United States v. Tafner

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 11-2465
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UNITED STATES OF AMERICA
v.
THEA TAFNER,
Appellant
_______________________
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Criminal No. 10-cr-00366-001)
District Judge: Honorable Yvette Kane
______________
Submitted Pursuant to Third Circuit LAR 34.1(a)
April 18, 2012
Before: SCIRICA, AMBRO and FISHER, Circuit Judges.
(Filed: May 29, 2012)
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OPINION OF THE COURT
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SCIRICA, Circuit Judge.
Thea Tafner appeals the sentence imposed by the United States District Court for
the Middle District of Pennsylvania for her conviction under 18 U.S.C. § 669 for theft or
embezzlement in connection with a healthcare benefit program. Tafner entered into a
negotiated plea agreement with the federal government on January 7, 2011 and was
sentenced to 30 months’ imprisonment and $1,816,045 in restitution. As part of its
sentence, the court ordered that Tafner pay $124,869 of the restitution amount within 60
days. Tafner contends the immediate payment provision violates a material term of her
plea agreement. The government asserts her appeal should be dismissed because Tafner
waived her right to appeal and, in the alternative, the sentence is consistent with the plea
agreement. We will affirm.
I.
Tafner served as the chairperson for American Hose Community Ambulance
Company (“American Hose Ambulance”), of Mount Carmel, Pennsylvania, for a period
of fourteen years. American Hose Ambulance was an ambulance services organization
operated by the American Hose and Chemical Fire Company (“American Hose”).
Tafner’s responsibilities for American Hose Ambulance included managing its operations
and finances.
In October 2000, Tafner began diverting funds from American Hose, the parent
company, into a separate bank account for which she was the only authorized signatory.
These funds consisted of payments to American Hose from Medicare and other insurance
companies. By November 2009, Tafner had steered a total of $3,712,203 into the separate
account, over $2 million of which represented payments from Medicare. She converted
$1,816,045 of those funds for personal use, using the money to landscape her house,
build a nursery, and fund a home décor business operated by her brother. In March 2010,
Tafner’s activities resulted in the closure of American Hose Ambulance.
2
In December 2010, the government issued a one-count felony Information
charging Tafner with willfully embezzling, stealing or otherwise converting for her own
use an excess of $1,000,000 that was intended for the benefit of a healthcare benefit
program, in violation of 18 U.S.C. § 669. On January 7, 2011, Tafner entered into a
negotiated plea agreement and waived her right to appeal. Under Paragraph 16 of the
agreement, she also committed to “make full restitution in accordance with a schedule to
be determined by the court,” with “the amount of the loss resulting from the defendant’s
actions [to] be determined at the pre-sentencing hearing.” The government, under
Paragraph 15(a), committed “not to seek forfeiture or garnishment of any funds held in
defendant’s Public School Employees’ Retirement System Account” and “not to use any
funds derived from this account as substitute assets to satisfy any judgment in this case.” 1
But the last sentence of Paragraph 15(a) also stated: “This agreement does not affect
defendant’s obligations set forth in Paragraph 16.” Additionally, the plea agreement
provided that “the Court is not a party to and is not bound by [the] agreement nor any
recommendations made by the parties”; that the court was “free to impose upon the
defendant any sentence up to and including the maximum sentence of imprisonment for
10 years, a fine of $250,000 [and] a maximum term of supervised release of up to three
years”; and that if the court “imposes a sentence with which the defendant is dissatisfied,
the defendant will not be permitted to withdraw any guilty plea for that reason alone.”
1
At the time of her guilty plea, Tafner had worked for thirty-five years for the Line
Mountain School District in Herndon, Pennsylvania. She had worked as a principal for
seven years and as an elementary school teacher for twenty-eight. Accordingly, Tafner
had acquired interest in a vested retirement account in the Public School Employees’
Retirement System.
3
After her plea hearing but before sentencing, Tafner “rolled over” $121,471 from
her Public School Employees’ Retirement System (“PSER”) account into an individual
retirement account (“IRA”) at First Columbia Bank and Trust. She also arranged for
PSER to directly forward her a lump-sum payment of $3,398. On April 28, 2011, the
government filed a Pre-Sentencing Report (“PSR”) and included both amounts – the
$121,471 in the IRA and the $3,398 to be forwarded to Tafner directly – in its estimation
of her total assets. It labeled these payments “Ms. Tafner’s total contributions and interest
in her retirement account.” The government advised the court, “[i]n view of [Tafner’s]
assets, which include equity in two residences and recent retirement payments, it appears
that the defendant has the ability to make a significant lump sum payment toward
restitution.” Tafner sent a letter to the Probation Office objecting to the use of her
retirement funds to satisfy the restitution order. In an off-the-record meeting with the
court and with opposing counsel on the day of sentencing, Tafner’s counsel raised the
issue of “the structuring of restitution.”
At Tafner’s sentencing hearing, the District Court imposed a sentence of 30
months’ imprisonment and $1,816,045 in restitution. It also ordered that Tafner pay
$124,896 of the restitution amount within 60 days. Tafner filed a notice of appeal.
II.
The District Court had jurisdiction pursuant to 18 U.S.C. § 3231. We have
jurisdiction pursuant to 28 U.S.C. § 1291. See United States v. Gwinnet, 483 F.3d 200,
203 (3d Cir. 2007) (holding the court of appeals had subject matter jurisdiction
notwithstanding a defendant’s waiver of appellate rights in a plea agreement). Our
4
review of the validity and applicability of the appellate waiver in Tafner’s plea agreement
is de novo. United States v. Jackson, 523 F.3d 234, 237 (3d Cir. 2008). As to whether the
award of restitution was permitted by law, our review is also plenary. United States v.
Graham, 72 F.3d 352, 355 (3d Cir. 1995). As to the specific award, we review for abuse
of discretion. Id.III. 2
Tafner argues the District Court violated a material term of her plea agreement
when it ordered her to make a lump-sum restitution payment of $124,869 within 60 days.
Under Paragraph 15(a), the government agreed “not to seek forfeiture or garnishment of
any funds held in defendant’s Public School Employees’ Retirement system account” and
“not to use any funds derived from this account as substitute assets to satisfy any
judgment in this case.” This gave her a reasonable understanding, she contends, that her
PSER “account would not be liquidated and applied to restitution as a lump sum.”
We interpret plea agreements under contract law standards, looking to “what was
reasonably understood by [the defendant] when he entered his plea of guilty.” United
2
The government contends we should summarily affirm the District Court’s order
because Tafner waived her rights to appeal when she entered into the plea agreement. It
cites Paragraph 26, which stated “the defendant knowingly waives the right to appeal any
conviction and sentence.” Tafner responds that enforcement of the appellate waiver
would result in a miscarriage of justice because her reasonable understanding was that
Paragraph 15(a) protected her PSER account from immediate liquidation, and the effect
of the court’s order was to require she draw down the account, now transferred to an IRA,
within 60 days. See United States v. Khattak, 273 F.3d 557, 563 (3d Cir. 2001) (holding
that appellate waivers can be relaxed when their enforcement would “work a miscarriage
of justice”). We need not resolve this issue because, as explained below, Tafner cannot
prevail on the merits of her claim – namely, she cannot show the District Court violated
her reasonable understanding of the plea agreement.
5
States v. Gilchrist, 130 F.3d 1131, 1134 (3d Cir. 1997) (internal quotation marks and
citation omitted). In this case, no reasonable understanding of the plea agreement would
have supported a belief that the sentencing court was bound to the terms of Paragraph
15(a). Under Paragraph 16, the agreement clearly stated that it was the court, not the
government, that would set the restitution amount and schedule of payments. It provided,
“[t]he defendant agrees to make full restitution in accordance with a schedule to be
determined by the court,” and that “the amount of the loss . . . will be determined at the
pre-sentencing hearing.” Paragraph 21 was also explicit that the court was “not bound by
[the] agreement nor any recommendations made by the parties” and was “free to impose
upon the defendant any sentence up to and including the maximum sentence . . . .” Under
Paragraph 22, were the court to “impos[e] a sentence with which the defendant is
dissatisfied, the defendant will not be permitted to withdraw any guilty plea for that
reason alone, nor will the defendant be permitted to withdraw any pleas should the Court
decline to follow any recommendations by any of the parties to this agreement.” These
provisions made clear that whatever limits the agreement placed on the U.S. Attorney’s
Office, such limits did not bind the District Court. Even the government’s concession in
Paragraph 15(a) not to seek forfeiture of the funds in the PSER account was made
subservient to the “defendant’s obligations set forth in Paragraph 16” to pay restitution
according to the schedule set by the court. Given this plain language, it was unreasonable
for Tafner to assume that the sentencing court would bind itself to the limitations set forth
in Paragraph 15(a).
6
The cases Tafner cites as supporting her position, namely Gilchrist, 130 F.3d at
1134, and United States v. Reyes, 313 F.3d 1152 (9th Cir. 2002), are inapposite. Those
cases involved plea agreements executed under Fed. R. Crim. P. 11(c)(1)(C), 3 not at issue
here. Under Rule 11(c)(1)(C), when the defendant and the government “agree that a
specific sentence or sentencing range is the appropriate disposition of the case,” “such a
recommendation or request binds the court once the court accepts the plea agreement.”
Fed. R. Crim. P. 11(c)(1)(C). The court “may accept or reject” the plea agreement, but it
cannot alter the sentence. Gilchrist, 130 F.3d at 1133. Both our Court and others have
held that when a court’s order contravenes a defendant’s reasonable understanding of a
Rule 11(c)(1)(C) plea agreement, it constitutes a breach of that agreement. Reyes, 313
F.3d at 1157-58; Gilchrist, 130 F.3d at 1133-34. But the plain language of Tafner’s
agreement made clear it did not fall under Rule 11(c)(1)(C). It stated, in Paragraphs 21
and 22, that the court was “not bound by [the] agreement nor any recommendations made
by the parties” and could use its own discretion to determine the sentence. This was a
“recommendation” plea agreement, falling under Fed. R. Crim. P. 11(c)(1)(B). Such
agreements do not similarly bind the court’s discretion.
Finally, Tafner argues that “any actions taken to enforce the order would result in
a violation of the plea agreement by the [g]overnment” because the Attorney General is
responsible for collecting unpaid restitution, see 18 U.S.C. §§ 3612 & 3664, and it would
have to seek forfeiture of her PSER account were she to decline to make a timely
payment. This argument is unavailing. The sole reason the Attorney General would bring
3
This rule was formerly codified as Fed. R. Crim. P. 11(e)(1)(C).
7
an enforcement action against Tafner would be if she failed to comply with her sentence.
Such a failure would likely constitute a breach of the plea agreement, given that Tafner
committed in Paragraph 16 “to make full restitution in accordance with a schedule to be
determined by the court.” In turn, the government would have the “the option to either
seek specific performance of the agreement or treat it as unenforceable” by bringing an
action for remedial relief. United States v. Williams, 510 F.3d 416, 427 (3d Cir. 2007)
(citing 5 Wayne R. LaFave et al., Criminal Procedure § 21.2(e), at 60 (2d ed. Supp.
2007)). Were Tafner to breach her duty to make timely payments towards restitution, the
Attorney General would likely be relieved of its duty to refrain from garnishing Tafner’s
PSER funds.
IV.
For the foregoing reasons, we will affirm the judgment of conviction and sentence.
8