United States v. Villongco ( 2017 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
v. Criminal Action No. 07-9 (BAH)
DAVID VILLONGCO, Chief Judge Beryl A. Howell
Defendant.
MEMORANDUM OPINION
Pending before the Court is the government’s motion for reconsideration, Gov’t’s Mot.
Reconsideration Mem. Opinion & Order Def.’s Mot. Quash Writ of Garnishment (“Gov’t’s
Mot.”), ECF No. 57, of the decision granting the defendant’s motion to quash the government’s
writ of garnishment as to certain retirement and brokerage accounts belonging to the defendant,
see United States v. Villongco, Crim. Action No. 07-9 (BAH), 2016 WL 3747508 (D.D.C. July
11, 2016). The government continues to press its entitlement to accelerate the defendant’s
payment of restitution by garnishing his retirement and brokerage accounts, notwithstanding a
payment schedule ordered by the sentencing Court, who was apprised at the time of sentencing
of the funds now targeted for garnishment. For the reasons set forth below, the government’s
motion is denied.
I. BACKGROUND
The factual background of this case is set out in this Court’s prior memorandum opinion
regarding the defendant’s Motion to Quash the Writ of Continuing Non-Wage Garnishment
(“Def.’s Mot. Quash”), ECF No. 46, which is fully incorporated here. See Villongco, 2016 WL
3747508, at *1–*3. In brief, the defendant was convicted in 2008 of conspiracy to defraud the
government and mail fraud, in violation of 18 U.S.C. §§ 286 and 1341, for his part in a scheme
1
to misappropriate funds from the Export-Import Bank of the United States. See Judgment and
Commitment Order at 1, ECF No. 33; Statement of Offense at 1, ECF No. 11. Pursuant to the
Mandatory Victims Restitution Act of 1996 (“MVRA”), the Judgment and Commitment Order
provided that the defendant owed restitution in a total amount of “$14,284,652.78, to be paid
jointly and severally with [defendant’s] accomplices with credit to the defendant for amount
already paid,” and that the defendant “shall pay the balance of any restitution owed at a rate of
no less than $500.00 each month.” Judgment and Commitment Order at 5–6. The defendant
himself obtained only $150,000 from the scheme, which he forfeited pursuant to his plea
agreement prior to sentencing. See Consent Order of Forfeiture, ECF No. 6.
Nearly eight years later, on March 4, 2016, the government filed an application for a writ
of garnishment, seeking any property belonging to the defendant within the possession of
Fidelity Investments. See Appl. Writ Continuing Non-Wage Garnishment, ECF No. 40. A
401(k) retirement savings account with Fidelity Investments, having a value of at least $300,000,
was known to the sentencing Court at the time the Judgment and Commitment Order was
entered. See Presentence Investigation Report, dated Feb 29, 2008, ¶¶ 64–64a, ECF No. 51. In a
letter dated April 19, 2016, which was construed as a motion to quash, the defendant requested
that the Court “rescind this collection effort and procedure” because “[t]here is no judg[]ment
that [his] financial accounts be garnished.” Def.’s Mot. Quash at 1. Prior to issuing its decision
on the defendant’s motion, the Court requested that the government, within two weeks, respond
to the defendant’s motion and “address the legal issues raised by” three circuit court cases:
United States v. Hughes, 813 F.3d 1007 (D.C. Cir. 2016); United States v. Martinez, 812 F.3d
1200 (10th Cir. 2015); and United States v. Ekong, 518 F.3d 285 (5th Cir. 2007). See Min.
Order, dated May 9, 2016 (citing Min. Order, dated May 5, 2016). In response, the government
2
submitted a six-page memorandum opposing the defendant’s motion, addressing the three
appellate cases expressly identified by the Court in a single page. See Gov’t’s Mem. Opp’n
Def.’s Mot. Quash Writ Garnishment (“Gov’t’s Opp’n Def.’s Mot.”), ECF No. 49.
Based on the defendant’s motion, the government’s opposition, the record in this matter,
and the relevant authorities, including analysis of the three appellate cases referenced in the
Court’s prior Minute Order, the defendant’s motion to quash was granted. See Order, dated July
11, 2016, ECF No. 54. The decision to grant the defendant’s motion rests primarily upon two
legal conclusions. First, although the MVRA contains “general enforcement provisions”
mandating that restitution be ordered in the full amount of the victim’s damages and permitting
the government to enforce a restitution order using a variety of means, the statute also limits the
government to the “specific terms of the restitution order,” including any “payment schedule
imposed” by the Court, in seeking enforcement of such an order. See Villongco, 2016 WL
3747508, at *7–*8. Second, in this case, the government may collect only the amounts specified
in the restitution order’s payment schedule, notwithstanding both the Order’s direction that
payment shall be made “at a rate of no less than $500 each month” and the sentencing Court’s
oral pronouncement that restitution was “immediately payable,” because that language fails to
manifest an intent to require the defendant to pay the full amount of restitution immediately. Id.at *8–*9.
On August 8, 2016, the government timely filed a motion for reconsideration of the
Court’s decision, pursuant to Fed. R. Civ. P. 59(e). See Gov’t’s Mot. at 1. The defendant
obtained pro bono counsel to represent him for purposes of the motion for reconsideration, see
Def.’s Not. Entry Appearance & Mot. Extension Time, ECF No. 58, and filed his response on
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October 28, 2016, see Def.’s Resp. Gov’t’s Mot. Recons. (“Def.’s Resp.”), ECF No. 61. 1 The
government’s motion for reconsideration is now ripe for consideration.
II. LEGAL STANDARD
“Unlike the Federal Rules of Civil Procedure, neither the Federal Rules of Criminal
Procedure nor the Local Criminal Rules for this district provide for motions for reconsideration.”
United States v. Bagcho, No. CR 06-00334 (ESH), 2017 WL 27925, at *2 (D.D.C. Jan. 3, 2017)
(citations omitted). Nevertheless, “the Supreme Court has recognized, in dicta, the utility of
such motions,” and “at least two Circuits have explicitly held . . . that motions for
reconsideration may properly be considered in criminal cases.” United States v. Ferguson, 574
F. Supp. 2d 111, 113 (D.D.C. 2008) (citing United States v. Dieter, 429 U.S. 6 (1976); United
States v. Healy, 376 U.S. 75, 80 (1964); United States v. Fiorelli, 337 F.3d 282, 286 (3d Cir.
2003); United States v. Clark, 984 F.2d 31, 33–34 (2d Cir. 1993)). Accordingly, “judges in this
district have assumed, without deciding, that they may consider motions for reconsideration in
criminal cases.” Bagcho, 2017 WL 27925, at *2 (citing United States v. Cooper, 947 F. Supp. 2d
108, 109 (D.D.C. 2013); United States v. Hong Vo, 978 F. Supp. 2d 41, 47 (D.D.C. 2013); and
United States v. Cabrera, 699 F. Supp. 2d 35, 40 (D.D.C. 2010)).
“Judges in this district have applied the standard contained in Rule 59(e) of the Federal
Rules of Civil Procedure to motions for reconsideration of final orders in criminal cases.” Hong
Vo, 978 F. Supp. 2d at 47 (distinguishing the legal standard applicable to motions for
reconsideration concerning final orders from that concerning interlocutory orders) (citations
omitted); see also Ferguson, 574 F. Supp. 2d at 113 (based on the dicta in Dieter, 429 U.S. at 8,
“the [c]ourt . . . proceed[ed] on the assumption that it may consider . . . [a] motion for
1
Pro bono counsel are commended for their service and the quality of their representation of the defendant
in this matter.
4
reconsideration” and applied the FED. R. CIV. P. 59(e) standard of review). Notably, “[m]otions
under FED. R. CIV. P. 59(e) are disfavored and relief from judgment is granted only when the
moving party establishes extraordinary circumstances.” Niedermeier v. Office of Baucus, 153 F.
Supp. 2d 23, 28 (D.D.C. 2001) (citation omitted). To prevail, the government “must demonstrate
that (1) there has been an intervening change in controlling law; (2) there is new evidence; or (3)
there is a need to correct clear error or prevent manifest injustice.” Ferguson, 574 F. Supp. 2d at
113 (citation omitted); see also Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996) (“A
Rule 59(e) motion ‘is discretionary’ and need not be granted unless the district court finds that
there is an ‘intervening change of controlling law, the availability of new evidence, or the need to
correct a clear error or prevent manifest injustice.’” (quoting Nat’l Trust v. Dep’t of State, 834 F.
Supp. 453, 455 (D.D.C. 1993), aff’d in part and rev’d in part on other grounds sub nom.
Sheridan Kalorama Historical Ass’n v. Christopher, 49 F.3d 750 (D.C. Cir. 1995))).
“Absent a demonstrated intervening change of controlling law or new evidence, the law
is well-settled that litigants may not use Rule 59(e) either to repeat unsuccessful arguments or to
assert new but previously available arguments.” Smith v. Lynch, 115 F. Supp. 3d 5, 11 (D.D.C.
2015) (citing Exxon Shipping Co. v. Baker, 554 U.S. 471, 485 n.5 (2008) (“Rule 59(e) permits a
court to alter or amend a judgment, but it ‘may not be used to relitigate old matters, or to raise
arguments or present evidence that could have been raised prior to the entry of judgment.’”
(quoting 11 C. WRIGHT & A. MILLER, FEDERAL P RACTICE AND P ROCEDURE § 2810.1, pp. 127–28
(2d ed. 1995) (footnotes omitted)))). Additionally, with regard to “clear error” under Rule 59(e),
courts have imposed a “very exacting standard,” Bond v. U.S. Dep’t of Justice, 286 F.R.D. 16, 22
(D.D.C. 2012), aff’d, No. 12-5296, 2013 WL 1187396 (D.C. Cir. Mar. 14, 2013) (quoting
Lightfoot v. District of Columbia, 355 F. Supp. 2d 414, 422 (D.D.C. 2005)). The “final judgment
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must be dead wrong to constitute clear error.” Lardner v. FBI, 875 F. Supp. 2d 49, 53 (D.D.C.
2012) (internal quotation marks omitted) (quoting Parts & Elec. Motors, Inc. v. Sterling Elec.,
Inc., 866 F.2d 228, 233 (7th Cir. 1988)). Similarly, “it is clear that ‘manifest injustice’ is an
exceptionally narrow concept in the context of a Rule 59(e) motion,” Slate v. Am. Broad. Cos.,
12 F. Supp. 3d 30, 35 (D.D.C. 2013), and, thus, “must entail more than just a clear and certain
prejudice to the moving party, but also a result that is fundamentally unfair in light of governing
law.” Id. at 35–36; cf. Associated Gen. Contractors of Cal., Inc. v. Cal. State. Council of
Carpenters, 459 U.S. 519, 536 (1983) (“[T]he judicial remedy cannot encompass every
conceivable harm that can be traced to alleged wrongdoing.”).
III. DISCUSSION
The government does not assert any intervening change in controlling law, nor does it
present any new evidence. See generally Gov’t’s Mem. Supp. Mot. Reconsideration of Mem.
Opinion & Order Def.’s Mot. Quash Writ of Garnishment (“Gov’t’s Mem.”), ECF No. 57-1.
Accordingly, the motion for reconsideration can be granted only if the government has
established the “need to correct a clear error or prevent manifest injustice.” Firestone, 76 F.3d at
1208.
In urging that reconsideration is warranted under this standard, the government has
submitted a brief more than five times the length of its original opposition, raising two principal
arguments regarding the scope of the government’s powers under the MVRA and under the
specific terms of the restitution order at issue to support its writ of garnishment. 2 Neither of the
government’s arguments is persuasive.
2
In reply, the government takes issue with the defendant’s characterization of the government’s initial
opportunity to address the issues raised by the defendant’s motion as “full and unrestricted,” Def.’s Resp. at 12. See
Gov’t’s Reply Mem. Supp. Mot. Recons. at 1, ECF No. 63. In disputing this characterization, the government
asserts that “the [d]efendant’s meager communication requesting relief from the garnishment . . . did not discuss the
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First, the government contends that “the Court’s interpretation of the MVRA is
unsupported and erroneous,” Gov’t’s Mem. at 12, because “the government’s enforcement
remedies [are] cumulative” such that “the fact of a payment order [is] irrelevant to whether the
government can also obtain process to enforce a criminal judgment,” id. at 16. To support this
contention, the government enumerates the applicable statutory authority permitting enforcement
of restitution orders through installment payment orders, garnishment, and other means, and
argues that the government properly followed the procedures for garnishment. See Gov’t’s
Mem. at 15–19. These assertions gain the government little ground because the question
presented is not whether garnishment may ever be used by the government to enforce an order of
restitution, but whether such enforcement is appropriate in light of the restitution order in this
case. 3 That the government may in some circumstances enforce an order of restitution in the
manner attempted here is beside the point and, consequently, lends no support for the
government’s motion for reconsideration.
The government further argues that the MVRA would be undercut by interpreting a
restitution order to require that the full restitution amount be satisfied exclusively by installment
payments. See Gov’t’s Mem. at 22 (asserting “the proposition that the entry of any installment-
based restitution order in a judgment means that the total restitution amount is not due
immediately . . . must be rejected as lacking in statutory or precedential support”). In pressing
specific grounds relied upon in the Court’s order, and the Court did not request briefing of specific issues before the
United States filed its opposition.” Id. at 1–2. The government’s position is disingenuous for at least two reasons.
First, the law is well-settled that the Court has an obligation to construe liberally the defendant’s pro se letter
requesting relief. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (“A document filed pro se is ‘to be liberally
construed . . . .’” (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976))). Second, while the Court’s Minute Order,
dated May 9, 2016, did not expressly list the legal issues raised by the referenced appellate cases, those issues were
apparent from even a cursory review of the cases and, indeed, the government referenced the issues, albeit cursorily
in a single page. See Gov’t’s Opp’n Def.’s Mot. Quash.
3
The government’s argument would be relevant to determining the government’s ability to use garnishment
as a means to collect restitution where a defendant has defaulted on a payment schedule contained in the restitution
order. That set of circumstances is not presented by the instant action and, accordingly, need not be considered.
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this argument, the government relies upon an interpretation of the MVRA, its legislative history,
and supporting authorities that has already been considered and deemed unpersuasive by this
Court for reasons explained in its original decision. See Villongco, 2016 WL 3747508, at *7–
*11 (considering and rejecting the “non-binding, out-of-circuit authority cited by the
government” and finding the government’s “singular focus on the over-arching purpose of the
MVRA ‘to make victims of crime whole’” unpersuasive with respect to interpretation of the
authority given the courts to fashion restitution orders). Nevertheless, the government criticizes
the Court’s conclusion that “the entry of any installment-based restitution order in a judgment
means that the total restitution amount is not due immediately” because, in the government’s
view, this would mean that “Villongco could win the lottery or inherit a fortune, but the
government would be unable to attach that windfall for the benefit of his victim.” Gov’t’s Mem.
at 22–23. This assertion is patently incorrect.
Pursuant to the MVRA, a restitution order must “provide that the defendant shall notify
the court and the Attorney General of any material change in the defendant’s economic
circumstances that might affect the defendant’s ability to pay restitution,” upon which
notification “the court may, on its own motion, or the motion of any party, including the victim,
adjust the payment schedule, or require immediate payment in full, as the interests of justice
require.” 18 U.S.C. § 3664(k). In this way, the statute contemplates the potential injustice the
government warns of and, in providing a method of preventing such injustice, reinforces the
primacy of the courts’ role in setting the terms of a defendant’s restitution. 4 To the extent the
4
Despite the statutory authority contemplating modifications of restitution orders by a court, the government
in this case has never asked that the defendant’s restitution order be modified to enable the defendant’s assets with
Fidelity Investments to be garnished, pressing only the argument that it possesses the unilateral authority to do so
under the existing restitution order. See United States v. Simpson-El, 2016 WL 2646704, at *1–*4 (D. Kan. May 10,
2016), aff’d, 856 F.3d 1295 (10th Cir. 2017) (ordering, upon the government’s motion “for an order adjusting
defendant’s restitution payment” in light of settlement award and after consideration of MVRA factors, that portion
of settlement be paid toward the defendant’s restitution obligation); Simpson-El v. United States, 2015 U.S. Dist.
8
government wishes to appropriate the power to set such terms, its arguments are more
appropriately directed toward Congress.
The government also notes that, pursuant to 18 U.S.C. § 3613(c), upon entry of the
judgment in this case, “all of Villongco’s property became subject to a lien,” including the
Fidelity account the government attempted to garnish. Gov’t’s Mem. at 21 (citing 18 U.S.C. §
3613(c)). The government suggests that the mere existence of a lien justifies the writ of
garnishment sought here, failing to acknowledge a critical difference between liens and writs of
garnishment: namely, in contrast to the latter, the former merely secures debts without providing
an independent means of satisfying them. Accordingly, that all a defendant’s property may be
subject to a lien does not mean that all a defendant’s property may be garnished by the
government.
The government further contends “there can be no lien,” as plainly contemplated by the
statute, if an installment payment order exclusively governs the collection of restitution because
a lien “requires a fixed amount due.” Id. at 26. This argument fares no better, since it is based
on the faulty premise that an installment payment order extinguishes a defendant’s obligation to
pay the full amount of restitution ordered. Rather, an installment payment order controls how
that obligation will be discharged, limiting not the total amount due per se, but the parties’ rights
regarding collection of that amount. In this case, since the defendant has complied thus far with
his obligation under the installment payment order, no amount is past due such that the
government could collect on its lien. Pursuant to statute and subject to court approval, however,
LEXIS 160789, at *6 (D. Ark. Dec. 1, 2015) (issuing declaratory judgment that the government could not presently
collect entire $200,000 settlement received by criminal defendant because his restitution obligation was “not past
due” given installment payment order, but noting “the sentencing court has jurisdiction to revise the restitution
order”); see also United States v. Hyde, 497 F.3d 103, 108 (1st Cir. 2007) (noting that “the court’s statutory
authority to adjust a defendant’s payment schedule is explicit” (citing 18 U.S.C. § 3572(d)(3)) and therefore
affirming district court’s decision allowing the government to garnish the sale proceeds from defendant’s home
notwithstanding installment payment order).
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the government would be able to collect on its lien if the defendant defaulted on that obligation.
See 18 U.S.C. §§ 3572(i), 3613A (providing that that “entire amount” of restitution becomes due
within thirty days of notification of default, notwithstanding any “installment schedule,” subject
to the court’s ordered action “to obtain compliance with the order of a fine or restitution,” which
action may include “adjust[ing] a payment schedule”).
Even assuming the defendant’s obligations under the restitution order were not yet
certain, the government’s contention that a lien requires a “fixed amount due” would still fail.
While a lien does not become “choate [i.e., enforceable] until such time as the underlying
amount becomes certain,” Lerner v. United States, 637 F. Supp. 679, 681 (S.D.N.Y. 1986)
(discussing, inter alia, United States v. Pioneer American Ins. Co., 374 U.S. 84, 89 (1963);
United States v. Waddill, Holland & Flinn, Inc., 323 U.S. 353, 359 (1945) (holding landlord’s
lien on future installments of rent inchoate)); see Pioneer American Ins. Co., 374 U.S. at 91(explaining in the case of a “lien to secure future indebtedness,” the “creditor holds merely ‘a
caveat of a more perfect lien to come’” (quoting New York v. Maclay, 288 U.S. 290, 294
(1933))), the MVRA contains no provision specifying that the liens contemplated therein be
choate at the time the restitution order is entered. Consequently, the statute’s lien provisions
lend no support to the government’s position.
In pressing its interpretation of the MVRA, the government seeks to distinguish the
authorities found persuasive in the original decision in this matter, but points only to distinctions
without a difference. First, the government asserts that Hughes and Martinez are distinguishable
in part because they involve “non-MVRA sentences.” Gov’t’s Mem. at 2. With respect to
Hughes, the government is correct that in the District Court’s view, imposition of restitution in
the full amount of the victims’ losses was not required under the MVRA. See Tr. Re-Sentence
10
Hr’g at 11:5–13, United States v. Hughes, Crim. Action No. 09-cr-240 (RMC) (D.D.C. July 18,
2013), ECF No. 45. Not once, however, did the D.C. Circuit mention the non-mandatory nature
of the restitution in determining that the installment payment order controlled over the full
amount of restitution contained in the same order, indicating the distinction is irrelevant. 5 With
respect to Martinez, the government’s assertion is simply incorrect. See United States v.
Martinez, 2014 WL 11429324, at *1 (D.N.M. Nov. 13, 2014) (“As part of [the defendant’s]
judgment, and pursuant to the Mandatory Victim Restitution Act (“MVRA”), 18 U.S.C. §
3663A, the Court ordered [the] [d]efendant to pay restitution in the amount of $2,710,818.66
. . . .”). The government further contends that “Martinez is factually inapposite because the
Martinez judgment provided only for a payment plan, not a monetary restitution judgment,” for
which the obligation to pay the full amount of restitution would “begin immediately.” Gov’t’s
Mem. at 22. As explained below, however, the “due immediately” language referenced by the
government provides little, if any, support for the government’s position, and, thus, offers no
viable distinction between Martinez and the case at hand.
The government’s second principal argument is that the Court’s factual findings
regarding the sentencing Court’s restitution orders are erroneous because “they fail to recognize
that it provides for immediate payment of the ordered restitution.” Id. at 21. Focusing on the
terms of the sentencing Court’s restitution order, the government makes three assertions in
support of its position, none of which is availing.
First, the government emphasizes that “in its oral pronouncement at sentencing, [the
Court] stated no less than four times that the restitution payment was due and payable
5
Indeed, before the District Court in Hughes, the government acknowledged that once ordered, whether
restitution was permissive or mandatory becomes irrelevant. See Tr. Re-Sentence Hr’g at 4:10–14 (“[I]f there’s
ordered restitution[,] whether or not the payment of restitution was mandatory or not, the [MVRA] still permits the
collection of the restitution that has been ordered.”).
11
immediately.” Id. at 19. As noted in the memorandum opinion in this matter, the D.C. Circuit
has described such language as “boilerplate” that cannot override the specific terms of a
restitution order permitting payment of restitution in installments. See Villongco, 2016 WL
3747508, at *9 (quoting Hughes, 813 F.3d at 1009). Likewise, in giving meaning to such
language, the Seventh Circuit has aptly explained that it “does not mean ‘immediate payment in
full,’ but rather ‘payment to the extent that the defendant can make in good faith, beginning
immediately.’” United States v. Sensmeier, 361 F.3d 982, 991 (7th Cir. 2004) (quoting United
States v. Burke, 125 F.3d 401, 407 (7th Cir. 1997)). Thus, “[a]ll that a ‘due immediately’
statement in a judgment does is command the defendant to discharge his obligations as quickly
as possible.” United States v. Sawyer, 521 F.3d 792, 796 (7th Cir. 2008). Reflecting this
understanding of the “due and payable immediately” language, the sentencing Court here
expressed the view that “[t]he fact is that, you know, payment schedules end up getting worked
out when people don’t have the full amount of all that’s due and payable immediately.” Tr.
Sentencing Hr’g at 32:3–5, (Feb. 29, 2008), ECF No. 52. Consequently, the government has
failed to show that the Court’s interpretation of this language constitutes “clear error” or
“manifest injustice” warranting reconsideration of its decision.
Second, the government notes that the Judgment and Commitment Order in this case
“lists the amount of restitution as $14,284,652.78, to be paid jointly and severally with
accomplices,” and requires payment of “the balance of any restitution owed at a rate of no less
than $500.00 each month.” Gov’t’s Mem. at 19 (quoting Judgment and Commitment Order at 5–
6). The government argues that “[i]t is logical and reasonable to conclude that this ‘balance of
any restitution owed’ language must follow a ‘due and payable immediately’ order” or else “the
word ‘balance’ has no antecedent, no description of or reference to the figure from which the
12
balance is derived.” Id. at 20. Yet, the government’s argument ignores a fact it acknowledges in
the same breath—that the defendant is jointly and severally liable for the total amount of
restitution along with his accomplices in this case. See Judgment and Commitment Order at 6.
It also ignores that the defendant forfeited $150,000 pursuant to a Consent Order of Forfeiture.
See id. at 4. Thus, the “balance” owed by the defendant would be derived by subtracting
payments made by the defendant himself, as well as any payments made by other wrongdoers.
Consequently, the use of that terminology does not lend support for, let alone necessitate,
interpreting the order to require the defendant to pay the full amount of restitution immediately. 6
Third, the government points to language in the Judgment and Commitment Order
providing for apportionment to the victims “if the defendant makes a partial payment” as
meaning that the sentencing Court contemplated the defendant making a payment for the full
amount of restitution, which the defendant would not choose to do unless required by the order.
Gov’t’s Mem. at 20. Putting aside the obvious fact that the full restitution order was over
$14,000,000 and the defendant’s assets were a small fraction of that amount, the government’s
argument on this point is not convincing for two reasons. First, while the government’s
interpretation of the contingent word “if” focuses on the contingency of whether a partial or full
payment is made, that word could as easily contemplate the contingency of any payment being
made at all. Second, while the government suggests that a defendant on a payment schedule
6
While the Supreme Court recently held that joint and several liability under the federal criminal forfeiture
statute, 18 U.S.C. § 853(a)(1), “is limited to property the defendant himself actually acquired as the result of the
crime,” Honeycutt v. United States, No. 16-142, slip. op. at 11 (U.S. June 5, 2017), that holding does not disturb the
D.C. Circuit’s suggestion that joint and several liability nevertheless applies “to restitution in a criminal case” given
restitution’s goal of “protecting victims,” United States v. Cano-Flores, 796 F.3d 83, 95 (D.C. Cir. 2015). Unlike
§ 853(a), the MVRA specifically contemplates joint and several liability, providing that a “court may make each
defendant liable for payment of the full amount of restitution or may apportion liability among the defendants to
reflect the level of contribution to the victim’s loss and economic circumstances of each defendant.” 18 U.S.C. §
3664(h). The restitution order in this matter reflects that the defendant was made jointly and severally liable for the
full amount of restitution owed by him and his accomplices.
13
would never “logically” pay the full amount of restitution, speculation as to what a defendant
would or would not do to make amends for the harm caused by his crime of conviction is hardly
a basis upon which to interpret the restitution order to order full payment in contravention of the
installment payment schedule clearly ordered therein. Any modicum of support lent by this
language to the government’s argument that the sentencing Court ordered immediate payment of
the full amount of restitution is vanishingly small. 7
* * *
Previously, the government opined that this case raises the “serious question” of
“whether Congress’ unambiguous statement that the full amount of the victim’s losses should be
ordered, without regard to financial ability to pay, should become subservient to the Court’s
discretion to order monthly installment payments.” Gov’t’s Opp’n Def.’s Mot. Quash at 5 n.4.
Yet, by affording courts the discretion to order that the full amount be paid over time and in
installments, with payment schedules to be determined upon review of a defendant’s financial
circumstances, see 18 U.S.C. § 3664(f)(2), Congress avoided serious questions raised under the
Constitution of ordering a criminal defendant to pay an amount of money he simply does not
have. See Williams v. Illinois, 399 U.S. 235, 241 (1970) (holding that under the Equal Protection
7
The government further challenges the defendant’s “standing to press any claim based on the Court’s
payment order because he is not suffering any legally cognizable injury based on the government’s non-enforcement
of that payment order.” Gov’t’s Mem. at 24. According to the government, “[a] misunderstanding about the scope
of the executive’s authority in enforcing the restitution judgment does not confer standing” upon the defendant. Id.
at 25. The defendant counters that he “has a legally protected property interest in his retirement and brokerage
accounts, and faces a concrete, particularized, and imminent injury in having the government garnish those
accounts,” asserting that “[w]hile third parties and victims are sometimes found to lack standing . . . a defendant
undoubtedly has standing based on injuries arising out of the defendant’s own sentence.” Def.’s Resp. at 27–28.
The defendant has the better of the argument. The government essentially recasts its merits arguments, asserting
that because the defendant is wrong on the merits of his motion to quash, he lacks standing to make any argument at
all. For the reasons amply set out in this Court’s decisions on this matter, the defendant did not misunderstand the
government’s authority to enforce the restitution order—quite the contrary. Even if he had, however, and was not
entitled to the relief he sought, the defendant would still have been injured by garnishment of funds in which he
retains a property interest, and, consequently, would have standing to challenge the writ of garnishment. See Steel
Co. v. Citizens for a Better Environ., 523 U.S. 83, 89 (1998) (“It is firmly established in our cases that the absence of
a valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction . . . .”).
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Clause “an indigent criminal defendant may not be imprisoned in default of payment of a fine”
related to an underlying offense). Notably, the government acknowledges this constitutional
concern, citing Williams and relevant statutory authority, and recognizing the defendant’s right to
an installment payment order that does not create “a contempt trap by requiring the [d]efendant
to pay an amount of money he does not have.” Gov’t’s Mem. at 24 & n.5.
In light of that constitutional concern, the MVRA’s requirement that full restitution be
ordered is, by necessity, aspirational in nature. Under the MVRA, while the government is
permitted to seek a restitution payment schedule approaching that aspirational amount, including
by filing a motion to adjust the restitution order in the event of a material change in the
defendant’s economic circumstances, see 18 U.S.C. § 3664(k), the authority to order “the manner
in which, and the schedule according to which, the restitution is to be paid” lies exclusively with
the courts, id. § 3664(f)(2). 8
Consequently, the government has fallen far short of demonstrating the need to correct a
clear error or prevent manifest injustice, and its motion for reconsideration must be denied.
8
Certainly the government is free to argue to a sentencing court that an installment payment schedule is
unnecessary or that payments should be increased in light of the defendant’s assets. As put by the defendant in this
case, given the government’s awareness of the defendant’s property held by Fidelity Investments at the time of
sentencing, “[i]f the Government wanted to recover assets from Mr. Villongco’s retirement and brokerage accounts,
‘it was incumbent on the government to speak up at that time, rather than accepting the Court’s ruling without
objection and then attempting to circumvent it by garnishment.’” Def.’s Resp. at 17 (quoting United States v.
Roush, 452 F. Supp. 2d 676, 682 (N.D. Tex. 2006)).
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IV. CONCLUSION
For the reasons stated above, the government’s Motion for Reconsideration of Court’s
Memorandum Opinion and Order on Defendant’s Motion to Quash Writ of Garnishment, ECF
No. 57, is denied. An appropriate Order accompanies this Memorandum Opinion.
Date: June 13, 2017
__________________________
BERYL A. HOWELL
Chief Judge
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