637 F.3d 128 (2nd Cir. 2011), 10-0520-cr(L), United States v. Pescatore
|Docket Nº:||10-0520-cr(L), 10-0615-cr.|
|Citation:||637 F.3d 128|
|Opinion Judge:||KEARSE, Circuit Judge:|
|Party Name:||UNITED STATES of America, Appellee, v. Michael PESCATORE, Defendant-Appellant.|
|Attorney:||Loretta E. Lynch, United States Attorney for the Eastern District of New York, Brooklyn, N.Y. (Varuni Nelson, Beth P. Schwartz, Kathleen A. Nandan, Assistant United States Attorneys, Karen R. Hennigan, Special Assistant United States Attorney, Brooklyn, NY, of counsel), for Appellee. James R. Fro...|
|Judge Panel:||Before: KEARSE, WINTER, and HALL, Circuit Judges.|
|Case Date:||February 23, 2011|
|Court:||United States Courts of Appeals, Court of Appeals for the Second Circuit|
Submitted: Jan. 3, 2011.
Defendant Michael Pescatore, who was convicted of operating chop shops in violation of 18 U.S.C. §§ 2322 and 2, and of extortion offenses in violation of 18 U.S.C. §§ 1951 and 2, and who, in his plea agreement with the government, agreed to forfeit $2.5 million in cash, plus certain real estate, and to pay-restitution in an amount not less than $3 million, appeals from an order of the United States District Court for the Eastern District of New York, Thomas C. Platt, Judge, denying his postconviction motion for an order either compelling the government to use a portion of his forfeited assets to relieve him of his restitution obligations, a process called " restoration," 18 U.S.C. § 981(e)(6), or vacating as illegal the requirement in the amended judgment of conviction that he pay $3 million in restitution, to the extent that that sum exceeds the total losses suffered
by his identified chop shop victims. On appeal, Pescatore contends principally (1) that the government should be compelled to use a portion of the forfeited assets to satisfy his restitution obligations because no law prohibits such restoration; (2) that the judgment ordering him to pay $3 million in restitution is illegal to the extent that the total amount of victim losses listed in the pages of the presentence report (" PSR" ) that are attached to the amended judgment is less than $3 million; and (3) that his obligation should be further reduced because the actual amount of victim losses totals even less than the amount shown in the PSR. In opposition, the government argues (1) that the decision whether to grant Pescatore relief in the form of restoration lay solely within the Attorney General's discretion, which was not abused; (2) that the amended judgment of conviction reduced Pescatore's restitution obligation to $2,559,611.79 to match the losses identified in the PSR; and (3) that any contention that the $2,559,611.79 figure is erroneous is subject to plain-error analysis and does not meet that standard.
For the reasons that follow, we conclude that the district court did not err in rejecting Pescatore's restoration request; that the amended judgment did not reduce the $3 million amount that Pescatore was ordered to pay in restitution; and that Pescatore is not entitled to an immediate— if any— order excusing him from paying that amount. The amount to be paid is limited to the restitution amounts needed to make Pescatore's victims whole, plus interest that Pescatore is obligated to pay on the properly ordered restitution amounts that he has not timely paid, see 18 U.S.C. § 3612(f)(1), plus any penalties to which he may be subject for unpaid restitution amounts as to which he is or was delinquent and/or in default, see id. §§ 3612(g), 3572(h)-(i). If all required payments of restitution, interest, and restitution-related penalties total less than $3 million, Pescatore will be entitled to a refund of the remainder. Accordingly, we affirm the denial of Pescatore's motion but remand for further proceedings.
To the extent relevant to the present case, Pescatore was first arrested, by law enforcement officers of Suffolk County, New York, in mid-2003. He and others, including Astra Motor Cars, Inc. (" Astra" ), of which Pescatore was president and 50-percent owner, were indicted by a New York State grand jury on charges of fraud and enterprise corruption in violation of New York State law; Astra was also indicted on state-law charges of money laundering. In late 2003, the United States commenced an in rem civil action pursuant to 18 U.S.C. § 981(a)(1)(A) and (C) and 21 U.S.C. § 881(a)(6) and (7) (the " civil forfeiture action" ) against several properties owned in whole or in part, directly or indirectly, by Pescatore, including one property leased to Astra. The complaint in that action alleged, inter alia, that Astra had engaged in illegal trafficking in stolen vehicles and stolen vehicle parts and had defrauded customers. ( See United States v. 322 Richardson Street, No. 2:03-cv-6456-TCP (E.D.N.Y. filed Dec. 24, 2003) (" Forfeiture Complaint" or " complaint" ) ¶ ¶ 21-23, 56-93.) It also alleged that Astra sold to a narcotics trafficking organization specially-ordered vehicles that could accommodate hidden compartments; that Astra accepted large sums of cash from that organization; and that Astra's other owner, Sanford Edmonston, knew that the buyers were drug dealers and that the cash was proceeds of narcotics trafficking. ( See id. ¶ ¶ 19-20, 94-99.) The complaint sought forfeiture of the defendant properties on the ground that they
were derived from proceeds traceable to " specified unlawful activity" within the meaning of 18 U.S.C. § 1956(c)(7), including the activities alleged in the complaint. (Forfeiture Complaint ¶ ¶ 100-62, 173-75.)
Pescatore, Astra, and numerous others were indicted by a federal grand jury in 2004. An 84-count second superseding indictment (the " Chop Shop Indictment" )— alleging, inter alia, operation of chop shops in violation of 18 U.S.C. § 2322, alteration or removal of motor vehicle identification numbers in violation of id. § 511, mail fraud in violation of id. § 1341, conspiracy to defraud the United States in violation of id. § 371, and money laundering in violation of id. § 1956— named Pescatore in most of the counts.
In February 2005, Pescatore was also charged, in six counts of a new federal indictment, with extorting money from a number of individuals. In February 2006, the extortion case was tried, and Pescatore was convicted on three of the six counts.
A. The Plea Agreement and the Judgment of Conviction
In March 2006, pursuant to a plea agreement dated March 9, 2006 (the " Plea Agreement" or " Agreement" ), Pescatore pleaded guilty to one count of the Chop Shop Indictment (count 22), which charged him with owning, operating, maintaining, or controlling a chop shop, in violation of 18 U.S.C. § 2322. Pescatore admitted that, in that operation from March 1987 through June 14, 2004, he " engaged in receiving stolen motor vehicle parts" that were used " to rebuild damaged motor vehicles" (Plea Hearing Transcript, March 9, 2006 (" Plea Tr." ), at 19-20) and hired employees to take apart, rebuild, and sell such vehicles ( id. at 21). The scheme also involved, inter alia, altering and removing vehicle identification numbers so that stolen cars could be sold to unwitting customers. ( See id. at 22).
The Plea Agreement was designed to settle not only the Chop Shop Indictment charges but also the civil forfeiture action and the punishment to be imposed for the three counts on which Pescatore was convicted in the extortion case. The advisory-Guidelines-recommended range of imprisonment for his chop shop and extortion offenses was 188-235 months. In the Agreement, the government agreed to drop the remaining 50-odd counts alleged against Pescatore in the Chop Shop Indictment and agreed that an appropriate total prison term for the chop shop offense and the extortion offenses would be 132 months. ( See Plea Agreement ¶ ¶ 4-5, 7.)
In addition to agreeing to plead guilty to count 22 of the Chop Shop Indictment, Pescatore agreed to, inter alia, pay restitution of " no less than $3 million" :
The count [to which Pescatore agreed to plead guilty] carries the following statutory penalties:
e. Restitution: In an amount to be determined by the Court, but no less than $3 million. The parties agree that restitution with respect to the defendant's tax liabilities may be ordered by the Court (18 U.S.C. §§ 3663 and 3663A).
(Plea Agreement ¶ 1.e.). The final sentence of this provision applied to Pescatore's federal tax liabilities but became moot, as Pescatore paid that debt prior to being sentenced.
In settlement of the civil forfeiture action, Pescatore agreed to forfeit $2.5 million in cash, plus real estate ( see id. ¶ 9). With respect to the assets to be forfeited, the United States Attorney's Office for the Eastern District of New York (" USAO" or " Office" ) agreed to recommend that the
Department of Justice (" DOJ" or " Department" ) grant restoration, relieving Pescatore of all or part of his restitution obligation:
The Office will recommend that any net proceeds derived from the sale of the Forfeited Assets be made available to eligible victims, pursuant to 18 U.S.C. § 981(e), 28 C.F.R. Pt. 9 and Attorney General Order No. 2088-97 (June 14, 1997), it being understood that the Office has authority only to recommend and that the final decision whether to grant such relief rests with the Department of Justice, which will make its decision in accordance with applicable law.
( Id. ¶ 17.)
Pescatore was sentenced some 2 1/2 years after his March 2006 plea of guilty. At the October 24, 2008 sentencing hearing, Pescatore informed the court that, in the interim, he had timely turned over many millions of dollars in assets (worth $9 million, see Hearing Transcript, January 29, 2010, at 17, 18) in complete satisfaction of his forfeiture obligations, and he urged the district court to...
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