United States v. Richard Leonard ( 2012 )


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  •                                                                            FILED
    NOT FOR PUBLICATION                              DEC 20 2012
    MOLLY C. DWYER, CLERK
    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS
    FOR THE NINTH CIRCUIT
    UNITED STATES OF AMERICA,                        No. 10-50220
    Plaintiff - Appellee,              D.C. No. 2:05-cr-00316-DSF-4
    v.
    MEMORANDUM *
    RICHARD B. LEONARD, aka Seal D.,
    Defendant - Appellant.
    Appeal from the United States District Court
    for the Central District of California
    Dale S. Fischer, District Judge, Presiding
    Submitted December 5, 2012 **
    Pasadena, California
    Before: PREGERSON, PAEZ, and HURWITZ, Circuit Judges.
    Richard Leonard appeals a $2,915,427.16 restitution order, imposed after he
    pleaded guilty to conspiring to defraud the United States of tax revenue in violation
    *
    This disposition is not appropriate for publication and is not precedent
    except as provided by 9th Cir. R. 36-3.
    **
    The panel unanimously concludes this case is suitable for decision
    without oral argument. See Fed. R. App. P. 34(a)(2).
    of 
    18 U.S.C. § 371
     and to willfully attempting to evade assessment and payment of
    individual income taxes in violation of 
    26 U.S.C. § 7201
    . “Provided that it is within
    the bounds of the statutory framework, a restitution order is reviewed for abuse of
    discretion.”   United States v. Brock-Davis, 
    504 F.3d 991
    , 996 (9th Cir. 2007)
    (citations omitted).
    1.   Leonard argues that the district court improperly relied on the “bank
    deposits” method of determining the amount of distributions made to Leonard and his
    co-conspirators. “The critical question is whether the government’s investigation has
    provided sufficient evidence to support an inference that an unexplained excess in
    bank deposits is attributable to taxable income.” United States v. Stone, 
    770 F.2d 842
    ,
    844-45 (9th Cir. 1985). “The adequacy of a bank deposits investigation necessarily
    turns on its own circumstances.” 
    Id. at 845
     (internal quotation marks and citation
    omitted). Here, although some records from the overseas bank in which relevant
    deposits were made were not available, the evidence presented was adequate to
    establish the amount of taxable income. See United States v. Hall, 
    650 F.2d 994
    , 996
    n.4 (9th Cir. 1981) (noting that the bank deposits method is “a circumstantial way of
    establishing unreported income”). In light of the Government’s burden to prove the
    restitution amount by a preponderance of the evidence, the method used here was
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    sufficient to provide a “reasonable estimate” of the loss. 
    18 U.S.C. § 3664
    (e); see also
    United States v. Ali, 
    620 F.3d 1062
    , 1073-74 n.10 (9th Cir. 2010).
    2. Leonard was not denied a meaningful opportunity to be heard on the issue
    of restitution. See United States v. Weir, 
    861 F.2d 542
    , 546 (9th Cir. 1988). Unlike
    Weir, Leonard had ample notice and an opportunity to dispute the final restitution
    amount. The district court held a lengthy restitution hearing at which Leonard was
    allowed to cross-examine the Government’s witnesses and present his own case.
    Leonard was also allowed to file several sentencing memoranda.
    3. Leonard’s argument that the district court abused its discretion by failing to
    invoke the so-called “complexity exception” of 18 U.S.C. § 3663A(c)(3)(B) was
    waived. In his plea agreement, Leonard agreed “to make full restitution for the losses
    caused by [his] activities” and not to appeal the imposition of restitution, although he
    retained the ability to appeal the terms and amount of restitution.
    4. Both parties agree that a remand is necessary for the court to set a restitution
    payment schedule. See Ward v. Chavez, 
    678 F.3d 1042
    , 1046-51 (9th Cir. 2012). In
    setting that schedule, the district court should consider “the financial resources and
    3
    other assets of the defendant.” 
    18 U.S.C. § 3664
    (f)(2)(A). The district court may also
    consider whether “nominal periodic payments” are appropriate.           
    18 U.S.C. § 3664
    (f)(3)(B). Finally, because a remand is necessary and the record does not make
    clear whether the district court was aware of its discretion to apportion restitution
    under 
    18 U.S.C. § 3664
    (h), the district court may also reconsider on remand its
    decision to impose upon Leonard the full amount of tax losses caused by the
    conspiracy.
    AFFIRMED IN PART, VACATED AND REMANDED IN PART.
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