which described the temporal scope and
nature of the conspiracy and instructed the victims to list financial losses from
the crime for which they had not been, or did not expect to be, repaid. The form
asked victims to provide receipts or other records demonstrating their losses,
if possible. Victims signed the forms under penalty of perjury. There is no
indication that these sworn statements are inherently unreliable. Therefore,
the district court did not err in relying on the loss amounts stated in the victim
impact statements and incorporated into the PSR addendum. See Scher, 601
F.3d at 414.
In addition, Dial contends that the district court erred in calculating the
restitution awards for eight victims, based on the information they provided in
their victim impact statements. With respect to three victims, Dial asserts
that their restitution awards were not properly offset, respectively, by the
value of stock at the time the victim completed the statement, the value of
stock sold, or the gain from a stock distribution. Dial argues that two victims
included consequential damages that are not compensable under the MVRA.
See Onyiego, 286 F.3d at 256. He asserts that one victim stated only a paper
loss, which was not his actual loss. See United States v. Olis, 429 F.3d 540, 547
(5th Cir. 2005). Another victim included stock purchased in 2008, after the
conspiracy ended. And one victim stated he had a “possible” loss in his
retirement account, which was included in his restitution award despite its
purported lack of certainty.
Even assuming the district court plainly erred in calculating these eight
restitution awards and that the error affected Dial’s substantial rights, he still
has not demonstrated his entitlement to the relief he seeks. Dial has not shown
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how the error “seriously affect[s] the fairness, integrity or public reputation of
judicial proceedings.” Olano, 507 U.S. at 736. At all relevant stages of the
proceedings below, Dial was in possession of the information that serves as the
basis for his claims of error. Dial had ample opportunities to point out these
alleged errors to the district court. He failed to do so during the nearly year-
long period between the Government’s proposal for restitution and the district
court’s first restitution order. He failed to do so in his motion for
reconsideration of that order. And he again failed to so during the proceedings
following remand from our Court after Dial’s first appeal. Following our
remand, the district court held two hearings. Dial did not raise his specific
claims of error at either hearing. Dial was then given an opportunity to submit
written objections and proposed findings of fact and conclusions of law. He
timely submitted neither. Dial has already gotten two bites at the apple. He
has not shown us why he is entitled to a third. See Puckett, 556 U.S. at 142(“The fourth prong is meant to be applied on a case-specific and fact-intensive
basis. . . [A] ‘per se approach to plain-error review is flawed.’”)
AFFIRMED.
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