U.S. v. Hughey

• Decision Date: 27 July 1989
• Docket Number: No. 87-5596,87-5596
• Citation: 877 F.2d 1256
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Frasiel L. HUGHEY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1256

877 F.2d 1256

58 USLW 2131

UNITED STATES of America, Plaintiff-Appellee, v. Frasiel L. HUGHEY, Defendant-Appellant.

No. 87-5596.

United States Court of Appeals Fifth Circuit.

July 27, 1989.

Lucien B. Campbell, Federal Public Defender, San Antonio, Tex., for defendant-appellant.

Michael R. Hardy, LeRoy Morgan Jahn, Daniel Maeso, Asst. U.S. Attys., for plaintiff-appellee.

Appeal from the United States District Court for the Western District of Texas.

Before REAVLEY, WILLIAMS and JONES, Circuit Judges.

JERRE S. WILLIAMS, Circuit Judge:

Frasiel L. Hughey pleaded guilty to one count of illegal credit card use out of a six count indictment, pursuant to a plea bargain. Hughey now appeals the denial of his Fed.R.Crim.P. 35 motion to correct his sentence on the ground that it was error for the trial court to order him to pay restitution beyond that attributable to the one criminal act of which he pleaded guilty. He claims the amount of restitution assessed exceeds that authorized by the Victim and Witness Protection Act (the "VWPA") for four reasons: 1) It includes the value of losses caused by crimes of which he was not found guilty. 2) While it is true that a defendant need not be convicted of a particular offense for that offense to figure into restitution calculations in scheme or conspiracy convictions, Hughey was convicted of neither. 3) The wrong standard of proof was applied by the court. 4) The court did not sufficiently consider his indigency in its restitutive assessment. We affirm the trial court's assessment of restitution.

Facts and Prior Proceedings

Hughey was charged in a second superseding indictment with three counts of mail theft (18 U.S.C. Sec. 1709) and three counts of fraudulent use of a credit card (18 U.S.C. Sec. 1029(a)(2)). He pleaded guilty to count IV of the indictment, which alleged that on or about October 18, 1985, he misused a Mastercard issued by MBank to Hershey Godfrey by buying merchandise worth more than $1000.00 with it.

As part of the plea bargain, detailed in a letter to the court by Hughey's attorney, the government agreed to dismiss all the remaining counts of all three indictments and not to prosecute Hughey for "any other offense arising in the Western District of Texas as part of the scheme alleged in the indictment." The plea bargain was silent regarding restitution. The government offered as the factual basis for the guilty plea that Hughey was a postal employee, that one of his tasks was to place undelivered MBank credit cards in a specific San Antonio Post Office box, and that he had stolen the undelivered Godfrey credit card "as well as a number of other cards adding to more than 15 in number." Hughey specifically advised the court that he was not acknowledging or responding to any allegations other than count IV (misuse of the Godfrey credit card).

When taking the guilty plea, the court notified Hughey that it could impose restitutive obligations in addition to other penalties. After the plea but before sentencing, Hughey was notified by the United States Probation Office that restitution of $147,646.89 might be sought at the time of sentencing. Hughey objected to this figure, and the government submitted a revised figure of $90,431, which was derived by adding up the losses resulting from unauthorized use of 21 credit cards issued by MBank to 19 individuals, including the Godfrey card.

In a hearing prior to sentencing, the government offered a stipulation of the testimony of witnesses that the government could produce who would testify with regard to Hughey's responsibility for the misuse of the 21 credit cards. ¹ The defense made no objection but noted that this was a stipulation as to expected testimony, not fact.

In response to the government's proposed figure, Hughey offered to make restitution of $10,412, which he claimed was the sum representing the total loss caused by the unauthorized use of the Godfrey credit card. He argued that he could not be legally held responsible for any greater restitution under the VWPA.

On April 2, 1987, Hughey was sentenced to eight years for violation of 18 U.S.C. Sec. 1029(a) (credit card fraud). Pursuant to the VWPA, 18 U.S.C. Secs. 3579 and 3580 (1982 and Supp. IV 1986) (current versions at 18 U.S.C. Secs. 3663 and 3664), ² he was ordered to make restitution to MBank of $90,431.

Hughey appeals the trial court's denial of his "Motion to Reduce Sentence and to Correct an Illegal Sentence" made under Fed.R.Crim.P. 35. In that motion he challenged the trial court's assessment of restitution as illegal under the VWPA. The trial court stated, when denying Hughey's motion in its order of October 7, 1987:

The total loss in dollars caused to the issuing banks was $90,431. Although defendant Hughey did not himself benefit in that sum, the loss to the issuing banks in that amount was caused by the fact that he used the credit cards or caused them to be used. The Court finds that a preponderance of the evidence supports the award of restitution.

The court also stated that while it had considered Hughey's indigency, it was convinced that the award was appropriate.

I. Restitution for Acts for Which the Defendant Was Not Convicted.

A. Standard of Review

In reviewing the denial of a rule 35 motion, this Court will "examine only whether the sentence was illegal or whether the district court abused its discretion." U.S. v. Kirkland, 853 F.2d 1243, 1246 (5th Cir.1988). The legality of a criminal sentence is examined on a de novo basis. See U.S. v. Pomazi, 851 F.2d 244, 247 (9th Cir.1988). Because Hughey challenges the legality of his criminal sentence, we review de novo.

May a defendant, charged with multiple offenses, who pleads guilty to one offense be required to make restitution under the VWPA for acts of which he was not found guilty? This is the critical issue before us. We find statutory language, history, and case authority all support a trial court's authority to assess restitution under the VWPA in appropriate circumstances for losses beyond those attributable to the offense of conviction.

B. Statutory Language and History

Section 3579 of the VWPA refers to "a defendant convicted of an offense" and "any victim of such offense." ³ Section 3580 refers to "the amount of the loss sustained by any victim as a result of the offense." ⁴ The difficulty here is that the term "offense" is not defined independently. Hence the statute is ambiguous, and we must give the term meaning.

The reference in Sec. 3579 to "such offense" and the repeated references to "the" property by themselves admittedly point to a maximum restitution determined by the loss attributable only to the offense of conviction and "perhaps for the proposition that the charging instrument establishes the maximum amount of that loss." United States v. Berrios, 869 F.2d 25, 28 (2nd Cir.1989).

Two procedural provisions of the VWPA, however, suggest a more open-ended application of the term "offense" was intended. Section 3580 provides that "the court, in determining ... the amount of such restitution, shall consider the amount of the loss sustained by any victim as a result of the offense," and that it shall consider "such other factors as the court deems appropriate." 18 U.S.C. Sec. 3580(a). It is obvious that the amount of loss may be more than that stated in the charging instrument. Therefore, at the minimum, the VWPA does not limit restitution to the amount specified in an indictment. Furthermore, the amount of loss is put forward as only one factor that the court must consider. The statute obviously gives a sentencing court some discretion in determining the proper restitutive amount. See Berrios, 869 F.2d at 29.

Section 3580(e) provides for estoppel in subsequent civil proceedings:

A conviction of a defendant for an offense involving the act giving rise to restitution under this section shall estop the defendant from denying the essential allegations of that offense in any subsequent Federal civil proceeding or State civil proceeding, to the extent consistent with State law, brought by the victim.

18 U.S.C. Sec. 3580(e) (1982). If Congress had intended to limit the amount of restitution to that attributable to the offense of conviction, subsection (e) would not have needed to employ the phrase "for an offense involving the act giving rise to restitution" but instead could have simply stated "for an offense giving rise to restitution." The phrase "involving the act" would be useless surplusage if such a limited reading was intended. It is our duty to give effect to every clause and word of a statute, if possible. See United States v. Menasche, 348 U.S. 528, 538-39, 75 S.Ct. 513, 520, 99 L.Ed. 615 (1955) (quoting Montclair v. Ramsdell, 107 U.S. 147, 152, 2 S.Ct. 391, 395, 27 L.Ed. 431 (1883)). Inclusion of the phrase "involving the act" "implies that the acts for which restitution may be ordered must be related to the offense of which defendant is convicted, but that those acts may extend beyond the boundaries of the offense itself." Berrios, 869 F.2d at 29.

An analysis of the history of the VWPA further confirms a broader reading of the term "the offense." If "offense" was meant to be limited purely to the offense for which defendant is convicted, the VWPA could have been written as was the Federal Probation Act (FPA). The FPA provided that a defendant "[m]ay be required to make restitution ... to aggrieved parties for ... loss caused by the offense for which conviction was had." 18 U.S.C. Sec. 3651 (1982) (repealed effective November 1, 1986, pursuant to Sec. 235 of Pub.L. 98-473) (emphasis added). The VWPA contains no such limiting language. United States v. Hill, 798 F.2d 402, 405 (10th Cir.1986); see also Berrios, 869 F.2d at 28-29.

Even under the more restrictive language of the FPA there was a division among the Circuit Courts on whether restitution was in fact limited to the amount charged in the indictment. Compare United...