United States v. Futrell

209 F.3d 1286

• Court: Court of Appeals for the Eleventh Circuit
• Decided: April 20, 2000
• Docket: 99-2163
• Status: Published

Opinion

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED U.S. COURT OF APPEALS ________________________ ELEVENTH CIRCUIT APR 20 2000 THOMAS K. KAHN No. 99-2163 CLERK Non-Argument Calendar ________________________

D. C. Docket No. 98-00117-CR-T-23E

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

ELIZABETH FUTRELL, ROYCE E. FUTRELL,

Defendants-Appellants.

________________________

Appeals from the United States District Court for the Middle District of Florida _________________________ (April 20, 2000)

Before BIRCH, DUBINA and CARNES, Circuit Judges.

PER CURIAM: This case involves, among other things, two issues of first impression in this

circuit concerning the application of the Mandatory Victims Restitution Act of 1996,

18 U.S.C. § 3663A (“MVRA”). Appellants’ first issue posits whether the MVRA

applies to acts in an ongoing conspiracy that began prior to the MVRA’s date of

enactment but concluded subsequent to the MVRA’s enactment. The second issue is

whether the district court may reasonably approximate the actual damage to the victim

for the purpose of assessing restitution under the MVRA. Appellants also assert that

the district court erred by failing to consider their ability to pay when setting the

amount of restitution.

I.

In March of 1978, Royce Futrell (“Mr. Futrell”) fell and injured himself while

working on a construction site for the Tennessee Valley Authority (“TVA”). Unable

to work, he began receiving benefits from the United States Department of Labor,

Office of Workers’ Compensation Programs (“OWCP”) in December of 1978. When

the OWCP approved Mr. Futrell’s long term disability payments, it informed him that

should he return to work, he must notify the OWCP immediately, and return any

disability checks he received after returning to work. Thereafter, Mr. Futrell

occasionally responded to questions sent by the OWCP regarding the status of his

employment and disability. In each response, Mr. Futrell attested that he had not

2 worked for anyone and had not received income from self-employment during the

period covered by the questionnaire.

In 1997, the Department of Labor investigated Mr. Futrell and discovered that

he had been driving a tractor-trailer truck for his wife’s trucking company, Futrell

Trucking. In August of that year, while testifying before a federal grand jury

investigating whether Mr. Futrell had been working while receiving government

disability payments, Mr. Futrell’s wife, Elizabeth, denied that Mr. Futrell was

involved in Futrell trucking in any capacity.

On March 25, 1998, the grand jury returned an indictment charging Mr. and

Mrs. Futrell (the “Futrells”) each with one count of conspiracy to make and use a false

statement in connection with the receipt of federal disability benefits in violation of

18 U.S.C. § 371. The indictment also charged Mr. Futrell with five counts of making

false statements beginning in January 1994, through March 1997, in connection with

the receipt of federal disability benefits, in violation of 18 U.S.C. § 1920, and charged

Mrs. Futrell with one count of making a false declaration under oath to a federal grand

jury, in violation of 18 U.S.C. § 1623.

A jury convicted Mr. Futrell on all counts, convicted Mrs. Futrell of conspiracy,

but found her not guilty on the perjury charge. At sentencing, the district court

sentenced Mr. Futrell to 15 months imprisonment, to be followed by three years of

3 supervised release. The district court sentenced Mrs. Futrell to three years probation

and ordered both defendants to pay jointly a total of $100,244.82 in restitution to the

TVA.

Mr. Futrell appeals his convictions for making false statements, alleging that

the district court abused its discretion in refusing to deviate from the pattern jury

instructions for 18 U.S.C. § 1920. Mrs. Futrell appeals her conspiracy conviction,

challenging the sufficiency of the evidence. In conjunction with the district court’s

assessment of restitution, the Futrells assert that the district court’s order of restitution

under the MVRA violated the Ex Post Facto Clause because part of the criminal

conspiracy occurred before the enactment of the MVRA. The Futrells also challenge

the district court’s use of an estimate to assess restitution in the amount of

$100,224.82, as well as its failure to consider their alleged inability to pay the amount

of restitution ordered.

II.

This court reviews a district court’s refusal to give a proposed jury instruction

for an abuse of discretion. See United States v. Schlei, 122 F.3d 944, 969 (11th Cir.

1997). We review challenges to the sufficiency of the evidence de novo, viewing the

evidence in the light most favorable to the government. See United States v. Chastain,

198 F.3d 1338, 1351 (11th Cir. 1999). Our analysis of the district court's restitution

4 order involves three standards of review. See United States v. Shugart, 176 F.3d 1373,

1375 (11th Cir. 1999). First, whether the term “amount of loss” in 18 U.S.C. § 3664(e)

contemplates the use of an estimation is a legal question, which we review de novo.

See id. The district court’s decision to allow an estimate of the victim’s loss in a

particular case is subject to review for an abuse of discretion. See id. The district

court’s factual finding as to the specific amount of restitution is reviewed for clear

error. See id. “A defendant's claim that his or her sentence was imposed in violation

of the Ex Post Facto Clause presents a question of law, and we review questions of

law de novo.”United States v. Logal, 106 F.3d 1547, 1550-51 (11th Cir. 1997).

Finally, the district court’s refusal to consider the Futrells’ ability to pay restitution

is a matter of statutory interpretation, which we review de novo. See United States v.

Pemco Aeroplex, Inc., 195 F.3d 1234, 1236 (11th Cir. 2000) (en banc).

III.

Having reviewed the record, we conclude that Mrs. Futrell’s sufficiency claim

lacks merit. Likewise, because the district court’s jury instructions adequately and

correctly addressed the elements of Mr. Futrell’s charged offenses as well as his

defenses, we affirm the district court’s decision not to deviate from the pattern jury

instructions. In sum, we reject these two claims without further discussion.1

1 See 11th Cir. R. 36-1.

5 IV.

The Futrells present three additional issues two of which concern matters of

first impression in this circuit. First, the Futrells argue that the district court should

have proceeded under the prior statute -- the Victims and Witness Protection Act of

1982 (VWPA), 18 U.S.C. § 3663 -- rather than the MVRA. Second, the Futrells assert

that the district court’s assessment of restitution based on an estimated value for

damage to the victim constitutes a violation of the MVRA. Finally, the Futrells argue

that the district court erred by failing to consider their ability to pay when assessing

the amount of restitution.

A.

The Futrells assert that the VWPA applies, rather than the MVRA, because the

conspiracy began before the effective date of the MVRA. Thus, they contend that the

district court’s non-compliance with the VWPA constitutes reversible error. The

government argues that the district court properly applied the MVRA because the

conspiracy continued after the MVRA’s effective date.

A jury convicted the Futrells of participating in a conspiracy that spanned

between October of 1992, and March 25, 1998. Because the conspiracy continued

until March of 1998, the district court sentenced the Futrells in accordance with the

MVRA, 18 U.S.C. §§ 3663A-3664, which went into effect on April 24, 1996, the

6 statute’s enactment date. We have already determined that the MVRA clearly does not

apply to a defendant whose criminal conduct occurred and ceased prior to April 24,

1996. See United States v. Siegel, 153 F.3d 1256, 1260 (11th Cir. 1998). We have

not, however, decided in a published opinion whether the MVRA applies to criminal

conduct which began prior to April 24, 1996, and continued after that date, but we

have addressed this issue in an unpublished opinion. See United States v. Pearlmutter,

No. 99-2332 Nov. 24, 1999 (unpublished opinion). Although an unpublished opinion

is not binding on this court, it is persuasive authority. See 11th Cir. R. 36-2.

Pearlmutter holds that if the MVRA takes effect during an ongoing conspiracy, then

the MVRA subjects the conspiratorial acts occurring before the statutory change to the

new provision. See Pearlmutter, at 3-4; see also United States v. Nixon, 918 F.2d 895,

906 (11th Cir. 1990) (applying Sentencing Guidelines to a conspiracy conviction

where the conspiracy commenced before the enactment of the guidelines, but

continued after enactment of the guidelines); United States v. Wells Fargo Armored

Serv. Corp., 587 F.2d 782, 782 (5th Cir. 1979) (applying a 1974 felony statute to a

conspiracy which ran from 1968 to 1975). The ongoing nature of the conspiracy

enables application of the new statute without violating the Ex Post Facto Clause. See

Pearlmutter, at 3-4; United States v. Terzado-Madruga, 897 F.2d 1099, 1123 (11th

Cir. 1990) (concluding that a conspiracy which began before the effective date of the

7 Sentencing Guidelines but continued after the effective date of the Guidelines “was

committed after the effective date” because conspiracy is a continuing offense).

Following the logic in Pearlmutter, we conclude that the MVRA applies to an

ongoing conspiracy where the conspiracy began before the statute’s effective date, but

concluded after the statute’s effective date. Therefore, we hold that the district court

correctly applied the provisions of the MVRA when sentencing the Futrells.

B.

The Futrells also argue that the district court erred in ordering a restitution

amount based upon an estimation. At the sentencing hearing, William Franson from

the OWCP testified that he calculated the government’s loss using information from

the TVA and Mr. Futrell’s gross income as stated on his income tax returns.2 The

OWCP erred in its calculation, however, by incorrectly using Mr. Futrell’s gross

income instead of his net income. Rather than recalculating the amounts, the

government asked Mr. Franson to estimate the loss. At the conclusion of the hearing,

the district court, accepting Mr. Franson’s estimate, entered an order that the Futrells

pay restitution in the amount of $100,224.82 to the TVA.

The plain language of the MVRA requires the district court to order restitution

“in the full amount of each victim’s losses as determined by the district court. . . .” 18

2 Originally, the Department calculated its actual loss at $108,844.00.

8 U.S.C. § 3664(f)(1)(A). The government bears the burden of demonstrating the

amount of the victim’s loss by a preponderance of the evidence. See 18 U.S.C. §

3664(e). The Futrells argue that the government’s burden to prove the amount of

loss under the MVRA is more exacting than its burden under the Sentencing

Guidelines, where, for the purposes of sentencing, “the calculation of loss is not an

exact science.” United States v. Dabbs, 134 F.3d 1071, 1081-82 (11th Cir. 1998)

(noting that under the Sentencing Guidelines, “the loss need not be determined with

precision. The court need only make a reasonable estimate of the loss, given the

available information.” (internal quotation and citations omitted)). In contrast to the

Sentencing Guidelines and the prior statute, the VWPA, the MVRA makes no

provision for the trial court to exercise its discretion. See United States v. Siegel, 153

F.3d 1256, 1259-60 (11th Cir. 1998).

To determine the amount of loss to the government caused by the Futrells’

fraud, the government must first ascertain the amount of disability that should have

been paid to Mr. Futrell in the absence of fraud. That amount is then subtracted from

the amount actually paid to Mr. Futrell. This difference represents the amount of the

government’s loss.

The Futrells contend that the district court did not need to use an estimate to

determine the government’s loss. Rather, they argue, the government should have re-

9 computed his disability using his actual earnings, as reported on his tax returns. The

Futrells argue that this figure, which comes from Mr. Futrell’s tax return, is not an

estimate, but is an accurate calculation of the amount of money which should be

subtracted from the total amount of disability already paid to Mr. Futrell. However,

the Futrells’ argument neglects the fact that the OWCP’s determination of the amount

of disability payments considers not only actual earnings, but the disabled individual’s

earning capacity. Strict reliance on Mr. Futrell’s tax returns fails to factor his earning

capacity into the calculation.

The government is correct that, in this case, it would be impossible to determine

the precise amount of restitution because there are no records which reflect Mr.

Futrell’s actual earned income and the extent of his ability to work during the time he

received federal disability benefits. In light of the Futrells’ fraud, the government

reasonably speculates that the amounts reported by Mr. Futrell on his tax returns

might not accurately reflect his actual earnings. Similarly, because Mr. Futrell’s

statements regarding his ability to work were fraudulent, they cannot be used to

determine his earning capacity. Thus, any figure which purports to represent Mr.

Futrell’s earning capacity is necessarily an estimate. Given these inherent uncertainties

in formulating the damage caused by Mr. Futrell’s fraud, the government argues that

10 the district court reasonably elected to rely on an estimate of the government’s loss

based on all of the available evidence.3

This court has not addressed whether a court may estimate the victim’s loss to

determine the amount of restitution owed under the MVRA. When faced with a

similar dilemma, the Eighth Circuit treated the MVRA like its predecessor on the

rationale that the two statutes provide the same statutory language for determining the

amount of loss. See United States v. Jackson, 155 F.3d 942, 949 n.3 (8th Cir. 1998).

Both statutes provide that the order of restitution:

shall require that such defendant – in the case of an offense resulting in damage to or loss or destruction of property of a victim of the offense – . . . pay an amount equal to the greater of the value of the property on the date of the damage, loss, or destruction; or the value of the property on the date of sentencing, less the value (as of the date the property is returned) of any part of the property that is returned[.]

Id. (quoting 18 U.S.C. § 3663(b)(1)(B); 18 U.S.C. § 3663A(b)(1)(B)). In Jackson, the

court ruled that “[i]n the case of fraud or theft, the loss ‘need not be determined with

precision. The court need only make a reasonable estimate of the loss, given the

3 An OWCP representative testified that in estimating the government’s loss, he used state statistical data to determine the average amount of money that a truck driver in Florida would have made during the time Mr. Futrell received disability payments. (R7-44-45). The representative then compared that amount with the amount of money Mr. Futrell would have earned absent his injury, and calculated an appropriate percentage of that as the amount Mr. Futrell actually would have been entitled to in disability payments. (R7-45-47). The representative then subtracted that sum from the amount that the government paid Mr. Futrell to determine the government’s actual loss. (R7-76). Based on this calculation, the representative testified that Mr. Futrell received $100,224.82 more than he was due. (R7-76-77. 83).

11 available information.’” Id. (quoting United States v. Chappell, 6 F.3d 1095, 1101 (5th

Cir. 1993)).

Moreover, other courts who have addressed the prior statute have concluded

that the restitution amount may be approximated. See e.g.,United States v. Teehee,893

F.2d 271, 274 (10th Cir. 1990) (“The determination of an appropriate restitution

amount is by nature an inexact science.”). Although the MVRA does not provide for

the exercise of the district court’s discretion in setting the amount of restitution, as did

the VWPA, the use of estimation under the MVRA is justified for the same reason as

under the VWPA– it is sometimes impossible to determine an exact restitution

amount:

The law cannot be blind to the fact that criminals rarely keep detailed records of their lawless dealings, totaling up every column and accounting for every misbegotten dollar. Hence, the preponderance standard must be applied in a practical, common-sense way. So long as the basis for reasonable approximation is at hand, difficulties in achieving exact measurements will not preclude a trial court from ordering restitution.

United States v. Savoie, 985 F.2d 612, 617 (1st Cir. 1993) (applying VWPA). In light

of the difficulties in determining exactly how much Mr. Futrell could have earned, we

hold that the district court did not abuse its discretion by accepting a reasonable

estimate of the amount of government loss caused by his fraud. Because of the

inevitable gaps in evidence in cases of this nature, the district court properly applied

12 the preponderance standard and did not abuse its discretion by accepting the

government’s approximation of its actual losses.

C.

Lastly, we reject the Futrells’ contention that the district court erred in failing

to consider their ability to pay when ordering restitution. Under the MVRA, the

amount of restitution is not discretionary. See United States v. Siegel, 153 F.3d 1256,

1260 (11th Cir. 1998). “The district court must order restitution in the full amount of

each victim’s losses without consideration of the defendant’s economic

circumstances.” Id.; see 18 U.S.C. § 3664(f)(1)(A). The statute is clear. The district

court is not required, nor does it have the discretion, to consider the offender’s ability

to pay when ordering restitution under the MVRA. Accordingly, we affirm the district

court’s order that the Futrells pay $100,244.82 in restitution to the TVA.

V.

In conclusion, we hold first that the district court properly applied the

provisions of the MVRA to an ongoing conspiracy that commenced before enactment

of the MVRA, but concluded after the enactment of the statute. Second, we hold that

the district court did not abuse its discretion in accepting an approximation of the

actual harm suffered by the government as a result of Mr. Futrell’s fraud. Finally, we

hold that the district court properly ordered restitution under the MVRA without

13 considering the Futrells’ ability to pay. Accordingly, we affirm the Futrells’

convictions and sentences.

AFFIRMED.