United States v. Bogart

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 09a0285p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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Plaintiff-Appellee, -
UNITED STATES OF AMERICA,
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No. 07-3779
v.
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Defendant-Appellant. -
RONALD J. BOGART,
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Appeal from the United States District Court
for the Southern District of Ohio at Columbus.
No. 01-00164—Algenon L. Marbley, District Judge.
Argued: June 18, 2009
Decided and Filed: August 14, 2009
Before: KEITH, CLAY, and GIBBONS, Circuit Judges.
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COUNSEL
ARGUED: Frederick D. Benton, Jr., LAW OFFICE, Columbus, Ohio, for Appellant.
Brenda S. Shoemaker, ASSISTANT UNITED STATES ATTORNEY, Columbus, Ohio, for
Appellee. ON BRIEF: Frederick D. Benton, Jr., LAW OFFICE, Columbus, Ohio, for
Appellant. Brenda S. Shoemaker, ASSISTANT UNITED STATES ATTORNEY,
Columbus, Ohio, for Appellee.
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OPINION
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CLAY, Circuit Judge. Defendant Ronald J. Bogart appeals his sentence arising from
his participation in a conspiracy to defraud numerous creditors of Richard Schultz. Pursuant
to a plea agreement, Bogart pled guilty to three of the counts charged in the indictment:
(1) conspiracy to commit wire fraud in violation of 18 U.S.C. § 1343, conspiracy to commit
mail fraud in violation of 18 U.S.C. § 1341, both in violation of 18 U.S.C. § 371;
(2) conspiracy to impair an Internal Revenue Service investigation in violation of 18 U.S.C.
1
No. 07-3779 United States v. Bogart Page 2
§ 371; and (3) conspiracy to obstruct justice in violation of 18 U.S.C. §§ 1503 and 371. As
part of his sentence, the district court ordered Bogart to pay $2,492,424.66 in restitution
jointly and severally with several other individuals convicted of participation in the
conspiracy. For the reasons that follow, we AFFIRM Bogart’s sentence.
BACKGROUND
I. FACTUAL BACKGROUND
This case arises from the efforts of Richard Schultz to conceal his assets from
creditors, the United States government, and his ex-wife.
A. The Conspiracy
As set forth in the second superseding indictment, in the mid-1980s, Schultz filed a
lawsuit related to an investment in thoroughbred racehorses. After he was unsuccessful, a
California federal court entered judgments in favor of three of Schultz’s creditors, totaling
$5 million. In response to the judgments, Schultz conspired with numerous individuals to
avoid payment to the creditors. The conspiracy sought to defraud Schultz’s creditors by
using third parties or “nominees” to purchase judgments against Schultz at a discount. To
purchase the judgments, the individuals involved in the conspiracy used various incorporated
entities, including Judgment Acquisition Corporation (“JAC”), Judgment Procurement
Corporation (“JPC”), Judgment Resolution Corporation (“JRC”), and Cedarwood
Acquisition Corporation (“Cedarwood”), as nominees. Bogart was among the individuals
who controlled these entities at the direction of Schultz. The third-party entities purchased
the judgments with Schultz’s funds that previously were concealed in offshore accounts.
Although Schultz was the true purchaser of the judgments, the nominees did not disclose to
the creditors the nature of Schultz’s interest.
B. Bogart’s Participation
On October 11, 1994, Bogart met with Schultz to assist Schultz in structuring a plan
to “shield” Schultz’s capital gains resulting from the sale of his stock in National Revenue
Corporation. As part of this plan, Bogart signed an agreement with Schultz to purchase
stock in Kennedy Northern, Inc. The agreement obligated Schultz to pay $2.5 million as a
down payment on the stock, and to pay the remaining balance of $2.5 million within thirty
No. 07-3779 United States v. Bogart Page 3
days. If Schultz failed to pay the balance within the required time, the agreement provided
that Schultz would forfeit the $2.5 million down payment. However, Bogart and Schultz
intended for Schultz to default on the obligation to pay the balance—and thus to forfeit the
$2.5 million payment—in order to generate losses to offset Schultz’s capital gains for tax
purposes. The agreement also offered Schultz a “mechanism . . . to transfer his funds to
offshore accounts in the Cayman Islands which became controlled by [Schultz] through his
brother, Tom Schultz.” (J.A. 312.)
In November 1994, Bogart entered into a similarly fraudulent agreement with
Schultz’s father to sell an office building, valued at almost $10 million, for $2 million. The
agreement had terms similar to the transaction to purchase Kennedy Northern’s stock—the
failure to pay the balance within thirty days resulted in the forfeiture of a substantial down
payment. “By April 1995, . . . Bogart had performed as Schultz required, transferring $4.3
million offshore to accounts controlled by Schultz, through [his brother, Tom], in the
Cayman Islands.” (J.A. 313.)
After assisting Schultz with these transactions, Bogart had no further involvement
with Schultz until 1997. In May 1997, Bogart met with Schultz’s brother, Tom. During the
meeting, Bogart agreed to help Tom and Schultz conceal Schultz’s ownership interest in the
offshore funds, despite knowing that a grand jury was investigating Schultz’s various
transactions. To hide Schultz’s ownership interest in these funds, Bogart incorporated
Cedarwood to use as a nominee for the wire transfers. In August 1997, $380,000 was
transferred from Schultz’s Cayman Island accounts to Cedarwood. As directed by Schultz,
Bogart used $327,000 to “purchase” a fifty-percent interest in JAC. Bogart also arranged
for the transfer of $800,000 from the Cayman Island accounts, and $2 million from a bank
account in London, to Cedarwood. Bogart then sent the funds to Frank McPeak, another co-
conspirator, who purchased several judgments against Schultz through Cedarwood, JRC, and
JAC. Bogart continued to participate in the conspiracy through April 2000, when he “made
false statements in a deposition . . . . intended to mislead . . . Richard Kennedy’s attorney,
and to make it appear that the transactions . . . were legitimate transactions, not an attempt
to conceal . . . Schultz’s funds from his creditors.” (J.A. 449.)
No. 07-3779 United States v. Bogart Page 4
II. PROCEDURAL HISTORY
On January 30, 2003, a grand jury returned a thirty-two-count second superseding
indictment charging Bogart, along with numerous co-defendants, with conspiracy to defraud
the United States, money laundering, wire fraud, mail fraud, tax fraud, and criminal
forfeiture. Relevant to Bogart’s appeal, count one charged conspiracy to commit wire fraud
in violation of 18 U.S.C. § 1343 and conspiracy to commit mail fraud in violation of
18 U.S.C. § 1341, both in violation of 18 U.S.C. § 371. Count two charged conspiracy to
defraud the United States Treasury in violation of 31 U.S.C. § 5314 and 26 U.S.C. § 7203.
In addition, count thirty-two charged that Bogart and others committed conspiracy to
obstruct justice in violation of 18 U.S.C. §§ 371 and 2.
On June 27, 2003, pursuant to a plea agreement, Bogart pled guilty to counts one,
two, and thirty-two of the second superseding indictment in exchange for the government’s
agreement to dismiss the remaining counts in the indictment. Bogart stipulated in the plea
agreement that, pursuant to 18 U.S.C. § 3663A, restitution was mandatory and agreed “to
pay restitution to victims of the conspiracy to defraud the victims of Richard D. Schultz’s
1
conspiracy.” (J.A. 197.)
On June 18, 2004, the district court held a sentencing hearing and ordered Bogart
to pay “restitution in the amount of $3,339,000 to the defrauded judgment holders.”
(J.A. 339.) At the conclusion of the hearing, the government sought “clarification”
regarding the court’s restitution order. (J.A. 341.) The government noted that Bogart’s
case was “wrapped up with the other actors who have varying levels of responsibility”
and that “it may not be the most appropriate thing to [hold Bogart responsible for $3.4
million] after the Court considers the rest of the coconspirators.” (J.A. 341.)
Accordingly, the government recommended that the district court hold a restitution
hearing within ninety days of the sentencing of the last co-defendant.
1
Bogart’s plea agreement also contained an appellate waiver provision under which Bogart agreed
to waive “the right to appeal his sentence on any ground.” (J.A. 196.) In its appellate brief filed six
months prior to oral argument, the government addressed the merits of Bogart’s claims on appeal and made
no mention of the appellate waiver provision. Eight days before oral argument, however, the government
filed a motion to dismiss Bogart’s appeal, arguing for the first time that the appellate waiver provision in
his plea agreement barred Bogart’s appeal. In light of the government’s failure to file the motion to
dismiss until days before oral argument, we decline to rule on the government’s motion seeking to dismiss
Bogart’s appeal, and instead address the merits of Bogart’s appeal.
No. 07-3779 United States v. Bogart Page 5
On July 13, 2004, the district court entered judgment, sentencing Bogart to an
eighteen-month term of imprisonment, and ordering Bogart to pay $3,339,000. The
order further provided that “[t]he restitution is to be paid jointly and severally with
Richard Kennedy, Dominic Massari, Frances McPeak, Cedarwood Corp., [and] Martin
Elson. The exact restitution amount each of these co-defendant’s [sic] will pay will be
determined at a hearing held at a later date pursuant to 18 U.S.C. § 3664(d)(5).” (J.A.
217.) Bogart subsequently filed a motion to modify the judgment, arguing that the
restitution order was invalid because “until a hearing is convened to determine the exact
portion of his liability it cannot be said that an order of restitution has been issued,” and
the deadline for issuing such an order had passed. (J.A. 221.)
On April 21, 2006, the district court held a restitution hearing with respect to all
of the defendants involved in the conspiracy. In an extensive written order, the district
court found Massari, Elson, Bogart, and Kennedy jointly and severally liable for
$2,492,424.66 in restitution. With respect to Bogart, the district court ordered him to
begin paying restitution on July 1, 2007, at a rate of $500 per month.
Following entry of the district court’s restitution order, Bogart filed a timely
notice of appeal. On appeal, Bogart argues that the district court’s restitution order was
invalid because it was untimely. He also contends that, based on his financial condition,
the district court abused its discretion in ordering him to pay restitution. Finally, Bogart
challenges the district court’s decision not to apportion the restitution amount among the
defendants based on their relative culpability.
DISCUSSION
I. RESTITUTION ORDER
A. Standard of Review
“The propriety and the amount of a restitution order are subject to different
standards of review.” United States v. Johnson, 440 F.3d 832, 849 (6th Cir. 2006).
Whether a restitution order is permitted under the law is subject to de novo review. Id.
Once the court determines that a restitution order was permissible, the amount of
No. 07-3779 United States v. Bogart Page 6
restitution ordered by the district court is reviewed for an abuse of discretion. United
States v. Vandeberg, 201 F.3d 805, 812 (6th Cir. 2000).
B. Analysis
Bogart contends that the district court’s restitution order is invalid under
18 U.S.C. § 3664(d)(5). Pursuant to the Mandatory Victims Restitution Act of 1996 (the
“MVRA”), “[a]n order of restitution under [the MVRA] shall be issued and enforced in
accordance with section 3664.” 18 U.S.C. § 3663A(d). Section 3664(d) offers “several
procedural options for the court to obtain the evidence necessary to determine the
amount of restitution.” United States v. Minneman, 143 F.3d 274, 284 (7th Cir. 1998).
Specifically, subsection (4) permits a district court, after reviewing the presentence
investigation report, to “require additional documentation or hear testimony.” 18 U.S.C.
§ 3664(d)(4). Under subsection (5):
If the victim’s losses are not ascertainable by the date that is 10 days
prior to sentencing, the attorney for the Government or the probation
officer shall so inform the court, and the court shall set a date for the final
determination of the victim’s losses, not to exceed 90 days after
sentencing.
18 U.S.C. § 3664(d)(5). Thus, § 3664(d)(5) “require[s] the sentencing court to resolve
the restitution question—including any objections a defendant may have—within 90
days of the sentencing hearing.” Vandeberg, 201 F.3d at 813. However, “the time limit
was not created for the benefit of the convicted criminal, but to protect the victims of the
crimes of which he has been convicted.” United States v. Terlingo, 327 F.3d 216, 220
(3d Cir. 2003). “[T]he 90-day limit on the entry of a restitution order is more consistent
with Congress’s concerns about preventing the dissipation of a defendant’s assets, than
with protecting a defendant from a drawn-out sentencing process.” United States v.
Stevens, 211 F.3d 1, 4 n.2 (2d Cir. 2000).
The district court in this case sentenced Bogart on June 18, 2004. During the
sentencing hearing, the court ordered Bogart “to pay restitution in the amount of
$3,339,000 to the defrauded judgment holders. The restitution is to be paid jointly and
severally with the codefendants.” (J.A. 339.) At the conclusion of the sentencing
No. 07-3779 United States v. Bogart Page 7
hearing, the government recommended “that pursuant to 18 U.S.C. 3664(d)(5), within
90 days of the sentencing of the last defendant, that we hold a restitution hearing . . . .”
(J.A. 341) (emphasis added).2 The district court agreed with the government’s
suggestion, noting that “to the extent that we need to modify the sentence in this case,
or in any of the other cases, we will do[] [s]o, but we will do so after the restitution
hearing.” (J.A. 342.)
On July 17, 2004, the district court entered judgment in Bogart’s case. With
respect to restitution, the judgment provided:
The defendant shall make restitution to the following payees in the
amounts listed below. The restitution is to be paid jointly and severally
with Richard Kennedy, Dominic Massari, Frances McPeak, Cedarwood
Corp., [and] Martin Elson. The exact restitution amount each of these
co-defendant’s [sic] will pay will be determined at a hearing held a later
date pursuant to 18 U.S.C. §3664(d)(5) [sic].
(J.A. 217.) The judgment then listed St. Paul Fire & Insurance (“St. Paul”), Thomas
Bourke, and Schultz’s ex-wife among the victims to be paid restitution, and listed the
total amount of restitution as $3,339,000. On April 21, 2006, the district court held a
restitution hearing, and subsequently issued its final restitution order mandating that
Bogart pay $2,492,424.66 in restitution jointly and severally with three co-defendants.
Because nearly two years elapsed between Bogart’s sentencing and the district
court’s restitution order, the district court failed to make a “final determination” of
Bogart’s restitution obligation within ninety days of sentencing. Based on this failure,
Bogart argues that the restitution order is invalid. The government appears to concede
that the district court committed error in failing to determine the specific amount of
restitution within ninety days of Bogart’s sentencing hearing, but argues that the error
was harmless.
2
The presentence investigation report, issued September 13, 2003, made similar
recommendations. The report noted that “[d]ue to various uncertainties in calculating the actual loss to
the victims, the government anticipates that it will recommend to the Court that, within 90 days following
sentencing of the last defendant in this matter, the Court hold a restitution hearing under 18 U.S.C.
§3664(d)(5) [sic].” (J.A. 460) (emphasis added).
No. 07-3779 United States v. Bogart Page 8
In addressing Bogart’s arguments, we first consider whether the district court
lacked authority to enter the restitution order in April 2006. In Vandeberg, this Court
held that “[§] 3664(d)(5) is not a jurisdictional statute.” 201 F.3d at 814. The court in
Vandeberg specifically rejected the defendant’s argument that “the [district] court lacked
jurisdiction to [schedule conferences and conduct an evidentiary hearing to determine
the victims’ losses] after the 90-day period.” Id. Despite this clear holding, a
subsequent published opinion of this Court, United States v. Jolivette, 257 F.3d 581 (6th
Cir. 2001), cast doubt on Vandeberg’s holding that § 3664(d)(5) does not deprive the
district court of authority to address the issue of restitution beyond the ninety-day time
limit.
In Jolivette, the panel addressed “whether the failure of the district court to set
a final amount for the sentence of restitution rob[bed] the judgment of finality and
deprive[d] this court of jurisdiction to hear the appeal.” Id. at 582-83. The parties
agreed that, although more than ninety days had passed since the sentencing hearing, the
district court had not made a final determination of loss. Id. at 583. In concluding that
the defendant’s conviction and sentence were nonetheless final for purposes of appeal,
the panel determined that “the restitution provision of the sentence is void, and the
remainder of the sentence . . . is a final appealable order.” Id.
Although Jolivette involved a challenge to the finality rather than the validity of
the district court’s restitution order, in the course of justifying its conclusion that the
defendant’s sentence was final for purposes of appellate review, the court suggested that
§ 3664(d)(5) limits the authority of a district court to impose a restitution order beyond
the ninety-day time period:
[T]he statutory deadline for calculating the amount of restitution due has
passed. . . . Those time periods having passed, the district court could
not now, consistent with the terms of the statute, set an amount of
restitution. . . .
We believe that the statute makes clear the congressional intent
to prohibit courts from making restitution determinations after the
statutory period has run. . . .
Accordingly, we hold that when the 90-day clock runs out, the
judgment of conviction and sentence, including the restitution provision,
No. 07-3779 United States v. Bogart Page 9
becomes final by operation of the statute. We therefore have jurisdiction
to review the judgment of conviction and sentence. It follows that
because there was no timely judicial determination of the restitution
amount, the judgment contains no enforceable restitution provision.
Id. at 584. The panel’s conclusion in Jolivette implies that the district court’s judgment
ordering Bogart to pay $3,339,000 in restitution became final at the end of the ninety-
day period, and that the district court subsequently lacked authority to set an amount of
restitution.
To the extent that Jolivette is contrary to or in any way undermines this Court’s
conclusion in Vandeberg that the passing of the ninety-day time period does not deprive
a district court of jurisdiction over a defendant’s restitution proceedings, we conclude
that Vandeberg controls. The court in Jolivette never cited to or discussed Vandeberg,
a prior published opinion of this Court. See United States v. Hardin, 539 F.3d 404, 410
(6th Cir. 2008) (noting that “our circuit’s rule that ‘[a] panel of this Court cannot
overrule the decision of another panel’ would mean that our prior holding . . . governs”
notwithstanding an inconsistent view expressed by a later panel (alteration in original)
(citation omitted)); Sam & Ali, Inc. v. Ohio Dep’t of Liquor Control, 158 F.3d 397, 405
(6th Cir. 1998) (“No legal authority empowers this panel to reconsider, reverse, overrule,
or modify the legal pronouncements of a prior published opinion of this [C]ircuit.”).
Moreover, the Jolivette court discussed § 3664(d)(5) in the context of
determining whether a district court’s failure to set any restitution amount deprived this
Court of jurisdiction over the appeal from the conviction and sentence. Thus, the court
in Jolivette faced a possible jurisdictional defect in the defendant’s sentence, and
approached the issue as arising under the final judgment doctrine. In contrast,
Vandeberg addressed whether the district court’s revised restitution order was valid
notwithstanding its entry beyond the ninety-day time period—the same question
presented in this case. Accordingly, we follow Vandeberg and conclude that the district
court’s failure to comply with § 3664(d)(5) did not deprive it of jurisdiction to enter the
April 2006 restitution order.
No. 07-3779 United States v. Bogart Page 10
Vandeberg also makes clear that the district court’s error in this case was
harmless. In Vandeberg, the district court held a sentencing hearing on December 12,
1997, during which Vandeberg was ordered to pay restitution in the amount of
$13,162.89. 201 F.3d at 809. Eighty-two days after sentencing, the “victim’s losses had
been ascertained,” and the district court accordingly increased Vandeberg’s restitution
liability to $165,428.41. Id. Vandeberg subsequently filed a motion with the district
court requesting a restitution hearing, which the district court granted. Id. The district
court held the hearing on September 10, 1998, and, after considering the evidence from
the hearing, reduced the amount of restitution to $100,000. Id.
On appeal, Vandeberg argued that the order requiring him to pay $100,000 in
restitution was invalid because it was entered more than ninety days after his sentencing
hearing. This Court held that the district court had erred in ordering the initial amount
of restitution “[r]ather than deferring the issue” pursuant to § 3664, and had failed to
provide Vandeberg with notice and an opportunity to be heard within the ninety-day
period as § 3664(d)(5) required. Id. at 814. In addition, the court determined that the
district court committed error “by failing to resolve the restitution amount . . . within 90
days after the sentencing hearing.” Id. Despite the district court’s numerous errors in
determining the restitution portion of Vandeberg’s sentence, the court upheld the
restitution order, finding the errors harmless. Id. The panel reasoned that Vandeberg
was afforded an opportunity to be heard regarding the restitution order at the subsequent
hearing. Id. Thus, this Court found that the district court’s restitution order of
September 1998—issued almost one year after sentencing—was valid. See id.
Other circuits have reached similar conclusions. For example, in United States
v. Marks, 530 F.3d 799 (9th Cir. 2008), the defendant argued that the district court’s
restitution order was “invalid because it was not entered until after the ninety-day
statutory period.” Id. at 803. The district court sentenced Marks on April 22, 2005, and,
at the sentencing hearing, the government sought approximately $42,000 in restitution.
Id. at 805. However, the government acknowledged that the restitution amount “could
become less” because it had yet to confirm that certain individuals were, in fact, victims.
No. 07-3779 United States v. Bogart Page 11
Id. at 804. In September 2005, the government submitted a proposed amended judgment
ordering restitution in the amount of approximately $30,000. Id. at 805. On October 20,
2005, “well beyond ninety days after entry of judgment,” the district court ordered the
defendant to pay restitution in the amount of $30,000, and did not hold a hearing before
entering the amended judgment. Id. The Ninth Circuit noted that it was “undisputed that
the district court failed to comply with the ninety-day requirement of 18 U.S.C.
§ 3664(d)(5)[,]” but found that “the error was harmless because Marks has failed to
demonstrate that he was prejudiced.” Id. at 812.
Accordingly, we conclude that the district court’s error in failing to comply with
§ 3664(d)(5) was harmless. As in Vandeberg, Bogart ultimately had the opportunity to
be heard regarding his objections to the district court’s conclusions about the victims
who were entitled to restitution, as well as the restitution amount. At the hearing, Bogart
had the opportunity to cross-examine witnesses who testified regarding their losses.
Because Bogart has failed to show prejudice from the district court’s delay in making
a final determination of restitution, the district court’s error is harmless. We therefore
conclude that the district court’s restitution order is valid.
II. RESTITUTION PAYMENT SCHEDULE
A. Standard of Review
Once we determine that the district court had authority to order restitution, we
review the amount of restitution the district court ordered for abuse of discretion. See
Johnson, 440 F.3d at 849.
B. Analysis
Bogart challenges two aspects of the district court’s order requiring him to pay
restitution jointly and severally with other convicted co-conspirators at a rate of $500 per
month. First, he argues that the district court “abused its discretion by imposing an order
of restitution upon [Bogart] who is indigent.” (Def. Br. 18.) Second, Bogart argues that
the district court improperly held him jointly and severally liable for the full restitution
award because his specific conduct did not cause the victims’ losses.
No. 07-3779 United States v. Bogart Page 12
1. Consideration of Bogart’s Financial Circumstances
In his brief to this Court, Bogart contends that, “[i]n determining whether to order
restitution,” the district court should have considered his financial resources, his
financial earning ability, and his financial obligations to his dependents. (Id.) However,
the MVRA makes restitution mandatory regardless of a defendant’s ability to pay.
Section 3664 requires a district court to “order restitution to each victim in the full
amount of each victim’s losses as determined by the court and without consideration of
the economic circumstances of the defendant.” 18 U.S.C. § 3664(f)(1)(A) (emphasis
added); see United States v. Yaker, 87 F. App’x 532, 534 (6th Cir. 2004) (“Nor was the
court required to consider Yaker’s ability to pay, because restitution under the MVRA
is mandatory.”). A district court therefore may “consider ability to pay only when
establishing the schedule of payment.” United States v. Ellis, 522 F.3d 737, 739 (7th
Cir. 2008). Accordingly, contrary to Bogart’s arguments, the district court was required
to order Bogart to pay restitution.3
Bogart next argues that the district court abused its discretion in setting the
restitution payment schedule. Although a court cannot take into account the financial
circumstances of a defendant in determining whether to award restitution, the statute
provides that district courts must evaluate a defendant’s ability to pay when establishing
the manner and schedule of restitution payments. See 18 U.S.C. § 3664(f)(2).
Specifically, the MVRA directs district courts to consider “the financial resources and
other assets of the defendant, including whether any of these assets are jointly
controlled;” id. § 3664(f)(2)(A), “projected earnings and other income of the defendant;
and” id. § 3664(f)(2)(B), “any financial obligations of the defendant; including
obligations to any dependents,” id. § 3664(f)(2)(C). In addition, the statute sets forth
3
Bogart cites to a case from the Seventh Circuit, United States v. Loscalzo, 18 F.3d 374 (7th Cir.
1994), in support of his argument. Loscalzo was decided under the MVRA’s predecessor statute, the
Victim and Witness Protection Act, which did allow a district court to decline to award restitution if it
determined that the defendant’s financial condition precluded such an award. However, Bogart was
sentenced pursuant to the MVRA, which makes restitution mandatory regardless of a defendant’s ability
to pay. 18 U.S.C. § 3664(f)(1)(A). Accordingly, Loscalzo does not support Bogart’s argument.
No. 07-3779 United States v. Bogart Page 13
numerous possible methods of payment, including a lump-sum payment, installments,
periodic nominal amounts, or a combination of methods. See id. § 3663(f)(3).
We conclude that the district court did not abuse its discretion in setting the
payment schedule. The district court fulfilled the requirements of § 3663(f)(2) by
establishing a payment schedule in the restitution order, and by considering the factors
set forth in the statute. The district court stated that it had examined the financial
statements that Bogart submitted to the court, and noted that it would “take into
consideration the financial resources of the Defendants when setting the restitution
payment schedule.” (J.A. 180.) Also indicating the district court’s consideration of
Bogart’s financial status is the reduced amount of Bogart’s monthly payments as
compared to his co-defendants. In setting the restitution payment schedule, the district
court ordered two of Bogart’s co-defendants to pay $1,000 per month, and Bogart and
a third codefendant to pay only $500 per month.
Moreover, while Bogart’s financial statements submitted to the district court
indicate that he had few financial resources at the time of the district court’s restitution
order,4 a district court may consider a defendant’s “education and entrepreneurial
talents” and potential earning capacity in setting a restitution payment schedule. United
States v. Viemont, 91 F.3d 946, 951 (7th Cir. 1996); see United States v. Booth, 309 F.3d
566, 576 (9th Cir. 2002) (finding no abuse of discretion where the district court,
although recognizing the defendant’s “present financial difficulties,” “set payments at
$500 per month as an amount that Booth might reasonably look forward to being able
to pay”). In Viemont, the Seventh Circuit found that, even when a defendant has a
4
The financial statements Bogart submitted to the district court disclose that, for June 2006, his
net monthly salary was approximately $3,675. For his necessary monthly cash outflows, Bogart stated that
he spends $3,868, leaving him with a net monthly cash flow of $193. With respect to “the prospective
increase of the value of any cash inflows,” Bogart noted that he was “just released” from prison and that
therefore his “prospects [were] unknown.” (J.A. 470.) In addition, Bogart reported that he had less than
$200 in his checking account, and that he had filed for bankruptcy in Ontario, Canada, in January 2006.
The bankruptcy petition attached to his financial statement revealed that he had approximately $448,245
in debts. Bogart also provided evidence of child support obligations.
The presentence investigation report found that Bogart’s net worth was $78,222, and noted that
Bogart “believes his business has the opportunity to significantly grow at some point in the future, which
may increase his income. It is currently suggested that the defendant’s available resources be directed
towards restitution.” (J.A. 458.) The probation officer also found that Bogart “does have equity in his
home, which could be utilized to pay restitution and/or a small fine.” (Id.)
No. 07-3779 United States v. Bogart Page 14
“‘negative net worth and a monthly cash flow of zero,’” 91 F.3d at 951 (quoting United
States v. Johnson-Wilder, 29 F.3d 1100, 1106 (7th Cir. 1994)), a district court can set a
restitution payment schedule “if ‘there is some likelihood’ that he will acquire sufficient
resources in the future” id. (quoting United States v. Simpson, 8 F.3d 546, 551 (7th Cir.
1993)). The court in Viemont also noted that the defendant had demonstrated significant
skill in carrying out the fraudulent scheme that had led to his conviction, indicating that
the defendant had “strong potential to generate income.” Id. at 951-52.
Similarly, this Court previously has relied on a defendant’s education and future
earning potential to uphold a district court’s restitution payment schedule. In United
States v. Callan, 22 F. App’x 434 (6th Cir. 2001), the court rejected the defendant’s
argument that he should be required to make only nominal payments because “neither
his current economic circumstances nor those in the foreseeable future allowed for full
restitution.” Id. at 453. The court concluded that, “because [the defendant] has a college
education . . . , his potential earning capacity” did not support a finding that he would
be unable to make restitution payments. Id. In this case, Bogart possesses a bachelor’s
degree and previously earned a living as an accountant and as a businessman. His
education and professional experience suggest that he once again could earn sufficient
income to make the restitution payments even if, as counsel indicated at oral argument,
Bogart lost his accountant’s license. Further, the presentence investigation report noted
that Bogart “believes his business has the opportunity to significantly grow . . . , which
may increase his income.” (J.A. 458.) Under these circumstances, the district court did
not abuse its discretion in setting Bogart’s payment schedule.
2. Joint and Several Liability
Bogart also challenges the district court’s order finding him jointly and severally
liable for the full restitution amount. Specifically, Bogart argues that the “order fails to
distinguish the relative culpability of each defendant while assuming they should be held
equally responsible for the losses incurred.” (Def. Br. 17.)
“In cases involving multiple defendants, § 3664(h) explicitly gives district courts
discretion as to whether they should apply joint and several liability or whether liability
No. 07-3779 United States v. Bogart Page 15
should be apportioned among the defendants based on their economic circumstances and
their respective contributions to the victims’ losses.” United States v. Hunt, 521 F.3d
636, 649 (6th Cir. 2008). In this case, the district court determined that “[e]ach
[d]efendant played a crucial role in the Schultz conspiracy—Defendants hid millions of
dollars in Schultz’s assets and erected legal barriers to prevent Schultz’s creditors from
enforcing judgments against him. . . . [A]s a result, there is no reasonable basis for
apportionment.” (J.A. 179.)
While Bogart argues that because his particular actions did not cause the victims’
losses, he should not be held responsible for the restitution payment, this Court has
rejected such an argument. In United States v. Jamieson, 427 F.3d 394 (6th Cir. 2005),
the court disagreed with the defendant’s argument that he could “only be ordered to pay
restitution to victims ‘directly harmed by [his] criminal conduct in the course of the . . .
conspiracy.’” Id. at 418 (alterations and omissions in original); see United States v.
Collins, 209 F.3d 1, 3 (1st Cir. 1999) (“In the context of a conspiracy, it is clear that a
defendant is liable in restitution to all the victims of the reasonably foreseeable acts of
his co-conspirators. No court has every held to the contrary.”). Further, while the
district court has the option under § 3664(h) to apportion the restitution payment among
defendants, a district court is not required to do so. See Booth, 309 F.3d at 576 (“The
court had the discretion to apportion the total, but was not required to do so.”).
Consequently, the district court did not abuse its discretion in holding Bogart jointly and
severally liable for restitution to the victims of the conspiracy.
CONCLUSION
For the reasons set forth above, we AFFIRM Bogart’s sentence.