United States v. Espinoza

• Decision Date: 17 April 2012
• Docket Number: No. 11–50369.,11–50369.
• Citation: 677 F.3d 730
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Nicholas ESPINOZA, also known as Nick Espinoza, Defendant–Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

677 F.3d 730

UNITED STATES of America, Plaintiff–Appellee,

v.Nicholas ESPINOZA, also known as Nick Espinoza, Defendant–Appellant.

No. 11–50369.

United States Court of Appeals, Fifth Circuit.

April 17, 2012.

Joseph H. Gay, Jr. and Ellen A. Lockwood, Asst. U.S. Attys., San Antonio, TX, for Plaintiff–Appellee.

Donna F. Coltharp, Asst. Fed. Pub. Def., Henry Joseph Bemporad, Fed. Pub. Def., San Antonio, TX, for Defendant–Appellant.

Appeal from the United States District Court for the Western District of Texas.

Before JONES, Chief Judge, and OWEN and HIGGINSON, Circuit Judges.

OWEN, Circuit Judge.

Defendant Nicholas Espinoza appeals from his sentence after pleading guilty to being a felon in possession of a firearm in violation of 18 U.S.C. § 922(g). Because restitution to a pawn shop to which Espinoza sold stolen firearms that he unlawfully possessed was not authorized by 18 U.S.C. § 3663 under the facts of this case, we vacate and remand for resentencing. We additionally conclude that the district court plainly erred in calculating Espinoza's criminal history but do not reach the question of whether that error affected Espinoza's substantial rights since resentencing will occur.

I

In late January 2010, the Fredericksburg, Texas Police Department received a report that four firearms had been stolen from a home. In early February, a detective received a phone call from a confidential informant who reported that Espinoza and his wife, Pamla Meier, had been pawning stolen property in San Antonio and Austin. Investigators subsequently learned that three of the four stolen firearms had been pawned at Cash America Pawn in Austin (Cash America) by Espinoza for a total of $525. A criminal record check revealed that Espinoza had been convicted of two prior felonies in Texas. Espinoza was subsequently indicted on one count of being a felon in possession of a firearm in violation of 18 U.S.C. § 922(g).

Espinoza pleaded guilty. Espinoza's counsel made clear that Espinoza was admitting to possessing and pawning the firearms but not stealing them. The court accepted Espinoza's plea, and a Presentence Investigation Report (PSR) was prepared. The total offense level was calculated to be fifteen. In addition, the PSR attributed five criminal history points to Espinoza for three countable offenses and added two more because the instant offense was committed while on probation. Consequently, the PSR calculated Espinoza's Guidelines range of imprisonment to be thirty to thirty-seven months. It also recommended that Espinoza be ordered to pay $525 in restitution to Cash America, as the stolen firearms were seized and returned to their owner.

Espinoza only objected to the recommendation that he be required to pay restitution. The district court overruled that objection and adopted the findings and recommendations of the PSR. The district court subsequently sentenced Espinoza to thirty months of imprisonment and three years of supervised release. The district court also ordered that Espinoza pay restitution in the amount of $525 to Cash America.

II

Espinoza objected to the award of restitution at his sentencing, and the issue is therefore preserved. Whether the law permits restitution to be imposed as part of a sentence in a particular case is reviewed de novo. ¹

“A federal court cannot order restitution ‘except when authorized by statute.’ ”² Under the Victim and Witness Protection Act (VWPA), a district court may order a defendant to pay restitution to any victim of an offense under Title 18 of the United States Code as well as victims of a number of other enumerated offenses.³ Under the Mandatory Victims Restitution Act (MVRA), a district court is required to order a defendant to pay restitution to a victim under certain circumstances, which include those in which the victim suffered a pecuniary loss as a result of a crime of violence or an offense against property under Title 18, including any such offense committed by fraud or deceit.⁴ Under both statutes, restitution can be awarded to a “victim,” defined as “a person directly and proximately harmed as a result of an offense for which restitution may be ordered including, in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity, any person directly harmed by the defendant's criminal conduct in the course of the scheme, conspiracy, or pattern.”⁵ Relying on the Supreme Court's decision in Hughey v. United States,⁶ we have held that “a district court can award restitution to victims of the offense, but the restitution award can encompass only those losses that resulted directly from the offense for which the defendant was convicted.”⁷

The record reflects that restitution was imposed pursuant to § 3663. We first note that the probation officer appears to have recommended, and the district court appears to have imposed, restitution partially because Espinoza's possession of the firearms was part of a scheme in which he would steal and then sell property, including firearms. However, acts in furtherance of a conspiracy, scheme, or pattern of criminal activity can only support restitution if the scheme, conspiracy, or pattern is an element of the offense. ⁸ Espinoza was charged and pleaded guilty to being a felon in possession of a firearm pursuant to 18 U.S.C. § 922(g). This offense does not “involve[ ] as an element a scheme, conspiracy, or pattern of criminal activity.”

1. United States v. Arledge, 553 F.3d 881, 897 (5th Cir.2008) (citing United States v. Adams, 363 F.3d 363, 365 (5th Cir.2004)).

2. United States v. Love, 431 F.3d 477, 479 (5th Cir.2005) (quoting United States v. Bok, 156 F.3d 157, 166 (2d Cir.1998)).

9 Therefore, the only ground for a restitution award pursuant to § 3663 is if Cash America was directly and proximately harmed as a result of Espinoza's possession of the firearms.

Espinoza was convicted only of possessing firearms, not stealing or illegally transferring firearms. In United States v. Mancillas, the defendant pleaded guilty to “knowingly possessing counterfeited securities” and “knowingly possessing implements designed to make counterfeited securities with the intent that they be so used.”¹⁰ The district court ordered that the defendant pay restitution to five check-cashing entities.¹¹ We reversed the restitution order, holding that “[the defendant's] possession of the implements with the intent to use them in the future can in no way be said to directly and proximately have caused a previous harm, specifically, the harm to the check-cashing companies.”¹² Because the restitution order was not for conduct underlying the offense for which the defendant had been convicted, we held that restitution was not proper.¹³ Similarly, in United States v. Hayes, the defendant pleaded guilty to possession of stolen mail “on or about” March 31, 1989.¹⁴ The stolen mail was three credit cards. ¹⁵ The district court ordered that the defendant pay restitution to the credit card companies for charges he had made in the months prior to March 31.¹⁶ We vacated the restitution order, observing that “Hayes pleaded guilty to an indictment charging him with mere possession on one day, not with conduct or a scheme that resulted in losses to any victims.”¹⁷ We noted that the loss was not from Hayes's possession of the cards but from Hayes's unauthorized use of the cards.¹⁸

The harm to the pawn shop in this case is not based on the conduct underlying Espinoza's offense—possession of a firearm—but rather the theft and subsequent sale of stolen firearms. Espinoza was not charged with or convicted of possession and transfer of stolen firearms. Mere possession of a firearm is not the equivalent of transferring stolen firearms.

The Government argues that the harm to Cash America would not have occurred “but for” Espinoza's possession of the firearms. Assuming, without deciding, that a relevant inquiry is whether the harm was a reasonably foreseeable result of the offense, the fact remains that Espinoza was not charged either with stealing firearms¹⁹ or illegally transferring firearms.²⁰ It may be that the harm here would be a foreseeable result of stealing firearms, and it is even more likely that it would be a foreseeable result of illegally transferring firearms. However, there is nothing inherent in the possession of firearms by a felon that would make one foresee that those firearms were stolen and would later be transferred, causing financial harm to the transferee. Accordingly, Cash America was not a “victim” within the meaning of the VWPA.

The district court erred in ordering restitution, and the portion of the sentence imposing restitution must be vacated. It is unclear whether the remainder of the sentence should be vacated. Our court has in some cases vacated the entire sentence when an order of restitution was vacated,²¹ but in other cases, our court has vacated only the restitution order and left in place a term of imprisonment that was also included in the sentence. ²² We conclude that the entire sentence should be vacated in the present case because restitution is “only one component of the sentencing court's balance of sanctions,”²³ and as we discuss below, there was other error in the sentencing process. Under these circumstances, we choose to follow the line of our decisions that vacates the entire sentence when restitution was erroneously imposed.

III

Espinoza additionally argues that the district court erred in calculating his criminal history. Because this issue is likely to recur following remand, we consider it. Espinoza admits that he did not object when the district court counted two of his prior convictions and sentences as separate sentences, and therefore we review his challenge to the district court's application of § 4A1.2(a)(2) for plain error.²⁴ When reviewing for plain error, we determine whether the error is “clear or obvious, rather than subject to reasonable dispute,” and if the error ...