U.S. v. Mahoney

• Decision Date: 07 October 1988
• Docket Number: No. 87-2800,87-2800
• Citation: 859 F.2d 47
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Clinton Dennis MAHONEY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 47

859 F.2d 47

UNITED STATES of America, Plaintiff-Appellee, v. Clinton Dennis MAHONEY, Defendant-Appellant.

No. 87-2800.

United States Court of Appeals Seventh Circuit.

Argued April 14, 1988.

Decided Oct. 7, 1988.

Richard H. Parsons, Peoria, Ill., for defendant-appellant.

K. Tate Chambers, Asst. U.S. Atty., Peoria, Ill., J. William Roberts, U.S. Atty., Springfield, Ill., for plaintiff-appellee.

Before WOOD, Jr., COFFEY and EASTERBROOK, Circuit Judges.

COFFEY, Circuit Judge.

Defendant-Appellant Clinton Dennis Mahoney appeals from the trial judge's order requiring him to pay $288,655.00 as restitution to the victims of a mail fraud scheme under the Victim and Witness Protection Act of 1982, 18 U.S.C. Secs. 3579-80 ("VWPA"). We vacate the order of restitution and remand for resentencing in light of the guidelines set forth in this opinion.

BACKGROUND

Clinton Dennis Mahoney, formerly the owner of two automobile dealerships in Peru and Spring Valley, Illinois, pleaded guilty to a criminal information charging him with three counts of mail fraud in At the sentencing hearing, the court heard testimony about Mahoney's current financial situation and his ability to pay restitution. ³ Mahoney testified, that he was employed as a salesman at Torri's Used Cars, which paid him $600 per week, plus bonuses when business was good. This salary was used to support himself and his dependent wife, who suffers from paranoid schizophrenia. Although she has not required extensive hospital treatment, Mahoney testified that his physician informed him that his close presence and support are necessary to prevent a deterioration of her condition. (Mahoney's five grown children are self-supporting.) He further testified that he had given up all of his assets in an effort to compensate the banks that had lost money as a result of his fraud scheme. ⁴

violation of 18 U.S.C. Sec. 1341. The information alleged that Mahoney engaged in a scheme to obtain duplicate "Manufacturer's Statement of Origin" on a single automobile from the Ford Motor Company through the United States mails and then to use those statements to obtain financing from two separate lending institutions on the single car. The district judge accepted Mahoney's guilty plea, and sentenced him to a one-year period of incarceration to be followed by two concurrent five-year periods of probation. In addition, and as a condition of his probation, ¹ the defendant was ordered to pay a total of $288,655.00 to the victims of his mail fraud scheme on a schedule of regular monthly payments over a five-year period as required by 18 U.S.C. Sec. 3579(f)(2) of the VWPA. ²

Upon concluding the presentation of evidence, the government made these recommendations:

"The government's recommendation is, as to Count I, that the defendant be imprisoned for a period of five years and given a $1,000 fine. As to Count II that he receive two concurrent periods of probation to commence upon termination of any period of incarceration under Count I, and that he be ordered to pay restitution in the amount of $73,850 to the State Bank of Cherry; $124,805 to the First National Bank of Oglesby; and $90,000 to the First Bank of Princeton. For a total of $288,655. Your honor, that is the recommendation of the government."

Defense counsel objected to the government's recommendation, stating that:

"Dennis is at this point without assets. Dennis at this point, if he were placed in jail, could not pay restitution, not to say he can make full and complete restitution now even if he is permitted to be on probation. But the fact of the matter remains that he has shown a willingness and an ability to pay to those banks as much as he possibly could to help make up for the wrong he committed, and he can continue to do this."

Finally, in his personal statement to the court, Mahoney stated that "[i]f you see fit In imposing the court's sentence, the judge made these comments with respect to the defendant's ability to comply with the $288,655 order of restitution:

to let me out there, I will do my very best to pay this back."

"I know that your wife is very dependent upon you. I appreciate that situation, and I understand it. I also think that it is time that some other members of your family start playing a greater role in helping you perform your responsibilities regarding the family. You have two sons that live in Texas. Maybe they should give some thought to maintaining a closer contact with what is going on in Illinois and doing their share to help out with the situation. In terms of restitution, I have no way of knowing to what extent restitution can ever meaningfully be realized in this case. Obviously, you do have that responsibility."

On appeal Mahoney insists that the district court failed to adequately consider his financial situation as well as the needs and earning abilities of his dependents in ordering restitution in an amount in excess of nine times his annual income.

LAW

Trial judges traditionally are vested with broad discretion in setting criminal sentences. We have consistently held that " '[a] sentence which is within the limits established by the statute under which it is imposed will not be vacated upon review unless the sentencing judge relied upon improper considerations or unreliable information in exercising his discretion or failed to exercise any discretion at all in imposing the sentence.' " United States v. Ford, 840 F.2d 460, 466 (7th Cir.1988) (quoting United States v. Harris, 761 F.2d 394, 402-03 (7th Cir.1985)). These rules of deference apply as well to restitution orders under the VWPA. See United States v. Bruchey, 810 F.2d 456, 458 (4th Cir.1987); United States v. Richard, 738 F.2d 1120, 1122 (10th Cir.1984).

Despite the fundamental need for appellate deference to trial court sentencing decisions, sentencing statutes such as the VWPA impose important substantive and procedural limitations on the trial judge's discretion. Most important in this case, the "VWPA implicitly requires the district judge to balance the victim's interest in compensation against the financial resources and circumstances of the defendant--all while remaining faithful to the usual rehabilitative, deterrent, retributive, and restrictive goals of criminal sentencing." Bruchey, 810 F.2d at 458. Accordingly, Sec. 3580(a) of the VWPA expressly requires the sentencing judge to consider "[t]he 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,...." ⁵ While the VWPA places on the defendant the burden of demonstrating the financial needs of his dependents, 18 U.S.C. Sec. 3580(d), Congress has seen fit to require the court to consider the financial need factor where, as here, the defendant "at least produce[s] some evidence on this issue." United States v. Gomer, 764 F.2d 1221, 1222 (7th Cir.1985); Cf. id. at 1226 (dissenting opinion) ("[t]he statute requires that the defendant bear the burden of establishing his dependents' needs and not just the burden of production") (emphasis in original). Thus, although the defendant must demonstrate the financial needs of his dependents, we are obligated to ensure that the sentencing judge at a minimum has considered the defendant's evidence concerning the "financial needs and earnings ability" of Mahoney and his dependents.

In order to facilitate effective appellate review on this issue, some courts have invoked their "supervisory power" to require district courts to make specific fact findings on the requirements of Sec. 3580(a). See, e.g., Bruchey, 810 F.2d at 458; United States v. Hill, 798 F.2d 402, 406-07 (10th "The vindication of a defendant's right to not be sentenced on the basis of improper factors or erroneous information--a right recognized by the Court in Townsend [v. Burke, 334 U.S. 736, 68 S.Ct. 1252, 92 L.Ed. 1690 (1948) ] and [United States v.] Tucker [404 U.S. 443, 92 S.Ct. 589, 30 L.Ed.2d 592 (1972) ]--should not depend upon the fortuity of the sentencing judge disclosing, perhaps inadvertently, the factors relied upon in the imposition of sentence. The fairness of the sentencing process is undermined by reliance upon inaccurate information, not by the sentencing judge stating that he relied upon material which proves to be inaccurate. In addition, the explicit reliance requirement simply encourages judges not to disclose factors considered in imposing sentence. While it is true that a trial judge is generally not obligated to give reasons for the imposition of a particular sentence, it is sometimes necessary, and always advisable, to do so.... Accordingly, we should not adopt a rule which will have the natural and probable effects of encouraging trial judges to avoid giving reasons for sentencing decisions and diminishing the individual offender's confidence in the fairness and objectivity of a critical step in the criminal justice process."

Cir.1986); United States v. Palma, 760 F.2d 475, 480 (3d Cir.1985). The defendant urges us to adopt this rule, yet this circuit has explicitly stopped short of requiring the sentencing judge to affirmatively state that he or she is relying on mandatory factors in imposing sentence. See Gomer, 764 F.2d at 1223; Andrews v. United States, 817 F.2d 1277, 1280-81 (7th Cir.1987). In United States v. Harris, 558 F.2d 366, 374-75 (7th Cir.1977), we explained that:

Thus, we have held that "[a]lthough the sentencing judge need not explicitly state he is relying on the mandatory factor, the appellate court must reverse where the defendant shows either (1) that the judge explicitly repudiated the mandatory factor, or (2) that it was not improbable that the judge failed to consider the mandatory factor and was influenced thereby." Gomer, 764 F.2d at 1223. Gomer is the law of this circuit; under the time-honored doctrine of stare decisis, we adhere to its principles...