U.S. v. Sparger, MO-98-113M.

• Decision Date: 30 December 1999
• Docket Number: No. MO-98-113M.,MO-98-113M.
• Citation: 79 F.Supp.2d 714
• Parties: UNITED STATES of America v. Terry SPARGER.
• Court: U.S. District Court — Western District of Texas

79 F.Supp.2d 714

UNITED STATES of America v. Terry SPARGER.

No. MO-98-113M.

United States District Court, W.D. Texas, Midland-Odessa Division.

December 30, 1999.

Adelaide G. Few, Assistant United States Attorney, Tampa, FF, Harold Atkinson, Assistant United States Attorney, San Antonio, TX, for United States.

Glen D. Aaron, II, Midland, TX, for defendant.

MEMORANDUM OPINION AND ORDER DENYING GOVERNMENT'S MOTION TO DIRECT CLERK TO PAY PARTIAL AMOUNT OF DEFENDANT'S RESTITUTION FROM COURT REGISTRY

PLATT, United States Magistrate Judge.

BEFORE THE COURT is the Motion by the United States Attorney's Office for the Middle District of Florida, Tampa Division, requesting an order from this Court directing the Clerk to remit the sum of five thousand dollars ($5,000), plus interest, from the Court Registry to the United States of America as partial payment towards defendant's criminal restitution, filed October 29, 1999. A hearing was conducted on December 8, 1999.

After careful consideration of the Motion, evidence, arguments of counsel, and the relevant law, the Court is of the opinion that the Government's Motion should be DENIED.

BACKGROUND

The central issue before the Court is whether the United States is entitled to $5,000 that was posted as cash a bond by the Defendant's attorney, Glenn Aaron.

At the evidentiary hearing concerning this Motion, the defendant in the above-captioned case. Terry Sparger, testified that sometime around May of 1998 he was the subject of a federal investigation. As a result of this investigation, Mr. Sparger was served with a subpoena duces tecum to appear before a Florida grand jury with certain business records. Mr. Sparger hired attorney Glenn Aaron to represent him in this matter, which Mr. Aaron did. During the course of this representation, Mr. Sparger paid Mr. Aaron an hourly fee. Mr. Sparger paid between four and five thousand dollars ($4,000 to $5,000) in legal fees to Mr. Aaron.

Subsequent to the investigation, Mr. Sparger was criminally indicted. Again, Mr. Sparger requested that Mr. Aaron represent him in the matter. According to Mr. Sparger, Mr. Aaron agreed to represent him; however, Mr. Sparger would have to put up a twenty thousand dollar ($20,000) retainer fee. Mr. Sparger cashed in three certificate of deposits, which totaled thirty thousand dollars ($30,000), and he paid Mr. Aaron, in cash, the twenty thousand dollar retainer fee ($20,000).

Mr. Sparger surrendered to the United States Marshal's Service in Midland, Texas. This Court set the conditions of release for Mr. Sparger, which included an appearance bond in the amount of $5,000 to be deposited with the Clerk of the Court. Mr. Aaron posted Mr. Sparger's bond by depositing $5,000 in cash in the Clerk's Office in Midland, Texas. This is corroborated from the receipt issued by the Clerk's office. The money used by Mr. Aaron was part of the $20,000 retainer fee paid by defendant Sparger. Mr. Sparger made all of his required bond appearances, and he ultimately pled guilty to the charge(s).

On October 1, 1999, a judgment was entered against the defendant, Terry Sparger, in the United States District Court for the Middle District of Florida. As part of the judgment, the defendant was required to pay restitution to the United States in the amount of seventeen thousand six hundred eighty dollars ($17,680.00) and a special assessment in the amount of fifty dollars ($50.00).

Pursuant to 28 U.S.C. § 2044, the United States Attorney's Office in the Middle District of Florida filed this Motion requesting that the cash monies used to post the defendant's appearance bond be released from the Clerk's Office in Midland, Texas, and be made payable to Florida's Clerk of Court in order for the money to be used to partially satisfy the defendant's criminal restitution debt.

Prior to this Motion being filed, Glen Aaron made application for return of the cash bail deposited in the Midland Clerk of Court's Registry on October 18, 1999.

DISCUSSION

The Government's position is rather straight forward. The Government maintains that pursuant to 28 U.S.C. § 2044 the United States is entitled to the $5,000, which was posted as a cash bond by the defendant's attorney. The statute provides:

On motion of the United States attorney, the court shall order any money belonging to and deposited by or on behalf of the defendant with the court for the purposes of a criminal appearance bail bond (trial or appeal) to be held and paid over to the United States attorney to be applied to the payment of any assessment, fine, restitution, or penalty imposed upon the defendant. The court shall not release any money deposited for bond purposes after a plea or a verdict of the defendant's guilt has been entered and before sentencing except upon a showing that an assessment, fine, restitution or penalty cannot be imposed for the offense the defendant committed or that the defendant would suffer an undue hardship. This section shall not apply to any third party surety.¹

28 U.S.C. § 2044 (this statute was passed in 1990, and it took effect in early 1991; see Federal Debt Collection Procedures Act of 1990, Pub.L. No. 101-647, 104 Stat. 4933).

1. Analysis

The Court has been able to find only two published decisions and one unpublished decision concerning the statute set out above. See United States v. Higgins, 987 F.2d 543 (8th Cir.1993) (focusing on two subjects that are not of concern here, first, whether § 2044 applies to bonds posted before the enactment of the statute, and second, whether § 2044 violates the Eighth Amendment's prohibition against excessive bail); United States v. Equere, 916 F.Supp. 450 (E.D.Pa.1996) (focusing on a subject which is of concern here, whether the statute applies to monies posted by third parties); United States v. Harris, 1996 WL 291200 (E.D.La. May 29, 1996) (applying a two part test to § 2044). The Court finds the Equere case very persuasive here, especially in light of the Fifth Circuit's views on attempts to use bail money to satisfy criminal fines prior to the enactment of 28 U.S.C. § 2044.

(a) Fifth Circuit Cases Prior to Section 2044

Prior to the enactment of 28 U.S.C. § 2044, the Fifth Circuit was confronted with the issues of whether bail money paid by a third party could be used as a partial payment for a criminal fine, United States v. Jones, 607 F.2d 687 (5th Cir.1979), and whether bail money paid by a defendant could be used as a partial payment for a criminal fine, United States v. Powell, 639 F.2d 224 (5th Cir. Unit A 1981). In both instances, the Fifth Circuit answered in the negative. In addition, in United States v. Rose, 791 F.2d 1477 (11th Cir.1986),² the court addressed the issue of whether a bail bond condition requiring the defendant to pay a fine, if imposed and affirmed on appeal, was at odds with both the Eighth Amendment prohibition against excessive bail and the Bail Reform Act. The court answered this question in the affirmative. Although these cases are not controlling here, they are an important illustration of the Fifth Circuit's long-standing view toward the proper treatment of appearance bonds when the defendant has satisfied the conditions of the bond.

In Jones, the defendant's wife posted a ten thousand dollar ($10,000) cash bond for release of her husband pending trial. The defendant later pled guilty to his charged offense, and the district court imposed sentence and fined him fifteen thousand dollars ($15,000). Several days before the sentencing, however, the defendant's wife assigned the cash bail to defendant's lawyer, who later applied for return of the bail money. The government filed a motion stating that the purpose of defendant's bond had been served, but the bail money should be used as partial payment of the outstanding $15,000 fine. The district court agreed and granted the government's motion, and the defendant appealed. Id. at 687.

On appeal, the Fifth Circuit held that a district court could not order payment of fines to the government from bond money posted by a third party. The court indicated in its holding that it would likely reach the same result even if the bail money belonged to the defendant. Id. at 688. In reaching its conclusion, the court recognized that Rule 46(f) of the Federal Rules of Criminal Procedure prescribes that "[w]hen the condition of the bond has been satisfied ... the court shall exonerate the obligors and release any bail." Id. at 687-88. The court noted that the government conceded that the conditions of bond had been satisfied.

Furthermore, the court found the only purpose to be served in requiring a cash deposit is to make it available to satisfy a forfeiture in the event of a willful default of the principal. The court reiterated that the purpose of bail is to secure the presence of the defendant, and like any other contract a bail bond should be construed to give effect to the reasonable intentions of the parties. Id. at 688 (citations omitted). Therefore, because the cash bond was posted by the defendant's wife, not the defendant, and she later assigned the bail money to an attorney, the court remanded the case so a determination could be made as to the validity of the assignment.

The government in Jones argued that "the United States, as a creditor, has the same right as other creditors to apply a debtor's money that is in its possession to extinguish debts due." Id. The government cited to United States v. Munsey Trust Co., 332 U.S. 234, 108 Ct.Cl. 765, 67 S.Ct. 1599, 91 L.Ed. 2022 (1947), for support of the argument. The court rejected this argument because it determined that the United States was not a creditor in possession of the debtor's money. Instead, the court found that the money was held by the clerk's office under the terms of a specific agreement — Rule 46(f). Id.

In Powell, the Fifth Circuit relied upon the rationale in Jones and extended its holding to include bail money paid by the defendant. Powel...