United States v. Smith

Opinion

RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 2 United States v. Smith Nos. 01-1124/2427 ELECTRONIC CITATION: 2003 FED App. 0335P (6th Cir.) File Name: 03a0335p.06 Jennifer J. Peregord, ASSISTANT UNITED STATES ATTORNEY, Detroit, Michigan, for Appellee. ON BRIEF: Nancy L. McGunn, Penny R. Beardslee, FEDERAL PUBLIC UNITED STATES COURT OF APPEALS DEFENDERS OFFICE, Detroit, Michigan, for Appellant. Jennifer J. Peregord, ASSISTANT UNITED STATES FOR THE SIXTH CIRCUIT ATTORNEY, Detroit, Michigan, for Appellee. _________________ _________________ UNITED STATES OF AMERICA , X Plaintiff-Appellee, - OPINION - _________________ - Nos. 01-1124/2427 v. - CLAY, Circuit Judge. This is a consolidated appeal. In > Case No. 01-1124, Defendant, James Smith, appeals from the , district court’s judgment entered on January 5, 2001, JAMES SMITH, - Defendant- Appellant. - sentencing Defendant to twenty-one months of imprisonment, three years of supervised release, and a restitution payment of N $61,774.80 following Defendant’s guilty plea conviction for Appeal from the United States District Court making false statements to the Social Security Administration for the Eastern District of Michigan at Detroit. (“the SSA”) in violation of 18 U.S.C. § 1001. In Case No. No. 00-80112—John Feikens, District Judge. 01-2427, Defendant appeals from the district court’s order entered on October 4, 2001, granting the government’s Argued: January 31, 2003 motion to enter a document into the record. For the reasons set forth below, we VACATE IN PART Defendant’s Decided and Filed: July 31, 2003* sentence in Case No. 01-1124, we REVERSE the district court’s order in Case No. 01-2427, and we REMAND both Before: BATCHELDER, MOORE, and CLAY, Circuit cases for further proceedings consistent with this opinion. Judges. BACKGROUND _________________ The government filed a criminal complaint on February 14, COUNSEL 2000, alleging that Defendant fraudulently collected disability benefits, totaling $61,744.80, from the SSA using the name ARGUED: Nancy L. McGunn, FEDERAL PUBLIC and social security number of Michael C. Johnson from DEFENDERS OFFICE, Detroit, Michigan, for Appellant. November of 1995 to January of 2000 in violation of 18 U.S.C. § 641. On the same day the complaint was filed, the district court issued a warrant for Defendant’s arrest. * This decision was originally issued as an “unpublished decision” Defendant turned himself into the United States Marshal filed on July 31, 2003. On August 28, 2003, the court designated the Service on February 24, 2000. Thereafter, on March 15, opinion as one recommend ed for full-text publication.

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2000, the district court dismissed the complaint without before sentence is imposed and will provide a receipt at prejudice. sentencing. The government filed an information on August 16, 2000, F. The court can order the defendant to pay restitution charging Defendant with one count of making false for all losses resulting from his relevant offense conduct. statements to the SSA in violation of 18 U.S.C. § 1001. Specifically, the information charged Defendant with G. The defendant, by entering into this plea agreement, knowingly and wilfully making the following false knowingly and voluntarily gives up any right he may statements: (1) that his name was Michael C. Johnson, (2) that have to appeal any sentence which is within the his social security number was identical to Michael C. parameters of this agreement as delineated above. Johnson’s social security number, and (3) that he had never used a different name or social security number. On the same .... day the information was filed, Defendant filed a waiver of indictment. J. This agreement incorporates the complete understanding between the parties, and no other promises At his arraignment held on September 11, 2000, Defendant have been made by the United States Attorney’s Office entered a guilty plea to the information pursuant to a Rule 11 for the Eastern District of Michigan to the defendant or plea agreement. The plea agreement provides in relevant part: to the attorney for the defendant.

A. . . . The defendant stipulates that all the allegations (J.A. at 14-15.) Before accepting Defendant’s guilty plea, the set forth in the information are true and constitute a district court explained the provisions of the plea agreement violation of the statute. to Defendant. The district court then asked Defendant whether he understood the plea agreement, and Defendant B. The maximum term of imprisonment shall not replied “Yes, sir.” (J.A. at 98.) exceed twenty-one (21) months. The United States Probation Office issued a Presentence C. The maximum term of supervised release shall not Investigation Report (“PSR”) on December 18, 2000. The exceed three (3) years. Violation of any condition of PSR determined that Defendant caused the SSA loss in the supervised release may result in the defendant being amount of $61,744.80, and recommended that Defendant pay imprisoned for the entire term of supervised release or restitution in that amount. The PSR also determined that being prosecuted for contempt of court under 18 U.S.C. Defendant had a total offense level of 11 and a criminal § 401(3). history category of IV. The PSR therefore recommended a sentencing range of 18 to 24 months of imprisonment. D. The maximum fine shall not exceed the statutory maximum. Defendant filed a sentencing memorandum on December 27, 2000, objecting to, inter alia, the PSR’s E. The court is required to impose a $100 special determination of the amount of loss. Defendant argued that assessment. The defendant will pay the assessment had he used his own name and social security number, he could have legally collected $28,064.00 in social security Nos. 01-1124/2427 United States v. Smith 5 6 United States v. Smith Nos. 01-1124/2427

income benefits from the SSA due to his diagnosed mental (J.A. at 53.) Defendant timely filed a notice of appeal on illness. Defendant argued that the $28,064.00 in social January 9, 2001, appealing the district court’s judgment (Case security income benefits he could have legally collected No. 01-1124). should be offset against the $61,744.80 in disability benefits he fraudulently collected. Defendant therefore argued that the By letter dated September 5, 2001, the SSA notified the SSA sustained loss in the amount of $33,710.00, and that he government that it had a policy of not paying social security should pay restitution in that amount. income benefits retroactively to an individual who, like Defendant, fraudulently collected disability benefits. On At the sentencing hearing held on January 3, 2001, the September 13, 2001, the government filed a motion to admit government argued that the amount of loss and restitution the SSA’s September 5, 2001 letter into the record pursuant should equal the amount of disability benefits Defendant to Federal Rule of Appellate Procedure 10(e)(2). In its fraudulently collected, $61,774.80. The district court agreed motion, the government claimed that it was unaware of the and stated that it will order Defendant to pay restitution in the district court’s notation in the judgment directing the SSA to amount of “roughly $61,000.” (J.A. at 124.) The district resolve the offset dispute until Case No. 01-1124 was on court further stated that it will order the “matter . . . be appeal. Defendant filed a response to the government’s resolved with the Social Security Administration as to motion on September 28, 2001. In his response, Defendant whether or not . . . [the alleged $28,064.00 in social security objected to the admission of the letter into the record and income benefits Defendant could have legally collected] is a requested a hearing on the matter. By order entered on legitimate offset.” (J.A. at 125-26.) Defense counsel stated October 4, 2001, the district court granted the government’s that Defendant would agree to the district court’s order if the motion without conducting a hearing on the matter. order specified that the government has the burden of proving Defendant timely filed a notice of appeal on October 11, Defendant is not entitled to an offset. The district court stated 2001, appealing the district court’s order (Case No. 01-2427). that it was “not going to get involved in a quarrel as to who has the burden of proof.” (J.A. at 126.) DISCUSSION

The district court entered judgment against Defendant on I. WAIVER OF RIGHT TO APPEAL (Case No. 01-1124) January 5, 2001, sentencing Defendant to twenty-one months of imprisonment, three years of supervised release, and a This Court reviews the question of whether a defendant restitution payment of $61,774.80. In the judgment, the waived his right to appeal his sentence in a valid plea district court noted: agreement de novo. United States v. Stubbs, 279 F.3d 402, 411 (6th Cir. 2002). Defendant Smith contends that he was legally entitled to receive social security benefits in the amount of It is well settled that a defendant in a criminal case may $28,064.00 and that this should be off-set against his waive his right to appeal his sentence in a valid plea illegal receipt of $61,774,80. If the Social Security agreement. See United States v. Fleming, 239 F.3d 761, 763- Administration on inquiry of the Office of the United 64 (6th Cir. 2001); Stubbs, 279 F.3d at 410. For a plea States Attorney for the Eastern District of Michigan agreement to be constitutionally valid, a defendant must have agrees with this contention, then this amount of entered into the agreement knowingly and voluntarily. See restitution will be reduced by that amount. Fleming, 239 F.3d at 764. “When a [d]efendant waives his Nos. 01-1124/2427 United States v. Smith 7 8 United States v. Smith Nos. 01-1124/2427

right to appeal his sentence in a valid plea agreement, this Section 5E1.1 of the Sentencing Guidelines provides in Court is bound by that agreement and will not review the relevant part that “[i]n the case of an identifiable victim, the sentence except in limited circumstances.” Stubbs, 279 F.3d court shall . . . enter a restitution order for the full amount of at 410. the victim’s loss, if such order is authorized under 18 U.S.C. § . . . 3663.” United States Sentencing Commission, In the plea agreement, Defendant agreed to “pay restitution Guidelines Manual, § 5E1.1(a)(1) (Nov. 2002). Section 3663 for all losses resulting from his relevant offense conduct,” and provides in relevant part that “[t]he court, when sentencing a to “knowingly and voluntarily give[ ] up any right he may defendant convicted of an offense under this title [Title 18], have to appeal any sentence which is within the parameters of . . . may order . . . that the defendant make restitution to any this agreement[.]” (J.A. at 15.) The government argues that victim of such offense . . . ” 18 U.S.C. § 3663(a)(1)(A). the above-quoted language indicates that Defendant Section 3663(a)(3) provides that “[t]he court may also order knowingly and voluntarily waived his right to appeal his restitution in any criminal case to the extent agreed to by the sentence in any respect. Defendant, on the other hand, argues parties in a plea agreement.” 18 U.S.C. § 3663(a)(3). that he did not knowingly and voluntarily waive his right to appeal the manner in which the district court determined the Section 3664 provides in relevant part that “the court shall amount of restitution. order the probation officer to obtain and include in its presentence report, or in a separate report, as the court may The plea agreement is ambiguous as to the amount and direct, information sufficient for the court to exercise its manner of determining restitution. The plea agreement merely discretion in fashioning a restitution order. The report shall provides that the district court can order Defendant to pay include, to the extent practicable, a complete accounting of restitution for all losses resulting from his relevant offense the losses to each victim, any restitution owed pursuant to a conduct. The plea agreement, however, does not provide the plea agreement, and information relating to the economic manner in which the district court can determine the amount circumstances of each defendant.” 18 U.S.C. § 3664(a). of loss. Because Defendant argues on appeal that the district Section 3664(f)(1)(A) provides that “[i]n each order of court erred in determining that the SSA sustained a loss in the restitution, the court shall order restitution to each victim in amount of $61,744.80, the manner in which the district court the full amount of each victim’s losses as determined by the determined the amount of loss is the primary issue on appeal, court and without consideration of the economic which falls outside the scope of the plea agreement. We circumstances of the defendant.” 18 U.S.C. § 3664(f)(1)(A). therefore hold that Defendant’s appeal is not waived. See Section 3664(e) provides “[a]ny dispute as to the proper United States v. Johnson, 979 F.2d 396, 399 (6th Cir. 1992) amount or type of restitution shall be resolved by the court by (stating that “ambiguity [in a plea agreement] must be the preponderance of the evidence. The burden of construed against the government”). demonstrating the amount of the loss sustained by a victim as a result of the offense shall be on the attorney for the II. RESTITUTION (Case No. 01-1124) Government.” 18 U.S.C. § 3664(e). This Court reviews the propriety of ordering restitution de novo and the amount of restitution ordered for abuse of discretion. United States v. Bearden, 274 F.3d 1031, 1040 (6th Cir. 2001). Nos. 01-1124/2427 United States v. Smith 9 10 United States v. Smith Nos. 01-1124/2427

Federal Rule of Criminal Procedure (“Rule”) 32(c)(1)1 the amount of $33,710.00, and that he should pay restitution provides in relevant part that “[a]t the sentencing hearing . . . in that amount. [f]or each matter controverted, the court must make either a finding on the allegation or a determination that no finding is At the sentencing hearing, Defendant again presented his necessary because the controverted matter will not be taken argument to the district court. The government responded by into account in, or will not affect, sentencing.” Fed. R. Crim. arguing that the amount of loss and restitution should equal P. 32(c)(1). This Court requires “literal compliance” with the amount of disability benefits Defendant fraudulently Rule 32(c)(1). United States v. Fry, 831 F.2d 664, 667 (6th collected. The district court acknowledged both parties’ Cir. 1987). This Court has made it clear that Rule 32(c)(1) arguments, but failed to make any factual findings regarding “prohibits a court faced with a dispute over sentencing factors the offset dispute. Rather, the district court stated that it will from adopting the factual findings of the presentence report order Defendant to pay restitution in the amount of “roughly without making factual determinations of its own.” United $61,000,” and that the “matter . . . be resolved with the Social States v. Monus, 128 F.3d 376, 396 (6th Cir. 1997). USSG Security Administration as to whether or not . . . [the alleged § 6A3.1(b) provides that “[t]he court shall resolve disputed $28,064.00 in social security income benefits Defendant sentencing factors at a sentencing hearing in accordance with could have legally collected] is a legitimate offset.” (J.A. at [Federal] Rule [of Criminal Procedure] 32(c)(1).” 124, 125-26.) When defense counsel stated that Defendant would agree to the district court’s order if the order specified Defendant argues that the district court violated Rule that the government has the burden of proving Defendant is 32(c)(1) by failing to make factual findings regarding the not entitled to an offset, the district court stated that it was disputed amount of loss sustained by the SSA at the time of “not going to get involved in a quarrel as to who has the sentencing. Defendant points out that the dispute was burden of proof.” (J.A. at 126.) presented to the district court in the pleadings and at the sentencing hearing. For instance, in his sentencing Thereafter, the district court entered judgment against memorandum, Defendant argued that had he used his own Defendant sentencing him to pay restitution in the precise name and social security number, he could have legally amount of disability benefits he fraudulently collected, collected $28,064.00 in social security income benefits from $61,744.80, as the PSR had recommended. In addition, the the SSA due to his diagnosed mental illness. Defendant district court delegated its duty of resolving the offset dispute argued that the $28,064.00 in social security income benefits to the SSA by noting in the judgment that “[i]f the Social he could have legally collected should be offset against the Security Administration on inquiry of the Office of the United $61,744.80 in disability benefits he fraudulently collected. States Attorney for the Eastern District of Michigan agrees Defendant therefore argued that the SSA sustained a loss in with . . . [Defendant’s] contention, then this amount of restitution will be reduced by . . . [$28,064.00].” (J.A. at 53.) We hold that the district court violated Rule 32(c)(1) by 1 The December 1, 2002 amendments to the Federal Rules of failing to make factual findings, at the time of sentencing, Criminal Procedure replaced R ule 32(c)(1) with Rule 32(i)(3). United regarding whether the alleged $28,064.00 in social security States v. Treadway, 328 F.3d 87 8, 885 n.3 (6th Cir. 2003). Because we income benefits Defendant claims he could have legally are reviewing the district court’s failure to make specific factual findings collected had he used his own name and social security at Defendant’s sentencing hearing held on January 3, 2001, we are number should have been offset against the $61,744.80 in applying the rule in effect at that time–Rule 32(c)(1). Nos. 01-1124/2427 United States v. Smith 11 12 United States v. Smith Nos. 01-1124/2427

disability benefits Defendant fraudulently collected from the III. EXPANSION OF THE RECORD SSA. The district court erred in delegating its duty to resolve the offset dispute to the SSA, and in refusing to respond to Federal Rule of Appellate Procedure (“Appellate Rule”) 10 Defendant’s objection that the government had the burden of provides in relevant part: proof. We therefore vacate Defendant’s sentence as to the amount of restitution and remand this case for resentencing in (a) Composition of the Record on Appeal. The compliance with Rule 32(c)(1). See United States v. Monus, following items constitute the record on appeal: 128 F.3d 376, 396-97 (6th Cir. 1998) (holding that the district (1) the original papers and exhibits filed in the district court violated Rule 32(c)(1) by failing to make factual court; findings as to the amount of loss attributed to the defendant); (2) the transcript of proceedings, if any; and United States v. Parrott, 148 F.3d 629, 633 (6th Cir.1998) (3) a certified copy of the docket entries prepared by the (holding that a district court cannot adopt “the factual district clerk. findings of the presentence report without making factual .... determinations of its own” when the facts are in dispute). (e) Correction or Modification of the Record. .... Defendant also argues that the district court violated 18 (2) If anything material to either party is omitted from or U.S.C. § 3572(d)(1)2 by not establishing a restitution payment misstated in the record by error or accident, the omission schedule. We hold that Defendant’s argument is without or misstatement may be corrected and a supplemental merit. The district court stated in the judgment that Defendant record may be certified and forwarded: “shall PAY THE BALANCE OF RESTITUTION OWED IN (A) on stipulation of the parties; MONTHLY PAYMENTS AS RECOMMENDED BY THE (B) by the district court before or after the record has PROBATION DEPARTMENT AND APPROVED BY THE been forwarded; or COURT.” This Court has approved such payment (C) by the court of appeals. scheduling. See Weinberger v. United States, 268 F.3d 346, (3) All other questions as to the form and content of the 359-60 (6th Cir. 2001). record must be presented to the court of appeals. Fed. R. App. P. 10(a) & (e). “The purpose of . . . [Appellate Rule 10(e)(2)] is to allow the [ ] court to correct omissions from or misstatements in the record for appeal, not to introduce new evidence in the court of appeals.” S & E Shipping Corp. v. Chesapeake & O. Ry. Co., 678 F.2d 636, 641 (6th Cir. 1982). 2 Section 3572 (d)(1) provides: In compliance with the district court’s directive as set forth A person sentenced to pay a fine or other monetary penalty, in the judgment, the SSA notified the government, by letter including restitution, shall make such paym ent imm ediately, dated September 5, 2001, that it had a policy of not paying unless, in the interest of justice, the court provides for payment social security income benefits retroactively to an individual on a date certain or in installments. who, like Defendant, fraudulently collected disability benefits. The government filed a motion to admit the letter 18 U.S.C. § 35 72(d)(1). Nos. 01-1124/2427 United States v. Smith 13 14 United States v. Smith Nos. 01-1124/2427

into the record pursuant to Appellate Rule 10(e)(2). In its finalize the restitution order within 90 days after sentencing. motion, the government claimed that it was unaware of the See United States v. Vandeberg, 201 F.3d 805, 814 (6th Cir. district court’s directive until Case No. 01-1124 was on 2000) (holding that the district court erred in unilaterally appeal. Defendant filed a response to the motion objecting to amending and finalizing the restitution order without the admission of the letter into the record and requesting a affording the parties an opportunity to object within the 90 hearing on the matter. The district court issued a one-page days after sentencing, as required by § 3664(d)(5)). We conclusory order admitting the letter into the record, without therefore vacate the district court’s order and remand this case conducting a hearing on the matter. for further proceedings consistent with Rule 32(c)(1) and § 3664(d)(5). Defendant argues that the district court erred in admitting the letter into the record because the letter neither qualifies as CONCLUSION a document under Appellate Rule 10(a) nor as an omission under Appellate Rule 10(e)(2). Defendant points out that the For the forgoing reasons, we VACATE IN PART letter was not in existence until eight months after the Defendant’s sentence in Case No. 01-1124, we REVERSE judgment in Case No. 01-1124 was entered on January 5, the district court’s order in Case No. 01-2427, and we 2001. Defendant argues that because the letter was not in REMAND both cases for further proceedings. existence while Case No. 01-1124 was pending before the district court, the district court did not have the right to consider the contents of the letter in finalizing its restitution order. The government concedes that the letter neither qualifies as a document under Appellate Rule 10(a) nor as an omission under Appellate Rule 10(e)(2). The government, however, argues that we may consider the contents of the letter because it was admitted into the record in direct response to the district court’s directive. Under these circumstances, the district court’s decision to admit the letter into the record was plainly unreasonable. The district court neither afforded Defendant the opportunity to respond or comment upon the letter, nor made factual findings regarding the contents of the letter. In addition, the district court violated 18 U.S.C. § 3664(d)(5)3 by failing to

3 probation officer shall so inform the court, and the court shall set Section 36 64(d)(5 ) provides in relevant part: a date fo r the final determination o f the victim's losses, not to exceed 90 d ays after sentencing. If the victim’s losses are not ascertainable by the date that is 10 days prior to sentencing, the attorney for the Governme nt or the 18 U.S.C. § 36 64(d)(5).