Monday, June 04, 2007

Restitution Order Vacated in Concealment of Bankruptcy Assets Case

United States v. Maturin, No. 05-30756 (5th Cir. Jun. 1, 2007) (Jolly, Higginbotham, Dennis)

This isn't the most exciting opinion you'll ever read, but at least it's not another crime-of-violence case, right? Plus, it's got some good language on plain error.

Maturin set up an account to conceal assets from creditors and the trustee in a bankruptcy proceeding. All told, he deposited over $160,000 worth of funds that belonged to the bankruptcy estate into the account. After a creditor got wise to this, Maturin was indicted on 28 counts of unlawful concealment of assets (18 U.S.C. § 152(1)) and one count of making a false statement under oath (18 U.S.C. § 152(2)).

Maturin reached a plea agreement with the government in which he agreed to plead guilty to a single count charging him with fraudulently depositing $54,384.43 into the concealed account, in exchange for dismissal of the remaining charges. The plea agreement was silent on restitution. Maturin stated, in the factual basis for his guilty plea, "that he believed that he had deposited a total of roughly $130,000 in the concealed account, but that he was not sure of the exact amount." At sentencing, the district court adopted the PSR's recommendation and ordered Maturin to pay restitution in the amount of $164,988.98, the total amount that Maturin had deposited in the concealed account.

On appeal, Maturin challenged the restitution order as excessive on the ground that it was "based on charges and conduct for which [he] was not convicted." Because he did not object at the time of sentencing, the court reviewed for plain error.

The court began with an extensive discussion of when restitution is required or permitted under the Mandatory Victims Restitution Act of 1996 and the Victim and Witness Protection Act. (It also reiterated that Hughey v. United States remains good law, notwithstanding statutory changes since the Supreme Court's decision in that case. Hughey, as you'll recall, held that as a general rule the MVRA limits restitution awards to "those losses that resulted directly from the offense for which the defendant was convicted.") You can read the discussion of the stautory ins-and-outs if you're interested, but the question ultimately boiled down to this:
[T]o determine the propriety of the district court’s restitution order, this court must consider whether the offense for which Maturin was convicted includes as an element a scheme, conspiracy, or pattern of activity, and/or whether the parties agreed in Maturin’s plea agreement that he would be subject to restitution for losses based on the dismissed counts of the indictment.

The court held that the restitution order was not supported on either ground. First, the court concluded, based on the text of the statute and the Fifth Circuit pattern jury instruction on the offense, that 18 U.S.C. § 152(1) plainly lacks "as an element proof of a scheme, conspiracy, or pattern of criminal activity, and, accordingly, Maturin’s conviction under that section cannot, without more, support the district court’s restitution order." Second, the court held that the record did not show an agreement by the parties that Maturin would be liable for the full $160+ grand, with an interesting observation about Maturin's failure to object at sentencing:
We do not read [United States v. Arnold] to hold that a defendant’s failure to object to the pre-sentence investigation report or the district court’s restitution order is sufficient to establish that the defendant agreed to pay the full amount of restitution that was ultimately ordered where, as here, the record is otherwise devoid of evidence of any agreement between the government and the defendant concerning restitution.
But what about plain error? "While this court has never expressly determined that the crime of concealing assets in a bankruptcy proceeding does not have a scheme, conspiracy, or pattern of criminal activity as an element, as we discussed above, it is indisputably clear from a reading of the plain statutory language, as well as this court’s pattern jury instructions, that the statute contains no such element. We therefore find that the district court’s error was plain." And the error affected Maturin's substantial rights, insofar as it put him on the hook for three times as much restitution as the district court actually had the authority to award. Result: restitution award vacated with a remand for the district court to have another go at it.



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