U.S. v. Randle

• Decision Date: 01 April 2003
• Docket Number: No. 02-1828.,02-1828.
• Citation: 324 F.3d 550
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. William H. RANDLE, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

324 F.3d 550

UNITED STATES of America, Plaintiff-Appellee, v. William H. RANDLE, Defendant-Appellant.

No. 02-1828.

United States Court of Appeals, Seventh Circuit.

Argued January 13, 2003.

Decided April 1, 2003.

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Debra Riggs Bonamici (argued), Office of U.S. Atty., Criminal Division, Chicago, IL, for Plaintiff-Appellee.

Richard H. Parsons (argued), Jonathan E. Hawley, Office of Federal Public Defender, Peoria, IL, for Defendant-Appellant.

Before POSNER, KANNE, and DIANE P. WOOD, Circuit Judges.

KANNE, Circuit Judge.

William H. Randle appeals that aspect of his sentence ordering restitution to three victims of his fraudulent bankruptcy scheme. Because we find that the district court was without statutory authority to order restitution with respect to two of the victims, we vacate that portion of the restitution ordered and remand the case for resentencing.

I. HISTORY

The sentence at issue in this appeal was imposed pursuant to Randle's conviction on one count of bankruptcy fraud. This fraud was perpetrated as part of a scheme in which Randle would approach homeowners facing foreclosure on their mortgages, promising the owners that he would use his "special knowledge and expertise" in the areas of bankruptcy and real estate to halt the foreclosure sales of their homes. This "special knowledge and expertise" apparently amounted to preparing and filing fraudulent Chapter 13 bankruptcy petitions on an owner's behalf in order to trigger the automatic stay of foreclosure proceedings granted to bankruptcy petitioners.

Randle would review the public notices of pending foreclosure sales and mail letters to distressed homeowners advising them of his ability to stop a sale. In return for a fee, Randle would have willing homeowners sign blank Bankruptcy Petitions, Schedules, and Plans of Reorganization, which he would then file as pro se proceedings. These petitions concealed Randle's role in preparing them and contained false information intended solely to procure a postponement of the foreclosure sale.

The government eventually uncovered the scheme and charged Randle in a four-count indictment. The first three counts alleged mail fraud in violation of 18 U.S.C. § 1341. The final count alleged bankruptcy fraud in violation of 18 U.S.C. § 152. Each count of mail fraud involved mailings relating to three separate homeowners facing foreclosure.¹ Count One involved mail fraud stemming from Randle's relationship with Odell Terry. Terry was charged $677 in return for the preparation and filing of a bankruptcy petition, solely for the purpose of delaying the foreclosure sale of his home. Count Two involved mail fraud with respect to similar work done on behalf of M.C. Gibson, who paid $6,850.00 for the advertised services. Count Three involved mail fraud arising from services performed for Christina Luna-Perez, who was charged $1,160.00 for Randle's bankruptcy filing.

Count Four of the indictment charged Randle with bankruptcy fraud solely with respect to the filings he prepared for Ms. Luna-Perez. Specifically, that count alleged that on March 22, 1994, Randle fraudulently filed a Statement of Financial Affairs in the name of Ms. Luna-Perez that falsely claimed no payment for debt or bankruptcy counseling had been paid within the past year.

Pursuant to a written plea agreement, Randle pleaded guilty solely to Count Four. Among its provisions, the plea agreement made four references to restitution. First, it stated that Randle "admits the following facts: ... Defendant fraudulently obtained (or caused a loss [of]) ... a total of $8,687 from three different debtors." (R. at 84-4.) Second, the agreement noted that for purposes of determining Randle's base offense level under the federal sentencing guidelines, "the amount of loss to the victims resulting from the offense of conviction and relevant conduct was $8,687, which is more than $5,000.00, but not more than $10,000.00." (R. at 84-4.) Third, the agreement recited that Randle understood the maximum penalties he faced under the statute, including imprisonment and a fine, "as well as any restitution ordered by the Court." (R. at 84-6.) Finally, the agreement stated that "Defendant will cooperate fully with the United States Attorney's Office and the United States Probation Office in their determination of the appropriate amount of restitution to be ordered by the Court." (R. at 84-8.)

Randle's presentence report ("PSR") recommended that he be sentenced under the federal sentencing guidelines according to a base offense level of 8 and a criminal history category of I. The base offense level was reached in part by reference to the total amount of loss involved in the offense: under sentencing guideline § 2B1.1, if the offense caused a loss exceeding $5,000, but not more than $10,000, then the base offense level is increased by two levels. U.S.S.G. § 2B1.1(b)(1)(B) (2003). The PSR, relying on the relevant conduct guideline § 1B1.3(a)(2) to take into account unconvicted conduct, found the total loss to be $8,687, and after several other adjustments not relevant here, arrived at an ultimate base offense level of eight. These calculations correspond to a sentence range of zero to six months imprisonment. In addition, the PSR determined that restitution in the amount of $8,687 was appropriate. Randle filed two Sentencing Memoranda raising objections to various aspects of the PSR, but neither memorandum objected to the PSR's calculation of an appropriate restitution amount.

At Randle's sentencing hearing, the district court questioned the parties about restitution for the victims of Randle's fraud. When the court asked where the restitution money would go, the government listed the three victims of Randle's scheme and noted the amounts paid by each. Defense counsel's only response was to emphasize that Randle's colleague Belloumini would be jointly and severally liable for any restitution amount.

After some additional questioning, the district court sentenced Randle to two months imprisonment followed by a term of supervised release, a fine of $100, and restitution in the amount of $8,687. The court then noted that the restitution was to be paid to "the individuals as set forth in the presentence investigation report." (Sent. Tr. at 14.) Randle made no objection, but now appeals that part of his sentence ordering restitution to victims Terry and Gibson.

II. ANALYSIS

Because Randle did not raise any objection to the restitution order at his sentencing, his challenge is reviewed here for plain error. United States v. Noble, 246 F.3d 946, 955 (7th Cir.2001). "To justify a finding of plain error, `there must be an "error" that is "plain" and that "affects substantial rights."'" Id. (quoting United States v. Olano, 507 U.S. 725, 732, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993)). Even then, a court maintains discretion to decide whether to notice and remedy the error, the exercise of which depends on whether the error "`seriously affects the fairness, integrity or public reputation of judicial proceedings.'" Id. (quoting Olano, 507 U.S. at 732, 113 S.Ct. 1770).

Randle argues, and the government at least partially concedes, that the district court committed an error in calculating its restitution order, as it had no authority to order restitution with respect to the two victims not affected by the bankruptcy fraud to which Randle pleaded guilty. According to Randle, neither Odell Terry nor M.C. Gibson qualify as "victims" under the statutory language authorizing restitution, as interpreted by the Supreme Court and this Court. The government agrees that the district court erred by ordering restitution on this basis. In addition, Randle argues that he never agreed, as part of his plea agreement, to pay these victims restitution. The government contends that it was clearly Randle's "intention" to pay them, whether the explicit terms of the written plea agreement say so or not, and this provided the district court with the authority to make its order.

We begin by noting that "[f]ederal courts possess no inherent authority to order restitution, and may do so only as explicitly empowered by statute." United States v. Hensley, 91 F.3d 274, 276 (1st Cir.1996) (citation omitted). Congress has, however, provided statutory authorization for court-ordered restitution in certain circumstances. For example, the Victim and Witness Protection Act ("VWPA"), 18 U.S.C. § 3663, authorizes a court to order "in addition to or ... in lieu of any other penalty authorized by law, that the defendant make restitution to any victim of such offense." 18 U.S.C. § 3663(a)(1)(A) (2003). The Mandatory Victims Restitution Act ("MVRA"), 18 U.S.C. § 3663A, requires that "the court shall order" restitution to the victims of certain specified offenses, including those which result in "an identifiable victim or victims [who] has suffered... pecuniary loss." 18 U.S.C. § 3663A(a)(1) & (c)(1)(B) (2003) (emphasis added).²

These two statutory provisions authorize federal courts to order offenders to pay restitution to "victims" of certain crimes. Both the VWPA and the MVRA define a "victim" either as "a person directly and proximately harmed as a result of the commission of an offense for which restitution may be ordered" or "in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity, any person directly harmed by the defendant's criminal conduct in the course of the scheme, conspiracy, or pattern." 18 U.S.C. §§ 3663(a)(2) & 3663A(a)(2). In addition, courts are authorized to order restitution to persons other than a "victim" only "if agreed to by the parties in a plea agreement." 18 U.S.C. § 3663A(a)(3).

Court decisions reviewing awards of restitution to "victims" under the VWPA and MVRA have generally required a direct nexus between the offense of conviction and the loss being remedied. In Hughey v. United States,...