U.S. v. Miller

• Decision Date: 09 April 1990
• Docket Number: Nos. 88-2272,89-1129,s. 88-2272
• Citation: 900 F.2d 919
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Evan MILLER (88-2272) and Jonathan Miller (89-1129), Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 919

900 F.2d 919

UNITED STATES of America, Plaintiff-Appellee, v. Evan MILLER (88-2272) and Jonathan Miller (89-1129) Defendants-Appellants.

Nos. 88-2272, 89-1129.

United States Court of Appeals Sixth Circuit.

Submitted Jan. 18, 1990.

Decided April 9, 1990.

F. William Soisson, Blondell Morey, Asst. U.S. Atty., Craig A. Weier, Office of the U.S. Atty., Detroit, Mich., for plaintiff-appellee.

Evan Miller, pro se.

Jonathan Miller, pro se.

Alan Ellis, Peter Goldberger (argued), Philadelphia, Pa., for petitioner-appellant.

Before KENNEDY and GUY, Circuit Judges, and ENGEL, Senior Circuit Judge.

KENNEDY, Circuit Judge.

Defendants appeal from sentences of incarceration and restitution imposed after each pled guilty to two counts of mail fraud. They assert that the restitution ordered violated their plea agreements as well as the Victim and Witness Protection Act (VWPA), 18 U.S.C. Secs. 3579 and 3580, and was imposed without adequate notice. We AFFIRM the incarceration portion of the sentence but REVERSE the restitution provisions and REMAND to the District Court for resentencing in accordance with this opinion.

Defendants Evan Miller and his brother Jonathan, Michigan attorneys, were indicted on multiple counts of conspiracy, bankruptcy fraud, mail fraud, and obstruction of justice. Jonathan Miller was additionally charged with bank fraud, fraudulent use of a social security number, and credit card fraud. Most of these charges grew out of a series of incidents in which the brothers defrauded numerous clients of large sums of money. Each brother pled guilty to two counts of mail fraud, 18 U.S.C. Sec. 1341, pursuant to a plea agreement. The remaining counts were dismissed. The plea agreements were silent on the issue of restitution but did provide for a maximum prison sentence of five years and a maximum term of probation of five years. The plea agreements stated that the parties had reached no agreement on the maximum fine that could be imposed by the court. Section 3571 of Title 18 provides for a fine of up to $250,000 on each count. At the time of plea, defendants acknowledged that they were subject to fines in that amount.

The District Court sentenced each defendant to five years in prison on one of the counts to be followed by five years probation on the second. Additionally, they were ordered to pay, jointly and severally, $465,272.98 in restitution to their former clients for all of the counts of the indictment in which restitution was appropriate, including the counts dismissed as a result of the plea agreements. Following Motions to Vacate Sentence and Reduce Sentence made by both defendants, the District Court reduced the restitution required of Evan Miller to reflect the fact that some of the dismissed counts of the indictment did not name him. The court also stated that any restitution paid to the victims as a result of a civil judgment would reduce the restitution obligation ordered by the court but otherwise refused to reduce the defendants' sentences. The defendants appeal the District Court's failure to otherwise grant their motions to vacate or reduce sentence.

The defendants raise several of the same arguments in their separate appeals. They both argue: (1) the District Court violated the plea agreements and Fed.R.Crim.P. 11 by ordering restitution; (2) the District Court could not order restitution payments without holding a hearing on the defendants' financial status; (3) the restitution award was unreasonable in amount; (4) the prison sentence was unreasonable in length; and (5) the District Court's failure to hold the requested hearings and failure to comment more extensively on the evidence is indicative of bias requiring reversal and remand for new hearings before a different judge. Additionally, Jonathan Miller argues: (1) the District Court should have reduced his restitution sentence relative to his brother's because he was less culpable; (2) the District Court's failure to affirmatively state that it had considered an alternative to incarceration requires reversal; and (3) the imposition of a special assessment was invalid under the origination clause and, with respect to count 25, constituted an ex post facto law.

I.

The Millers first argue that the imposition of restitution violated the plea agreements since restitution was not mentioned as a possible penalty either in the plea agreements or at the Rule 11 hearings. In addition they argue that restitution can only be imposed for the offenses for which a defendant is convicted. We reject the defendants' plea agreement and Rule 11 arguments but agree that restitution can be ordered only for victims of the offenses of conviction.

The Millers argue that any restitution award violates the plea agreements and Fed.R.Crim.P. 11, since restitution was not mentioned in their plea agreements or Rule 11 hearings. The plea agreements did not state that restitution would not be ordered, however. In fact, they explicitly stated that no other promises had been made to the defendants. Where a plea agreement does not address one aspect of a defendant's sentence, the reasonable assumption in most cases is that no agreement was reached on that issue, not that the court could not impose such a punishment. See, e.g., United States v. Fentress, 792 F.2d 461, 464 (4th Cir.1986) ("[w]hile the government must be held to promises it made, it will not be bound to those it did not make"). Since the agreements were silent on the issue of restitution, restitution could be ordered as provided in the restitution statutes. While the defendants argue that the restitution orders upset their expectations, we do not believe the expectations were reasonable, particularly since the restitution ordered was less than the maximum possible fine.

Any error in the Rule 11 hearings that resulted from failure to mention restitution is harmless within the meaning of Fed.R.Crim.P. 11(h). At the hearings, both defendants told the court that they knew a fine of $250,000 could be imposed on each count for a total of $500,000. ¹ No fine was imposed. Defendants were not harmed by the substitution of restitution for a fine. As long as each defendant is required to pay restitution in an amount less than $500,000, the error was harmless. Fed.R.Crim.P. 11(h) ("[a]ny variance from the procedures required by this rule which does not affect substantial rights shall be disregarded"); Fentress, 792 F.2d at 465-66.

At the time of the defendants' sentencing it was not clear whether the court made the restitution orders under the VWPA or the Federal Probation Act, 18 U.S.C. Sec. 3651. In considering the post-sentencing motions, however, both the District Court and the parties treated the cases as though restitution had been ordered under the VWPA. Accordingly, we will review the cases under the VWPA. See also United States v. Padgett, 892 F.2d 445, 448 (6th Cir.1989) ("unless a clear intention appears to the contrary, we will assume restitution orders are made pursuant to the broader provisions of the VWPA"). The VWPA provides in relevant part: "[t]he court, when sentencing a defendant convicted of an offense under this title ..., may order, in addition to or in lieu of any other penalty authorized by law, that the defendant make restitution to any victim of the offense." 18 U.S.C. Sec. 3579(a)(1) (1982) (emphasis added). ² We have interpreted the definition of "offense" narrowly, limiting restitution payments to "victims of the offense for which [the defendant] was convicted." United States v. Durham, 755 F.2d 511, 512 (6th Cir.1985); see also United States v. Mounts, 793 F.2d 125, 127 (6th Cir.), cert. denied, 479 U.S. 1019, 107 S.Ct. 673, 93 L.Ed.2d 724 (1986). But see United States v. Duncan, 870 F.2d 1532, 1536 (10th Cir.), cert. denied, --- U.S. ----, 110 S.Ct. 264, 107 L.Ed.2d 214 (1989) (the term offense does not "restrict a sentencing judge to [consider] only those acts for which conviction was had, or for which the defendant pleaded guilty"). While the definition of "victim" is read more broadly in this Circuit, we have nonetheless stated that "Congress intended a 'victim' to be a person who suffered injury as a result of the defendant's actions that surround the commission of the offense, regardless of whether the actions are elements of the offense charged." Durham, 755 F.2d at 513 (emphasis added).

The record is ambiguous as to who is to receive the restitution payments ordered by the court. The presentence reports listed numerous victims of the indictment counts and suggested that the victims had together suffered more than $748,000 in damages, a figure far in excess of the amount awarded by the court. These ambiguities alone would be a sufficient reason to reverse the restitution orders. Without a clear statement of who the court considered to be a victim and the amount of restitution each victim was to receive, it is impossible for the defendants to determine what portion of the restitution orders has been offset by their payment of civil judgments.

The parties agree that a substantial portion of the restitution payments was ordered for victims of the dismissed counts of the indictment. It is impossible for this Court to determine on the record before us whether all the individuals who received restitution were victims of the offenses of which defendants stand convicted. In the interests of judicial economy, we consider the question of whether any victims of the dismissed counts can also be considered victims of the counts of conviction.

The indictment identifies two victims of the counts of conviction for whom the court could order $241,000 in restitution. ³ Count 18, to which both pled guilty, was a scheme to defraud Joseph Jacobson of $200,000 by issuing Jacobson fraudulent stock certificates in the Ingleside Convalescent Center, Inc. (ICC). Count 21, to which Evan Miller pled guilty, and count 25, to which Jonathan Miller pled guilty, involved letters...