Government of Virgin Islands v. Davis
| Decision Date | 13 December 1994 |
| Docket Number | No. 93-7299,Nos. 93-7299,No. 93-7300,93-7300,93-7299,s. 93-7299 |
| Citation | 43 F.3d 41 |
| Parties | GOVERNMENT OF the VIRGIN ISLANDS v. Astarte DAVIS, Appellant,UNITED STATES of America v. RICE, Astarte, Astarte Davis, Appellant, |
| Court | U.S. Court of Appeals — Third Circuit |
Thurston T. McKelvin (argued), Office of the Federal Public Defender, Charlotte Amalie, St. Thomas, U.S. VI, for appellant.
David M. Nissman (argued), Office of the U.S. Atty., Christiansted, St. Croix, U.S. VI, for appellee.
Before: MANSMANN, HUTCHINSON, and LEWIS, Circuit Judges.
On December 21, 1988, Astarte Davis was charged in a 28-count information with forgery, grand larceny, perjury, obtaining money under false pretenses, filing false documents, maintaining a fraudulent civil action, preparing false evidence and making false statements to the government in Government of the Virgin Islands v. Astarte Davis, D.C. VI Crim. No. 88-132 (the "V.I. Case"). Davis was also indicted on five counts of mail fraud in United States v. Astarte Davis, D.C. VI Crim. No. 88-403 (the "U.S. Case").
On October 10, 1991, Davis pleaded guilty to Counts One (Conspiracy to Defraud, in violation of Virgin Islands Code, Title 14, Section 551); Two (Forgery on Real Property Deed, in violation of Virgin Islands Code, Title 14, Section 791(1)); Twenty-Four (Offering False Evidence in a Civil Case, in violation of Virgin Islands Code, Title 14, Section 1504); Twenty-Five (Perjury, in violation of Virgin Islands Code, Title 14, Section 1541); and Twenty-Six (Selling Property Obtained Unlawfully, in violation of Virgin Islands Code, Title 14, Section 2101(a) in the V.I. Case); and Count Two (Mail Fraud, in violation of United States Code, Title 18, Section 1341) of the indictment in the U.S. Case. Davis also pleaded guilty to Making False Statements in violation of 18 U.S.C. Sec. 1001 (Sec. 1001) and Failure to Appear in violation of 18 U.S.C. Sec. 3146 (Sec. 3146). 1
Both the V.I. Case and the U.S. Case involved Davis' efforts to defraud the estate of James Merrills Rice (Rice Estate) of more than one million dollars worth of real and personal property. 2 Specifically, Davis prepared a false and fictitious last will and testament of James Rice purporting to bequeath to her the bulk of the Rice Estate; altered Rice's power of attorney, giving herself full and complete control over his property, assets and affairs; and prepared a false warranty deed for the purpose of facilitating the transfer of valuable realty owned by Rice to herself. Using the forged documents, Davis transferred title for or otherwise unlawfully appropriated or conveyed personal property belonging to Rice which was valued at more than $120,000. Davis also forged Rice's signature on a series of checks which totalled $10,985 and entered into contractual agreements concerning Rice's boat, the Fish Eagle, assigning to herself a percentage of the profits earned by the venture.
In addition to the other illegal activities Davis stood convicted of by virtue of her plea in the V.I. Case, she filed a lawsuit against a number of entities and individuals, including Rice, to quiet title to property she had fraudulently obtained. In preparation for that lawsuit, Davis forged letters, deeds and other documents to make it appear as though James Rice was alive and that he had given all of his worldly possessions to her and her sons. Davis presented the false documents at a deposition during which she also gave false testimony.
With respect to the U.S. Case, Davis prepared forged documents instructing the Guardian Savings Bank in Houston, Texas, to transfer two one hundred thousand (100,000) dollar certificates of deposit into an account held by the Icon Corporation, which was wholly-owned by Davis and her sons.
As a result of her guilty pleas, on January 31, 1992, the District Court of the Virgin Islands, Division of St. Croix, sentenced Davis to 10 years imprisonment and five years probation in connection with the V.I. Case, and 15 months imprisonment in connection with the U.S. Case. 3 In addition, the court ordered her to pay restitution in the amount of $547,000. 4
Following the district court's denial of her motions for reduction of sentence and for reconsideration, Davis appealed, claiming that the district court had failed to make specific findings with respect to: (1) the amount of loss sustained by the Rice Estate as a result of the offenses; (2) her own financial resources and the relationship between the amount of restitution imposed, and (3) any loss caused by the underlying offenses for which she was convicted. Upon the government's request, we remanded the case for additional fact-finding in connection with the district court's restitution order. Government of the Virgin Islands v. Davis Nos. 92-7472, 92-7473 and 92-7474 (3d Cir. Jan. 20, 1993).
On remand, the district court conducted an evidentiary hearing and reduced the amount of restitution from $547,000 to $297,246.78. Of the total amount, $229,282.78 was awarded pursuant to Title 5, Virgin Islands Code, Sec. 3721 (1993) (), and the remaining $67,964 was awarded under the Victim and Witness Protection Act (VWPA), 18 U.S.C. Secs. 3663-3664. Davis now appeals the modified restitution order. We have jurisdiction over this appeal pursuant to 28 U.S.C. Sec. 1291.
Davis raises three issues on appeal: (1) that the district court erred by including legal fees which the Rice Estate incurred to recover funds which Davis had fraudulently obtained, as well as lost interest, in her obligation to the Rice Estate; (2) that the district court erred in finding that she had the present or future means to comply with the restitution order, and (3) that the district court improperly ordered restitution under the V.I. restitution statute. 5
Our review of whether a district court correctly imposed an order of restitution is bifurcated: we exercise plenary review over whether the award is permitted under law, but we review the amount of the award for abuse of discretion. United States v. Badaracco, 954 F.2d 928, 942 (3d Cir.1992).
Because we conclude that restitution ordered pursuant to the VWPA may not include legal expenses, we will reverse the district court's inclusion of $27,964 in such fees in the amount of restitution ordered under the VWPA. We will, however, affirm the district court's order with respect to the inclusion of interest, and will likewise affirm the award made pursuant to the V.I. restitution statute in its entirety.
We first address Davis' assertion that the district court improperly included legal fees and lost interest in her restitution obligations to the Rice Estate.
As the government correctly points out, the restitution award in the V.I. Case was ordered pursuant to the V.I. restitution statute and not the VWPA. That point, which Davis fails to recognize, defeats her argument with regard to the $95,997.78 in legal expenses included in the restitution ordered in the V.I. Case. This expenditure by the estate arose from the fraud Davis had perpetrated on it, and was incurred in the estate's effort to recover losses it had sustained as a result of the offenses to which Davis pleaded guilty. The V.I. restitution statute provides that "the court shall require restitution designated to compensate the victim's pecuniary loss resulting from the crime to the extent possible.... " 5 V.I.C. Sec. 3721 (emphasis added). We believe that the district court appropriately included legal fees in the order of restitution made pursuant to the V.I. restitution statute because the expenses clearly represent pecuniary losses incurred by the estate, and these losses are directly attributable to Davis' crimes against the estate.
The amount of restitution ordered in the U.S. Case included compensation for legal expenses incurred by the Rice Estate in litigation to recover the balance of the funds in Rice's account in the Guardian Savings of Houston, Texas. Guardian Savings had frozen Rice's account after discovering that Davis had fraudulently withdrawn two certificates of deposit, each worth one hundred thousand (100,000) dollars, and deposited them into an account held by the Icon Corporation.
In defining the substantive boundaries of compensation in cases where restitution is ordered for offenses resulting in the loss of property, Sec. 3663(b)(1) of the VWPA provides:
(b) The order may require that such defendant--
(1) in the case of an offense resulting in damage to or loss or destruction of property of a victim of the offense--
(A) return the property to the owner ...; or
(B) if return of the property under subparagraph (A) is impossible, impractical, or inadequate, pay an amount equal to the greater of--
(i) the value of the property on the date of the damage, loss, or destruction, or
(ii) the value of the property on the date of sentencing, less the value (as of the date the property is returned) of any part of the property that is returned.
This section has been construed to authorize "restitution in an amount pegged to the actual losses suffered by the victims of the defendant's criminal conduct." United States v. Barany, 884 F.2d 1255, 1260 (9th Cir.1989). Furthermore, the obligation must be based upon losses directly resulting from such conduct. Id. at 1261 (emphasis added).
Most courts which have analyzed the meaning of "losses directly resulting" from the offense have interpreted this language narrowly. In fact, the Fourth, Fifth, Seventh, Ninth and Tenth Circuits have specifically held that restitution under the VWPA cannot include consequential damages such as attorneys' fees. See United States v. Mullins, 971 F.2d 1138, 1147 (4th Cir.1992) (); United States v....
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