United States v. Dawson, Carmella ( 2001 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 00-3899
United States of America,
Plaintiff-Appellee,
v.
Carmella Dawson,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 98 CR 378-01--James F. Holderman, Judge.
Argued April 6, 2001--Decided May 4, 2001
Before Flaum, Chief Judge, and Posner and
Williams, Circuit Judges.
Flaum, Chief Judge. Carmella Dawson
exploited her position as a billing clerk
at a Chicago hospital in order to defraud
the institution of over $175,000. After a
grand jury indicted Dawson on six counts
of mail fraud, she entered into a plea
agreement with the government. Pursuant
to that agreement, Dawson pled guilty to
one count of the indictment and
acknowledged that she owed the hospital
$175,089 in restitution. On October 23,
2000, the district court sentenced Dawson
to 18 months imprisonment, and ordered
her to pay the previously agreed upon
amount in restitution. Dawson now appeals
her sentence, arguing that her
restitution judgment should be vacated,
and the cause remanded, so that the
district court can offset the amount she
owes by any payments that may have been
made by her co-schemers. Furthermore,
Dawson contends that the application of
the Mandatory Victims Restitution Act of
1996 ("MVRA") to her crime violates the
Ex Post Facto Clause of the United States
Constitution. For the reasons stated
herein, we affirm the decision of the
district court.
I. BACKGROUND
Carmella Dawson was employed as a
Medical Services Plan Billing Clerk for
the Rush Presbyterian St. Luke’s Hospital
("Rush Hospital") in Chicago, Illinois.
In that capacity, one of Dawson’s duties
was to prepare the paperwork that
triggered the issuance of refund checks
to insurance companies that had overpaid
the hospital. Recognizing an opportunity
for illegal gains, Dawson (along with her
then husband, Derrell Adams) recruited
individuals to assist in defrauding the
hospital. For three years, Dawson
prepared and filed the necessary
paperwork so that the hospital
unwittingly issued refund checks to her
selected co-schemers. Once an individual
received his or her "refund," Dawson or
Adams would accompany that person to cash
the check. For assisting in the
machination, the individual would receive
a portion of the check sum, with the
lion’s share going to Dawson and Adams.
In all, Dawson fraudulently caused Rush
Hospital to issue approximately 100
checks, totaling $175,089.
Eleven of Dawson’s payees cooperated
with the government, detailing how the
scheme was perpetrated. As a result of
their testimony, Dawson was indicted by a
grand jury on six counts of mail fraud in
violation of 18 U.S.C. sec. 1341. Rather
than proceed to trial, Dawson entered
into a plea agreement with the
government. Pursuant to that agreement,
on May 23, 2000, Dawson pled guilty to
Count One of the indictment, and the
government dismissed the remaining five
counts. As to the amount Dawson was obli
gated to repay the hospital, the
agreement contained a statement that
"[r]egarding restitution, the parties ac
knowledge that the amount of restitution
owed to Rush Presbyterian St. Luke’s
Hospital, Chicago, Illinois . . . [is]
$175,089 and that pursuant to Title 18,
United States Code, section 3663A the
court must order defendant to make
restitution in this amount."
In a sentencing memorandum, Dawson
acknowledged that she owed Rush Hospital
$175,089 in restitution. However, Dawson
remarked that "several [of her] co-
schemers [had] entered into pre-trial
diversion agreements with the government
towards resolving their criminal
liability." Typically, she noted, those
types of agreements require restitution
to be made to the victim. Dawson informed
the court that she had received no
information as to whether her co-schemers
had contributed towards restitution. She
requested that if any such payments had
been made to Rush Hospital, that the
restitution figure of $175,089 be offset
to reflect those payments, thereby
ensuring that the hospital not receive a
"windfall." Neither the probation officer
who authored the Presentence
Investigation Report nor the government
responded to Dawson’s contention
regarding restitution. On October 23,
2000, the district court sentenced Dawson
to 18 months imprisonment, followed by
three years of supervised release, and
ordered Dawson to pay restitution in the
amount of $175,089.
On appeal, Dawson contends that, because
of possible restitution payments by her
co-schemers, the district court lacked
authority to order full restitution sans
offset. Additionally, Dawson posits that
the MVRA effectuates a criminal penalty,
which was applied in her situation in
violation of the constitutional
prohibition against ex post facto laws.
II. DISCUSSION
A. Offsetting Of Restitution
Dawson’s first contention on appeal is
that the government failed to meet its
burden of proving Dawson’s liability for
$175,089 in restitution. Dawson notes
that under 18 U.S.C. sec. 3664(e) "[t]he
burden of demonstrating the amount of the
loss sustained by a victim as a result of
the offense shall be on the attorney for
the Government." In this instance, Dawson
points out that several of her co-
schemers entered into pretrial diversion
agreements with the government in order
to resolve their respective criminal
liabilities. Dawson posits that
wrongdoers do not typically cooperate
with the government without entering into
some form of agreement regarding
restitution, "and it is difficult to
imagine that the government would have
allowed offenders to escape prosecution
through pretrial diversion absent seeking
restitution." Thus, she contends that the
restitution judgment should be vacated,
and the cause remanded with instructions
to offset Dawson’s restitution obligation
by any restitution payments previously
made by co-schemers.
A district court’s authority to order
restitution is a question of law which is
reviewed de novo. United States v. Wells,
177 F.3d 603, 608 (7th Cir. 1999). Any
dispute as to the proper amount of
restitution is resolved by the district
court under the preponderance of evidence
standard. See 18 U.S.C. sec. 3664(e).
Assuming a district has
correctlyconcluded that restitution is
authorized, the court’s calculation of
the amount of restitution is reviewed for
clear error. United States v. Newman, 144
F.3d 531, 542 (7th Cir. 1998).
We note at the outset that Dawson does
not contend that the district court
lacked authority to order restitution in
this instance. Furthermore, despite
Dawson’s statements to the contrary, she
is not challenging her liability for
$175,089. In her plea agreement, Dawson
specifically notes that, under the MVRA,
she is responsible for paying Rush
Hospital the full amount owed. Rather,
Dawson is arguing that her co-schemers
surely have made restitution payments,
and that therefore her liability must be
offset by the amounts paid, in order to
prevent Rush Hospital from receiving a
"windfall."
We agree with Dawson that Rush Hospital
should not receive anything more in
restitution than is required to make the
hospital whole. See, e.g., 18 U.S.C. sec.
3664(f)(1)(A). Furthermore, we are not
unsympathetic to Dawson’s assertion that
the information on restitution that she
requests is solely in the province of the
hospital and the government. At oral
argument, the government assured this
Court that it had not sought nor received
restitution from any of Dawson’s co-
schemers as part of their pre-trial
diversion agreements. Furthermore, the
government represented that, at this
time, it has no intention of seeking
restitution from any of those parties.
Were that to change, and were Dawson’s
co-schemers to pay Rush Hospital any
amounts in restitution, we expect that
the government would notify Dawson of
that occurrence so that she could
properly file a request for modification
of restitution. See 18 U.S.C. sec.
3664(j)(2). However, until such time, we
find that the district court’s decision
to hold Dawson accountable for the entire
$175,089--the amount she acknowledged was
owed to Rush Hospital--is in accordance
with the MVRA’s rules regarding
apportionment of liability. See 18 U.S.C.
sec. 3664(h) ("If the court finds that
more than 1 defendant has contributed to
the loss of a victim, the court may make
each defendant liable for payment of the
full amount of restitution . . . .").
Thus, we affirm the decision of the
district court.
B. Retroactive Application Of The MVRA
Dawson’s second argument on appeal is
that the district court retroactively
applied the MVRA to her case, and in
doing so violated the constitutional
prohibition against imposition of ex post
facto laws. Specifically, Dawson points
out that the her acts of mail fraud were
alleged to have transpired between June
13, 1990 and June 22, 1993, and that the
fraud referenced in Count One of the
indictment (to which Dawson pled guilty)
occurred on May 23, 1993. At that time,
the Victim and Witness Protection Act
("VWPA") governed the district court’s
authority to order restitution. See 18
U.S.C. sec. 3663 (1993). Under the VWPA,
district courts were authorized, but not
required, to order restitution. See
Newman, 144 F.3d at 537. Crucial to the
discretionary decision was the
defendant’s financial standing. "Before a
district court could order any
restitution, the old Act required the
court to determine how much, if any,
restitution a defendant could make in
light of ’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.’"
Id. (citing 18 U.S.C. sec.
3663(a)(1)(B)(i)(II) (1993)).
Dawson does not dispute that the MVRA
discarded this discretionary balancing
system, directing that district courts
"shall order" restitution. See 18 U.S.C.
sec. 3663A(a)(1) & (b). Under the MVRA, a
defendant’s financial status is relevant
only to fixing a payment schedule for the
mandated restitution payments. See 18
U.S.C. sec. 3664(f)(1)(A) ("In each order
of restitution, the court shall order
restitution to each victim in the full
amount of each victim’s losses as
determined by the court and without
consideration of the economic
circumstances of the defendant."). At the
time of Dawson’s sentencing, in October
of 2000, the MVRA was in effect. Dawson
suggests that the district court applied
the MVRA in ordering restitution, and
therefore did not analyze her financial
condition prior to finalizing its order.
Thus, she asserts that, in this instance,
application of the MVRA has increased the
punishment for her criminal conduct,
thereby creating a violation of the
prohibition against ex post facto laws.
We review the district court’s decision
to apply the MVRA to Dawson’s charged
conduct de novo./1 See Newman, 144 F.3d
at 538. Unfortunately for Dawson, the
question of whether retroactive
application of the MVRA constitutes a
violation of the Ex Post Facto Clause is
a settled issue in this Circuit. In
Newman, we extensively examined the prob
lem, and concluded that the Clause was
not violated when a district court
imposed restitution pursuant to the MVRA
for actions which occurred prior to the
effective date of the law. See Newman,
144 F.3d at 537-42. In that decision, we
acknowledged, and found unpersuasive, the
arguments in favor of finding that the
MVRA could not be applied retroactively
without violating the Ex Post Facto
Clause, as well as the fact that our
decision was not in accord with those of
other Circuits. See id.; see also United
States v. Edwards, 162 F.3d 87, 89-90 (3d
Cir. 1998) (collecting cases).
Since that time, the holding of Newman
has been affirmed by this Court in cases
such as United States v. Grimes, 173 F.3d
634, 640 (7th Cir. 1999), United States
v. Bach, 172 F.3d 520, 523 (7th Cir.
1999), and United States v. Szarwark, 168
F.3d 993, 998 (7th Cir. 1999). While
Dawson has presented a bevy of reasons
why retroactive application of the MVRA
violates the Ex Post Facto Clause, we
have expressly found those justifications
unpersuasive in Grimes, Bach, Szarwark,
and Newman. Thus, we find that Dawson has
presented no compelling justification for
us to revisit the holding of Newman and
its progeny.
III. CONCLUSION
For the foregoing reasons, we Affirm the
decision of the district court.
FOOTNOTE
/1 The government argues that Dawson’s agreement to
pay restitution constitutes a forfeiture of her
challenge to the propriety of retroactive
application of the MVRA. As such, the government
asserts that correct standard of review is plain
error rather than de novo. See United States v.
Olano, 507 U.S. 725, 733-34 (1993). Because we
find that law of our Circuit forecloses Dawson’s
claims under either standard of review, we will
assume arguendo that Dawson’s actions did not
constitute a forfeiture of her issue, and analyze
the claim under the de novo standard.