U.S. v. Sclafani

• Decision Date: 11 March 1998
• Docket Number: No. CRIM. 97-405.,CRIM. 97-405.
• Citation: 996 F.Supp. 400
• Parties: UNITED STATES of America v. Leonard SCLAFANI.
• Court: U.S. District Court — District of New Jersey

996 F.Supp. 400

UNITED STATES of America v. Leonard SCLAFANI.

No. CRIM. 97-405.

United States District Court, D. New Jersey.

March 11, 1998.

Faith S. Hochberg, U.S. Atty., Jeremy D. Frey, Asst. U.S. Atty., U.S. Atty's Office, Mitchell H. Cohen U.S. Courthouse, Camden, NJ, for U.S.

Anne C. Singer, Earp, Cohn & Pendery, A Professional Corp., Westmont, NJ, for Leonard Sclafani.

OPINION

ORLOFSKY, District Judge.

After pleading guilty to a one-count information charging conspiracy to commit bank larceny, the defendant was sentenced by a magistrate judge to a three-year term of probation and ordered to pay $15,000 in restitution. The defendant has appealed to this Court from the restitution order on the grounds that: (1) the magistrate judge erred by failing to make specific factual findings regarding the defendant's ability to pay restitution as required by a Third Circuit supervisory rule; and (2) the magistrate judge abused his discretion in setting the amount of restitution. The defendant, however, raises these objections for the first time on this appeal. The resolution of this appeal requires this Court to unravel the tangled web of federal appellate "waiver-forfeiture" jurisprudence.

The Third Circuit has issued contradictory decisions regarding a defendant's ability to obtain appellate review of a restitution order to which the defendant did not object below. Compare United States v. Kendis, 883 F.2d 209 (3d Cir.1989) (refusing to review restitution order where there was no dispute as to defendant's ability to make restitution and defendant failed to raise objections below) and United States v. Cannistraro, 871 F.2d 1210 (3d Cir.1989) (refusing to review restitution order where defendant failed to raise objections below and agreed with the sentencing court's restitution analysis) with United States v. Turcks, 41 F.3d 893 (3d Cir.1994) (reversing restitution order despite defendant's failure to object below), cert. denied, 514 U.S. 1074, 115 S.Ct. 1716, 131 L.Ed.2d 575 (1995).

To decide this appeal, therefore, I must reconcile these conflicting panel decisions. I conclude that Kendis and Cannistraro were undermined by the Supreme Court's decision in United States v. Olano, 507 U.S. 725, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993), and that the Turcks court implicitly relied upon that decision in establishing new Third Circuit precedent. Thus, pursuant to Olano and Turcks, I must determine whether the defendant "waived" his objections to the restitution order effectively precluding appellate review, or merely "forfeited" his objections permitting review for plain error.

For the reasons set forth below, I conclude that the defendant "forfeited," rather than "waived," his objections and that the magistrate judge's failure to make specific factual findings amounted to plain error. Therefore, the restitution order will be vacated and this matter remanded for further proceedings consistent with this Opinion.

I. BACKGROUND

On April 3, 1997, the defendant, Leonard Sclafani (formerly known as Leonardo Sclafani), pled guilty before the Honorable Robert B. Kugler, United States Magistrate Judge, to a one-count information charging him with conspiracy to commit bank larceny in violation of 18 U.S.C. §§ 2113(b), 371. See Transcript of Plea before Hon. Robert B. Kugler, dated April 3, 1997 ("Plea Tr."). On July 16, 1997, Magistrate Judge Kugler sentenced Sclafani to a three-year term of probation and ordered Sclafani to make restitution in an amount totaling $15,000.00. See Judgment, United States v. Sclafani, Magistrate No. 97-1045 (D.N.J. Jul. 17, 1997); see also Transcript of Sentencing before Hon. Robert B. Kugler, dated July 16, 1997 ("Sent. Tr.").

The plea agreement between Sclafani and the government provided that the sentencing judge "may order Leonardo Sclafani to pay restitution pursuant to 18 U.S.C. §§ [sic] 3663A." Plea Agreement with Leonardo Sclafani, dated March 31, 1997 ("Plea Agreement" or "Plea Agr."), 2. The Plea Agreement also contained the following stipulation:

The loss figure attributable to this defendant for purposes of the Guidelines and restitution is $16,800. As a result, 5 levels are added under Section 2B1.1(b)(1). The offense involved more than minimal planning and 2 levels are added under Section 2B1.1(b)(4).

Plea Agr. at 5, ¶ 2; accord Presentence Investigation Report ("PSI"), ¶ 5.2.

The PSI incorporated the stipulations contained in the Plea Agreement. See PSI at ¶¶ 59, 5. Moreover, the PSI stated:

Pursuant to 18 U.S.C. § 3663, restitution may be ordered in this case. If the Court does not order restitution or only partial restitution, it must state its reasons for doing so, pursuant to 18 U.S.C. § 3553. Per the plea agreement, restitution in the amount of $16,800 is outstanding. The U.S. Attorney's Office reported that $3,800 is due to CitiBank ... and that $11,200 is due to The Chase Manhattan Bank ... for a total restitution due of $15,000.

Id. at ¶ 66. Sclafani made no objections to the PSI relating to restitution. See id. at Addendum; Sent. Tr. at 3.

At the sentencing hearing, the Assistant United States Attorney stated that "the United States would request that the Court consider restitution as well." Id. at 5; see id. at 3 (requesting an order of restitution). Jay Blumberg, Esq., counsel for Sclafani at his sentencing,¹ discussed this request with Magistrate Judge Kugler as follows:

MR. BLUMBERG: Now with respect to the restitution amount, I have not — the 15,000, the numbers that the U.S. Attorney just read to you, I wasn't, I'm not privy to. I don't know — I know that there was an amount of loss, I think, of a certain amount of money, but in terms of the specific accounts and how much was actually lost, I'm not privy to that information. But we understood that restitution may very well be —

THE COURT: Well, are you disputing that the amount is $15,000? Because we need to clear this up if you are.

MR. BLUMBERG: I'm not disputing. All I need is an opportunity to look at the numbers that the U.S. Attorney has, because I don't have those numbers before me. I didn't receive those numbers. I don't have anything to dispute that, quite frankly, Your Honor, but I just don't have —

THE COURT: Well, I want you to be satisfied because this is an issue you're entitled to contest if you don't agree with it. Now this is information that came to the — it's in the Presentence Investigation Report at paragraph 66, $3800 due to Citibank and $11,200 to Chase Manhattan. Also, I thought, wasn't there a stipulation of the restitution amount?

MR. BLUMBERG: That was in the — I'm sorry, that was in the amended I believe, Presentence Report, you're correct.

THE COURT: That's the one that I have. I get the final one. You guys get the preliminary ones. But that was part of the plea agreement. Wasn't there a stipulation?

MR. BLUMBERG: Yes. We don't contest. I quite frankly [sic] those numbers, because of the fact that I was working off the wrong Presentence Report, I don't contest.

THE COURT: All right.

Id. at 8-9. Following that exchange, Mr. Blumberg advocated a sentence of probation, arguing in part that, "if there is going to be an order of restitution, it certainly will allow him to continue and attempt to pay off whatever restitution that the Court orders." Id. at 11.

Near the end of the sentencing hearing, the Assistant United States Attorney broached the subject of restitution again:

MS. FUTCHER: ... Your Honor, there is the matter also of restitution. It does comes [sic] out to 15,000. If the defense is, if there's any problem with that figure —

THE COURT: No, there's no problem with that.

MS. FUTCHER: Very well.

THE COURT: Because they stipulated from the beginning, in fact they stipulated to 16,800 and it turns out to be 15,000, and that will be a term of this Court's sentence. We'll require restitution.

Id. at 17. On July 21, 1997, Sclafani filed a Notice of Appeal to this Court from the restitution order imposed by Magistrate Judge Kugler. See Fed.R.Crim.P. 58(g)(2)(B). The magistrate judge had jurisdiction of this matter pursuant to 18 U.S.C. § 3401, and this Court has jurisdiction over the appeal pursuant to 18 U.S.C. § 3402.

II. DISCUSSION

On appeal, Sclafani contends that the restitution order must be vacated and the case remanded for resentencing. Sclafani argues that Magistrate Judge Kugler failed to make specific findings of fact regarding Sclafani's financial circumstances as required by a Third Circuit supervisory rule, and that, given Sclafani's financial straits, the entry of the restitution order in this instance was an abuse of discretion.

A. Standard of Review

This Court reviews a magistrate judge's sentencing order under the same legal standards as a court of appeals reviews a district court's sentencing order. See Fed. R.Crim.P. 58(g)(2)(D); United States v. Mather, 902 F.Supp. 560, 562 (E.D.Pa.1995), aff'd mem., 91 F.3d 127 (3d Cir.1996); United States v. Peck, 545 F.2d 962, 964 (5th Cir.1977). Accordingly, I review the legality of the imposition of restitution under a de novo standard. See, e.g., United States v. Copple, 74 F.3d 479, 482 (3d Cir.1996). The amount of the restitution order imposed by the magistrate judge, however, is reviewed only for an abuse of discretion. See id.

B. Retroactivity and the Statutory Framework of Restitution

The Victim and Witness Protection Act of 1982 ("VWPA"), 18 U.S.C. §§ 3663-3664, provides for the formulation and imposition of a restitution order as part of a defendant's sentence. See United States v. Copple, 74 F.3d 479, 482 (3d Cir.1996). In 1996, however, Congress passed the Mandatory Victims Restitution Act of 1996 ("MVRA"), Pub.L. No. 104-321, 110 Stat. 1227, which substantially amended the relevant provisions of the VWPA. See generally United States v. Baggett, 125 F.3d 1319, 1322 (9th Cir.1997).

Prior to the passage of the MVRA, the VWPA provided in relevant part: "The court, in determining...