United States v. Fuentes

United States Court of Appeals,
Eleventh Circuit.
No. 94-4916.
UNITED STATES of America, Plaintiff-Appellee,
v.
Jose FUENTES, Defendant-Appellant.
March 25, 1997.
Appeal from the United States District Court for the Southern
District of Florida. (No. 93-256-CR-SM), Stanley Marcus, District
Judge.
Before TJOFLAT, Circuit Judge, and RONEY and PHILLIPS*, Senior
Circuit Judges.
TJOFLAT, Circuit Judge:
In this appeal, Jose Fuentes challenges the sentence he
received in the district court, following a plea of guilty, for
conspiring to run a "chop shop" operation.1 Pursuant to this
operation, Fuentes had stolen several Porsche automobiles, had
taken them to different locations where he removed many of their
parts, and after removing or altering the parts' vehicle
identification numbers ("VINs"), had sold the parts to customers
throughout the country. Prior to this federal prosecution, Fuentes
had been convicted in state court for some of this activity, and at
the time of his conviction in the district court, he was serving
two concurrent state sentences. The district court sentenced him
*
Honorable J. Dickson Phillips, Jr., Senior U.S. Circuit Judge
for the Fourth Circuit, sitting by designation.
1
A "chop shop" operation involves dismantling stolen
automobiles and selling their parts. See infra note 4 (citing
statutes prohibiting this conduct). Hereinafter, we refer to this
criminal activity as "chopping" automobiles.
to a term of sixty months imprisonment consecutive to his two state
sentences and ordered him to pay restitution.
In this appeal, Fuentes challenges the court's determination
under the federal sentencing guidelines that the federal sentence
should run consecutively to the state sentences. He also claims
that the order of restitution was erroneous in light of his
financial condition. We agree with him on both points and
accordingly vacate his sentence and remand for resentencing.
I.
Fuentes has a long criminal history.2 From his eighteenth
birthday in 1976 until 1984, he was arrested at least seven times
and convicted five times for various crimes, including battery,
carrying a concealed firearm, drug possession, and grand theft.
Beginning in May 1985, his criminal endeavors focused on
stealing Porsche automobiles and either selling them intact or
stripping them and selling their parts. From May 1985 until
January 1986, he stole or attempted to steal at least four
different Porsches. He was arrested and convicted of crimes
relating to this activity in four separate prosecutions in the
Circuit Court for Dade County, Florida. These cases were
consolidated for sentencing, and he was sentenced to prison for
seven years. He was released when these sentences expired in March
2
We derive the following factual account from the presentence
report ("PSR") prepared by the district court's probation office.
Neither Fuentes nor the Government objected to the factual findings
contained in the PSR, and the sentencing court therefore adopted
them as its own findings of fact. See Fed.R.Crim.P. 32(b)(6)(D).
2
1988.
Far from being rehabilitated, Fuentes returned to stealing
Porsches and, over time, increased his efforts to make a living
running chop shops in South Florida. In August 1989, he stole a
Porsche from a shopping center parking lot, brought it to a chop
shop, stripped it, removed the VINs, and sold the parts. In June
1990, he chopped another Porsche stolen from the same location.
His chop-shop operations hit stride in 1991. In February, he stole
a Porsche from a residence and chopped it in a friend's shed. In
March and April, he sold parts from three different Porsches to two
friends. The VINs had been ground off, and further details about
these three thefts are unknown. In the summer of 1991, he rented
two warehouses from which to operate his illegal enterprise.
During this time, he stole at least twelve Porsches from
locations—frequently, but not exclusively, doctor's offices and
hospitals—in Miami, Fort Lauderdale, and West Palm Beach. He
brought the Porsches to one of the two warehouses and chopped them
there. He stole one in June, one in July, four in August, three in
September, one in October, and two on unknown dates.
Fuentes sold the stolen parts to bona fide purchasers and to
co-conspirators who were aware the parts were stolen. He
distributed flyers listing available parts to repair shops and
parts stores in the Miami area. He also marketed the parts
nationwide, advertising in the classified section of Hemmings Motor
News. He included his beeper number in the flyers and
advertisements.
3
At some point, both state and federal law enforcement
officials became aware of Fuentes' activities. The Metro-Dade
Police Department arrested him in August 1990 for the two thefts in
1989 and 1990, and they arrested him again in October 1991 for the
February 1991 theft.3 After each arrest, he was charged by
information in the Circuit Court for Dade County, Florida. After
Fuentes pled nolo contendre in both state cases, that court
sentenced him on March 11, 1992, to a total term of imprisonment of
twelve years.
On June 4, 1993, a grand jury for the Southern District of
Florida indicted Fuentes for his chop shop activities. On April
29, 1994, it returned a superseding indictment, which is now before
us. The indictment contained seven counts. Count one charged
Fuentes with conspiracy, in violation of 18 U.S.C. § 371, to alter
VINs in violation of 18 U.S.C. § 511(a) and to possess with intent
to dispose of motor vehicles and parts with altered VINs in
violation of 18 U.S.C. § 2321.4 The grand jury alleged that this
conspiracy lasted "[f]rom an unknown date until on or about October
3
Hereinafter we refer to the three Porsches involved in the
state cases as the "state Porsches."
4
Section 371 makes it a crime for "two or more persons [to]
conspire ... to commit any offense against the United States." 18
U.S.C. § 371 (1994). Section 511(a) prohibits "knowingly
remov[ing], obliterat[ing], tamper[ing] with, or alter[ing] an
identification number for a motor vehicle or motor vehicle part."
18 U.S.C. § 511(a)(1) (1994). Section 2321 provides for punishment
for anyone who "buys, receives, possesses, or obtains control of,
with intent to sell or otherwise dispose of, a motor vehicle or
motor vehicle part, knowing that an identification number for such
motor vehicle or part has been removed, obliterated, tampered with,
or altered." 18 U.S.C. § 2321(a) (1994).
4
21, 1991." Counts two through seven charged Fuentes with
substantive violations: five counts under section 2321 and one
count under section 511(a).
Fuentes entered into a written plea agreement and, on June 13,
1994, pleaded guilty to count one, the conspiracy count. The
district court accepted the guilty plea and, pursuant to the plea
agreement, dismissed the remaining six substantive counts of the
indictment.
The court then directed its probation office to prepare a PSR.
In describing the offense conduct underlying this conviction, the
PSR accounted for all the stolen Porsches described above, except
the three state Porsches.5 On August 29, 1994, the court sentenced
Fuentes to a term of imprisonment for sixty months (the maximum
prison sentence authorized for the conspiracy offense), to run
consecutively to the two undischarged state sentences, and three
years of supervised release. The court also ordered Fuentes to
make restitution in the amount of $357,281. After sentencing,
Fuentes was returned to the custody of the State of Florida to
serve the remainder of his undischarged state sentences.
Fuentes now appeals from his sentence claiming that under the
sentencing guidelines his sentence should run concurrently to the
undischarged state sentences and that the order of restitution was
improper because the district court "found as fact that Fuentes is
indigent and not capable of making restitution in the full amount."
5
Hereinafter we refer to the Porsches involved in the instant
prosecution as the "federal Porsches."
5
We agree and therefore vacate his sentence. We address the merits
of his arguments in turn.
II.
Fuentes first claims that the district court erred in
ordering that his sentence run consecutively to his undischarged
state sentences. The Sentencing Reform Act of 1984 grants district
courts discretion to order that a sentence run concurrently or
consecutively to an undischarged term of imprisonment. See 18
U.S.C. § 3584(a) (1994).6 In exercising this discretion, the court
6
Before the enactment of the Sentencing Reform Act of 1984, it
was widely held that a district court lacked the authority to order
a federal sentence to run concurrently with an undischarged state
sentence. See, e.g., Meagher v. Clark, 943 F.2d 1277, 1283 (11th
Cir.1991) ("[F]ederal jail time [may] be computed only to include
such time that the prisoner has served in confinement for the
federal offense involved.").
This rule was based on now-repealed 18 U.S.C. § 3568,
which provided that a "sentence of imprisonment ... shall
commence to run from the date on which [the prisoner] is
received at the penitentiary, reformatory, or jail for service
of such sentence.... No sentence shall prescribe any other
method of computing the term." 18 U.S.C. § 3568 (1982)
(emphasis added); see Meagher, 943 F.2d at 1282 ("This court,
and others, have uniformly interpreted the language of Section
3568 and its predecessors as precluding the calculation of the
time served on a federal charge from any date other than that
on which the defendant was delivered to federal prison
officials."); see also United States v. Segal, 549 F.2d 1293,
1301 (9th Cir.) ("[T]he district judge has no authority to
impose a federal sentence concurrent with a state sentence
because a federal term cannot begin until a prisoner has been
received by federal authorities.") (citing 18 U.S.C. § 3568),
cert. denied, 431 U.S. 919, 97 S. Ct. 2187, 53 L. Ed. 2d 231
(1977).
The Sentencing Reform Act of 1984, which took effect
after the defendant in Meagher was convicted, repealed this
longstanding rule. Section 3568 was replaced with new §§ 3584
and 3585. While new § 3585 also provides that a federal
sentence commences when the defendant is received into federal
custody, see 18 U.S.C. § 3585(a) (1994), it is clear that
6
must consider the factors enumerated in 18 U.S.C. § 3553(a) (1994).
18 U.S.C. § 3584(b). These factors, which the court considers
whenever imposing a sentence, include the sentencing guidelines.
See 18 U.S.C. § 3553(a)(4)(A), (5). Pursuant to 28 U.S.C. §
994(a)(1)(D), the United States Sentencing Commission promulgated
section 5G1.3 of the sentencing guidelines to guide a district
court in determining whether a sentence should run concurrently or
consecutively to an undischarged term of imprisonment. See United
States Sentencing Commission, Guidelines Manual, § 5G1.3 (Nov. 1,
Congress intended to authorize a district court to order that
a federal sentence run concurrently to a state sentence.
The clause prohibiting "any other method of computing the
term" was omitted from new § 3585. Furthermore, new § 3584
specifically authorizes a federal sentence to run concurrently
to "an undischarged term of imprisonment." 18 U.S.C. §
3584(a). The legislative history for both sections makes
Congress' intent clear. See S.Rep. No. 98-225, at 129 (1984)
("The Committee ... does not intend that [new § 3585] be read
to bar concurrent Federal and State sentences for a defendant
who is serving a State sentence at the time he receives a
Federal sentence."), reprinted in 1984 U.S.C.C.A.N. 3182,
3312; id. at 126-27 & nn. 310, 314 (commenting that new §
3584(a) "changes the law that now applies to a person
sentenced for a Federal offense who is already serving a term
of imprisonment for a State offense" and noting that the new
section is intended to overrule Segal and similar cases),
reprinted in 1984 U.S.C.C.A.N. at 3309-10.
That district courts now have authority to impose
sentences concurrent to undischarged state sentences has been
explicitly recognized by the United States Sentencing
Commission, see Revisions to the Sentencing Guidelines for the
United States Courts, 60 Fed.Reg. 62,289, 62,291-92 (1995),
and by other circuit courts of appeals, see, e.g., United
States v. Terrovona, 785 F.2d 767, 770 (9th Cir.), cert.
denied, 476 U.S. 1186, 106 S. Ct. 2926, 91 L. Ed. 2d 553 (1986),
and is expressly acknowledged by this court today.
7
1993).7
The district court's determination that Fuentes' sentence
should run consecutively to his undischarged state sentences
resulted from its application of this guideline to the facts. We
therefore review this determination de novo. See United States v.
Johnson, 87 F.3d 1257, 1258 (11th Cir.1996).
A.
Section 5G1.3 contains three different subsections. The first
addresses sentencing for an offense committed while the defendant
was serving the undischarged term of imprisonment; the second
provides the rule for sentences not covered by the first subsection
where "the undischarged term of imprisonment resulted from
offense(s) that have been fully taken into account in the
determination of the offense level for the instant offense"; and
the third provides a policy framework for "any other case."8 It is
7
When reviewing a sentence on appeal, we generally apply the
guidelines in effect on the date the appellant was sentenced.
United States v. Shields, 87 F.3d 1194, 1196 n. 2 (11th Cir.1996)
(en banc). However, subsequent amendments that clarify a
guideline, rather than make substantive changes, should be
considered on appeal regardless of the date of sentencing. United
States v. Stinson, 30 F.3d 121, 122 (11th Cir.1994).
Because Fuentes was sentenced on August 29, 1994, we
apply the guidelines from the 1993 manual. We note that the
relevant subsection, § 5G1.3(b), has not been amended since
1993. While § 5G1.3(c) has been amended, that subsection does
not apply in the instant case, as we discuss infra note 9.
The commentary to § 5G1.3 has been amended, and because
we construe these commentary changes as clarifying amendments,
we consider the most recent version. Unless otherwise noted,
all citations to the guidelines are to the 1993 version.
8
The full text of § 5G1.3 at the time of appellant's
sentencing stated:
8
undisputed that Fuentes committed the instant offense before the
undischarged state sentences were imposed, thus the first
subsection clearly does not apply. Fuentes contends that the
second subsection, section 5G1.3(b), controls the instant case,
while the Government argues that this subsection does not apply and
that the third subsection governs.9
Section 5G1.3(b) dictates that a federal sentence run
concurrently to an "undischarged term of imprisonment [that]
resulted from offense(s) that have been fully taken into account in
the determination of the offense level for the instant offense."
According to the sentencing guidelines' commentary, this guideline
(a) If the instant offense was committed while the
defendant was serving a term of imprisonment (including
work release, furlough, or escape status) or after
sentencing for, but before commencing service of, such
term of imprisonment, the sentence for the instant
offense shall be imposed to run consecutively to the
undischarged term of imprisonment.
(b) If subsection (a) does not apply, and the
undischarged term of imprisonment resulted from
offense(s) that have been fully taken into account in the
determination of the offense level for the instant
offense, the sentence for the instant offense shall be
imposed to run concurrently to the undischarged term of
imprisonment.
(c) (Policy Statement) In any other case, the sentence
for the instant offense shall be imposed to run
consecutively to the prior undischarged term of
imprisonment to the extent necessary to achieve a
reasonable incremental punishment for the instant
offense.
9
As a fall back argument, Fuentes also argues that even if §
5G1.3(c) controls, that subsection requires a concurrent sentence.
The Government argues that § 5G1.3(c) granted the district court
discretion to order the sentence to run consecutively. Because we
find that § 5G1.3(b) applies, we need not address the proper
interpretation of § 5G1.3(c).
9
applies when the undischarged term was imposed for "conduct taken
into account in determining the guideline range for the instant
offense." U.S.S.G. § 5G1.3, comment. (n.2) (Nov. 1, 1995).
To illustrate how this guideline is to be applied, the
commentary provides the example of a defendant convicted for
selling thirty grams of cocaine. Id. At the time of sentencing,
the defendant in the example has served six months of a nine-month
state sentence imposed for the sale of fifteen grams of cocaine.
Id. In calculating the defendant's guideline range, the example
posits that the fifteen grams of cocaine underlying the state
sentence are considered relevant conduct pursuant to U.S.S.G. §
1B1.3,10 and thus the defendant's offense level is calculated based
10
Section 1B1.3(a) provides that when calculating a defendant's
total offense level, the district court should consider the
following:
(1) (A) all acts and omissions committed, aided, abetted,
counseled, commanded, induced, procured, or willfully
caused by the defendant; and
(B) in the case of a jointly undertaken criminal
activity (a criminal plan, scheme, endeavor, or
enterprise undertaken by the defendant in concert with
others, whether or not charged as a conspiracy), all
reasonably foreseeable acts and omissions of others in
furtherance of the jointly undertaken criminal activity,
that occurred during the commission of the offense of
conviction, in preparation for that offense, or in the
course of attempting to avoid detection or responsibility
for that offense;
(2) solely with respect to offenses of a character for
which § 3D1.2(d) would require grouping of multiple
counts, all acts and omissions described in subdivisions
(1)(A) and (1)(B) above that were part of the same course
of conduct or common scheme or plan as the offense of
conviction;
10
on forty-five grams of cocaine. Id. The sentencing court in the
example calculates the guideline range to be from ten to sixteen
months and determines that the appropriate sentence for the federal
conviction is thirteen months. Id. The commentary states that
proper application of § 5G1.3(b) results in a seven-month sentence
(the thirteen months determined by the court minus the six months
already served on the state sentence) to run concurrently with the
remaining three months of the state sentence.11 Id.
From the guidelines, commentary, and the above example, we
conclude that whenever a defendant is subject to an undischarged
sentence imposed for criminal activity that section 1B1.3 treats as
relevant conduct, section 5G1.3(b) directs the court to impose a
sentence that runs concurrently to the undischarged sentence.
B.
Fuentes argues that the conduct underlying his undischarged
(3) all harm that resulted from the acts and omissions
specified in subsections (a)(1) and (a)(2) above, and all
harm that was the object of such acts and omissions; and
(4) any other information specified in the applicable
guideline.
U.S.S.G. § 1B1.3(a). We discuss this section in greater
detail infra part II.C.
11
The commentary also suggests,
For clarity, the court should note on the Judgment in a
Criminal Case Order that the sentence imposed is not a
departure from the guideline range because the defendant
has been credited for guideline purposes under § 5G1.3(b)
with six months served in state custody that will not be
credited to the federal sentence under 18 U.S.C. §
3585(b).
U.S.S.G. § 5G1.3, comment. (n.2) (Nov. 1, 1995).
11
state sentences (that is, the chopping of the state Porsches) is
relevant conduct under section 1B1.3. The Government counters by
correctly noting that it did not seek to include the chopping of
the state Porsches as relevant conduct when it provided the
probation office with information for the PSR. Pursuant to U.S.S.G.
§ 2F1.1(b)(1), the probation office calculated Fuentes' offense
level in part on the basis of the value of the Porsches he had
chopped. Because the Government gave the probation office no
indication that the chopping of the state Porsches should be
treated as relevant conduct, the probation office did not include
the value of the state Porsches in calculating Fuentes' offense
level. Thus, the Government contends, section 5G1.3(b) does not
apply because the conduct underlying the state offenses was not
"fully taken into account in the determination of the offense level
for the instant offense." In fact, the probation office did not
take that conduct into account at all in determining Fuentes'
offense level.
The appellant responds to this contention by arguing that his
chopping of the state Porsches was required to be treated as
relevant conduct. He claims that the Government and probation
officer intentionally omitted the state Porsches from the
calculations to avoid application of section 5G1.3(b). He
correctly notes that whether or not the state Porsches were
included had absolutely no effect on the sentencing range provided
by the guidelines.
Although including the state Porsches would have increased his
12
base offense level, the sentencing range applicable without this
increase was 100-125 months (offense level, after adjustments not
relevant here, of 24 with a criminal history category of VI).
However, the maximum sentence authorized for the instant offense
was only 60 months, see 18 U.S.C. § 371, well below the range
provided by the sentencing guidelines table. Thus, with or without
the state Porsches, the guideline sentence was 60 months. See
U.S.S.G. § 5G1.1(a) ("Where the statutorily authorized maximum
sentence is less than the minimum of the applicable guideline
range, the statutorily authorized maximum sentence shall be the
guideline sentence.").
The essence of Fuentes' argument is that the "fully taken into
account" requirement of section 5G1.3(b) is satisfied when the
undischarged term resulted from an offense that section 1B1.3
requires to be included as relevant conduct, regardless of whether
the sentencing court actually took that conduct into account. We
agree.
The purpose of both sections 5G1.3(b) and 1B1.3 is to provide
one, uniform punishment for the same criminal activity. We have
noted that the guidelines provide for punishment not just for the
"offense of conviction," but for all "offense conduct," which
"refers to the totality of the criminal transaction in which the
defendant participated and which gave rise to his indictment,
without regard to the particular crimes charged in the indictment."
United States v. Scroggins, 880 F.2d 1204, 1209 n. 12 (11th
Cir.1989), cert. denied, 494 U.S. 1083, 110 S. Ct. 1816, 108 L. Ed. 2d
13
946 (1990); see also United States v. Flowers, 13 F.3d 395, 397
(11th Cir.1994) (per curiam) ("The intended purpose of section
5G1.3(b) is to effectively "credit[ ] for guidelines purposes'
defendants who have already served time—generally in another
jurisdiction—for the same conduct or course of conduct.") (quoting
U.S.S.G. § 5G1.3, comment. (n.2)).
This principle underlies the Supreme Court's recent opinion in
Witte v. United States, --- U.S. ----, 115 S. Ct. 2199, 132 L. Ed. 2d
351 (1995), in which the Court held that consideration of prior
convictions as relevant conduct in calculating a guideline sentence
does not violate the Double Jeopardy Clause. The Court stated:
[Section] 5G1.3 of the Guidelines attempts to achieve some
coordination of sentences imposed in ... situations [where a
defendant is prosecuted in more than one jurisdiction for the
same criminal course of conduct] with an eye toward having
such punishments approximate the total penalty that would have
been imposed had the sentences for the different offenses been
imposed at the same time (i.e., had all of the offenses been
prosecuted in a single proceeding).
Because the concept of relevant conduct under the
Guidelines is reciprocal, § 5G1.3 operates to mitigate the
possibility that the fortuity of two separate prosecutions
will grossly increase a defendant's sentence.... Significant
safeguards therefore protect [a defendant] against having the
length of his sentence multiplied by duplicative
considerations of the same criminal conduct....
Id. at ---- - ----, 115 S. Ct. at 2208-09 (citations omitted); see
also id. at ----, 115 S.Ct. at 2213 (Stevens, J., concurring in
part, dissenting in part) ("The Guidelines will generally ensure
that the total sentence received in ... two proceedings [involving
prosecutions for the same course of conduct] is the same sentence
that would have been received had both offenses been brought in the
same proceeding.").
14
Assuming for the moment that the district court could have
considered the chopping of the state Porsches as relevant conduct
under section 1B1.3,12 we conclude that the Government deliberately
refrained from portraying Fuentes' chopping of the state Porsches
as relevant conduct for one reason—to manipulate the application of
the guidelines so that his federal sentence would run consecutively
to the state sentences. That inclusion of the state Porsches would
have had absolutely no effect on the length of the guideline
sentence makes this conclusion all the more inescapable.
We find such manipulation by the Government contrary to both
the letter and spirit of the guidelines. First, section 1B1.3
states that a defendant's offense level "shall be determined on the
basis of" all relevant conduct. U.S.S.G. § 1B1.3(a) (emphasis
added). Thus, intentionally to refrain from considering relevant
conduct violates the command of the sentencing guidelines. In a
similar context, we suggested that a district court must consider
all relevant conduct—even if the defendant entered into a plea
bargain suggesting that such conduct would not be considered at
sentencing. See Scroggins, 880 F.2d at 1214 ("Nor did the
Government's agreement to drop count one of appellant's indictment
somehow impliedly preclude the district court from considering
evidence [that the defendant committed the offense charged in the
dropped count]—under guideline sentencing, counsel cannot bind the
sentencing discretion of the district judge....").
Second, the guidelines were written to prevent the Government
12
We turn to this inquiry in part II.C, infra.
15
from manipulating indictments and prosecutions to increase
artificially a defendant's sentence or sentences for the same
criminal conduct. The guidelines state that the Sentencing
Commission "has written its rules for the treatment of multicount
convictions with an eye toward eliminating unfair treatment that
might flow from count manipulation." U.S.S.G. Ch. 1, Pt. A, intr.
comment. § 4(a), p.s. The guideline sentencing scheme is designed
to avoid "the potential [that] prosecutors [will] influence
sentences by increasing or decreasing the number of counts in an
indictment." Id. Although these comments are directed at count
manipulation in a single prosecution, they are equally applicable
to manipulation in successive state and federal prosecutions. See
Scroggins, 880 F.2d at 1214 (indicating that guidelines do not
allow prosecutor to "cloak the facts to reach a result contrary to
the guidelines' mandate").
Moreover, interpreting section 5G1.3(b) to apply when the
undischarged sentence resulted from conduct that was required to be
taken into account in determining the defendant's sentence, even if
it was not taken into account, is in accord with the sentencing
scheme embraced by the guidelines. Guideline sentencing represents
a compromise between two competing paradigms of sentencing—"real
offense" sentencing and "charge offense" sentencing. See generally
Stephen Breyer, The Federal Sentencing Guidelines and the Key
Compromises upon Which They Rest, 17 Hofstra L.Rev. 1, 8-12 (1988)
(describing this compromise as one between "procedural" and
"substantive" justice); see also Scroggins, 880 F.2d at 1212-13
16
(summarizing the dichotomy between the two systems). Under a real
offense system, the sentencing judge considers all the defendant's
conduct surrounding the offense in fashioning a sentence. A charge
offense system, on other hand, bases the defendant's sentence only
on the charged offense itself.
The difference between the systems is best understood by
considering an example. Posit a defendant convicted of robbery.
Under a real offense system, the court will fashion a sentence
based on the totality of the defendant's conduct in committing the
offense. Thus, a higher sentence will be imposed if the defendant
committed the offense in a violent manner, if the robbery was but
one episode in a spree of robberies on the same day in the same
city, or if the defendant stole an inordinately large amount of
money. Conversely, a lower sentence would be imposed if the
defendant committed the offense without violence, if the robbery
was an isolated incident, or if only a de minimis amount was
stolen. In other words, the sentence will be tailored to the
circumstances of the crime. The facts to be considered by the
court need not be included in the charge for which the defendant
was convicted.
Under a charge offense system, however, the defendant will
only be sentenced based on the charged offense itself; the
sentence will only reflect the facts essential to the offense of
conviction. In the example, the defendant's sentence would be the
same regardless of how he carried out the robbery.
The sentencing guidelines are best described as "closer to a
17
charge system[, but] contain[ing] a significant number of real
offense elements." U.S.S.G. Ch. 1, Pt. A, intr. comment. § 4(a),
p.s.; see also Scroggins, 880 F.2d at 1212-13. As Justice Breyer
aptly noted before ascending to the High Court, guideline
sentencing is a charge system in that it "looks to the offense
charged to secure the "base offense level.' " Breyer, supra, at
11-12. However, the system draws from the real offense system
because "[i]t then modifies that level in light of several "real'
aggravating or mitigating factors (listed under each separate
crime), several "real' general adjustments ("role in the offense,'
for example) and several "real' characteristics of the offender,
related to past record." Id. at 12; see also Scroggins, 880 F.2d
at 1213.
The guidelines thus provide a method for uniformly calculating
a sentence based, to the extent practicable, on the totality of a
defendant's conduct. The Sentencing Commission decided to
incorporate elements of real offense sentencing when a defendant
faces multiple counts or multiple prosecutions "[i]n order to limit
the significance of the formal charging decision and to prevent
multiple punishment for substantially identical offense conduct."
U.S.S.G. Ch. 3, Pt. D, intr. comment. The guidelines state,
"Convictions on multiple counts do not result in a sentence
enhancement unless they represent additional conduct that is not
otherwise accounted for by the guidelines." Id.
We find that this real offense sentencing approach should
apply with equal force to multiple convictions in different
18
jurisdictions. Consequently, when a defendant subject to an
undischarged state sentence is subsequently sentenced in federal
court, the defendant's aggregate time served (that is, time served
in state prison plus time served in federal prison) should not
exceed the guideline sentence—assuming no upward departure is
appropriate—unless the state sentence "represent[s] additional
conduct that is not otherwise accounted for by the guidelines" in
determining the federal sentence.
We therefore conclude that when a defendant is serving an
undischarged sentence resulting from conduct that is required to be
considered in a subsequent sentencing proceeding as relevant
conduct pursuant to section 1B1.3, section 5G1.3(b) provides that
the subsequent sentence should run concurrently to the undischarged
sentence. This conclusion does not end our inquiry, however. We
still must determine whether section 1B1.3 requires that Fuentes'
chopping of the state Porsches be considered relevant conduct in
determining his sentence.13
C.
To determine whether section 1B1.3 requires that Fuentes'
chopping of the state Porsches be considered relevant conduct, we
follow a somewhat complex chain of cross-references in the
guidelines. We begin with section 1B1.3(a), which defines four
13
We note that Fuentes did not object to the sentencing court's
(or the PSR's) failure to include the state Porsches as relevant
conduct in calculating his offense level. We find that this
failure to object should not prejudice his argument on appeal
regarding the application of § 5G1.3. By timely objecting to the
sentencing court's (and the PSR's) § 5G1.3 determination, he
adequately preserved this issue for appeal.
19
categories of relevant conduct.14 One category, defined by section
1B1.3(a)(2), applies when sentencing a defendant for an offense
covered by section 3D1.2(d).15 Section 3D1.2(d) covers a conspiracy
"if the offense that is the object of the conspiracy ... is [also]
covered under" that subsection. U.S.S.G. § 3D1.2, comment. (n.6).
Fuentes was sentenced for conspiracy to violate 18 U.S.C. §§ 511(a)
and 2321, both of which are covered by section 3D1.2(d).16 Section
1B1.3(a)(2) therefore defines relevant conduct for determining
Fuentes' sentence.
Section 1B1.3(a)(2) includes as relevant conduct, inter alia,
all acts committed by the defendant "that were part of the same
course of conduct or common scheme or plan as the offense of
conviction." Our complicated journey through the guidelines
therefore reveals that the crucial question in this appeal is
whether Fuentes' conduct in chopping the state Porsches is "part of
the same course of conduct or common scheme or plan as" the instant
federal offense—chopping the federal Porsches. Fortunately, this
question is easily resolved.
"Same course of conduct" and "common scheme or plan" are
14
This subsection is quoted in note 10, supra.
15
Section 3D1.2(d), which aggregates closely related counts
when sentencing a defendant on multiple counts, covers a long list
of Chapter Two guidelines, each of which in turn governs the
calculation of the base offense level for specific federal
offenses. In other words, a particular offense is covered by §
3D1.2(d) if the offense level for that offense is governed by a
guideline listed in § 3D1.2(d).
16
The offense levels for these substantive offenses are
governed by U.S.S.G. § 2B6.1. See U.S.S.G.App. A. Section 2B6.1 is
one of the guidelines covered by § 3D1.2(d).
20
terms of art defined in the commentary to section 1B1.3. Two
offenses form the same course of conduct if "they are sufficiently
connected or related to each other as to warrant the conclusion
that they are part of a single episode, spree, or ongoing series of
offenses." U.S.S.G. § 1B1.3, comment. (n.9(B)) (Nov. 1, 1995)
(emphasis added). In evaluating whether two or more offenses meet
this test, the sentencing court should consider "the degree of
similarity of the offenses, the regularity (repetitions) of the
offenses, and the time interval between the offenses." Id.; see
also United States v. Maxwell, 34 F.3d 1006, 1011 (11th Cir.1994)
(concluding—before cited commentary was added to guidelines—that
court should consider "similarity, regularity, and temporal
proximity" of offenses).
We believe that examination of each of these factors firmly
establishes that the conduct underlying both the state and federal
offenses constitutes the same course of conduct. Both offenses
were very similar, if not identical. The Government conceded as
much at the sentencing hearing, noting that the state and federal
"charges may involve similar criminal activity, but it's not the
same criminal activity" (emphasis added).
The offenses also were committed with clear regularity and
within a very close time period. In a little over three years, the
appellant stole and chopped Porsches at least eighteen different
times. The last state Porsche was stolen in February 1991, and the
first federal Porsche was stolen no later than March 1991. Five of
the federal Porsches were stolen at unknown dates in 1991; it is
21
possible that they were stolen before the last state Porsche.
Thus, all three factors outlined by the guidelines suggest that the
offenses formed an ongoing series of offenses and therefore qualify
as the same course of conduct. See Scroggins, 880 F.2d at 1211
(agreeing with district court finding that series of thefts from
self-service stamp vending machines formed same course of conduct).
Moreover, the offenses also constitute a common scheme or
plan. A common scheme or plan refers to offenses "substantially
connected to each other by at least one common factor, such as
common victims, common accomplices, common purpose, or similar
modus operandi." U.S.S.G. § 1B1.3, comment. (n.9(A)) (Nov. 1,
1995). We find at least two common factors, although only one is
required.
The offenses shared the same purpose—making money by selling
stolen Porsche parts to co-conspirators and bona fide purchasers.
They also share an identical modus operandi. The PSR describes the
federal offense conduct as follows: "The defendant's basic method
of operation revolved around the theft of Porsches, bringing them
to a warehouse which he rented as his chop shop premises, and
dismantling them inside the warehouse." Fuentes' method of
operation for the state offenses, as described in the PSR, was
almost identical. The only difference was that Fuentes brought the
state Porsches to a residence and his friend's shed, instead of to
a rented warehouse; this is a trivial deviation. Chopping the
state and federal Porsches clearly constitute a common scheme.
Thus, the state offenses must be considered relevant conduct
22
under section 1B1.3(a)(2) because the state and federal offenses
formed both the same course of conduct and a common scheme or plan.
The Government's attempts to distinguish the offenses are
unconvincing. The Government points out that the offenses involved
different Porsches, different victims, and different chop shop
locations.17 While there are differences between the offenses, they
are dwarfed by the similarities.
If the maximum prison sentence authorized by 18 U.S.C. § 371
had not been an issue and the Government had sought to include the
state offenses as relevant conduct to raise Fuentes' offense
level,18 we cannot imagine that any court would find the offenses
unrelated. Surely the Government would complain bitterly if we
were to apply the strict test for relevant conduct that it argues
for here. That consideration of the state offenses leads to a
lesser sentence in this case is no reason to apply a more stringent
17
The Government also asserts that the federal offense involved
a different modus operandi than the state offenses. It claims that
the federal Porsches were all stolen from doctors' offices or
hospitals, while the state Porsches were stolen from residences.
Although this distinction would make little difference even if
accurate, we note that the PSR belies the Government's
characterization. It indicates that some of the federal Porsches
were also stolen from residences.
18
We point out that had the Government not agreed to drop the
other charges in the indictment and obtained convictions for them,
the maximum authorized prison sentence would be easily and properly
circumvented by proper application of the guidelines. Even though
the maximum prison sentences available for each of the dropped
substantive charges might have fallen below the guideline range,
the guidelines provide that where "the highest statutory maximum is
less than the total punishment [provided by the guidelines], ...
the sentence imposed on one or more of the other counts shall run
consecutively, but only to the extent necessary to produce a
combined sentence equal to the total punishment." U.S.S.G. §
5G1.2(d).
23
standard. Cf. Scroggins, 880 F.2d at 1213 (noting that "real
offense elements do not always work to the disadvantage of a
defendant; in many cases, consideration of these factors will act
to reduce an offender's sentence").
We hold that Fuentes' undischarged state sentences resulted
from conduct that the guidelines require to be "fully taken into
account in the determination of the offense level for the instant
offense," and that the district court consequently erred in
concluding that section 5G1.3(b) does not require the instant
sentence to run concurrently to the state sentences. Cf. United
States v. French, 46 F.3d 710, 717 (8th Cir.1995) (finding state
perjury conviction and federal fraud and perjury convictions to be
relevant, thus warranting concurrent sentences under § 5G1.3(b),
because offenses were "based upon actions taken ... during the same
time period, in the same general geographic area, for the same
purpose, as part of a common plan ..., and involving the same set
of ... assets").
D.
Even though the guidelines require a concurrent sentence in
this case, the sentencing court is always free to consider an
upward departure. See 18 U.S.C. § 3553(b) (1994) (authorizing
departure from guidelines if "the court finds that there exists an
aggravating or mitigating circumstance of a kind, or to a degree,
not adequately taken into consideration by ... the guidelines that
should result in a sentence different from" the sentence provided
by the guidelines). We have expressly recognized that a court may
24
impose a consecutive sentence where the guidelines call for a
concurrent sentence, as long as the court follows the proper
procedures for departing from the guidelines. United States v.
Harris, 990 F.2d 594, 597 (11th Cir.1993) (citing United States v.
Perez, 956 F.2d 1098, 1103 (11th Cir.1992)).
Although the instant case may well present compelling reasons
for an upward departure,19 the district court made no indication it
was departing from the guidelines, nor did it follow the required
procedures. See 18 U.S.C. § 3553(c)(2) (requiring court to explain
in open court reasons for departure from guidelines); United
States v. Valentine, 21 F.3d 395, 398 (11th Cir.1994) (requiring
sentencing judge to give defendant notice that it is considering
departure). Thus, Fuentes' sentence clearly resulted from an
erroneous interpretation of the guidelines.
19
The court stated at sentencing:
[T]here are powerful reasons, indeed, why the defendant's
sentence in this case should be run consecutive to the
State penalty, rather than concurrent....
....
...[I]t seems to me under the circumstances of this
case that plainly [Fuentes' sentence] ought to be made to
run consecutive. I do not see—I could be wrong as I see
it, but I do not see this as a difficult or a close
question with regard to whether the sentence on the
conspiracy ought to be made to run consecutive to a
different offense in a different forum.
....
...I am satisfied that for all of the reasons that
have been stated that his sentence should be made to run
consecutive ..., because [that] would achieve a
reasonable incremental punishment in this offense, which
I think is the touchstone of the analysis.
25
Because the court could have imposed a consecutive sentence
had it determined that an upward departure was warranted, we may
not direct that Fuentes' sentence run concurrently to the state
sentences. Rather, we must vacate the sentence and remand for
resentencing. See United States v. Bell, 46 F.3d 442, 443 (5th
Cir.1995) (remanding on same grounds).
III.
Fuentes also challenges the district court's order that he pay
$357,281 in restitution. He claims that the district court erred
in ordering full restitution because he was indigent at the time of
sentencing and unlikely to be able to pay the full amount of
restitution in the future. Because the record suggests that the
district court found that Fuentes was not likely to be able to pay
the full restitution amount in the future, we vacate the
restitution order and direct the district court to reconsider the
issue of restitution.
A.
Sentencing Guidelines section 5E1.1 directs the sentencing
court to order restitution whenever authorized by 18 U.S.C. §§
3663-3664 (1994). These sections, part of the Victim and Witness
Protection Act of 1982 (the "VWPA"), Pub.L. No. 97-291, 96 Stat.
1248,20 allow district courts to order defendants to pay restitution
20
The provisions for restitution were amended substantially by
the Mandatory Victims Restitution Act of 1996, Pub.L. No. 104-132,
§§ 201-211, 1996 U.S.C.C.A.N. (110 Stat.) 1227. These new
provisions take effect for cases in which the defendant is
convicted on or after April 24, 1996. § 211, 1996 U.S.S.C.A.N. (110
Stat.) at 1241. Because Fuentes was convicted before this date,
the new act has no application to this case.
26
to any victim of a Title 18 offense. See 18 U.S.C. § 3663(a)(1).
To determine the amount of restitution, if any, the sentencing
court "shall consider the amount of the loss sustained by any
victim as a result of the offense, 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." 18 U.S.C. § 3664(a).21
An examination of the transcript of the sentencing hearing
shows that these factors were considered. The probation officer
who had prepared the PSR calculated the total loss to the victims
of Fuentes' offense to be $380,781. Defense counsel objected to
the inclusion of two victims with losses totaling $13,500,
contending that these two victims had conspired with Fuentes.22
After sustaining these defense objections, the court determined
that "full restitution" was $357,281.23
Furthermore, defense counsel, the Government, and the
probation officer made several arguments concerning Fuentes'
21
We elaborate on these procedures in greater detail in part
III.C, infra.
22
Specifically, the two alleged victims had purchased Porsche
engines from Fuentes at below-market prices. Due to the low
prices, defense counsel suggested, and the Government conceded,
that these victims knew, or at least should have known, that they
were buying stolen parts and thus did not deserve restitution.
This consideration is a good example of a section 3664(a) "other"
factor deemed appropriate by the trial court.
23
Unfortunately, the probation officer, the Government, and the
district court appear to have committed multiple mathematical
errors in calculating restitution. Because we are vacating the
restitution order and remanding for recalculation, we need not
address these errors.
27
financial condition and earning capacity. Everyone agreed that
Fuentes was indigent and could not pay restitution at the time of
sentencing. The focus of most of the testimony at sentencing
regarding restitution was on Fuentes' ability to pay restitution in
the future, while on supervised release.24 Defense counsel
contended that Fuentes' lack of job skills rendered him unlikely to
be able to make full restitution during his period of supervised
release. Both the Government and the probation officer argued that
the very nature of his crimes showed that he possessed significant
mechanical skills that would help him earn a legitimate living and
pay restitution following his release.
Defense counsel conceded that some restitution might be
appropriate, but argued that ordering full restitution would be
improper in light of Fuentes' current financial condition and
limited skills. In response to this concern, the probation officer
recommended restitution in the full amount suggesting that the
probation office could determine how much Fuentes could pay in
monthly payments during supervised release. The Government agreed
with the probation officer's recommendation and further argued that
full restitution was appropriate so that an order would be in place
in the admittedly unlikely event that Fuentes did acquire enough
money to pay full restitution.
After considering all these arguments, the court ordered
24
The VWPA authorizes the district court to order that
restitution be payable within five years after imprisonment. 18
U.S.C. § 3663(f)(2)(B). Good faith compliance with a restitution
order is a condition of supervised release. § 3663(g).
28
restitution in the amount of $357,281. The final judgment stated,
"Payments of restitution are to be made as directed by the U.S.
Probation Office."25 In this appeal, Fuentes challenges the amount
25
Fuentes contends on appeal that the district court may not
delegate to the probation office the duty of setting a payment
schedule for restitution. His argument finds support in both the
text of the VWPA and the majority of cases from other circuits
addressing this issue. The VWPA provides, "The [sentencing] court
may require that [the] defendant make restitution under this
section within a specified time or in specified installments." 18
U.S.C. § 3663(f)(1) (emphasis added); see also U.S.S.G. § 5E1.1,
comment. (backg'd) ("The restitution order should specify the
manner in which ... payment is to be made.").
Several circuits have found that this language prevents
district courts from delegating authority to set payment
schedules. See, e.g., United States v. Graham, 72 F.3d 352,
356-57 (3d Cir.1995), cert. denied, --- U.S. ----, 116 S. Ct.
1286, 134 L. Ed. 2d 230 (1996); United States v. Porter, 41
F.3d 68, 71 (2d Cir.1994); United States v. Ahmad, 2 F.3d
245, 248-49 (7th Cir.1993). But cf. United States v. Lilly,
901 F. Supp. 25, 31-32 (D.Mass.1995) (ordering full restitution
but declining to set payment schedule and instead allowing
probation office to "assess the defendant's progress toward
satisfaction of [restitution]" and to act to revoke supervised
release if satisfactory progress is not made), aff'd, 80 F.3d
24 (1st Cir.1996).
Other circuits have held that the determination of
restitution and payment schedules is a judicial function the
delegation of which would violate Article III of the United
States Constitution. See, e.g., United States v. Johnson, 48
F.3d 806, 808-09 (4th Cir.1995); United States v. Albro, 32
F.3d 173, 174 (5th Cir.1994) (applying plain error standard).
But see United States v. Barany, 884 F.2d 1255, 1260 (9th
Cir.1989) (approving delegation under Probation Act of
determination of payment schedule for restitution to probation
office where court has set "maximum amount of restitution in
light of that loss"), cert. denied, 493 U.S. 1034, 110 S. Ct.
755, 107 L. Ed. 2d 771 (1990).
Notwithstanding the plain language of the statute and the
persuasive opinions from our sister circuits, our precedent
clearly authorizes delegation of payment schedules to the
probation office. See United States v. Stinson, 97 F.3d 466,
468 n. 1 (1996) (per curiam) (citing United States v.
Lombardo, 35 F.3d 526, 528 n. 2 (11th Cir.1994) (per curiam)).
As we are bound by precedent, we must reject Fuentes'
29
of restitution in light of his financial condition. Specifically,
he argues that the district court erred in ordering restitution in
an amount that the record showed he would unlikely be able to pay
either at the time of sentencing or in the future.
B.
The VWPA requires sentencing courts to "consider," inter
alia, "the financial resources of the defendant, [and] the
financial needs and earning ability of the defendant and the
defendant's dependents." 18 U.S.C. § 3664(a). Although a
sentencing court may order restitution even if the defendant is
indigent at the time of sentencing, United States v. Stevens, 909
F.2d 431, 435 (11th Cir.1990), it may not order restitution in an
amount that the defendant cannot repay. See United States v.
Remillong, 55 F.3d 572, 574 (11th Cir.1995) (per curiam); cf.
United States v. Apex Roofing of Tallahassee, Inc., 49 F.3d 1509,
1514 (11th Cir.1995) (vacating restitution order against dissolved
corporation partly because it was not able to pay restitution). A
contrary rule would effectively eliminate the mandate of section
3664(a) that the sentencing court consider the defendant's ability
to pay.26
delegation challenge.
26
Although the primary policy behind orders of restitution is
clearly the compensation of victims for their losses, limiting
restitution orders to an amount that the defendant can pay serves
other important policies. A restitution order in an amount the
defendant cannot possibly pay "threatens respect for judicial
orders generally." Remillong, 55 F.3d at 574 (quoting United
States v. Bailey, 975 F.2d 1028, 1032 (4th Cir.1992)) (internal
quotation marks omitted).
30
In light of this requirement that restitution not exceed the
defendant's ability to pay, we must focus on the district court's
consideration of Fuentes' ability to pay. We review orders of
restitution for abuse of discretion. See Remillong, 55 F.3d at
574. A district court abuses its discretion when it orders
restitution in an amount that it finds the defendant is not likely
to be able to pay. Our review of the record strongly suggests
that, although it made no explicit findings regarding ability to
pay, the court believed that Fuentes was not likely to be able to
pay restitution in the amount ordered.27
Moreover, an order in an amount well beyond a defendant's
means strongly detracts from any hope of rehabilitation for
the defendant. See United States v. Mahoney, 859 F.2d 47, 52
(7th Cir.1988) ("[I]t is most paramount that the defendant, in
the all-important rehabilitative process, have at least a hope
of fulfilling and complying with each and every order of the
court."). Judge Winter of the Second Circuit has elaborated
on this policy:
A defendant subject to an impossible restitution order
may be tempted to pay little or nothing because partial
restitution offers no assurance of being considered by
the court as satisfaction of the order. As a result, a
defendant subject to an impossible restitution order has
less incentive to seek remunerative, rehabilitative, and
non-criminal employment and to maximize his or her income
than a defendant subject to a difficult but doable order.
Porter, 41 F.3d at 73 (Winter, J., concurring); cf. Bearden
v. Georgia, 461 U.S. 660, 670-71, 103 S. Ct. 2064, 2072, 76
L. Ed. 2d 221 (1983) ("Revoking the probation of someone who
through no fault of his own is unable to make restitution ....
may have the perverse effect of inducing the probationer to
use illegal means to acquire funds to pay in order to avoid
revocation.").
27
We note that this would be a different case if the record
either showed that the court believed Fuentes was able to pay
restitution in the amount ordered or gave no indication of its
belief on this issue. In imposing an order of restitution, a court
need not make an explicit finding that the defendant will be able
31
At the sentencing hearing, the court prefaced the discussion
about the amount of restitution by commenting, "I don't know that
it's going to make all that much difference in this case." When
defense counsel began to point out that Fuentes was indigent, the
court interrupted, "All you are saying is it's academic.... I want
to find out what the amount is. That's really the thrust of my
question." The court also stated that the Government "hardly
expect[s] that [Fuentes] is going to ultimately be able to make
restitution in the full amount, but ... it's fair and reasonable to
require that some restitution be made."
Later in the discussion, defense counsel stated that "based on
the Court's statement now—I think we all agree that he cannot make
full restitution, so we need to find a monetary amount that he can
make" (emphasis added). Apparently agreeing with defense counsel's
statement that Fuentes could not pay the full amount, but believing
that some amount of restitution "does make sense to the victims,"
the court next asked the Government how to calculate the award in
an amount Fuentes would be able to pay. The Government responded,
It's not really possible to calculate how much the defendant
is going to able to repay during his period of supervised
release or later on in his lifetime. The State of Florida
certainly provides ample legal protection against debtors from
having their entire means of living taken by creditors, so I
don't think the Court needs to worry about him being oppressed
by a large debt.
to make restitution in the amount ordered so long as the record
provides sufficient reasons for the decision to order restitution.
Remillong, 55 F.3d at 576 (citing United States v. Hairston, 888
F.2d 1349, 1352-53 (11th Cir.1989)). This form of review is not
appropriate where, as here, the record strongly suggests the
sentencing court found that the defendant was unlikely to be able
to comply with the order.
32
It is the Government's position that he should be ordered
to pay the full amount of restitution, and that while he is on
supervised release, his supervised release officer can
designate that portion of his income that should be given over
to restitution based on how much money he is making and what
his obligations are to support himself or any legal
dependents, and that the debt should be established so that in
the future if [Fuentes] does come into sufficient money to be
collectable under the laws of the State of Florida or the
United States, then that order will be there and the victims
will have their opportunity.
The Government conceded that "[t]here may not be a strong
likelihood" that Fuentes would "come into" such a sum of money.
Apparently accepting these arguments, the court ordered full
restitution.
Taken together, all these statements by the court and counsel
convince us that there is at least a strong likelihood that the
court ordered restitution in an amount it believed Fuentes was
unlikely to be able to pay. The Government's argument that full
restitution is nonetheless appropriate may be persuasive, but it is
foreclosed by the inclusion of the defendant's ability to pay among
the factors the sentencing court must consider. The mere
possibility that a defendant will unexpectedly acquire a large sum
of money is not sufficient to support an order in an amount he is
unlikely to be able to pay. See Remillong, 55 F.3d at 575 n. 8. As
the Third Circuit has noted,
[I]f it is realistic that [the] defendant may inherit a
substantial sum from a well-off relative or has a story to
write that will be a bestseller, then the district court would
be entitled to consider these possible additional sources of
income in fashioning a restitution order. On the other hand,
we will not put the court in the lottery business.
United States v. Logar, 975 F.2d 958, 964 (3d Cir.1992); see also
Mahoney, 859 F.2d at 51 n. 6 ("The prospect of the defendant's
33
winning a lottery—present in any case—is too remote a possibility
to justify [an unreasonably high] restitution order....").
Moreover, the VWPA requires the sentencing judge to consider
ability to pay at the time of sentencing. See United States v.
Sasnett, 925 F.2d 392, 398-99 (11th Cir.1991) (per curiam) (holding
that restitution must be determined at sentencing and cannot be
postponed, even in light of uncertainty of predicting defendant's
future ability to pay). Under the Government's line of reasoning,
a sentencing court should order full restitution in every instance,
regardless of the financial resources of the defendant.28 On this
point, we find instructive the observation of the Seventh Circuit:
[H]ad Congress intended that the defendant's ability to pay be
considered only after ... nonpayment, it could very easily
have mandated that the court direct the payment of full
restitution in every case subject to a later revision of the
said order should the defendant fail to comply with his
payment schedule based upon his financial condition.
Mahoney, 859 F.2d at 52.
The VWPA states, "Any dispute as to the proper amount ... of
restitution shall be resolved by the court by the preponderance of
the evidence." 18 U.S.C. § 3664(d). The defendant bears the
28
Congress apparently adopted this policy in the Mandatory
Victim Restitution Act of 1996. Under the new act, the sentencing
court may not consider "the economic circumstances of the
defendant" when determining the amount of restitution. § 206(a),
1996 U.S.C.C.A.N. (110 Stat.) 1232, 1234 (to be codified at 18
U.S.C. § 3664(f)(1)(A)).
The court will take these factors into account when it
determines "the manner in which, and the schedule according to
which," the defendant will satisfy the restitution order. Id.
(to be codified at 18 U.S.C. § 3664(f)(2)). If the defendant
cannot pay any amount of restitution, the court may direct him
to pay "nominal periodic payments." Id. (to be codified at 18
U.S.C. § 3664(f)(3)(B)).
34
burden of persuasion on the issue of his ability to pay. Id. The
defendant carries this burden when the court finds that the
defendant more likely than not will be unable to pay full
restitution. To order full restitution in the face of this finding
constitutes an abuse of discretion. Because our review of the
record strongly suggests that the court made just such a finding,
we must vacate the restitution order and remand for recalculation
29
in an amount Fuentes is likely to be able to pay. See United
States v. Grimes, 967 F.2d 1468, 1473 (10th Cir.) (vacating
restitution order where sentencing court had stated, "[i]t's, of
course, doubtful that she could pay much or at least any
substantial amount of restitution"), cert. denied sub nom. McGlynn
v. United States, 506 U.S. 927, 113 S. Ct. 355, 121 L. Ed. 2d 269
(1992).
C.
To assist the sentencing court in its task, we briefly discuss
the proper procedures for determining restitution when a defendant
29
Because the court did not expressly find that full
restitution was beyond Fuentes' means, we acknowledge that it is
possible that the court believed Fuentes would be able to pay the
full amount. We must vacate the order, however, because the record
is not sufficient to clear up this ambiguity. Cf. Hairston, 888
F.2d at 1352-53 (holding that district court should make express
findings of fact where the record "does not provide an adequate
basis for appellate review").
Nothing in this opinion should be interpreted to imply
that we believe the original $357,281 order is or is not, as
a matter of fact, beyond Fuentes' means. If the court finds
on remand that Fuentes will be able to make full restitution,
that determination would be a factual finding entitled to
clear error review only.
35
alleges that she is unable to pay.30 The procedural scheme for
issuing an order of restitution is set forth in 18 U.S.C. § 3664.
As discussed supra, the sentencing court must "consider" several
factors—most importantly, the amount of loss by any victim of the
offense and the defendant's financial condition and ability to pay.
18 U.S.C. § 3664(a).
While the VWPA authorizes the court to order the probation
office to gather pertinent information either in the PSR or a
separate report made available to both sides, 18 U.S.C. § 3664(b),
(c), the statute explicitly allocates between the parties burdens
of persuasion with respect to the relevant restitution issues. The
Government must prove the amount of loss by a preponderance of the
evidence, and the defendant must establish her financial resources
and needs by a preponderance of the evidence. 18 U.S.C. § 3664(d).
The burden of proving other relevant issues falls "upon the party
designated by the court as justice requires." Id.
In most cases, the amount of loss will be relatively clear,
30
This discussion only applies to sentencing proceedings in
cases in which the defendant was convicted prior to April 24, 1996.
As discussed in note 20, supra, all other cases are governed by the
procedures outlined in the Mandatory Victims Restitution Act of
1996. We provide this discussion to assist the sentencing court on
remand of the instant case and to provide guidance for the
substantial number of sentencing hearings not covered by the new
act.
Two of the major changes are that restitution is
mandatory for, inter alia, Title 18 crimes against property,
§ 204(a), 1996 U.S.C.C.A.N. (110) Stat. at 1227-29 (to be
codified at 18 U.S.C. § 3663A(a)(1), (c)(1)(A)(ii)), and that
the sentencing judge does not consider the defendant's
financial resources at all when determining the amount of
restitution, instead accounting for ability to pay when
setting the payment schedule, see supra note 28.
36
and the Government will have little trouble carrying its burden.
Determining how much restitution the defendant is able to pay is a
much more speculative venture; the court must look into the future
and predict the defendant's ability to pay. When the defendant is
subject to a long prison term, this determination becomes
progressively more speculative.
In light of the allocation of burdens of persuasion, there is
a presumption that the defendant can pay full restitution. The
defendant must present some evidence that she cannot pay full
restitution before ability to pay becomes an issue. Because the
defendant bears the burden of persuasion, she also bears the risk
of nonpersuasion. Thus, while a bald assertion that she is
indigent may put her ability to pay at issue, a defendant may not
be able to carry her burden without persuasive evidence supporting
her claim.
Once the defendant presents evidence suggesting that she
cannot pay full restitution, the sentencing court assumes its
traditional fact finding role. The court must evaluate not just
the probative value of the evidence before it, but also the
credibility of any witnesses, particularly the defendant. If the
court is not persuaded by the defendant's evidence, or if it finds
that the evidence is in equipoise, it is free to order full
restitution. Thus, a defendant who is not completely candid with
the court and merely asserts that she is indigent faces a
formidable risk that full restitution will be ordered.
Where the underlying criminal conduct resulted in substantial
37
financial gain for the defendant, a strong inference may arise that
the defendant has access to the fruits of her crime, or at least
proceeds therefrom. She must present convincing evidence to rebut
this natural inference. See United States v. Copple, 74 F.3d 479,
486 (3d Cir.1996) (Alito, J., concurring) ("All the [illegally
obtained] assets for which the defendant cannot account may be
included in the amount of restitution ordered. To the extent that
records are unavailable, the risk of inaccuracy should be borne by
the defendant rather than the victims.").
Although it need not introduce any evidence of ability to
pay—again, the defendant bears the burden of persuasion on this
issue—the Government often will seek to rebut the defendant's
evidence of indigency. It may seek to prove that the defendant has
secreted assets or concealed a source of income (for example, a
family member who provides the defendant with financial
assistance). It may also point to evidence adduced at trial to
prove that the defendant is underrepresenting her financial
abilities.
If the defendant shows to the satisfaction of the sentencing
court that it is more likely than not that she cannot pay full
restitution at the time of sentencing, the sentencing court must
fashion a restitution order that accounts for her ability to pay.31
31
The defendant retains her burden on ability to pay even if
she has successfully proven that she cannot be expected to pay full
restitution. She bears the burden of proving how much restitution
she cannot pay or, depending on one's perspective, how much
restitution she can pay. This concept is implicit in the
defendant's burden on ability to pay.
38
While it may solve this problem by simply ordering restitution in
32
a lesser amount or declining to order restitution at all, the
better course often will be to set up a payment schedule over time.
The VWPA authorizes the court to make restitution payable by a
specified date or to set a schedule of installments. 18 U.S.C. §
3663(f)(2).
There are statutory limits to the deadline by which full
payment must be made. If the court sentences the defendant to
probation, it must require that the full amount of restitution
ordered be paid by the end of the period of probation. 18 U.S.C.
§ 3663(f)(2)(A). When no probation is ordered, the court must
require restitution within five years of the end of the term of
imprisonment imposed, or if no imprisonment is imposed, within five
years of the date of sentencing. 18 U.S.C. § 3663(f)(2)(B), (C).
The sentencing court must fashion a restitution order so that the
defendant reasonably will be able to comply with the order within
the statutorily mandated time period.33 See Remillong, 55 F.3d at
32
While the court may decline to order any restitution in light
of the defendant's financial condition, Stevens, 909 F.2d at 435,
restitution even in a small amount is favored, see 18 U.S.C. §
3553(c) (1994) (requiring court to explain why partial or no
restitution is ordered); U.S.S.G. § 5E1.1 (requiring restitution
where authorized); Ahmad, 2 F.3d at 247 ("When there is doubt
about ability to pay, the court should order full restitution.").
The court may also decline to order any restitution if it
"determines that the complication and prolongation of the
sentencing process resulting from the fashioning of an order
of restitution ... outweighs the need to provide restitution
to any victims." 18 U.S.C. § 3663(d). Again, however, some
restitution is favored.
33
We note that although the sentencing court must determine the
amount of restitution in light of the defendant's ability to pay
39
575 & n. 8.
Calculating the exact amount that the defendant will be able
to pay within the statutory period may be the most difficult and
speculative task facing the sentencing court. The longer the term
of imprisonment, the more speculative any prediction of future
earnings becomes. However, the VWPA requires that this
determination be made at the time of sentencing. See Sasnett, 925
F.2d at 398-99. The task is not impossible, nor is it a duty for
which district courts are unprepared. They must make similar
determinations when calculating future earnings in tort and
employment discrimination cases.
Counterbalancing the speculative nature of this determination
are mechanisms that soften the effects of an order that turns out
within the time period provided by § 3663(f), the defendant is not
automatically "off the hook" at the end of that period. While the
court might no longer be able to enforce its order through its
contempt power or through revocation of supervised release, the
VWPA provides two other methods of enforcement.
First, the United States can enforce a restitution order
"in the manner provided for the collection and payment of
fines in subchapter B of chapter 229 of" Title 18 of the
United States Code. Subchapter B of chapter 229 provides inter
alia that a fine is "a lien in favor of the United States upon
all property belonging to the person fined." 18 U.S.C. §
3613(a) (1994). This lien becomes unenforceable twenty years
after entry of judgment or upon the defendant's death. See 18
U.S.C. § 3613(b).
Second, both the United States and any victim named in
the restitution order may enforce the order "in the same
manner as a judgment in a civil action." 18 U.S.C. §
3663(h)(1)(B), (h)(2). Presumably, the restitution order may
be recorded as a money judgment and thus become a lien on the
defendant's property. If so, this form of enforcement would
be governed by the statute of limitations applicable to
judgment liens.
40
to be beyond the defendant's means. The sentencing court remains
free to modify its order in the future if the defendant's financial
condition changes.34 See Stevens, 909 F.2d at 435. Moreover, the
VWPA expressly provides that district courts must "consider the
defendant's employment status, earning ability, financial
resources, the willfulness of the defendant's failure to pay, and
any other special circumstances that may have a bearing on the
defendant's ability to pay." 18 U.S.C. § 3663(g); see also
Bearden, 461 U.S. at 672, 103 S.Ct. at 2073 (holding that
sentencing court cannot revoke defendant's probation for failure to
pay fine or restitution absent finding that defendant was
responsible for failure to pay or that no alternative punishment
would adequately punish and deter defendant).
This court takes the speculative nature of a sentencing
court's prediction of an indigent defendant's future earnings into
account by reviewing such determinations with a deferential
standard. See United States v. Porter, 90 F.3d 64, 68 (2d
Cir.1996) ("Because of the nuanced nature of the decision to impose
restitution it makes little sense for an appellate court,
significantly more removed from the case than the district court,
to scrutinize the decision closely."). We review any factual
finding that the defendant will be able to comply with the
34
Although this modification usually will entail a reduction
of the restitution to be paid where a defendant's financial
condition worsens, some courts have suggested that the amount may
be increased where the defendant's financial condition improves.
See United States v. Mitchell, 893 F.2d 935, 936 (8th Cir.1990);
Mahoney, 859 F.2d at 51 n. 6. But see Porter, 41 F.3d at 71
(calling this practice into doubt).
41
restitution order for clear error, Sasnett, 925 F.2d at 397, and
restitution orders themselves for abuse of discretion, Remillong,
55 F.3d at 574.
When the sentencing court makes the restitution determination
by following the procedures discussed here, its determination
rarely will be disturbed on appeal. A quick review of the record
of the sentencing hearing will reveal whether the court followed
these procedures. If the defendant raises an ability-to-pay
objection at sentencing, the record must show that the sentencing
court considered all relevant evidence of the defendant's financial
resources as well as the financial needs of the defendant and her
dependents. United States v. Page, 69 F.3d 482, 493 (11th
Cir.1995). If the court finds that the defendant likely will be
able to pay restitution in the amount ordered, its finding will be
reviewed only for clear error. Even if it does not make an
explicit finding, its order will be affirmed so long as the record
supports a finding that the defendant likely will be able to pay
restitution in the amount ordered. Hairston, 888 F.2d at 1353.
Finally, where the record suggests that the court found as a matter
of fact that the defendant would not be able to make restitution in
the amount ordered, as the record in the instant case suggests, the
order will be vacated as an abuse of discretion.
IV.
For the foregoing reasons, we hold that the district court
erred in ruling that the sentencing guidelines require that
Fuentes' sentence run consecutively to his undischarged state
42
sentences and also erred in ordering restitution in an amount it
found he unlikely was able to pay. We therefore VACATE the
appellant's sentence and REMAND the case for resentencing in
accordance with this opinion.
SO ORDERED.
43