United States v. Schenck
| Decision Date | 20 April 2023 |
| Docket Number | CRIMINAL ACTION 20-19 |
| Parties | UNITED STATES OF AMERICA v. RANDY JONAL SCHENCK |
| Court | U.S. District Court — Eastern District of Louisiana |
ORDER & REASONS
Before the Court is the request filed by the United States of America (the “Government”) for an order of restitution to be imposed on the defendant in the amount of $1,099,408.67.[1]Defendant Randy Jonal Schenck opposes the full amount of the restitution requested by the Government,[2] and the parties submit supplemental memoranda addressing the proper amount to be awarded.[3] Having considered the parties' memoranda, the record, and the applicable law, the Court issues this Order & Reasons granting the request in part and denying it in part.
On October 6, 2022, this Court sentenced Schenck to 300 months' imprisonment[4] after he pleaded guilty to Counts 1 and 7 of the indictment pursuant to a Rule 11(c)(1)(B) plea agreement.[5]Those counts charged him with wire fraud in violation of 18 U.S.C. § 1343, and interstate and foreign travel or transportation in aid of racketeering enterprises, in violation of 18 U.S.C. § 1952. The charges stem from a wide-ranging theft and fraud scheme wherein Schenck and his accomplice, Dominique Berry,[6] conspired to target prospective male victims through the placement of online advertisements that suggested the availability of commercial sex acts. Once a prospective target agreed to meet with Berry, the pair would typically return to the victim's residence, where, under Schenck's direction, Berry would lace an alcoholic beverage with drugs supplied by Schenck to render the victim unconscious. Upon the victim's incapacitation, Schenck would direct Berry to steal valuables from the victim's residence, which typically included credit and debit cards, cash, laptops, and other electronics. Schenck and Berry would subsequently make unauthorized purchases with the stolen credit and debit cards and attempt to sell the other stolen valuables at pawn shops. Schenck and Berry executed this scheme “on at least fifty (50) occasions throughout the United States” from 2015 to 2017.[7] The pair were ultimately apprehended in Georgia in September 2017, but not before one victim was placed in the intensive care unit after reportedly suffering a “minor stroke,” and another was found dead at his residence, following their interactions with Schenck and Berry.[8] In sentencing him to 300 months of imprisonment, the Court found Schenck to be the leader of the operation and concluded that he used threats and acts of physical violence to force Berry into continued participation in his prostitution trafficking scheme.
The only sentencing-related issue still pending before the Court is the amount of restitution Schenck should be ordered to pay to the victims of his offenses of conviction pursuant to the Mandatory Victims Restitution Act (the “MVRA”). On February 14, 2023, the Court held a restitution hearing, which involved the testimony of two witnesses and the admission of documentary evidence in further support of the Government's request, and heard oral argument.[9] Following the hearing, the Court ordered the parties to submit supplemental memoranda to address the scope of the MVRA and issues related to certain of the categories of restitution sought by the Government.[10]
The Government is requesting the Court to order Schenck to pay a total of $1,099,408.67 in restitution to the identified victims of the theft and fraud scheme he led and perpetrated.[11] The Government's request consists of four categories of loss: (1) the value of the personal property items stolen from the individual victims of the theft and fraud scheme (totaling approximately $32,000); (2) the funeral expenses for S.A., the victim who was found dead after his interaction with Schenck and Berry ($12,885.84); (3) S.A.'s lost future wages ($1,000,000); and (4) the “gross income or value” received by Schenck “for Dominique Berry's commercial sex acts” between 2014 and 2017 ($54,000).[12] The Government argues that an order requiring payment of restitution for each category of loss is compulsory under the MVRA and within the scope of the authority granted to the Court by the statute. In supplemental briefing, the Government maintains its position that the amount and categories of restitution requested are appropriate under the MVRA and are supported by prevailing authorities.[13]
In opposition, Schenck concedes that he should be ordered to pay restitution for the value of the personal property he stole in the course of the scheme. However, he contends that the bulk of the Government's request - more than $1 million of it - is both unprecedented and outside the permissible scope of restitution under the MVRA.[14] Specifically, Schenck argues that the requests for approximately $12,000 in funeral expenses and $1,000,000 in lost future wages attributable to S.A. fall outside the scope of the MVRA and are unsupported by Fifth Circuit or other precedent. Similarly, Schenck argues that an award of $54,000 for the proceeds from the commercial sex acts rendered by Berry and confiscated by Schenck would be unprecedented when considering that he would be “ordered to pay restitution to a co-conspirator in the scheme to which he ple[aded] guilty.”[15] In supplemental briefing, Schenck reasserts his contention that the plain language of the MVRA - as well as Fifth Circuit precedent - precludes an award of funeral expenses and lost future wages in this context.[16] He also maintains that there exists no authority to support an award of restitution to Berry for the proceeds from her commercial sex acts that Schenck seized during the course of the criminal enterprise.[17]
“‘A federal court cannot order restitution except when authorized by statute.'” United States v. Espinoza, 677 F.3d 730, 732 (5th Cir. 2012) (quoting United States v. Love, 431 F.3d 477, 479 (5th Cir. 2005)). “The [MVRA] is one of several federal statutes that govern federal court orders requiring defendants convicted of certain crimes to pay their victims restitution.” Lagos v. United States, 138 S.Ct. 1684, 1687 (2018). The parties do not dispute that the MVRA authorizes the Court to order restitution to the victims of Schenck's offenses of conviction and, indeed, the Court has already found that the MVRA applies when it adopted the factual statements set out in the presentence investigation report (“PSR”) as its findings of fact at sentencing.[18] The MVRA mandates that the district court order a defendant to pay restitution to victims of offenses against property under Title 18 and of crimes of violence, among other offenses. Id. (citing 18 U.S.C. § 3663A(c)(1)(A)). For offenses that fall within the MVRA, restitution is required when “an identifiable victim suffers a physical or pecuniary loss.” United States v. Koutsostamatis, 956 F.3d 301, 304 (5th Cir. 2020) (citing 18 U.S.C. § 3663A(c)(1)(B)). In the event the victim is deceased, the MVRA expressly provides for the payment of restitution to the victim's estate. 18 U.S.C. § 3663A(a)(1). A “victim” under the MVRA is defined as:
[A] person directly and proximately harmed as a result of the commission 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.
Id. § 3663A(a)(2). The Fifth Circuit has described the district court's authority to award restitution under the MVRA as follows:
The MVRA limits restitution to the actual loss directly and proximately caused by the defendant's offense of conviction. An award of restitution cannot compensate a victim for losses caused by conduct not charged in the indictment or specified in a guilty plea, or for losses caused by conduct that falls outside the temporal scope of the acts of conviction. Moreover, excessive restitution awards cannot be excused by harmless error; every dollar must be supported by record evidence.
United States v. Sharma, 704 F.3d 318, 323 (5th Cir. 2012) (footnotes omitted). And while “[a] defendant sentenced under the MVRA is only responsible to pay restitution for the conduct underlying the offense for which he has been convicted,” when “a fraudulent scheme is an element of the conviction, the court may award restitution for actions pursuant to that scheme.” United States v. Adams, 363 F.3d 363, 366 (5th Cir. 2004) (quoting United States v. Cothran, 302 F.3d 279, 289 (5th Cir. 2002)); see also Hughey v. United States, 495 U.S. 411, 420 (1990) ().[19] “Both the statutory language of the MVRA and [the Fifth Circuit's] prior decisions make it plain that a defendant's conviction on one count can support a broad restitution award encompassing additional losses only if the count of conviction requires proof of a scheme, conspiracy, or pattern of criminal activity as an element.” Maturin, 488 F.3d at 661-62 (emphasis in original).
The MVRA delineates the types of loss a defendant is required to pay a victim in restitution. If the offense of conviction results in the victim having (1) lost property, then the property must be returned or the defendant must pay an amount equal to its value; (2) suffered bodily injury, then the defendant must pay for the costs associated with the injury including medical expenses, rehabilitation expenses, and...
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