United States v. Eric Shibley

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 28, 2023
• Docket: 22-30043
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION FEB 28 2023 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, Nos. 22-30043 22-30113 Plaintiff-Appellee, D.C. No. 2:20-cr-00174-JCC-1 v.

ERIC SHIBLEY, MEMORANDUM*

Defendant-Appellant.

Appeal from the United States District Court for the Western District of Washington John C. Coughenour, District Judge, Presiding

Argued and Submitted February 15, 2023 Seattle, Washington

Before: W. FLETCHER and VANDYKE, Circuit Judges, and LIBURDI,** District Judge.

Eric Shibley (“Shibley”) appeals from the district court’s judgment in his

criminal case. Shibley was convicted of fifteen total counts of wire fraud, bank

fraud, and money laundering. He challenges the amount of restitution that the

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Michael T. Liburdi, United States District Judge for the District of Arizona, sitting by designation. district court ordered him to pay his lenders, arguing that it should have been

reduced by the amount that the government seized through forfeiture. We have

jurisdiction under 28 U.S.C. § 1291. We affirm.

During the early months of the COVID-19 pandemic, Congress established

the Paycheck Protection Program (“PPP”) to provide emergency loan assistance to

businesses. The Small Business Association (“SBA”) also issued loans through

the Economic Injury Disaster Loan (“EIDL”) Program. Shibley submitted twenty-

six fraudulent loan applications to these programs.

The government had executed forfeiture seizure warrants for five of

Shibley’s business bank accounts prior to his conviction. After the government

moved for a combined preliminary order of forfeiture and an order of forfeiture, on

January 21, 2022, the district court entered a preliminary order granting a forfeiture

of $1,183,501.08, based on money that Shibley obtained through his fraudulent

COVID-19 relief loans. The forfeiture order became final at Shibley’s sentencing.

Also at sentencing, the district court sentenced Shibley to forty-eight months in

prison and three years of supervised release. It adopted the government’s

restitution calculations and ordered that Shibley pay $1,438,000 in restitution.

Shibley requests that this panel review his claim de novo. This court

reviews the district court’s valuation of a restitution amount de novo. United

2 States v. Carter, 742 F.3d 440, 445 (9th Cir. 2014). The government contends that

we should apply plain error review because Shibley did not object to the district

court’s restitution calculation at sentencing. E.g., United States v. Bright, 353 F.3d

1114, 1120 (9th Cir. 2004). Because we would affirm the district court under

either plain error or de novo review, we refrain from deciding which standard

applies. United States v. Davis, 706 F.3d 1081, 1083 (9th Cir. 2013).

“Forfeiture and restitution are separate components of many criminal

sentences.” Carter, 742 F.3d at 446. While restitution provides compensation to

victims in order to make them whole, the purpose of forfeiture is punitive. E.g.,

Davis, 706 F.3d at 1083–84. The district court ordered restitution under the

Mandatory Victims Restitution Act (“MVRA”), which provides that “the [district]

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.” 18 U.S.C. § 3664(f)(1)(A). The MVRA’s

language is mandatory—the district court does not have discretion in reducing

restitution when, as here, sentencing for offenses to which the MVRA applies. The

parties do not contest that the district court calculated restitution based on the “full

amount” of the lenders’ losses under the MVRA. Id. The district court properly

based its calculation on the unrecovered funds that the lenders had transferred to

3 Shibley’s bank accounts, $1,438,000. Shibley does not have the “right to a credit

against a restitution order equal to any part of the amount forfeited.” Carter, 742

F.3d at 441, 446. The district court thus did not err in declining to reduce

restitution by the amount that Shibley forfeited to the government. Bright, 353

F.3d at 1120.

The victimized lenders have not yet recovered any money. At oral

argument, the government represented to us that the prosecutors in this case will

seek approval from the Money Laundering and Asset Recovery Section

(“MLARS”) to transfer the forfeited funds to the lenders under the Department of

Justice’s restoration process. See also Rule 28(j) letter in United States v. Shibley,

Nos. 22-30043 & 22-30113, Feb. 21, 2023, ECF No. 39. Under the Department of

Justice Asset Forfeiture Policy, once MLARS approves the transfer, it notifies the

prosecutors and the property custodian, who “will then transfer the net forfeited

proceeds of all assets in the case or related cases to the clerk of court for

distribution pursuant to the restitution order.” Department of Justice Asset

Forfeiture Policy Manual, ch. 14, § B,

https://www.justice.gov/criminal-afmls/file/839521/download. Thus, while the

district court did not have the authority to reduce Shibley’s restitution obligation at

the time of sentencing, that obligation will decrease if and when the government

4 transfers the forfeited funds to the lenders.

AFFIRMED.