U.S. v. Miell

• Decision Date: 04 October 2010
• Docket Number: No. CR 07–101–MWB.,CR 07–101–MWB.
• Citation: 744 F.Supp.2d 961
• Parties: UNITED STATES of America, Plaintiff,v.Robert MIELL, Defendant.
• Court: U.S. District Court — Northern District of Iowa

744 F.Supp.2d 961

UNITED STATES of America, Plaintiff,

v.Robert MIELL, Defendant.

No. CR 07–101–MWB.

United States District Court, N.D. Iowa, Cedar Rapids Division.

Oct. 4, 2010.

Charles J. Williams, U.S. Attorney's Office, Cedar Rapids, IA, for Plaintiff.

MEMORANDUM OPINION AND ORDER REGARDING RESTITUTION

MARK W. BENNETT, District Judge.

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                ¦TABLE OF CONTENTS¦
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I. INTRODUCTION                                                       962
                

 A. Factual And Procedural Background                               962
                   B. Restitution Claims                                              964
                

                II. LEGAL ANALYSIS                                                    965
                

 A. Authority To Order Restitution                                  965
                   B. Determination Of Restitution Amounts                            966
                

 1. Restitution for the mail fraud counts                      966
                        2. Restitution for the perjury counts                         968
                        3. “Restitution” for the tax counts                       969
                

 C. Payment Schedule                                                969
                

                III. CONCLUSION                                                        970
                

In a detailed Memorandum Opinion And Order Regarding Sentencing, entered September 27, 2010, 744 F.Supp.2d 904, 2010 WL 3853155 (N.D.Iowa 2010) I sentenced the defendant, the owner of hundreds of rental properties in Cedar Rapids and Linn County, Iowa, who engaged in separate fraud schemes to defraud renters out of their damage deposits and his property insurer out of insurance payments for roof repairs from a massive hail storm, to 240 months of imprisonment on eighteen counts of mail fraud, two counts of perjury, and two counts of filing false tax returns. I now address the outstanding questions of restitution on the mail fraud and tax counts.

I. INTRODUCTION

A. Factual And Procedural Background

I discussed the factual and procedural background to this case extensively in my September 27, 2010, Memorandum Opinion And Order Regarding Sentencing (docket no. 311). I will not repeat that full recitation here. Rather, suffice it to say that defendant Robert Miell owned hundreds of rental properties in Cedar Rapids and Linn County, Iowa, and, consequently, was himself worth many millions of dollars. Nevertheless, he engaged in a fraud scheme involving renters' damage deposits over many years to “squeeze” an extra few hundred dollars each from people that he thought were too economically vulnerable or unsophisticated to contest his claims. His damage deposit fraud scheme involved creation of fake and inflated invoices for repairs to and cleaning of his rental properties to justify claims and judgments against renters' damage deposits. He also engaged in another fraud scheme to obtain insurance payments for repair of hail damage to the roofs of more than a hundred of his rental properties based on fake or inflated invoices, whether or not the roofs in question had actually been repaired. He engaged in perjury in civil litigation brought by his insurer, American Family Insurance (AFI), and filed false tax returns for 2001 and 2002 that failed to declare the fraudulently obtained insurance proceeds as income.

Somewhat more specifically, in a Third Superseding Indictment (docket no. 72) handed down October 21, 2008, Counts 1 through 18 charged Miell with “mail fraud” allegedly arising from the insurance fraud scheme (Counts 1 through 6) ¹ and the damage deposit fraud schemes (Counts 7 through 18);² Counts 19 through 21 charged Miell with “perjury”; ³ and Counts 22 and 23 charged Miell with “filing false tax returns.” ⁴ Miell pleaded guilty to the eighteen counts of mail fraud arising from his fraud schemes and to two of the three counts of perjury.⁵ He was convicted by a jury of the two counts of filing false tax returns.

After episodic sentencing proceedings on September 2 and 3, 2009, and August 17 and 18, 2010, I entered my Memorandum Opinion And Order Regarding Sentencing (docket no. 311) on September 27, 2010. In that ruling, I overruled all of Miell's objections to the Second Final And Amended Presentence Investigation Report (Final PSIR) (docket no. 291). In pertinent part, I found that the amount of loss to AFI from the insurance fraud scheme, for sentencing purposes, relevant to the mail fraud offenses in Counts 1 through 6, was $336,541.26, resulting in a 12–level upward adjustment to the offense level for those offenses for loss in excess of $200,000; that the amount of loss to renters from the damage deposit fraud scheme, relevant to the mail fraud offenses in Counts 7 through 18, exceeded $1 million, resulting in a 16–level upward adjustment to the offense level for those offenses; and that the tax loss for the tax offenses in Counts 22 and 23, which determined the base offense level for those offenses, was $94,080 (based on failure to report income of just over $336,000, at a tax rate of 28 %). I determined that the advisory sentencing guidelines range for Miell's offenses was 168 to 210 months, denied Miell's motion for a downward departure, and denied the prosecution's motion for an upward departure as moot, in light of my determination that an upward variance was appropriate, upon consideration of all of the sentencing factors set forth in 18 U.S.C. § 3553(a). Specifically, I determined that an upward variance to the statutory maximum sentence of 240 months for the mail fraud offenses was warranted, particularly in light of the circumstances of the damage deposit fraud scheme. As I noted repeatedly in that ruling, restitution was left for determination in a separate ruling. That same day, September 27, 2010, I held the completion of Miell's sentencing hearing at which I imposed a sentence of 240 months of imprisonment, with certain other terms and conditions as set forth on the record.

The restitution claims against Miell remained unresolved. I turn to their disposition now.

B. Restitution Claims

Restitution regarding the damage deposit fraud scheme had been the subject of extensive, separate proceedings in this case before United States Magistrate Judge Jon S. Scoles. On August 23, 2010, however, the prosecution filed a Notice Regarding Restitution Claims (docket no. 304), stating that the parties had reached an agreement pursuant to which Miell agreed to entry of a judgment of restitution as part of the criminal judgment in this case with respect to all 140 claims made by former tenants who had been identified as victims for purposes of Counts 7 through 18 of the Indictment, the mail fraud counts arising from the damage deposit fraud scheme, obviating the need to hear the claims of 79 former tenants. I was eventually provided with a spreadsheet reflecting the agreed actual damage deposit not returned for each of 140 claimants, totaling $86,554.19.

The parties' agreement did not extend to restitution on the mail fraud counts arising from the insurance fraud scheme or the tax counts. The Declaration of Victim's Losses submitted by AFI, the victim of the insurance fraud scheme giving rise to the mail fraud charges in Counts 1 through 6, requests restitution in the amount of $547,764.44. Miell made no objection to that claim in paragraph 175 of the Final PSIR. Miell also did not object to paragraph 177 of the Final PSIR, which states that the court may order him to pay restitution to the Internal Revenue Service as a condition of supervised release on the charges of filing false tax returns in Counts 22 and 22. Again, I determined that the tax loss was $94,080.

II. LEGAL ANALYSIS

A. Authority To Order Restitution

As the Eighth Circuit Court of Appeals has recognized, federal courts have no inherent authority to impose restitution: “Federal courts cannot order restitution in a criminal case without a statutory basis.” United States v. Lachowski, 405 F.3d 696, 698 (8th Cir.2005). Thus, the question is whether restitution is allowed or required pursuant to a statute for the charges in this case.

Restitution is mandatory pursuant to the Mandatory Victims Restitution Act (MVRA) for certain specified offenses, including “an offense against property under this title [Title 18], ... including any offense committed by fraud or deceit.” 18 U.S.C. § 3663A(a)(1) and (c)(1).⁶ The mail fraud offenses, under 18 U.S.C. § 1341, charged in Counts 1 through 18 in this case, plainly fall within the mandatory restitution requirements of the MVRA, as they are offenses against property under Title 18 committed by fraud or deceit, and they have identifiable victims who have suffered pecuniary loss. 18 U.S.C. § 3663A(c)(1)(A)(ii) and (B).

The perjury and tax charges in this case, however, do not fall within the requirements for mandatory restitution under the MVRA, as they are not crimes of violence, crimes against property, or crimes involving tampering with consumer products. See 18 U.S.C. § 3663A(c)(1). Nor do they fall within the requirements for restitution under any other statute. See 18 U.S.C. § 3663. Although there is no statutory provision for “restitution” of tax losses, payment of delinquent taxes may be ordered as a condition of supervised release on tax offenses pursuant to 18 U.S.C. § 3583(d). See, e.g., United States v. Miller, 557 F.3d 910, 918 (8th Cir.2009) (a condition of release requiring payment of outstanding taxes pursuant to § 3583(d) does not violate the MVRA, because it “does not impose a restitution requirement; it imposes a requirement that [the defendant] comply with the tax laws—including the payment of his outstanding tax obligations,” and citing cases so holding); see also United States v. Miller, 557 F.3d 919, 921 (8th Cir.2009); 18 U.S.C. § 3583(d) (requiring sentencing courts to order as a condition of supervised release that a defendant refrain from committing a federal, state, or local crime); and compare United States v. Batson, 608 F.3d 630, 632–33 (...