U.S. v. Murphy, 93-1911

• Decision Date: 28 June 1994
• Docket Number: No. 93-1911,93-1911
• Citation: 28 F.3d 38
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. William C. MURPHY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 38

28 F.3d 38

UNITED STATES of America, Plaintiff-Appellee, v. William C. MURPHY, Defendant-Appellant.

No. 93-1911.

United States Court of Appeals Seventh Circuit.

Argued Jan. 26, 1994.

Decided June 28, 1994.

Frances C. Hulin, U.S. Atty., Danville, IL, Joseph Hartzler, Office of U.S. Atty., Springfield, IL (argued), for plaintiff-appellee.

George F. Taseff, Jennings, Novick, Taseff, Smalley & Davis, Bloomington, IL (argued), for defendant-appellant.

Before ESCHBACH, RIPPLE and MANION, Circuit Judges.

RIPPLE, Circuit Judge.

William Murphy pled guilty to conspiracy to steal goods in interstate commerce and to transport those stolen goods in violation of 18 U.S.C. Sec. 371. See 18 U.S.C. Secs. 659, 2314. The district judge sentenced Mr. Murphy to 50 months' imprisonment, to be followed by 3 years of supervised release, and ordered restitution in the amount of $467,137.12, to be paid within three years of his release from prison. Mr. Murphy now appeals. He submits that, in ordering restitution, the district court failed to consider his financial status and ability to pay as required by 18 U.S.C. Sec. 3664(a). Because we cannot ascertain the basis for the district court's decision to impose full restitution but not a fine, we vacate and remand the case to the district court for resentencing. We also remand because the district court improperly delegated to the United States Probation office its authority to set up a payment schedule for Mr. Murphy.

I FACTUAL BACKGROUND

Mr. Murphy operated a trucking company out of Anniston, Alabama. For more than a year, Mr. Murphy conspired with Gerald Drake to steal at least 20 truckloads of goods which Mr. Murphy sold to food brokers. Their scheme involved the use of false names and false company identification numbers. Mr. Drake picked up the goods and delivered them to Mr. Murphy, who then sold them to food brokers. The food brokers purchased the goods with checks which Mr. Murphy either cashed or used to purchase cashier's checks. During the course of the conspiracy, Mr. Murphy and Mr. Drake stole over $500,000 worth of goods.

Nothing in the record reveals what became of the proceeds of the conspiracy. The presentence report (PSR) listed Mr. Murphy's assets as cash in the amount of $200, a car worth $2,500, and furniture worth $3,000. Mr. Murphy apparently filed petitions for Chapter 13 bankruptcy in January and March 1992, but both cases were dismissed within a few months. ¹ His business liabilities totaled $75,648.21, and his family income was reported as negative $930 per month. Mr. Murphy's wife and two children wrote letters to the district court explaining their financial situation and requesting a lenient sentence for Mr. Murphy. His wife's letter stated that she was working at J.C. Penney for minimum wage and was collecting food stamps. Although at the sentencing hearing Mr. Murphy poignantly expressed his deep regret for having violated the law, he did not explain what had become of the proceeds of his crimes.

Despite Mr. Murphy's claim of indigence, the district court ordered full restitution in the amount of $467,137.12, to be paid jointly and severally with Mr. Drake within three years of Mr. Murphy's release from prison. In ordering restitution, the district court made reference to Mr. Murphy's failure to explain what became of the proceeds; however, the court apparently did not believe that it could rely on the possibility that Mr. Murphy might still have access to that money. As to how it expected Mr. Murphy to pay the full amount of restitution in the given period absent access to the conspiracy proceeds, the court stated only that Mr. Murphy would be able to work toward his college degree and to earn money in prison. ²

The district court also imposed a special assessment of $350 ($50 for each count in the indictment). However, by checking a box in the "Statement of Reasons," the court waived all fines because of Mr. Murphy's inability to pay. The applicable fine under the guideline would have been between $7,500 and $75,000. See U.S.S.G. Sec. 5E1.2. Finally, the district court delegated its authority to devise a payment schedule to the U.S. Probation Department. ³

II ANALYSIS

The Victim Witness and Protection Act (VWPA) instructs the sentencing court to impose restitution whenever possible. 18 U.S.C. Sec. 3663(a)(2). Nonetheless, the decision to order restitution is within the discretion of the district court, and we therefore review that decision only for an abuse of discretion. United States v. Boula, 997 F.2d 263, 267 (7th Cir.1993); United States v. Arvanitis, 902 F.2d 489, 496 (7th Cir.1990); United States v. Studley, 892 F.2d 518, 531 (7th Cir.1989). In determining whether to order restitution, Sec. 3664(a) of the VWPA directs the sentencing court to consider "the amount of the loss sustained by the 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." 18 U.S.C. Sec. 3664(a). Thus, in reaching an appropriate order of restitution, the district court must 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." United States v. Mahoney, 859 F.2d 47, 49 (7th Cir.1988). The defendant bears the burden of demonstrating by a preponderance of the evidence that, under the circumstances of his case, restitution is not warranted. 18 U.S.C. Sec. 3664(d); United States v. Ahmad, 2 F.3d 245, 247 (7th Cir.1993).

Mr. Murphy argues that, in ordering full restitution, the district court failed to consider the mandatory factors enumerated in Sec. 3664(a). He relies on the district court's failure to mention his financial resources or his ability to pay. We shall sustain the district court's order of restitution if it is apparent that the district court considered the statutory factors. United States v. Dorsey, 27 F.3d 285, 290-91 (7th Cir.1994); United States v. Simpson, 8 F.3d 546, 551 (7th Cir.1993). A defendant claiming that the district judge failed to consider a mandatory sentencing factor must show either that (1) it is not improbable that the judge failed to consider the mandatory factor and was influenced thereby, or (2) the judge explicitly repudiated the mandatory factor. United States v. Gomer, 764 F.2d 1221, 1223 (7th Cir.1985); see also Mahoney, 859 F.2d at 50. When ordering full restitution, the district court need not make express findings concerning the factors it is required to consider under the VWPA. Ahmad, 2 F.3d at 246-47. Consequently, this court often must infer from the district court's statements and the information before it that the mandatory factors were properly considered. See id.; Gomer, 764 F.2d at 1222-23.

The record reflects that the district court was aware of its duty to consider the mandatory factors, and that it had sufficient information concerning Mr. Murphy's financial resources and his family's needs to comply with its obligation to consider that information prior to ordering restitution. Early in the sentencing hearing the district court stated:

His conviction here is for conspiracy. All of this falls within that umbrella. And he, therefore, may be held responsible by way of restitution. That, of course, is tempered with a further caviat [sic ] set forth in the Seventh Circuit's Mahoney, based on his established financial condition and that is dependent.

Tr. 11. The PSR provided the district court with adequate information concerning Mr. Murphy's net worth, his family's monthly income and their expenses. It also included information about Mr. Murphy's educational background and his employment and military history. As noted by the government, the district court could not have ruled on the numerous objections filed by Mr. Murphy without having thoroughly reviewed the PSR. The sentencing transcript also reveals that the district court considered the needs of Mr. Murphy's dependents, including the "very touching letters" the court had before it. Tr. 38. Moreover, in arguing for full restitution, the government conceded that such an order would adversely affect Mr. Murphy's dependents. Tr. 16-17.

It thus appears that the district court was aware of the mandatory factors. It is unclear, however, whether the court disregarded Mr. Murphy's financial status in ordering full restitution. Because Mr. Murphy failed to account for the proceeds of the conspiracy, the district court could have relied on the possibility that Mr. Murphy would have access to the proceeds at some point in the future. See United States v. Boyle, 10 F.3d 485, 492 (7th Cir.1993) (upholding a district court order of restitution for $2 million because the defendant failed to account for the proceeds of his crime). However, the court expressly indicated its mistaken belief that it could not rely on that possibility. In ordering restitution, the district court stated:

And for the purpose I am referring to [Mr. Murphy's failure to explain], it makes no difference.... We are told by the reviewing courts that we can't just bank upon possible windfall for restitution purposes and I accept that across the board.

Tr. 47. In Mahoney, we raised the concern that an impossible order of restitution could defeat the goals of sentencing. 859 F.2d at 52. But we noted that reliance on the possibility that a defendant might be able to pay in the future might be appropriate if the district court can articulate "a reasonable rationale for ordering full restitution," and if a factual basis in the record exists to support the stated rationale. Id. at 51 n. 6; see also Ahmad, 2 F.3d at 247 (stating that the possibility of ability to pay may be relied upon "provided there is some likelihood that [the defendant]...