United States v. Mathews

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
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UNITED STATES OF AMERICA, )
)
v. ) Criminal No. 05-0452 (PLF)
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GERRY D. MATHEWS, )
)
Defendant. )
____________________________________)
MEMORANDUM OPINION AND ORDER
This matter is before the Court on the defendant’s motion to transfer the
post-judgment garnishment proceedings before this Court to the United States District Court for
the District of Maryland. Upon consideration of the parties’ papers, the relevant legal authorities,
and the entire record in this case, the Court will deny the defendant’s motion to transfer.1
I. BACKGROUND
On January 30, 2006, defendant Gerry D. Mathews pled guilty to one count of
interstate transportation of money taken by fraud, in violation of 18 U.S.C. § 2314. See Plea
Agreement at 1. As Ms. Mathews admitted, for over 12 years, she embezzled “money totaling
1
The papers reviewed in connection with the pending motion include: the plea
agreement (“Plea Agreement”); the statement of the offense (“Statement of Offense”); the
judgment in the criminal case (“Judgment”); the government’s application for a writ of
continuing non-wage garnishment directed to garnishee Merrill Lynch (“Merrill Lynch
Garnishment Application”); the answer of garnishee Merrill Lynch (“Merrill Lynch Answer”);
the government’s application for a writ of continuing garnishment directed to garnishee A. P.
Mathews Heating & Air Conditioning (“A. P. Mathews Garnishment Application”); the answer
of garnishee A. P. Mathews Heating & Air Conditioning (“A. P. Mathews Answer”); the
defendant’s motion to transfer (“Mot.”); and the government’s opposition to the defendant’s
motion to transfer (“Opp.”).
about $350,500” from her employer, the law firm of Fried, Frank, Harris, Shriver & Jacobson
LLP (“Fried Frank”). See Statement of Offense at 3.
On June 16, 2006, the Court sentenced Ms. Mathews to 12 months and one day of
incarceration and three years of supervised release. See Judgment at 2-3. The Court also ordered
Ms. Mathews to pay restitution in the amount of $312,260.09 to Fried Frank. See id. at 4.
According to the government, the Court’s order of restitution has not yet been satisfied: as of
March 24, 2011, Ms. Mathews owed an outstanding balance of $308,407.22. See Merrill Lynch
Garnishment Application at 1; A. P. Mathews Garnishment Application at 1; see also Opp. at 2.
Consequently, the government now seeks to garnish Ms. Mathews’ wages and funds pursuant to
the Federal Debt Collection Procedures Act (“FDCPA”), 28 U.S.C. §§ 3001 et seq. See Opp.
at 2. In response, on May 9, 2011, Ms. Mathews filed a motion requesting that the Court transfer
the garnishment proceedings to the district court for the district in which she resides — that is,
the United States District Court for the District of Maryland. See Mot. at 1. The government has
filed an opposition, and this matter now is ripe for decision.2
II. DISCUSSION
A. Federal Debt Collection Procedures Act
Under 18 U.S.C. § 3613, the government “may enforce a judgment imposing
[restitution] in accordance with the practices and procedures for the enforcement of a civil
judgment under Federal law . . . .” 18 U.S.C. § 3613(a) & (f). This provision may be enforced
pursuant to 28 U.S.C. § 3205, which sets forth the following garnishment procedure: First, the
2
Ms. Mathews did not file a reply to the government’s opposition, and the time for
doing so has passed. See LOC. CRIM . R. 47(d).
2
government must apply for a writ of garnishment against a judgment debtor’s property. See
28 U.S.C. § 3205(b). Second, if a court determines that the requirements for such a writ are met,
“the court shall issue an appropriate writ of garnishment.” Id. § 3205(c)(1). Third, upon
issuance of a writ, the government must “serve the garnishee and the judgment debtor with a
copy of the writ of garnishment . . . .” Id. § 3205(c)(3). Fourth, the garnishee must answer the
writ. Id. § 3205(c)(4). Fifth, the judgment debtor then has the opportunity to file a written
objection and request a hearing. Id. § 3205(c)(5). In addition, the judgment debtor may request a
transfer: Section 3004(b)(2) provides that, upon a judgment debtor’s timely request, “the action
or proceeding in which the writ, order, or judgment was issued shall be transferred to the district
court for the district in which the debtor resides.” 28 U.S.C. § 3004(b)(2). And sixth, after
consideration of any objection, the court “shall promptly enter [a disposition] order directing the
garnishee as to the disposition of the judgment debtor’s nonexempt interest in such property.” Id.§ 3205(c)(7).
In this case, on April 1, 2011, the government applied for two writs of continuing
garnishment under the FDCPA: it filed an application for a writ of continuing non-wage
garnishment directed to garnishee Merrill Lynch and an application for writ of continuing
garnishment directed to garnishee A. P. Mathews Heating & Air Conditioning. See generally
Merrill Lynch Garnishment Application; A. P. Mathews Garnishment Application. That same
day, the Clerk of this Court issued the respective writs of continuing garnishment. On May 2,
2011, Merrill Lynch filed its answer, see Merrill Lynch Answer at 1-3, and, soon thereafter, on
May 9, 2011, A. P. Mathews Heating & Air Conditioning filed its answer. See A. P. Mathews
Answer at 1-2. Also on May 9, 2011, pursuant to 28 U.S.C. § 3004(b)(2), Ms. Mathews
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filed a motion in which she requests that the Court “transfer the case because [she] now live[s] in
[the] State of Maryland.” Mot. at 1.3
B. Transfer Requests Under the Federal Debt Collection Procedures Act
Section 3004 of Title 28 provides: “If the debtor so requests, within 20 days after
receiving the [required] notice . . . , the action or proceeding in which the writ, order, or
judgment was issued shall be transferred to the district court for the district in which the debtor
resides.” 28 U.S.C. § 3004(b)(2). The government agrees that Ms. Mathews filed a timely
request to transfer this case, see Opp. at 3, and the government acknowledges that, “[a]t first
blush, a transfer under [Section 3004] appears mandatory.” Id. The government contends,
however, that some district courts have concluded that Section 3004 is not mandatory and that
this Court should find that a transfer is not warranted in this case. See id. at 4-5.
Ms. Mathews’ motion therefore presents the question whether transfer is in fact
mandatory under Section 3004(b)(2) once a timely request for such a transfer is made. There is
no controlling authority on point, and the only two circuits to have addressed the issue have split.
Compare United States v. Furkin, 165 F.3d 33, 1998 WL 846873, at *4 (7th Cir. Nov. 24, 1998)
(“The district court . . . properly denied [the defendant’s] request to transfer the collection
proceedings brought to enforce the criminal judgment entered by that court.”), with United States
v. Nash, 175 F.3d 440, 442 (6th Cir. 1999) (“Because the plain language of [Section 3004(b)(2)]
is mandatory, the district court must grant such a transfer as long as it is made in a timely
3
Ms. Mathews requests only that the Court transfer this case. She does not request
a hearing or contend that she does not owe the money the government seeks. See Mot. at 1; see
also Opp. at 1. Nor does Ms. Mathews contend that either of the writs applies to property that
qualifies as exempt from garnishment. See id.; see also Opp. at 1.
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manner.”). Having reviewed the case law, the Court finds persuasive the reasoning of Judge
Ellis in United States v. Gipson, 714 F. Supp. 2d 571 (E.D. Va. 2010), and concludes that the
FDCPA’s transfer provision is not mandatory. Instead, this provision “merely operates to shift
the burden from the party requesting transfer — on whom the burden ordinarily rests in civil and
criminal matters — to the party opposing transfer where . . . the requirements of § 3004(b)(2) are
met.” United States v. Gipson, 714 F. Supp. 2d at 576 (internal footnote omitted).
“Standing alone, the mandatory language of § 3004(b)(2) (‘shall be transferred’)
appears to compel courts to transfer garnishment proceedings to a garnishee’s place of residence
upon a timely motion.” United States v. Gipson, 714 F. Supp. 2d at 573. But, as Gipson
recognized, “this does not end the analysis, for the FDCPA also grants district courts plenary
authority to ‘make an order denying, limiting, conditioning, regulating, extending, or modifying
the use of any enforcement procedure’ under the statute.” Id. (quoting 28 U.S.C. § 3013).
Accordingly, the Court concludes that, notwithstanding the “shall be granted” language of
Section 3004(b)(2),
the FDCPA’s grant of plenary authority to district courts to
“deny[], limit[], condition[], regulat[e], extend[], or modify[] the
use of any enforcement procedure” clearly allows a court to deny a
timely transfer motion for good cause, and good cause to deny
transfer ordinarily would exist where transfer is requested merely
to delay or frustrate efforts to collect on restitution judgments.
Id. at 576; see also United States v. LaFaive, Criminal No. 07-0062, 2011 WL 1296200, at *4
(N.D. Ind. Mar. 31, 2011) (agreeing with Gipson and concluding that “the [g]overnment must
show good cause why the [c]ourt should not grant the [d]efendant’s transfer request”); United
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States v. Nettles, Criminal No. 09-0014, 2011 WL 1059111, at *2 (S.D. Ala. Mar. 23, 2011)
(citing United States v. Gipson, 714 F. Supp. 2d at 576).4
As there is no dispute that Ms. Mathews’ motion is timely under Section
3004(b)(2), see Opp. at 3, “the only question that remains is whether the government has shown
good cause to deny the motion.” United States v. Gipson, 714 F. Supp. 2d at 576. The Court
concludes that there is good cause in this case. The government notes first that Ms. Mathews
currently resides at the same address as she did when she pled guilty before this Court in 2006,
Opp. at 4, and that Ms. Mathews neither asserts that she does not owe the government the money
it seeks, nor asserts that the writs apply to property that is exempt. See id. at 4-5; see also Mot.
at 1. The government then states that it “has been actively pursuing collection of [Ms.
Mathews’] restitution in this case” and “recently deposed both [Ms. Mathews] and her husband
with respect to their assets and financial affairs.” Opp. at 1.5 Accordingly, given that Ms.
Mathews’ residence has not changed since 2006, that Ms. Mathews has paid less than $4,000 of
4
Another line of district court authority, although relying on a different rationale,
similarly has concluded that Section 3004(b)(2) is not mandatory. See, e.g., United States v.
Tedder, Criminal No. 02-0105, 2004 WL 415270, at *1-4 (W.D. Wis. Feb. 26, 2004); see also
United States v. Poulsen, Criminal No. 06-0129, 2010 WL 1849294, at *4-5 (S.D. Ohio May 3,
2010); United States v. Jeburk, Criminal No. 95-0058, 2008 WL 4499982, at *1-2 (S.D. Ga. Oct.
6, 2008). Unlike in Gipson, these courts have concluded that granting a transfer request under
Section 3004(b)(2) “would be inconsistent with the procedures set out in [the Mandatory
Victim’s Compensation Act (“MVRA”),] 18 U.S.C. §§ 3611-15 and would pose a real risk of
curtailing or limiting the government’s right to collect fine[s] and forfeiture . . . .” United States
v. Tedder, 2004 WL 415270, at *1.
The court in Gipson considered this line of authority and found it unpersuasive,
concluding that the FDCPA’s transfer provision is not inconsistent with the MVRA. See United
States v. Gipson, 714 F. Supp. 2d at 575-76. The Court agrees.
5
These depositions were held in the District of Columbia. Opp. at 1 n.1, 4-5.
6
the $312,260.09 that she owes in restitution, and that Ms. Mathews presents no substantive basis
for contesting the garnishment proceedings against her, the government asserts that Ms.
Mathews’ transfer request is merely an attempt “to delay or frustrate the United States’ efforts to
collect on her restitution judgment[.]” Id. at 1. In further support of its position, the government
points to a specific example of such attempted delay or frustration: in 2006, Ms. Mathews
represented to the Court that she “agreed to sign over to [Fried Frank] the entirety of her 401(k)
Plan,” Def. Mem. in Aid of Sentencing at 4, June 7, 2006; see Opp. at 5, yet she “has consistently
refused to sign the necessary papers to have these funds applied to her restitution.” Opp. at 5.6
The Court concludes that the government has met its burden: the circumstances of
the garnishment proceedings in this case show that granting Ms. Mathews’ transfer request
would delay or frustrate the government’s efforts to collect on the Court’s restitution judgment.
Accordingly, Ms. Mathews’ motion will be denied.7
6
The government notes that, at a status conference before the Court on April 28,
2010, Ms. Mathews against represented that she would sign the necessary papers, but claimed
that her previous attorney had not provided them to her. Opp. at 5 n.5. The government asserts
that it subsequently “spent considerable time obtaining new documents for [Ms. Mathews] to
sign to turn over these funds, but she has consistently refused to sign the documents.” Id.
7
The government requests in its opposition that the Court “issue a disposition
order” with respect to the writ of continuing garnishment directed to A. P. Mathews Heating
& Air Conditioning. Opp. at 5. Such a request shall be made in a separate filing and shall
include as an attachment a proposed disposition order.
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III. CONCLUSION
For the foregoing reasons, it is hereby
ORDERED that the defendant’s motion to transfer the post-judgment garnishment
proceedings before this Court to the United States District Court for the District of Maryland
[Dkt. No. 20] is DENIED.
SO ORDERED.
/s/
PAUL L. FRIEDMAN
DATE: June 20, 2011 United States District Judge
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