United States v. Simon, 19-1317

• Decision Date: 06 March 2020
• Docket Number: No. 19-1317,19-1317
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. James A. SIMON, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

952 F.3d 848

UNITED STATES of America, Plaintiff-Appellee,

v.James A. SIMON, Defendant-Appellant.

No. 19-1317

United States Court of Appeals, Seventh Circuit.

Argued November 5, 2019

Decided March 6, 2020

Nathaniel Whalen, Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Hammond, IN, for Plaintiff-Appellee.

Patrick W. Blegen, Attorney, BLEGEN & GARVEY, Chicago, IL, James A. Simon, Huntertown, IN, for Defendant-Appellant.

Before Flaum, Rovner, and Hamilton, Circuit Judges.

Rovner, Circuit Judge.

James Simon appeals the district court's decision denying his motions to reconsider amendments to his restitution obligations. See United States v. Simon , 2019 WL 422447 (N.D. Ind. Feb. 4, 2019). We conclude that the majority of the challenges Simon is making could and should have been raised at sentencing and on direct appeal from his conviction and were therefore waived; as to the remainder, his appeal is untimely. We therefore affirm the judgment.

I.

In 2010, a jury convicted Simon of filing false tax returns, failing to file reports related to foreign bank accounts, mail fraud related to financial aid, and federal financial aid fraud. Simon, a certified public accountant and entrepreneur, had under-reported his taxable income by millions of dollars, failed to file the requisite reports as to foreign bank accounts over which he had signature authority, and falsely pleaded poverty in order to secure need-based scholarships for his children at private schools. The district court ordered him to serve a six-year prison term, followed by a three-year period of supervised release, and to pay restitution totaling $1,053,572.04: $886,901.69 to the Internal Revenue Service, $48,070.35 to the Department of Education, $17,000 to Canterbury School, and $101,600 to Culver Academies. Although Simon had filed numerous objections to the pre-sentence report, he made no objections to the probation officer's restitution calculations, which the court adopted, and he voiced no objections to the restitution obligations that the court imposed. We affirmed Simon's convictions in 2013; in that appeal, Simon raised no objections to his restitution obligations. United States v. Simon , 727 F.3d 682 (7th Cir. 2013).

In 2014, Simon moved to vacate his conviction pursuant to 28 U.S.C. § 2255, alleging that his trial counsel was ineffective in multiple respects, but not with respect to sentencing, including the restitution component of the sentence. The district court denied his motion, and neither the district court nor we issued a certificate of appealability. See United States v. Simon , 2016 WL 3597579 (N.D. Ind. Jul. 15, 2016), certif. of appealability denied , 2017 WL 3397345 (7th Cir. Mar. 30, 2017), cert. denied , ––– U.S. ––––, 138 S. Ct. 337, 199 L.Ed.2d 214 (2017).

Simon was released from prison in 2016. He completed his term of supervised release in May 2019. The bulk of his restitution debt remains outstanding, however.

In March 2016, the government filed a motion asking the district court to amend Simon's restitution obligations in limited respects. The government asked the court to remove Canterbury School as a payee, in view of Canterbury's ongoing declarations that it was not interested in restitution.¹ Removing Canterbury would have the effect of directing Simon's future restitution payments to Culver until such time as it was made whole, as private victims receive restitution payments ahead of the United States and its agencies. See 18 U.S.C. § 3664(i). The government asked the court to further amend the restitution order to indicate that Culver was owed an updated balance of $48,376, an amount considerably less than the $101,600 originally ordered. R. 231.

On the day after it was filed, the court granted the government's motion without a hearing. The restitution order was amended to reflect the revised balance owed to Culver: $48,376; Canterbury was removed as a restitution payee; and the restitution previously ordered to the Internal Revenue Service and the Department of Education were deemed not amended and reinstated. The court "directed the Clerk to make all future disbursements consistent with this order." R. 232. Within a week, Simon received by mail notice of both the government's motion and the district court's order.

Seven months later, in October 2018, Simon filed the first of two pro se motions to reconsider. He argued that he had a due process right to be heard on the government's motion to amend the restitution order; that the restitution he was originally ordered to make to Culver and Canterbury was based solely on financial aid, but that the revised figure for Culver set forth in the amended order as due to Culver constituted a new obligation based on non -financial aid and was therefore improper; and that the government had presented incomplete documentation to support the revised figure owed to Culver. Noting that both Canterbury and Culver had disclaimed any interest in restitution, Simon urged the court to eliminate his restitutions to both schools or, in the alternative, grant him a hearing and the opportunity to argue for a lower restitution figure. In a second motion filed in December 2018, Simon asked that the court strike all of the restitution due to the Department of Education based on his representation that his daughter had paid off her student loans and, consequently, the Department was no longer at any risk of having to honor its guarantee of those loans.

The district court denied Simon's motions. 2019 WL 422447. The court reasoned in the first instance that because the amendment to the restitution order had actually reduced Simon's total restitution obligation by $17,000 (by eliminating Canterbury as a payee), Simon could not show that he had been deprived of a cognizable property interest and consequently had no viable due process claim. Id. , at *2. The court proceeded to reject Simon's argument that the amended restitution improperly included "non-financial aid." The balance owed to Culver as reflected in the amended order was "in no way ‘new’ restitution" nor was it unrelated to the financial aid fraud of which Simon had been convicted. Id. , at *3. The court also rejected Simon's assertion that an evidentiary hearing was required as to the amended order on the ground the documentation the government had submitted to establish the remaining restitution owed to Culver was incomplete, as Simon had not given the court any reason to believe that Culver had misled the court or the parties as to what it was owed. Id. , at *4. Finally, although Simon argued that he should no longer be obliged to make restitution to the Department of Education, the court found his arguments to be a "rehash[ ]" of those made at sentencing and that he could not re-litigate the obligations imposed by the original restitution order after the fact. Id.

Simon filed a timely notice of appeal from the district court's order denying his motions for reconsideration.

II.

The district court's order denying Simon's motions for reconsideration was a final order, and as such we have appellate jurisdiction under 28 U.S.C. § 1291. See Autotech Techs. LP v. Integral Research & Dev. Corp. , 499 F.3d 737, 745 (7th Cir. 2007) (order which disposes of all issues raised in post-judgment motion will be treated as final for purposes of § 1291 ).

The primary challenges Simon advances on appeal are aimed at the validity of the restitution obligations imposed by the original sentencing order. These include his arguments that the district court improperly ordered restitution (1) for losses associated with relevant conduct; (2) to parties (including Culver as well as Canterbury) who, from the outset, disclaimed any interest in receiving restitution.

The first of these arguments was not made below, as Simon acknowledges, with the consequence that it was waived. E.g. , United States v. Valenzuela , 931 F.3d 605, 609 n.1 (7th Cir. 2019), cert. denied , 2019 WL 6257440, ––– U.S. ––––, 140 S.Ct. 575, 205 L.Ed.2d 359 (U.S. Nov. 25, 2019).

Moreover, the time to raise these sorts of arguments was at sentencing and on direct appeal from the judgment. See Barnickel v. United States , 113 F.3d 704, 706 (7th Cir. 1997) ("Nonconstitutional claims like this one, which could have been raised on direct appeal but were not, are deemed waived even without taking cause and prejudice into account.") (citing Bontkowski v. United States , 850 F.2d 306, 313 (7th Cir. 1988) ); United States v. Bania , 787 F.3d 1168, 1171–72 (7th Cir. 2015) (collecting cases). Simon's argument regarding the propriety of awarding restitution based on relevant conduct explicitly references and is based upon the pre-sentence report, so there can be no doubt that he could have made this same argument at sentencing and in his direct appeal. Likewise, the parties and the court were aware at the time of sentencing that Culver and Canterbury both disclaimed their right to restitution, so that too was an issue that Simon could have raised at that time. His failure to advance these claims in a timely manner amounts to a waiver.

Simon suggests that the March 2016 amendment of the restitution order opened the door to any and all challenges to his restitution obligations, even those that would otherwise be deemed procedurally defaulted. We disagree. We may assume that a new obligation imposed by the amended order might be fair game for challenge, but the amended order neither imposed a new obligation nor materially altered the nature of Simon's existing restitution obligations. The amendment to the restitution order did not amount to a re-sentencing or even a de novo reconsideration of restitution. It simply eliminated one restitution payee and updated the amount owed to another.

The sole challenge that Simon directed to the amended, as opposed to the original, restitution order posited that the updated balance owed to Culver was not adequately substantiated. He renews that contention here, adding that the...