United States v. Williams

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS August 7, 2018
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
UNITED STATES OF AMERICA,
Plaintiff–Appellee,
v. No. 17-6226
RICKY C. WILLIAMS,
Defendant–Appellant.
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USAA FEDERAL SAVINGS BANK, and
its successors or assigns,
Garnishee.
_________________________________
Appeal from the United States District Court
for the Western District of Oklahoma
(D.C. No. 5:15-CR-00196-M-1)
_________________________________
Submitted on the briefs:*
Ricky C. Williams, pro se.
Mark A. Yancey, United States Attorney, and Kay Sewell, Assistant United States
Attorney, Oklahoma City, Oklahoma, for Plaintiff–Appellee.
_________________________________
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2)(C); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
Before PHILLIPS, McKAY, and O’BRIEN, Circuit Judges.
_________________________________
McKAY, Circuit Judge.
_________________________________
In February 2016, Defendant Ricky Williams pled guilty to tax fraud relating
to his preparation of federal income-tax returns for third-party clients for the 2010
and 2011 tax years. In his plea agreement, he “agree[d] to pay restitution by making
an immediate payment in full on or before the date set for sentencing” and “agree[d]
to make payments as ordered by the Court” if he lacked the resources to make an
immediate payment in full. (R. Vol. I at 27.) After pleading guilty, he was initially
released on bond pending sentencing. However, his release was revoked after the
court discovered that he had been violating the terms of his release by again engaging
in tax preparation activities for someone other than himself or his spouse. The
probation officer who prepared his Presentence Investigation Report “determined that
the defendant lied about his income, assets, and liabilities” to the probation officer.
(R. Vol. II at 33.) Among other things, the probation officer discovered several
undisclosed financial transactions that Defendant had conducted with someone else’s
social security number; for instance, Defendant opened a credit card account using
another person’s Social Security number in March 2016, shortly after being released
on bond. In discussing Defendant’s dishonest post-plea conduct, the probation
officer noted that Defendant had a bank “account containing approximately $37,000
that had been frozen due to the IRS investigation.” (Id. at 18.) The probation officer
reported that Defendant had contacted the bank about a month after he entered his
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guilty plea and “asked the bank to unfreeze the account by falsely representing to the
bank that he was no longer under investigation.” (Id.) The bank contacted the IRS
and learned that Defendant had pled guilty to the charge. The bank then “advised the
IRS they would keep the account frozen.” (Id.)
The district court sentenced Defendant to thirty months of imprisonment and
ordered him to pay $240,361 in restitution to the IRS. Defendant was also ordered to
pay a $100 special assessment. The court’s Schedule of Payments provided in
pertinent part:
A Lump sum payment of $240,461.00 ($240,361.00/restitution;
$100.00/special assessment) due immediately, balance due . . . in
accordance with . . . F below . . . .
F Special instructions regarding the payment of criminal monetary
penalties:
If restitution is not paid immediately, the defendant shall make payments of
10% of the defendant’s quarterly earnings during the term of imprisonment;
and
If restitution is not paid in full at the time of release from confinement, the
defendant shall make payments the greater of $100.00 per month or not less
than 10% of the defendant’s gross monthly income, as directed by the
probation officer. . . .
(R. Vol. I at 57.)
A few months after Defendant’s sentencing, the government filed an
application for post-judgment writ of garnishment against the frozen bank account.
The bank objected on the grounds that the account was subject to “a prior internal
USAA Federal Savings Bank hold from its Fraud Department for the amount of
$37,542.02.” (Id. at 66.) The bank stated: “This account has been under this hold
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from May 29, 2012 and continues at the present time. Therefore, it is not subject to
this garnishment.” (Id.)
The magistrate judge concluded that there was no need to address the bank’s
objection because the government could not seek garnishment in any event;
according to the magistrate judge’s interpretation of the Schedule of Payments, if
Defendant did not immediately pay restitution, then the government could not collect
any restitution above the 10% of quarterly earnings provided for in the Schedule.
The magistrate judge thus recommended denial of the government’s application for
garnishment.
The district court declined to accept the magistrate judge’s recommendation.
The court held that because its sentencing order made a lump-sum payment of the
total amount “due immediately,” “the total amount of restitution is currently due and
. . . the government can enforce the restitution order by way of the instant application
for post-judgment writ of garnishment.” (Id. at 132.) For support, the district court
cited to United States v. Behrens, 656 F. App’x 789, 790 (8th Cir. 2016), and United
States v. Shusterman, 331 F. App’x 994, 996–97 (3d Cir. 2009), both of which held
that a payment schedule set forth in the judgment did not preclude garnishment as an
additional means to collect the restitution judgment where the judgment specified
that the amount owed was due in full immediately. The court thus granted the
government’s application for a writ of garnishment. In so doing, the district court did
not address the bank’s objection to the writ of garnishment. Defendant then filed this
appeal.
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As the magistrate judge’s and district court’s contrasting holdings show, the
restitution order in this case is subject to two different interpretations. First, the
order could be interpreted as the magistrate judge interpreted it, with the schedule of
payments in Provision F effectively and impliedly modifying Provision A’s
requirement of an immediate lump-sum payment of $240,461, making this provision
null and void if it was not immediately and fully complied with. Second, the order
could be interpreted as the district court interpreted it, with the schedule of payments
in Provision F providing a back-up schedule for the payment of whatever amounts
are not paid in accordance with Provision A, but with Provision A’s requirement of
immediate payment of the total sum of restitution remaining in effect and controlling
to the extent that funds are available to satisfy this payment requirement.
“We give deference to the district court’s interpretation of its own order.”
Auto-Owners Ins. Co. v. Summit Park Townhome Ass’n, 886 F.3d 863, 872 (10th Cir.
2018). We are persuaded that the district court’s interpretation of its own prior
restitution order in this case is reasonable, and we accordingly defer to this
interpretation. Therefore, like the district court, we interpret the restitution order to
mean that the total amount of restitution remains currently due under Provision A,
with Provision F providing only a secondary, back-up system for payments that
cannot be made now in accordance with Provision A.
Under this interpretation of the restitution order, we see no error in the court’s
conclusion that the government was entitled to garnish Defendant’s bank account to
obtain partial payment of the amount currently due in restitution. Garnishment is
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improper where the government is seeking payment of an amount that is not currently
due. In United States v. Martinez, for instance, we held that the government could
not garnish a defendant’s retirement accounts to “enforce payments that are not yet
due under [the defendant’s] court-ordered payment schedule.” 812 F.3d 1200, 1201
(10th Cir. 2015). But the reason the payments were not yet due in that case is that
the district court had expressly declined to make the total amount of restitution due in
full immediately, but had instead only required “$300 immediately,” with the
“balance due” in accordance with the schedule of payments. Id. at 1203–04. Courts
have almost uniformly recognized a “crucial distinction” between cases like
Martinez, in which the court orders the defendant to pay only through a payment
schedule with no requirement of immediate payment in full, and cases like Behrens
and Shusterman, in which the judgment specifies that the amount owed is due in full
on the date of judgment, regardless of whether the judgment includes a back-up
schedule of payments to cover any unpaid amounts. See United States v. Daniels,
2017 WL 1538457, at *3 (N.D. Okla. 2017); see also, e.g., United States v. Kay,
2017 WL 875784 (D. Minn. 2017); but see United States v. Villongco, 2016 WL
3747508 (D.D.C. 2016). Defendant’s “debt is payable in full now, as [he] agreed.”
United States v. Fariduddin, 469 F.3d 1111, 1113 (7th Cir. 2006).
We agree with the courts that have recognized this distinction and thus
AFFIRM the district court’s conclusion that the government may seek garnishment
of Defendant’s bank account because the total amount of restitution was ordered “due
immediately” at the time of judgment. We note, however, that the district court
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failed to consider the bank’s objection to the writ of garnishment, and we suggest that
the district court address the bank’s objection before ordering the release of funds to
the government.
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