U.S. v. Ahmad

• Decision Date: 24 August 1993
• Docket Number: No. 92-3909,92-3909
• Citation: 2 F.3d 245
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Syed Sami AHMAD, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 245

2 F.3d 245

UNITED STATES of America, Plaintiff-Appellee, v. Syed Sami AHMAD, Defendant-Appellant.

No. 92-3909.

United States Court of Appeals, Seventh Circuit.

Argued Aug. 4, 1993.

Decided Aug. 24, 1993.

Barry R. Elden, Asst. U.S. Atty., Kathleen T. Murdock, Asst. U.S. Atty. (argued), Crim. Receiving, Appellate Div., Chicago, IL, for plaintiff-appellee.

William T. Huyck (argued), Chicago, IL, for defendant-appellant.

Before FLAUM, EASTERBROOK, and ROVNER, Circuit Judges.

EASTERBROOK, Circuit Judge.

After receiving one college degree in Pakistan, Syed Sami Ahmad came to the United States to pursue another. He put himself through college with a combination of part-time jobs, aid from his family, and counterfeiting. Instead of passing bogus currency, Ahmad used bogus electronic components. Each cellular phone has a microchip that identifies the subscriber. Ahmad pirated telephone subscribers' identification numbers, had a friend reprogram three chips with these numbers, and inserted the chips in cellular phones so that calls would be billed to these account holders. Then he placed long distance calls for himself and his friends, charging the friends for his trouble. This scheme violated 18 U.S.C. Sec. 1029(a)(1). Ahmad pleaded guilty and was sentenced to six months' imprisonment plus restitution of $39,663, the amount Ameritech and AT & T billed for the calls Ahmad completed. The propriety of restitution is the only issue on appeal.

Ahmad contends that the order is improper because the district judge did not comply with 18 U.S.C. Sec. 3664(a), which provides: "The court, in determining whether to order restitution under section 3663 of this title and the amount of such restitution, shall consider the amount of the loss sustained by any victim as a result of the offense, the financial resources of the defendant, the financial needs and earning ability of the defendant and the defendant's dependents, and such other factors as the court deems appropriate." According to Ahmad, the district court did not "consider" his "financial resources ... financial needs and earning ability" because the court did not make express findings on the subject. A few courts of appeals require express findings. United States v. Bailey, 975 F.2d 1028, 1031 (4th Cir.1992); United States v. Logar, 975 F.2d 958, 961 (3d Cir.1992); United States v. Hill, 798 F.2d 402, 406-07 (10th Cir.1986). We do not, see United States v. Helton, 975 F.2d 430, 432 (7th Cir.1992); United States v. Arvanitis, 902 F.2d 489, 495-96 & n. 6 (7th Cir.1990); United States v. Mahoney, 859 F.2d 47, 50 (7th Cir.1988), and are not disposed to change sides. Findings simplify review, no doubt, but the United States Code does not compel district judges to do whatever helps appellate judges. Congress distinguished consideration--that is, taking a subject into account--from formal findings. Restitution is the norm, and a judge who declines to order full restitution must make explicit findings. 18 U.S.C. Sec. 3553(c). No comparable provision requires findings for ordering restitution. Section 3664(d) says: "The burden of demonstrating the financial resources of the defendant and the financial needs of the defendant and such defendant's dependents shall be on the defendant." Lack of findings coupled with an award of full restitution implies that the defendant has failed to carry this burden.

After reading the presentence report, the district judge required Ahmad to make full restitution. The presentence report contains details about Ahmad's financial resources, needs, and earning ability. Ahmad does not deny any of the pertinent details: he has one college degree, is progressing toward another, has worked in the past, and held an offer of another job. Although Ahmad's bank account may be empty, he has substantial human capital, which he can use to generate income and pay his debts--including his debt for cellular telephone service. Neither the district court's procedure nor Ahmad's circumstances supports a conclusion that the court failed to give his financial status the necessary attention. See United States v. Boula, 997 F.2d 263, 267-69 (7th Cir.1993); United States v. Narvaez, 995 F.2d 759 (7th Cir.1993); United States v. McClellan, 868 F.2d 210, 212-13 (7th Cir.1989).

Nonetheless, one thing gives us pause. The district judge did make an explicit finding about Ahmad's financial capacity, albeit not in connection with restitution. The court declined to impose a fine, stating: "Based on the information contained in the PSI, the defendant appears unable to pay and is not likely to become able to pay any fine." How can Ahmad pay $40,000 in restitution if he is unable to pay any fine, even in installments, and is unlikely to become able to do so?

One possible answer would be that the probability of payment required to support an order of restitution might be lower than the probability required to support a fine. Recall that Sec. 3664(a) does not require the district court to find that the defendant can pay; it requires only that the judge consider his ability to pay. Thus a person actually unable to pay may be directed to make restitution, provided there is some likelihood that he will acquire resources in the future. McClellan, 868 F.2d at 213; United States v. House, 808 F.2d 508, 510 (7th Cir.1986); United States v. Fountain, 768 F.2d 790, 802-03, modified on other grounds, 777 F.2d 345 (7th Cir.1985). See Logar, 975 F.2d at 962 (collecting cases). The victim of a crime may obtain a civil judgment for the damage done. Inability to satisfy a judgment is no defense in civil litigation, and a civil judgment arising out of crime, like an award of restitution, may not be discharged in bankruptcy. Because the wrongdoer is legally obligated to make his victim whole whether or not the court includes restitution as part of the criminal judgment, the need to give any consideration to the defendant's resources is something of a puzzle. Differences in enforcement may account for the requirement that the judge consider ability to pay. A felon who does not make restitution goes back to prison, while a judgment debtor may take advantage of state laws that entitle him to keep some of his current earnings--for example, laws limiting the percentage of salary that is subject to garnishment. These laws reflect in part the interests of those dependent on the wage earner and moderate the rule forbidding discharge in bankruptcy of debts incurred via fraud. Moreover, collecting restitution is costly, and Congress may have decided that the expense of wringing the last penny out of an offender should be borne by the private rather than the public sector. Although Sec. 3664(a) thus may serve some function, full restitution remains the norm, sparing victims the need to get a separate civil judgment. When there is doubt about ability to pay, the court should order full restitution. See also U.S.S.G. Sec. 5E1.1(a), which makes restitution mandatory whenever the statute permits restitution.

Yet in this case the district judge did not express doubt. He flatly stated that Ahmad cannot pay a fine, any fine, now or tomorrow or in the foreseeable future. Perhaps the district judge was just trying to ensure that the victims have the first claim on Ahmad's resources, but the Sentencing Guidelines do this automatically. "If a defendant is ordered to make restitution and to pay a fine, the court shall order that any money paid by the defendant shall first be applied to satisfy the order of restitution." U.S.S.G. Sec. 5E1.1(c). Priority for victims does not excuse a fine: "The court shall impose a fine in all cases, except where the defendant establishes that he is unable to pay and is not likely to become able to pay any fine." U.S.S.G. Sec. 5E1.2(a). See United States v. Ferrin, 994 F.2d 658, 665-66 (9th Cir.1993), among cases emphasizing that "shall" makes the fine mandatory.

Ahmad's offense level was 10, for which the Guidelines specify a fine of $2,000 to $20,000. U.S.S.G. Sec. 5E1.2(c)(3). Application Note 4 authorizes upward departure to twice the loss caused by the offense--in this case, $79,326. To the fine under Sec. 5E1.2(c)(3) the district judge must add the costs of custody under Sec. 5E1.2(i). United States v. Turner, 998 F.2d 534 (7th Cir.1993). Restitution is not a reason to...