United States v. Greg Carter

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 12-10549
Plaintiff-Appellee,
D.C. No.
v. 2:04-cr-00038-
LDG-GWF-2
GREG CARTER,
Defendant-Appellant. OPINION
Appeal from the United States District Court
for the District of Nevada
Lloyd D. George, Senior District Judge, Presiding
Argued and Submitted
September 12, 2013—San Francisco, California
Filed February 7, 2014
Before: J. Clifford Wallace and Marsha S. Berzon,
Circuit Judges, and Jack Zouhary, District Judge.*
Per Curiam Opinion;
Dissent by Judge Zouhary
*
The Honorable Jack Zouhary, United States District Judge for the
Northern District of Ohio, sitting by designation.
2 UNITED STATES V. CARTER
SUMMARY**
Criminal Law
The panel reversed the district court’s order partially
denying a criminal defendant’s “Motion to Clarify Conditions
of Supervised Release and the Amount and Current Status of
Restitution” in a case in which the defendant argued that he
is not liable for the remaining restitution balance after the
credit of forfeited assets.
The panel held that because the district court did not make
restitution a component of the defendant’s term of supervised
release, 18 U.S.C. § 3583 gave the district court no power to
alter the amount of restitution, but that the district court
retains jurisdiction to enforce the order of restitution and to
calculate the amount of restitution owing.
The panel held that in general, restitution and forfeiture
are two separate and distinct parts of a criminal sentence, and
a defendant does not have a right to have forfeited funds
applied to a restitution obligation or have the value of the
forfeited assets “frozen” at the moment they were turned over
to the government. The panel held, however, that in this case,
the district court did not sentence the defendant to pay
$505,781.01 as a sum certain for restitution; instead, it
sentenced the defendant to pay this amount on the
understanding that the amount ordered paid had already been
satisfied by the forfeited assets.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
UNITED STATES V. CARTER 3
The panel therefore concluded that because the restitution
amount was fulfilled through the forfeited assets, the
defendant does not have any remaining restitution obligation.
Dissenting, District Judge Zouhary agreed with the
majority in every way except that he disagreed with the
conclusion that the record clearly demonstrates the district
court ordered restitution in whatever amount was recovered
from forfeited assets.
COUNSEL
Alina Maria Shell (argued) and Jason F. Carr, Federal Public
Defender’s Office, Las Vegas, Nevada, for Defendant-
Appellant.
Daniel Bogden, United States Attorney’s Office, Las Vegas,
Nevada; Elizabeth Olson White (argued), United States
Attorney’s Office, Reno, Nevada, for Plaintiff-Appellee.
OPINION
PER CURIAM:
Defendant-Appellant Greg Carter (“Carter”) appeals from
the district court’s partial denial of his “Motion to Clarify
Conditions of Supervised Release and the Amount and
Current Status of Restitution.” Carter argues he and his co-
defendants are not liable for the remaining restitution balance,
after the credit of forfeited assets, because everyone at
Carter’s sentencing hearing believed that the forfeited assets
would satisfy the restitution obligation. We hold the district
4 UNITED STATES V. CARTER
court had jurisdiction to enforce its restitution judgment and
reverse the district court’s calculation of the amount due and
owing.
I. Background
A. Indictment and Conviction
In January 2004, a grand jury indicted Carter and co-
defendants Susan Carter (his then-wife) and Jaime Abarghoie
(Susan Carter’s daughter) for their participation in a scheme
involving the fraudulent issuance of airline passenger tickets.
Between 2000 and 2003, Carter and his co-defendants gained
unauthorized access to the airline ticket-writing authority of
various travel agencies, then wrote international tickets at
bogus face value prices allegedly discounted from the actual
fares. Defendants pocketed the difference – over $1 million
– and left the travel agencies and airlines to deal with the
losses.
In October 2005, the grand jury returned a superseding
indictment against Carter and his co-defendants, charging
them with conspiracy to commit wire fraud, wire fraud,
access device fraud, and money laundering.
The superseding indictment also included forfeiture
allegations for the following property:
• $51,763.30 in a Bank of America account;
• $44,400.00 in a Bank of America safe deposit
box;
UNITED STATES V. CARTER 5
• Real property at 3009 Beach View Court, Las Vegas,
NV;
• Real property at 3317 Chesterbrook Court, Las
Vegas, NV;
• 1996 Mercedes Benz;
• 1994 Rolls Royce;
• 2001 Ford Mustang;
• Contents of a metal container seized during the
search of 3009 Beach View Court, including:
$10,300.00 in cash; a check for $9,150.00 made
payable to Susan Carter; and coins totaling
$40.17; and
• various computer equipment.
In February 2006, Carter’s co-defendants pled guilty with
written plea agreements. In March 2006, a jury convicted
Carter on all counts.
B. Sentencing
In August 2006, the district court sentenced Carter to 70
months in prison, followed by 36 months of supervised
release. The district court also ordered Carter and his co-
defendants to pay restitution in the amount of $505,781.01,
applying joint and several liability. The district court
determined that the loss calculation, for purposes of
determining Carter’s offense level, was $1,484,841.40. The
$505,781.01 restitution figure represented the estimated
6 UNITED STATES V. CARTER
liquidated value of the forfeited assets, not the amount of loss
incurred by the victims. Addressing Carter’s objection about
the offense-level loss calculation, the district court noted:
[T]he government stipulation as to the
restitution owed by Susan Carter [and others]
is not an accurate measure of the loss caused
by the criminal conduct. Rather and perhaps
most obviously, the restitution reflects a
pragmatic acceptance of the fact that the
Carters had approximately $505,000 in assets
that could be forfeited to pay restitution. The
stipulation was, in fact, an agreement that
Susan Carter would forfeit all of the assets
listed in the forfeiture count, which effectively
included all assets.
Carter’s presentence investigation report made the
following restitution recommendation:
Restitution in this case is being addressed
through the Superseding Indictment as
Forfeiture Allegation One. The proceeds of
the forfeiture will be dispersed to the airline
companies pro rata. At this time, the total
estimated value of the forfeited items is
determined to be $505,781.01. This amount
will be requested as restitution, noting that the
items listed in the forfeiture and the actual
amounts garnered from these items is the
actual restitution.
(emphasis added).
UNITED STATES V. CARTER 7
When pronouncing Carter’s sentence, the district court
stated:
THE COURT: . . . . In terms of restitution,
restitution of 505,781.01 will be a joint
requirement, joint and several, and the
forfeiture -- the forfeiture has been approved
by the Court, hasn’t it, Counsel?
[THE GOVERNMENT]: Your Honor, the
Court has entered a preliminary forfeiture,
that’s correct. We have the final order of
forfeiture here.
THE COURT: And you have no objection to
that, [defense counsel]?
[DEFENSE COUNSEL]: No objection.
THE COURT: And so restitution will be in
the amount of $505,781.01.
Near the conclusion of Carter’s hearing, the district court
summarized the sentence as follows:
I have imposed a 70 month custodial sentence,
all of the counts to run concurrent, and have
ordered restitution in the amount of
$505,781.01 that are joint and several. That
has been paid I understand by what has been
taken by the government.
The same day as Carter’s sentencing, the district court
entered a Final Order of Forfeiture, purportedly under both
8 UNITED STATES V. CARTER
civil and criminal forfeiture statutes, citing both 18 U.S.C.
§§ 981 and 982. In October 2006, two months after Carter’s
sentencing hearing, the district court entered another order
vesting all property rights in the forfeited assets to the United
States. Nothing in the appellate record delineates the
estimated value of non-cash forfeited items at the time the
district court entered its Forfeiture Orders.
Carter filed a direct appeal, challenging, among other
things, the district court’s finding that the amount of loss, for
offense level purposes, exceeded $1.4 million. United States
v. Carter, 262 F. App’x 10, 11 (9th Cir. 2007). This Court
rejected that argument and others, affirming Carter’s
conviction and sentence. Id. Carter did not challenge the
amount of restitution ordered.
C. Revisiting Restitution
Carter completed his 70-month term of incarceration in
April 2011. After beginning his 36-month term of supervised
release, Probation informed Carter, to his apparent surprise,
that his restitution obligation remained outstanding and that
he needed to begin making payments. In November 2011, he
filed a motion arguing the forfeited assets should have more
than satisfied the restitution of $505,781.01. The
Government conceded that post-sentence credits and
payments were not up to date, and that after applying a credit
of $427,082, from the cash and sale of assets, and payments
of $12,743, from monies paid by Carter’s co-defendants, the
remaining balance was actually $65,955.73.
Carter countered that he was not liable for any amount
because the estimated value of the forfeited real and personal
property at the time of his sentencing satisfied the obligation.
UNITED STATES V. CARTER 9
Further, Carter argued, all parties understood that the
restitution obligation of $505,781.01 would be satisfied in full
with the forfeited assets.
The district court accepted the Government’s updated
accounting and reduced Carter’s remaining restitution
obligation to $65,955.73, rejecting Carter’s contention that
his restitution obligation had been fully satisfied upon the
Government’s seizure of the assets and finding, after
reviewing the sentencing transcripts, that it “ordered
restitution in the amount of $505,781.01 . . . well aware . . .
that the net value of the forfeited assets was estimated to be
$505,781.01.” The district court further stated that it “did not
order that the crediting of proceeds of the forfeited assets, if
this estimate proved to be incorrect, would fully satisfy the
amount of restitution owed. Rather, the court recognized
only that the proceeds would be credited towards satisfying
the restitution.”
II. Discussion
A. Jurisdiction
The Government contends the district court lacked
jurisdiction to consider Carter’s motion to clarify, that a
challenge to the terms of his supervised release was not an
appropriate vehicle for Carter to challenge the restitution
order, and that a direct appeal of the original sentence would
have been the only proper vehicle. Carter denies he is
challenging the original restitution and forfeiture order;
instead, he argues that he seeks to enforce its terms, including
the understanding that the forfeiture would satisfy the
restitution obligation.
10 UNITED STATES V. CARTER
1. Restitution Was Not Ordered as a Condition of
Supervised Release
This Court reviews de novo whether a district court had
jurisdiction to hear Carter’s motion. Hoeck v. City of
Portland, 57 F.3d 781, 784 (9th Cir. 1995); see also United
States v. Miller, 205 F.3d 1098, 1100 (9th Cir. 2000).
One statute possibly applicable here provides, under the
heading “Modification of conditions or revocation,” that a
district court “may modify, reduce, or enlarge the conditions
of supervised release, at any time prior to the expiration or
termination of the term of supervised release.” 18 U.S.C.
§ 3583(e)(2). Section 3583(e)(2) does not, however, apply in
this case, because restitution was never made a condition of
Carter’s supervised release. The final orders here do not list
restitution as a term of supervised release, and no payment
terms were identified in the supervised release documents.
The 36-month term of supervised release required Carter
to “pay in accordance with the Schedule of Payments sheet of
this judgment.” The “Schedule of Payments” sheet, however,
did not set forth any restitution. Left unchecked was the box
ordering that “The defendant must make restitution (including
community restitution) to the following payees in the amount
listed below.” The “Schedule of Payments” does not list the
$505,781.01 restitution sum or identify how or to whom
payments would be made. The only financial obligation was
the lump sum $2,000 special assessment ($100 per count) that
was immediately due at the time of judgment.
While Carter’s Presentence Report did recommend that
“any remaining restitution balance shall be paid during the
term of supervised release at the rate of no less than 10% of
UNITED STATES V. CARTER 11
gross income, subject to an adjustment by the court based
upon ability to pay,” the district court chose not to include
this provision in its final judgment.
In United States v. Morales, 328 F.3d 1202, 1204–05 (9th
Cir. 2003), this Court made clear that 18 U.S.C. § 3583
cannot be invoked to modify fines not made a condition of
supervised release. Such is the case here. Section 3583
therefore gave the district court no power to alter the amount
of the restitution order.
2. The District Court Retains Jurisdiction to
Calculate the Amount of Restitution Owing
The practical effect of omitting restitution from the
conditions of supervised release is that restitution was due
immediately upon Carter’s sentencing, pursuant to 18 U.S.C.
§ 3572(d)(1) (“A person sentenced to pay . . . restitution, shall
make such payment immediately, unless, in the interest of
justice, the court provides for payment on a date certain or in
installments.”). Arguments seeking to modify or clarify
restitution payment terms are therefore inapposite and cannot
be the basis for the district court’s jurisdiction post-sentence.
This conclusion, however, does not mean the district court
lacked jurisdiction over Carter’s motion. The district court
retained the power to enforce the order of restitution, even if
it did not condition supervised release on complying with a
particular payment schedule. See United States v. Mays,
430 F.3d 963, 967 (9th Cir. 2005) (“The existence or
non-existence of supervised release has no bearing on the
district court’s jurisdiction to enter a postjudgment
garnishment order.”); 28 U.S.C. § 3202(a) (enforcement
remedies). In executing that enforcement, the court must
12 UNITED STATES V. CARTER
make determinations of amounts paid and amounts owed.
See, e.g., United States v. Bright, 353 F.3d 1114, 1122 (9th
Cir. 2004); see also 18 U.S.C. § 3664(j)(2) (amounts victims
receive as compensatory damages in civil proceedings must
reduce the order of restitution). Regardless of how Carter
phrased his motion in the district court and regardless of how
the district court addressed that motion, Carter was entitled to
an accounting to determine how much he owed, and the
district court had the power to clarify the disputed balance
owing. See Bright, 353 F.3d at 1122. Thus, the district court
had the power to account for the original amount due, and to
calculate credits, payments, and the balance owing, if any.
And we therefore have jurisdiction under 28 U.S.C. § 1291 to
review the district court order calculating the outstanding
restitution.
As discussed above, the district court did not make
restitution a component of Carter’s term of supervised
release. The district court therefore cannot now find Carter
violated his supervised release for nonpayment of restitution.
18 U.S.C. § 3583(e)(3). With no approved schedule of
payments, the Government can only chase the balance by a
civil collection action.
“An order of restitution may be enforced by the United
States in the manner provided for in subchapter C of chapter
227 and subchapter B of chapter 229 of this title” or “by all
other available and reasonable means.” 18 U.S.C.
§§ 3664(m)(1)(A)(i)–(ii). Chapter 229 provides that the
United States “may enforce a judgment imposing a fine in
accordance with the practices and procedures for the
enforcement of a civil judgment under Federal law or State
law,” and, generally, “a judgment imposing a fine may be
UNITED STATES V. CARTER 13
enforced against all property or rights to property of the
person fined.” 18 U.S.C. § 3613(a).
B. Carter’s Restitution Amount Has Been Satisfied
Our question, then, is whether Carter in fact owes any
restitution. We review a district court’s valuation and
accounting de novo. See United States v. Lomow, 266 F.3d
1013, 1020 (9th Cir. 2001), superseded by statute on other
grounds as recognized in United States v. McEnry, 659 F.3d
893, 899 n.8 (9th Cir. 2011).
1. Restitution versus Forfeiture in General
Carter argues that he paid his restitution at the time he
forfeited certain property to the Government – in other words,
that he should be credited as having paid an amount equal to
the estimated value of the forfeited property at the time the
Government took control of it. He maintains that, when his
sentence was pronounced, all involved understood that his
restitution obligation would be satisfied by the forfeited
assets.
Forfeiture and restitution are separate components of
many criminal sentences. In 1996, the Mandatory Victims
Restitution Act (MVRA) made restitution mandatory for most
federal crimes, including fraud, where a victim suffers a loss.
See 18 U.S.C. §§ 3663A(a)(1), (c)(1)(A)(ii). Title 18, United
States Code Sections 3663, 3663A, and 3664 govern
restitution to victims in criminal cases. In a fraud case,
restitution to persons “directly and proximately harmed” by
the fraud is mandatory. 18 U.S.C. §§ 3663A(a)(1), (2). If a
court orders restitution, it must order full restitution for the
14 UNITED STATES V. CARTER
victim’s loss, regardless of the defendant’s ability to pay. See
Bright, 353 F.3d at 1121.
Likewise, courts must order forfeiture when a defendant
is convicted of a crime that provides for forfeiture as part of
the penalty. See, e.g., 18 U.S.C. § 982(a)(1) (“The court, in
imposing sentence on a person convicted of an offense in
violation of section 1956, 1957, or 1960 of this title, shall
order that the person forfeit to the United States any property,
real or personal, involved in such offense, or any property
traceable to such property.”); see also United States v.
Monsanto, 491 U.S. 600, 607 (1989) (stating that by using the
words “shall order” in a forfeiture statute, “Congress could
not have chosen stronger words to express its intent that
forfeiture be mandatory in cases where the statute applied”);
United States v. Newman, 659 F.3d 1235, 1240 (9th Cir.
2011) (“the district court has no discretion to reduce or
eliminate mandatory criminal forfeiture”).
Thus, under these statutes, “‘defendants may be required
to pay restitution and forfeit the same amounts.’” Newman,
659 F.3d at 1241 (quoting United States v. Boulware,
384 F.3d 794, 813 (9th Cir. 2004)); see also United States v.
Davis, 706 F.3d 1081, 1083 (9th Cir. 2013); United States v.
Kalish, 626 F.3d 165, 169–70 (2d Cir. 2010); United States
v. Emerson, 128 F.3d 557, 566–67 (7th Cir. 1997); United
States v. Tencer, 107 F.3d 1120, 1135 (5th Cir. 1997)
(affirming restitution order for about $452,000 to fraud
victims plus criminal forfeiture of $1 million, which included
the fraud proceeds plus commingled funds). And a defendant
has no right to a credit against a restitution order equal to any
part of the amount forfeited. See Bright, 353 F.3d at
1122–32; United States v. Taylor, 582 F.3d 558, 567 (5th Cir.
2009); United States v. Alalade, 204 F.3d 536, 540–41 (4th
UNITED STATES V. CARTER 15
Cir. 2000). However, the Government may choose to assign
forfeited proceeds to victims, as was the case here. See
18 U.S.C. § 981(e)(6) (Government may transfer forfeited
property “as restoration to any victim of the offense giving
rise to the forfeiture”); 21 U.S.C. § 853(i)(1) (Government
may “restore forfeited property to victims”).
Carter asks us to credit him with the estimated value of
the assets at the time the Government took control of them.
However, all the cases cited by Carter address how a court
determines loss for purposes of restitution when property is
returned directly to the victim, not how to credit forfeited
assets that are to be liquidated by a third party. See United
States v. Yeung, 672 F.3d 594, 601 (9th Cir. 2012) (value of
real property subject of a mortgage fraud is computed when
victims took control of the property); United States v.
Catherine, 55 F.3d 1462, 1465–66 (9th Cir. 1995) (for
purposes of determining restitution, property must be valued
as of the date the victim took control of the property); see
also United States v. Gossi, 608 F.3d 574, 580 (9th Cir. 2010)
(restitution for mortgage fraud was the “unpaid balance on
the loan, minus the value of the collateral at the date the
victim bank gained control of the collateral, plus the bank’s
expenses prior to the same date”); United States v. Tyler,
767 F.2d 1350, 1352 (9th Cir. 1985) (“The timber was
restored to the government on the day of the theft. Any
reduction in its value stems from the government’s decision
to hold the timber during a period of declining prices, not
from Tyler’s criminal acts.”).
These cases uniformly stand for the proposition that we
award restitution to make the victim whole. United States v.
Gordon, 393 F.3d 1044, 1053 (9th Cir. 2004). An item
returned is no longer a loss as of the day it lands in the
16 UNITED STATES V. CARTER
victim’s hands (even if the victim incurs costs in liquidating
it). That is, in each case, we found the victim’s total loss to
be equal to the amount illegally taken, less any amount the
victim recovered (as measured on the date the victim
recovered it). See Lomow, 266 F.3d at 1020.
Our decision in Lomow, however, adds another wrinkle.
Lomow pled guilty to fraudulently overbilling for sanitation
services and money laundering. Lomow, 266 F.3d at
1016–17. In a prior state civil proceeding, the plaintiff-victim
was awarded $9 million, and the state appointed a receiver to
liquidate Lomow’s business to recover the judgment. Id. at
1017. As part of his federal sentencing, the district court
determined the scheme caused a total loss of $2,862,657,
credited amounts already reimbursed to victims, and ordered
$1,980,789.90 in restitution to be paid directly to the receiver.
Id. at 1020. This Court held that the district court erred in
crediting only the sale prices of Lomow’s property against his
restitution obligation and, instead, must reduce the restitution
due by the value of the property on the date the receiver took
control of the property. Id. at 1021. We further noted the
district court erred by charging the receiver’s fees for
liquidating the property against Lomow. Id. at 1020 (“The
receiver’s expenses are not a direct result of Lomow’s
criminal conduct. Therefore, the district court may not
include them, de facto or otherwise, in the restitution order.”
(quotation marks, emphasis, and citations omitted)).
If the forfeited property in this case had been handed to
the victims or their agent, as in Lomow, it would be fair to
charge the victims with the decline in value. But the only
transfer of funds to victims in this case came after the
Government’s liquidation of the forfeited property. Keep in
mind that the Government could have chosen to keep those
UNITED STATES V. CARTER 17
proceeds for itself under the forfeiture statutes, but chose to
provide the victim airlines access to the only source of
recovery in this case. This circumstance does not transform
the Government into an agent for crime victims.
Thus, in general, restitution and forfeiture are two
separate and distinct parts of a criminal sentence, and a
defendant does not have a right to have forfeited funds
applied to a restitution obligation or to have the value of the
forfeited assets “frozen” at the moment they were turned over
to the government.
2. The Sentence Imposed in this Case
We hold, however, that in this case, the district court did
not sentence Carter to pay $505,781.01 as a sum certain for
restitution. Instead, the record shows that the district court
sentenced Carter to pay this amount in restitution on the
understanding that the amount ordered paid had already been
satisfied by the forfeited assets. So there was no future
restitution obligation, not because of any general principles
concerning the relationship between forfeiture and restitution,
or concerning the time of valuation of in-kind assets, but
because of the terms of Carter’s own restitution order,
imposed at sentencing.
“‘The intent of the sentencing court must guide any
retrospective inquiry into the term and nature of a sentence.’”
Fenner v. U.S. Parole Comm’n, 251 F.3d 782, 786 (9th Cir.
2001) (citation omitted). “Thus, to the extent that there is an
ambiguity in the sentence, we properly may consider the
sentencing judge’s subjective intent.” Id. (citation omitted).
“[T]hat intent is to be determined by reference to the entire
record.” Id. (citation and internal quotation marks omitted).
18 UNITED STATES V. CARTER
The record here, considered as a whole, clearly
demonstrates that at the time of sentencing, it was the intent
and understanding of the district court and the parties that the
restitution was fulfilled through the forfeiture, and that, in
essence, they used the $505,000 amount as shorthand for the
proceeds of the forfeiture.
To begin, in pronouncing the sentence, the district court
stated that “restitution of 505,781.01 will be a joint
requirement, joint and several,” giving the appearance that
restitution was for a sum certain. But the district judge went
onto to clarify that the restitution amount “has been paid I
understand by what has been taken by the government.”
Similarly, the written judgment shows that the amount for
“Restitution Ordered” was $505,781,01, but on the form,
where the court could have checked a box to indicate that
“[t]he defendant must make restitution . . . in the amount
listed below,” no checkmark appears. Further, the written
judgment does not contemplate future restitution payments.
The portions of the form that address interest obligations on
restitution, the schedule for future payments, and penalties for
delinquency and default were left blank.
In particular, the judgment form provides under “Criminal
Monetary Penalties” three alternatives regarding interest
payments: “The defendant must pay interest on restitution . . .
unless the restitution . . . is paid in full before the fifteenth
day after the date of the judgment,” or “the interest
requirement is waived for the . . . restitution,” or “the interest
requirement for the . . . restitution is modified as follows.”
None of these options is checked, confirming that no future
payments were contemplated.
UNITED STATES V. CARTER 19
Second, the plea agreement of Carter’s co-defendant,
Susan Carter, with whom the restitution obligation was
shared jointly and severally, provided, “The parties agree that
at the time of sentencing, the government will recommend
that the Court enter an Order of Restitution in the amount of
the liquidated value of all assets subject to Forfeiture Count
One in the Superseding Indictment,” and “that the proceeds
of the assets forfeited . . . be credited toward the amount of
restitution ordered by the Court.” The government explained
during Carter’s sentencing hearing that it had agreed to this
approach,
because of the fact of the unlikelihood of any
future collectability of an amount in excess of
that which we’ve already seized the $505,000
worth of assets, that it’s better to enter the
restitution amount at that amount as opposed
to complicating not only these proceedings
but future proceedings in terms of trying to
collect something that’s not there.
Third, the presentence report prepared by the Probation
Office for Carter stated,
Restitution . . . is being addressed through the
Superseding Indictment as Forfeiture
Allegation One. . . . At this time, the total
estimated value of the forfeited items is
determined to be $505,781.01. This amount
will be requested as restitution, noting that the
items listed in the forfeiture and the actual
amounts garnered from these items is the
actual restitution.
20 UNITED STATES V. CARTER
(emphasis added). In its summary of the restitution
recommendation for Carter, the Probation Office stated,
“Restitution is mandatory in the amount of $505,781.01
(jointly and severally), with interest, payable immediately.”
(emphasis added). Although this summary omitted any
reference to the forfeited items, the “payable immediately”
reference is consistent with the understanding that the
restitution amount would be covered by the already forfeited
assets.
Finally, during Carter’s sentencing hearing, the district
court evidenced its understanding that the parties sought to tie
the restitution amount to the forfeited assets, stating,
the government stipulation as to the restitution
owed by Susan Carter is not an accurate
measure of the loss caused by the criminal
conduct. Rather and perhaps most obviously,
the restitution reflects a pragmatic acceptance
of the fact that the Carters had approximately
$505,000 in assets that could be forfeited to
pay restitution.
Taken together, these statements, documents, and
circumstances unmistakably indicate that the forfeited assets
were intended to satisfy fully the restitution award.
The dissent would hold that the district court ordered
Carter to pay a sum certain. But the Probation Office
recommendation was for a set dollar amount, coupled with
“noting that the items listed in the forfeiture and the actual
amounts garnered from these items is the actual restitution.”
That is why the restitution amount requested was to be
“payable immediately.” Far from explicitly rejecting the
UNITED STATES V. CARTER 21
approach urged by the parties and endorsed by the probation
officer – that the restitution would be equal to the value of the
forfeited assets, rather than the actual loss suffered by the
victims – the district court accepted that approach as “a
pragmatic acceptance” of the approximately $505,000 in
forfeited assets as the restitution amount. That the district
court understood and intended that the restitution obligation
be satisfied by the forfeited assets is reflected in its statement
that it understood that the restitution amount had already been
paid by the assets forfeited to the government, an
understanding confirmed by the written judgment’s lack of
provisions for any future restitution obligation, or for any
interest payments.1
We recognize that the same district judge who imposed
Carter’s sentence also issued the order clarifying the amount
of restitution, and stated at that time that it “did not order that
the crediting of proceeds of the forfeited assets . . . would
fully satisfy the amount of restitution owed,” if the proceeds
were less than $505,781.01. See Fenner, 251 F.3d at 786
(noting that the judge that imposed the sentence was “in a
good position to interpret” that sentence); see also United
States v. O’Brien, 789 F.2d 1344, 1347 (9th Cir. 1986). The
district court’s later statements are relevant to understanding
its intent at the time of sentencing, but not determinative.
Here, the district court’s interpretation was pronounced
more than six years after it actually imposed the sentence.
1
Susan Carter’s judgment, unlike Carter’s, contains, under “Special
instructions regarding the payment of criminal monetary penalties,” the
statement, “Defendant is to pay towards any unpaid balance of restitution
($505,781.01) at the rate of no less than 10% of gross income.
Adjustment made by the probation department based on ability to pay.”
22 UNITED STATES V. CARTER
So, not surprisingly, the district court did not reach its recent
conclusion based on its independent recollection of the
proceedings. Instead, as it stated, “[h]aving reviewed the
sentencing transcript, the Court finds that it ordered
restitution in the amount of $505,781.01.” (emphasis added).
Thus, the district court was in a similar position to this
Court with respect to its prior intention in ascertaining its
intent in sentencing, that is, limited to the available written
record. Yet, the district court did not, it appears, take into
account the additional considerations recounted above – the
parties’ and the Probation Office’s understanding; the
circumstances surrounding Susan Carter’s restitution order;
and the indices in the written judgment that the obligation
was considered satisfied. Given these circumstances, the
district court’s statements made contemporaneously with
sentencing, read in conjunction with the surrounding
circumstances, are simply more probative of its intent at that
time than its much-later interpretation.
Accordingly, we conclude that, because the restitution
amount was fulfilled through the forfeited assets, Carter does
not have any remaining restitution obligation.
III. Conclusion
For the reasons stated above, Carter’s restitution balance
has been satisfied. The district court’s October 19, 2012
order is reversed.
REVERSED.
UNITED STATES V. CARTER 23
ZOUHARY, District Judge, dissenting:
I agree with the majority in every way except one.
Specifically, I agree that: Greg Carter’s restitution was not
ordered as a condition of his supervised release; the district
court had jurisdiction to clarify the outstanding balance of
that restitution; and as restitution and forfeiture are two
separate and distinct parts of a criminal sentence, a defendant
generally does not have a right to have forfeited funds applied
to a restitution obligation or to have the value of the forfeited
assets “frozen” at the moment they were turned over to the
government. I join those portions of the majority opinion.
But, I disagree with the majority’s conclusion that the
record clearly demonstrates the district court here ordered
restitution in whatever amount was recovered from forfeited
assets. “The intent of the sentencing court must guide any
retrospective inquiry into the term and nature of a sentence.”
Fenner v. U.S. Parole Comm’n, 251 F.3d 782, 786 (9th Cir.
2001) (quotation marks and citation omitted).
The majority notes that during Carter’s sentencing
hearing, the district court stated that the restitution amount
“has been paid I understand by what has been taken by the
government.” The district court however made other
remarks, ignored by the majority, rendering the district court
intent far from “clear.” Earlier in the same hearing, the
district court, following a conversation with counsel,
pronounced:
THE COURT: . . . . In terms of restitution,
restitution of $505,781.01 will be a joint
requirement, joint and several, and the
24 UNITED STATES V. CARTER
forfeiture -- the forfeiture has been approved
by the Court, hasn’t it, Counsel?
[THE GOVERNMENT]: Your Honor, the
Court has entered a preliminary forfeiture,
that’s correct. We have the final order of
forfeiture here.
THE COURT: And you have no objection to
that, [defense counsel]?
[DEFENSE COUNSEL]: No objection.
THE COURT: And so restitution will be in
the amount of $505,781.01.
Further, the judgment entry identifies the sum certain, with no
mention that restitution was limited to the forfeited assets.
The majority also divines the district court’s intent from
a form, completed by the deputy clerk (and often not even
seen or reviewed by a judge), which did not reflect that
restitution or a payment schedule was made a condition of
Carter’s supervised release, as well as from proceedings in
co-defendant Susan Carter’s case (a defendant not before this
Court). True, the government did agree in Susan Carter’s
plea agreement that it would “recommend that the Court enter
an Order of Restitution in the amount of the liquidated value
of all assets,” but, as the government pointed out during oral
argument, the district court rejected that recommendation.
Similarly, in Carter’s case, the Probation Office proposed the
district court order restitution in whatever amount was
recovered from the sale of the assets. Yet again, however, the
district court rejected that proposal and entered a sum certain.
UNITED STATES V. CARTER 25
These remarks reinforce the true intent expressed by the
district court in its clarification order.
In short, forfeiture and restitution are distinct concepts.
See United States v. Bright, 353 F.3d 1114, 1120 (9th Cir.
2004). The amount a defendant owes for one does not
depend on the amount owed for the other. While forfeited
assets may be applied toward satisfying restitution, they need
not be. And, the value of physical assets at a particular point
in time does not necessarily indicate the amount to be
credited toward restitution, and perhaps a sentencing court
should not tie one to the other.
Here, the record is, at best, ambiguous. The district
court’s subsequent interpretation of its own intent is
consistent with and sufficiently supported by the entire
record. I would affirm the district court judgment and find
Carter owes the balance of $65,955.73.