USA. v. Alalada

• Decision Date: 03 December 1999
• Docket Number: No. 98-4877,CR-98-275-AW,98-4877
• Citation: 204 F.3d 536
• Parties: (4th Cir. 2000) UNITED STATES OF AMERICA, Plaintiff-Appellee, v. OLUSOLA A. ALALADE, a/k/a George Alalade, Defendant-Appellant. () . Argued:
• Court: U.S. Court of Appeals — Fourth Circuit

Page 536

204 F.3d 536 (4th Cir. 2000)

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. OLUSOLA A. ALALADE, a/k/a George Alalade, Defendant-Appellant.

No. 98-4877 (CR-98-275-AW)

UNITED STATES COURT OF APPEALS, FOR THE FOURTH CIRCUIT.

Argued: December 3, 1999.

Decided: February 25, 2000.

Appeal from the United States District Court for the District of Maryland, at Greenbelt. Alexander Williams, Jr., District Judge.

ARGUED: Jason D. Tulley, BENNETT & NATHANS, L.L.P., Baltimore, Maryland, for Appellant. Odessa Palmer Jackson, Assistant United States Attorney, UNITED STATES ATTORNEY'S OFFICE, Greenbelt, Maryland, for Appellee. ON BRIEF: Lynne A. Battaglia, United States Attorney, UNITED STATES ATTORNEY'S OFFICE, Greenbelt, Maryland, for Appellee.

Before NIEMEYER and WILLIAMS, Circuit Judges, and HAMILTON, Senior Circuit Judge.

Affirmed by published opinion. Senior Judge Hamilton wrote the opinion, in which Judge Niemeyer and Judge Williams joined.

OPINION

HAMILTON, Senior Circuit Judge:

The sole issue in this appeal is whether a district court has discretion under the Mandatory Victims Restitution Act of 1996 (the MVRA) § 206(a), 18 U.S.C.A. § 3664 (West Supp. 1999), to order a defendant convicted of credit card fraud, see 18 U.S.C.A. § 1029(a)(2) (West Supp. 1999), to pay restitution in an amount less than the full amount of each victim's loss by allowing an offset for the value of fraudulently obtained property the government seized from the defendant and retained in administrative forfeiture. For reasons that follow, we answer this question in the negative. We, therefore, affirm the judgment in the present case to the extent it orders Olusola Alalade (Alalade), the defendant in this case, to pay $667,858.18 in restitution on a payment schedule of $150.00 per month.

I

On September 9, 1998, Alalade pled guilty in the United States District Court for the District of Maryland, pursuant to a written plea agreement, to one count of credit card fraud in violation of 18 U.S.C. § 1029(a)(2). Alalade's fraudulent scheme, which began in late 1996 and ended in or about March 1998, is best described as occurring in four stages. In the initial stage, Alalade obtained counterfeit drivers' licenses and social security cards in the names of numerous actual persons by using identifying information of those persons he obtained without their knowledge or consent. Using the counterfeit drivers' licenses and social security cards, Alalade next secured post office boxes, office space, and clerical services in the names of at least ten different fictitious business entities at a variety of locations in the Maryland counties of Montgomery and Prince George's. Alalade then obtained more than forty corporate credit card accounts, typically with $20,000 credit limits, from a number of different financial institutions (the Victim Financial Institutions) in the names of his various fictitious business entities. In the final stage of his fraudulent scheme, Alalade used the credit cards chiefly to obtain cash advances on the credit card accounts through automatic teller machines. Alalade also charged some purchases directly to the credit card accounts.

Alalade used all of the cash and credit that he fraudulently obtained to support himself personally, including using a portion of the cash to pay his home mortgage and purchase furniture. In total, Alalade fraudulently obtained $667,858.18 from the Victim Financial Institutions.

As part of the plea agreement between Alalade and the government, Alalade agreed not to contest the administrative forfeiture of all items seized from him in connection with the investigation and prosecution of his case.¹ The government ultimately seized and retained $78,982.02 worth of items from Alalade in administrative forfeiture.

The record does not establish that any of the Victim Financial Institutions received any of the forfeited property through the Department of Justice's program for remitting administrative forfeitures to "individuals who have an interest in the forfeited property but who did not participate in, or have knowledge of, the conduct that resulted in the property being subject to forfeiture and, where required, took all reasonable steps under the circumstances to ensure that such property would not be used, acquired, or disposed of contrary to law."² 28 C.F.R. § 9.1(a) (1999). Furthermore, the record does not establish that the Victim Financial Institutions received any compensation for their respective losses from any other source either prior to or subsequent to the district court's sentencing of Alalade.

At his sentencing hearing on November 23, 1998, Alalade asked the district court to reduce any amount of restitution it ordered him to pay the Victim Financial Institutions by the value of the items the government seized in administrative forfeiture. The district court refused to grant Alalade the reduction he requested. In this regard, the district court reasoned that, under the terms of the MVRA, the government's receipt of the items from Alalade in administrative forfeiture was not germane to the question of the appropriate amount of restitution to be ordered.

At the conclusion of Alalade's sentencing hearing, the district court sentenced Alalade to twenty-four months' imprisonment, followed by a three-year term of supervised release. Additionally, the district court ordered Alalade to pay restitution to the Victim Financial Institutions in the amount of $667,858.18 on a payment schedule of $150.00 per month. The district court subsequently entered a criminal judgment against Alalade reflecting its rulings at sentencing.

Alalade noted this timely appeal. On appeal, Alalade solely challenges the total amount of restitution ordered by the district court. Specifically, he challenges the district court's refusal to reduce the total amount of restitution it ordered him to pay by the value of the items the government seized from him and retained in administrative forfeiture.

II

We begin our consideration of Alalade's challenge to the amount of restitution ordered by the district court by setting forth the statutory provisions implicated by his challenge. Alalade agrees that he is subject to the MVRA, which makes restitution mandatory for particular crimes, including those offenses involving fraud such as the crime to which Alalade pled guilty.³ See 18 U.S.C.A. § 3663A(a)(1), (c)(1)(A)(ii) (West Supp. 1999). With respect to the amount of mandatory restitution to be ordered, the MVRA provides that "[i]n each order of restitution, the court shall order restitution to each victim in the full amount of each victim's losses as determined by the court and without consideration of the economic circumstances of the defendant." Id. § 3664(f)(1)(A) (emphasis added); see also id. § 3663A(d) (providing that an order of restitution under 18 U.S.C. § 3663A "shall be issued and enforced in accordance with section 3664"). "In no case shall the fact that a victim has received or is entitled to receive compensation with respect to a loss from insurance or any other source be considered in determining the amount of restitution." Id. § 3664(f)(1)(B).

Under the MVRA, after determining the full amount of restitution owed to each victim, the district court is required to set the manner in which, and the schedule according to which, the defendant is to pay the amount of restitution ordered. See id.§ 3664(f)(2). In so doing, the district court is required to consider: (1) the financial resources and other assets of the defendant, including whether any of the assets are jointly controlled; (2) projected earnings and other income of the defendant; and (3) any financial obligations of the defendant, including obligations to dependents. See id.

Despite the MVRA's prohibition on a district court from considering the fact that a victim has received or is entitled to receive compensation with respect to a loss from insurance or any other source in determining the amount of restitution to be ordered initially, see id. § 3664(f)(1)(B), the MVRA provides that "[a]ny amount paid to a victim under an order of restitution shall be reduced by any amount later recovered as compensatory damages for the same loss by the victim in--(A) any Federal civil proceeding; and (B) any State civil proceeding, to the extent provided by the law of the State," id. § 3664(j)(2).

Under the law in existence prior to the effective date of the MVRA, the payment of restitution in this case would have been a discretionary decision in the hands of the district court under the Victim and Witness Protection Act of 1982 (VWPA) § 5(a), 18 U.S.C.A. § 3663(a) (West 1985) (amended 1996). Furthermore, in determining whether to order restitution under the VWPA and the amount of such restitution, the district court had to "consider the amount of loss sustained by any victim as a result of the offense, the financial resources of the defendant, the financial needs and earning ability of the defendant and the defendant's dependants, and such other factors as the court deem[ed] appropriate." Id.§ 3664(a).

Alalade concedes that the full amount of loss to the Victim Financial Institutions is $667,858.18. Nevertheless, he contends the district court erred in ordering him to pay restitution in this amount. According to Alalade, the district court mistakenly believed that it lacked discretion under the MVRA to grant the reduction in restitution he requested. Whether the district court possessed discretion under the MVRA to order restitution in an amount less than the full amount of each Victim Financial Institution's loss by allowing an offset for the value of the property seized from Alalade and retained by the government in administrative forfeiture is purely a legal question and, therefore, subject to de novo review. See United States v. Hall, 972 F.2d 67, 69 (4th Cir. 1992) (noting that interpretation of a statute is a...